Partly allowed

M/S Chantilly Group v. State of Karnataka

Karnataka HC20 Apr 2023WP/65254/2016

Case brief

AI extract

What is this about?

The High Court of Karnataka held that the Karnataka Industrial Areas Development Board breached its obligation to provide infrastructure, thereby waiving its right to cancel the land allotment for non-payment. The writ petition was partly allowed, directing the Board to refund the land cost with interest.

What did the court decide?

Directing respondents to refund Rs. 1,06,96,000 paid by the petitioner along with interest at 6% per annum from the date of deposit.

M/S Chantilly Group Vs State of Karnataka — Landlord and Tenant | Karnataka HC (2023)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 20^TH DAY OF APRIL, 2023

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BEFORE

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THE HON'BLE MS. JUSTICE JYOTI MULIMANI WRIT PETITION NO. 65254 OF 2016 (GM-KIADB)

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BETWEEN:

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M/S.CHANTILLY GROUP (A REGISTERED PARTNERSHIP FIRM), NO.210, AMAR JYOTHI LAYOUT, 6TH MAIN, OFF INNER RING ROAD, DOMLUR EXTENSION, BANGALORE - 560 071. REPRESENTED BY ITS PARTNER, SMT. PRITI UNADKAT.

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…PETITIONER (BY SRI.K.N.PHANINDRA., SENIOR ADVOCATE FOR SMT.VAISHALI HEGDE., ADVOCATE)

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AND:

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Digitally signed by THEJASKUMAR N Location: HIGH COURT OF KARNATAKA

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STATE OF KARNATAKA REP. BY ITS SECRETARY, DEPARTMENT OF COMMERCE & INDUSTRIES, VIKASA SOUDHA, 1^ST FLOOR, DR.B.R.AMBEDKAR ROAD, BANGALORE - 560 001.

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KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD, REP. BY ITS CHIEF EXECUTIVE OFFICER, 4^TH & 5^TH FLOOR, EAST WING, KHANIJA BHAVAN, RACE COURSE ROAD, BANGALORE - 560 001.

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KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD, REP. BY ITS ASSISTANT SECRETARY, ZONAL OFFICE,

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BAIKAMPADY INDUSTRIAL AREA, MANGALORE - 575 011.

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…RESPONDENTS

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(BY SMT.RASHMI PATEL., HCGP FOR R1; SRI.P.V.CHANDRASHEKAR., ADVOCATE FOR R2 & R3)

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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, SEEKING CERTAIN RELIEFS.

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THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 07.02.2023, COMING ON FOR PRONOUNCEMENT OF ORDERS THROUGH VIDEO CONFERENCING AT KALABURAGI BENCH, THIS DAY THE COURT MADE THE FOLLOWING:

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ORDER

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“INFRASTRUCTURE EMPOWERS PROGRESS”.

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Sri.K.N.Phanindra., learned Senior counsel on behalf of Smt.Vaishali Hegde., for the petitioner, Smt.Rashmi Patel., learned HCGP for respondent No.1 and Sri.P.V.Chandrashekar., learned counsel for respondents 2 & 3 have appeared in person.

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The brief facts are these:

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The petitioner Firm had filed an application on 11.03.2006 to the Karnataka Udyog Mithra seeking approval for the establishment of a “Business Process Outsourcing, Offshore Development Centre and Software Development and Service Center” from Mangalore’s proposed IT City and sought for

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allotment of an extent of 40,470 square meters of land at Kairangala, Pajeer Villages at Mangalore along with other infrastructure facilities like power, water, etc.

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The Karnataka Udyog Mithra addressed a letter dated 03.04.2006 to the petitioner, intimating that the project proposal was considered by the State Level Single Window Clearance Committee on 20.03.2006 and the same had been approved by providing the infrastructural assistance as set out in the letter therein. The Committee resolved to recommend to KIADB to issue a letter of intent for 10 Acres of land being acquired by KIADB at Pajeer, Kairangala, Koornadu Villages in Mangalore. A quantity of 3,00,000 LPD of water was assured to be supplied by KIADB and 250 KVA power was assured to be serviced by MESCOM.

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Subsequently, Karnataka Biotechnology & Information Technology Services issued the letter dated 22.05.2006 to the petitioner intimating about the State Level Single Window Agency Clearance given on 20.03.2006 to its project.

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A meeting was held on 01.07.2006 regarding the approval of the layout plan and cost structure of the project

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being undertaken by KIADB and detailed minutes of proceedings had been drawn out, containing the costs of the project and the facilities to be provided to the project. Thereafter, a Notice dated 25.07.2006 was issued by the Chief Engineer and Chief Development Officer of KIADB to the petitioner and other Companies, intimating about a meeting convened on 21.07.2006 to discuss the establishment of Sector Specific Economic Zone at Mangalore. The partners of the petitioner firm attended the said meeting and the proceedings of the Meeting dated 21.07.2006 were drawn. It was expressly explained therein that the Board would prepare the layout plan in consultation with the promoters and the estimates for development works will be prepared as per the specifications of the PWD/NH and also the specifications of M/s.Infosys Technologies Ltd. will be adopted.

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Subsequently, the petitioner Firm filed an application dated 23.11.2006 to the second respondent seeking allotment of the land at IT City in Mangalore along with Rs.2,00,000/- (Rupees Two Lakh only) as the initial deposit and Rs.5,000/- (Rupees Five Thousand only) as EMD. The second respondent thereafter issued a letter dated 29.06.2007 to the

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petitioner intimating that the Board had decided to allot to the petitioner, 10.63 Acres of land in Plot No.3 & 13 of IT SEZ Industrial Area, Mangalore, and the tentative price of the land was fixed at Rs.30,00,000/- (Rupees Thirty Lakh only) per acre. The petitioner was called to pay Rs.1,25,56,000/- (Rupees One Crore Twenty-Five Lakh Fifty-Six Thousand only) towards the balance of 40% of the land cost as an initial deposit. Subsequently, the petitioner addressed a letter dated 09.07.2007 to the second respondent, requesting to change the allocation of land to a contiguous piece of rectangular land without any divisions. Thereafter, the second respondent issued a letter dated 07.08.2007 to the petitioner intimating that it had decided to allot 9.00 Acres of land in a compact block in Plot No.2 Part & 3 of IT SEZ Industrial Area, Mangalore, and asked the petitioner to pay Rs.1,06,96,000/- (Rupees One Crore Six Lakh Ninety-Six Thousand only) being the balance 40% of the land cost.

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Subsequently, after an exchange of correspondences, the petitioner Firm paid the said amount (40% of the land cost) by way of two installments of Rs.61,00,000/- (Rupees Sixty-One Lakh only) on 10.09.2007 and Rs.45,96,000/- (Rupees Forty-

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Five Lakh Ninety-Six Thousand only) on 20.09.2007. The petitioner also addressed the letters dated 10.09.2007 and 20.09.2007 and asked the second respondent to furnish the details of the map of the land, regarding the cancellation of allotment and forfeiture of amounts and the time scale for development work with the proposed start date. Subsequently, the second respondent issued the Allotment Letter dated 26.10.2007 to the petitioner, allotting 9.08 Acres of land in Plot Nos.2 Part & 3 of Pajeeru, Kairangala IT SEZ Industrial Area for setting up of industry for BPO, ODC & Software Development Service Centre. The allotment of land was on a 20-year lease basis and the tentative price of land per acre had been fixed at Rs.30,00,000/- (Rupees Thirty Lakh only). A condition at Clause No.4(b) had been imposed therein that the petitioner should pay Rs.1,63,44,000/- (Rupees One Crore Sixty-Three Lakh Forty-Four Thousand only) being the balance 60% tentative cost of land within 180 days, i.e., on or before 25.04.2008. It was made clear in Clause No. (7) therein that the possession of the land would be handed over after payment of 100% of the tentative land cost. Thereafter the second respondent issued the demand notice/letter dated 12.05.2008

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calling upon the petitioner to pay the balance land cost of Rs.1,63,44,000/- (Rupees One Crore Sixty-Three Lakh FortyFour Thousand only) along with interest at 12.75% from the due date, within 10 days from the date of receipt of the said letter and intimating that the allotment was liable for cancellation.

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The petitioner Firm addressed letters dated 17.05.2008 & 22.05.2008 to the second respondent in reply to the letter dated 12.05.2008 and the advisor of the petitioner also addressed a letter dated 17.06.2008 to the second respondent, raising certain queries regarding the land costs, stage of development of land and infrastructure and sought for clarifications in this regard. Subsequently, meetings were held between the partners of the petitioner Firm and the officials of the second respondent and correspondences were also exchanged to sort out the issues that had arisen and the second respondent had agreed in principle for three months extension of time to make the payment. Ultimately, the Karnataka Udyog Mitra addressed a letter dated 29.12.2008 to the second respondent referring to the clarifications that had

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been sought by the petitioners regarding the lease period and had asked the second respondent to do the needful.

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Subsequently, the petitioner Firm on several occasions sought an appointment with the officers of the second respondent for discussing the issues regarding providing infrastructure facilities and development of the area but the meetings did not fructify. Thereafter, the petitioner addressed a letter dated 08.12.2009 to the second respondent thanking it for the meetings held on 19.11.2009 and about the oral assurances made out for making balance payment only after twelve months from providing water and electricity and sought information as to when the facilities would be provided to make the payment.

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Thereafter, a review meeting was held on 07.12.2010 under the chairmanship of the Principal Secretary to the Government, Commerce & Industries Department, regarding the subject of providing infrastructural facilities such as road, water & power supply at IT-SEZ Industrial Area in Pajeeru & Kairangala Villages of Bantwal Taluk and also the commencement of implementation of projects by individual

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allottees. The partner of the petitioner Firm also attended the meeting. It was decided in the meeting dated 07.12.2010 that in view of the delay in providing infrastructural facilities, the time was extended up to 30.04.2011 for payment of the balance cost of land without payment of any interest. The said decision was also communicated to the petitioner by a letter dated 06.01.2011 intimating that the petitioner had to pay Rs.1,63,44,000/- (Rupees One Crore Sixty-Three Lakh FortyFour Thousand only) within 30.04.2011.

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Thereafter, though the providing of infrastructure facilities such as roads, water, and electricity supply had not yet been completed, the second respondent Board issued a Demand Notice/letter dated 28.09.2011 to the petitioner to pay a sum of Rs.1,73,90,993/- (Rupees One Crore Seventy-Three Lakh Ninety Thousand Nine Hundred and Ninety-Three only) by 15.10.2011 by charging interest at 12.75% per annum up to 15.10.2011. It is stated that the third respondent had admitted that the major portion of road work had been completed and was open for users and that other developmental work was in the advanced stage and that water and electricity would be provided on demand temporarily.

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The petitioner addressed a letter dated 04.07.2012 to the second respondent seeking its response/feedback to the issue relating to providing infrastructural facilities and also attached the photographs of the land that were taken in March 2012. The petitioner referred to the decision taken in the meeting dated 07.12.2010 and intimated that the infrastructural facilities were still not ready and sought a response on the date when the availability of electricity and water would be provided along with the construction of the compound wall.

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The petitioner yet again submitted a letter dated 25.03.2014 to the second respondent, requesting it to move its location of land to a non-SEZ area on a priority basis and intimated that to start any project, the basic infrastructure has to be in place and that the pipeline for the availability of water was not yet finished.

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Strangely, the third respondent instead of answering the queries raised by the petitioner issued another Demand Notice/letter dated 05.05.2014 asking the petitioner to pay Rs.2,28,61,125/- (Rupees Two Crore Twenty-Eight Lakh SixtyOne Thousand One Hundred and Twenty-Five only) towards the

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balance 60% of the cost of land, interest, and slum cess within 31.05.2014 failing which the board would be constrained to take action.

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Subsequently, the third respondent issued a reply letter dated 13.05.2014 to the petitioner’s letter dated 25.03.2014 with reference to the transfer of allotment of land to the nonSEZ area and asked the petitioner to obtain approval/clearances of the concerned project approval authority for forwarding the same to head office. The third respondent issued another Demand Notice/Letter dated 03.07.2015 to the petitioner asking it to pay Rs.2,53,09,529/- (Rupees Two Crore Fifty-Three Lakh Nine Thousand Five Hundred and Twenty-Nine only) towards the balance 60% of the cost of land, interest, and slum cess within 31.07.2015 failing which the board would be constrained to take action to cancel the allotment.

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As things stood thus, to the utter shock and surprise of the petitioner, the third respondent issued the Order/communication dated 06.02.2016 canceling the allotment of land measuring to an extent of 9 Acres 08 Guntas in Plot No.2 Part & 3 of IT-SEZ Industrial Area Bantwal Taluk,

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Dakshina Kannada District, that had been made in favor of the petitioner.

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Under these circumstances, the petitioner left with no other alternative and efficacious remedy, has filed this Writ Petition under Articles 226 and 227 of the Constitution of India.

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Learned Senior counsel for the petitioner and

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learned counsel for the respondents have urged several contentions.

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Learned counsel for the petitioner placed reliance on the following decision:

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ABL INTERNATIONAL LTD. AND ANOTHER VS. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD. AND OTHERS (2004) 3 SCC 553.

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Learned counsel for the respondent placed reliance on the following decision:

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M/S RADHAKRISHNA AGARWAL AND OTHERS VS. STATE OF BIHAR AND OTHERS - (1977 ) 3 SCC 457.

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Heard, the contentions urged on behalf of the respective parties and perused the Writ papers and also the Annexures with utmost care.

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The following short point would arise for my

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consideration:

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Is the action of the Industrial Board justified?

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The first argument, in the present case, is centered around that the Board being the Promisor has by its promise created a reasonable expectation that it will adhere to the commitment to provide basic infrastructure facilities to set up the project, but it failed to keep up the obligation and the second is about the unilateral cancellation of the allotment of plots for the alleged violation of the terms and conditions contained in the allotment letter.

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Before answering the point let us quickly glance through the simple meaning of infrastructure.

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The term infrastructure first appeared in the late 1880s, derived from French, with infra- meaning below and structure meaning building. Infrastructure can mean the foundation upon which the structure of an economy is built.

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It is well known that the progress of every community across the globe depends on the success of infrastructure projects. Whether in the private or public sector, precise planning and finely-tuned strategies are necessary to overcome the challenges faced by modern infrastructure projects. More importantly, careful consideration of the human element as well as the economic impacts is required for these essential projects. For this reason, it’s worth clarifying the logistics and challenges professionals need to balance to succeed in infrastructure project management. Infrastructure is crucially an important sector for the overall development of any country.

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Suffice it to note that the State of Karnataka with a laudable object for the establishment of an Industrial Area has constituted the Karnataka Industrial Areas Development Board (KIADB). The KIADB is a statutory body established under the provisions of the KIAD Act of 1966 to promote the establishment and orderly development of industries in industrial areas. The State Government issued Notifications under the provisions of the KIAD Act, as an Industrial Area in several lands situated at Pajeeru and Kariangala villages of Bantwals Taluk, Dakshina Kannada. The State Government

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issued Notifications under Sections 28(1) and 28(4) of the Land Acquisition Act and transferred the lands to KIADB. The Board formed an industrial area known as Pajeeru and Kariangala IT SEZ Industrial Area Mangalore.

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It is not in dispute that plots Nos.2 Part & 3 measuring an extent of 9.08 Acres were allotted to the petitioner on the 26^th day of October 2007 for setting up BPO, ODC, and Software Development Service Centre with certain terms and conditions. In the present case, the whole controversy revolves around the non-fulfillment of the obligations by the Board on one side and the alleged violations of the terms and conditions by the petitioner on the other side.

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Sri.P.V.Chandrashekar., learned counsel appearing on behalf of the Board vehemently contended that the allottee ought to have paid 40% of the tentative cost of the allotment price within 30 days from the date of the allotment and the balance 60% within 180 days from the date of issue of the allotment letter or on before 25.04.2008. He argued by saying that despite several reminders and extension of time, the petitioner failed to pay the balance land cost hence the Board

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was constrained to cancel the allotment. Accordingly, learned counsel sought to justify the action of the Board.

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By way of answer, Sri.K.N.Phanindra., learned senior counsel submitted that the Board has not adhered to their obligation/commitment in providing the basic infrastructure facilities. He also argued by saying that several meetings and proceedings were held at the Government level regarding the subject of providing infrastructural facilities such as road, water, and power supply at IT SEZ Industrial Area to enable the petitioner to implement the project. He drew the attention of the Court to one of such documents i.e., Annexure-K.

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I have perused Annexure-K with utmost care. Annexure-K is the Record of notes of discussions held on the 7^th day of December 2010. The discussion of the subject was about providing infrastructure facilities such as road, water and power supply at IT SEZ Industrial in the villages of Pajeeru and Kariangala of Bantwal Taluk, Dakshina Kannada, and also the commencement of implementation of projects by individual allottees. A perusal of the same depicts that several officials from different Companies attended the meeting. It is pivotal

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and interesting to note that the officials of the Board also participated in the meeting. Mr.Sandeep Kotecha, the Director, of Chantilly Group, informed that the Company has paid 20% cost of the land and they have not received any communication from the Board regarding the progress achieved in providing infrastructural facilities in the Industrial Area. He also informed and expressed his desire to pay the balance of 80% cost of the land and implement the project once the infrastructural facilities are provided by the Board. The representatives of different companies expressed their views that the Board is yet to provide infrastructural facilities. In response to the views expressed by the representatives of the companies, Mr.Satyanarayana Pawar, the Development Officer, KIADB, Mangalore and Mr.M.B.Burji, the Chief Development Officer and Chief Engineer of KIADB clarified the status of the infrastructure. It would be relevant to extract the points of clarification that were highlighted by the officials of the KIADB in the meeting. The extract of the review meeting is as under:

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1. FORMATION OF ROAD AND CONSTRUCTION OF

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COMPOUND WALL:

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In view of the filing of a writ petition by erstwhile landowners of Sy.Nos.406, 418/2C, 415/2B, and

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415/1A of Pajeeru Village and Sy. No.214/2A in Karangala Village, a portion of the work of the formation of the road and construction of the compound wall could not be completed. It was clarified that since now the legal problems are solved, the tender has been floated for the formation of the balance length of the road & construction of the balance length of the compound wall.

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2. WATER SUPPLY:

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M/S. Maloo Construction has been entrusted with the work of the Major Water Supply Scheme for supplying 1.00 MGD capacity water from Nethravathi River to IT-SEZ on 25.03.2010. At present, the work is in progress and the company has supplied 12000.00-meter length water supply D.I. pipes, out of the required 14,450.00-meter length and the laying work is under progress. The work construction of the Treatment Plant components is also under progress. The Board in its meeting held on 19.11.2010 has accorded approval for the issues relating to the Water Supply Scheme and as such there are no further hurdles in the implementation of the Water Supply Scheme.

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3. POWER SUPPLY:

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The Tender was called for supplying 1.00 MW of power from Konaje Sub-Station to IT-SEZ. The

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technical bid scrutinizing process is in progress and the Work Order will be issued to the lowest bidder after the completion of the tender process.

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A perusal of the meeting extract makes it very clear that the CDO & CE and Development Officer, KIADB, Mangalore, assured that the infrastructural facilities such as the formation of the road, construction of the compound wall, water and power supply will be provided to the IT-SEZ Industrial Area, Mangalore by April 2011.

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As things stood thus, the Principal Secretary to Government, C & I Department., and Chairman, KIADB, instructed the CDO & CE and the Development Officer, KIADB, Mangalore, to take all effective steps/measures to complete the

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said infrastructural works at IT-SEZ Industrial Area, Mangalore by the end of April 2011 without fail. It was also suggested to convene the next Review Meeting in the month of April 2011. Because of the delay in providing infrastructural facilities, it was decided to consider the grant of extension of time up to 30.04.2011 for the payment of the balance of the cost of the land without payment of any interest.

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Suffice it to note that the meeting was held on the 7^th day of December 2010. The details of the meeting are extracted by me in the above paragraph. After the meeting, there was a series of communication between the officials of the Board and the petitioner. A perusal of the same shows that the Board kept on demanding the payment of the balance amount on one hand and the petitioner insisted on the completion of the infrastructure facilities on the other.

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The demand for the payment of the balance amount is made by the Board on 06.01.2011 i.e., within one month of the meeting. The Board intimated the petitioner to utilize the opportunity of the extension of the time and requested to make payment on or before 30.04.2011 and in case the amount is not paid within the due time, the interest will be levied on the balance amount as per the norms of the Board. Strangely there was no progress in the matter till 28.09.2011. However, on the 28^th day of September 2011, the Board communicated to the petitioner and intimated that other developmental works are in the advanced stage of completion. Water will be provided on demand by the Board and power can be sourced from MESCOM temporarily for the construction of buildings/ facilities on the

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land allotted to the petitioner. It is pivotal to note that Board made calculations about the payment of the balance amount which included the compound interest and Slum Improvement Cess.

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A good deal of argument is canvassed about the importance of the Promisor’s obligation to keep up the promise and the scope of the writ court to interpret the terms of the contract.

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Sri.K.N.Phanindra., learned senior counsel in presenting his argument strenuously urged that in the meeting that was held on the 7^th day of December 2010, the Board had agreed to provide infrastructure facilities by April 2011 but they did not keep up their promise. Learned Senior Counsel also argued by saying that despite several reminders the Board did not commit to their obligations and on the other hand, the Board proceeded to cancel the allotment on the allegation that the petitioner violated the terms and conditions.

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By way of answer to this contention,

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Sri.P.V.Chandrashekar., sought to justify the action of the

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Board on the ground of violation of the terms and conditions of the contract.

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I have considered the rival contentions urged on behalf of the respective parties with utmost care. As already noted above, the whole controversy revolves around the alleged violations of the terms and conditions. Learned counsel appearing on behalf of the Board strenuously urged regarding the violations of the terms and conditions of the contract. To answer this query, the Board must consider the following points.

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Is there a contract? Whether the terms and conditions of the allotment letter amount to the formation of a contract? Can the allotment letter be construed as a concluded contract?

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It is well established that a contract is a promise or set of promises which the law will enforce. The main justification for the legal enforcement of promise is an economic one: trade and commerce would be impossible if the law permitted a promisor to break his promise without, at least, placing him under an obligation to pay compensation for the loss occasioned by his default. But a moral justification has also been put forward as

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the basis of the law of contract, in that the promisor has by his promise created a reasonable expectation that it will be kept. The law, therefore, recognizes a moral duty in the promisor to keep his promise and attempts the realization of the reasonable expectations that have been induced by the making of the promise.

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Common sense suggests that the law has long recognized that the obligations created by a contract are not all of equal importance. It is primarily for the parties to set their value on the terms that they impose upon each other. But it is rare for them to express with any precision what, if anything, they have in their minds; and the resultant ask for inferring and interpreting their intention is, as always, a matter of great difficulty.

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As already noted above, the learned counsel appearing on behalf of the Board strenuously urged that the petitioner has violated the terms and conditions that are stipulated in the allotment letter and did fulfill the contractual obligations. Hence, he sought to justify the cancellation of the allotment. To

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answer this query, let us quickly glance at the allotment letter and subsequent developments.

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The allotment letter is furnished and the same is marked as Annexure-G. It is dated 26.10.2007. I may extract the relevant terms and conditions indicated in the allotment letter. They are as under:

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4(a) A sum of Rs. --- being the balance of 40% of the land cost shall be paid within 30 days from the date of issue of this letter.

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4(b) A sum of Rs.1,63,44,000/- being the balance 60% tentative cost of land shall be paid within 180 days from the date of issue of this letter i.e., on or before 25.4.2008.

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6(a) In case of your failure to pay the amount mentioned in Para 4(b) before the expiry of the time stipulated therein, this offer of allotment stands automatically expired, and the Earnest Money Deposit and 25% of the amount paid by you towards the cost of the land stand automatically forfeited.

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The standard terms and conditions were also indicated in the Annexure appended to the allotment letter.

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The allotment of the land is on twenty years lease basis. The tentative price of the land per acre was fixed at Rs.30,00,000/- (Rupees Thirty Lakh only). A perusal of terms and conditions No.4(a), (b), and 6(a) depicts that 40% of the land cost shall be paid within thirty days from the date of issue of the allotment letter; a sum of Rs.1,63,44,000/- (Rupees One Crore Sixty-Three Lakh Forty-Four Thousand only) being the balance 60% tentative cost of land shall be paid within 180 days from the date of issue of the allotment letter. Condition No.6(a) refers to the automatic expiry of the offer of allotment and forfeiture of the earnest money deposit and 25% of the amount paid towards the cost of the land.

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It is not in dispute that the meeting was held on the 7^th day of December 2010 regarding providing infrastructural facilities. It is interesting to note that due to the delay in providing infrastructural facilities, it was decided to extend the time for the payment of the balance cost of the land without any interest. The Board indeed extended the timeline for the payment of the balance amount. It has given the go-by to the terms and conditions. Under these circumstances, the action of the Board is not justified.

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The main justification for the legal enforcement of the right by the petitioner is that the Board was under an obligation to provide the infrastructure facilities but it failed to keep up the obligation even after the extension of time. In my considered view, the petitioner is right in its justification. There is nothing on record to show that the Board informed the petitioner about the completion of the infrastructure facilities. On the other hand, it went on demanding the payment of the balance amount with interest. And on one fine day, it informed the petitioner that it has canceled the allotment of land in plots No.2 Part & 3 with immediate effect. The Board also informed the petitioner to go over to their office for a refund of the eligible amount as per the rules.

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If the foregoing analysis of the relevant law is correct, it can be safely summarized by stating that the Board has not kept the promise; it has given the go-by to the terms and conditions and agreed to extend the timeline for the payment. Hence, the contention that the petitioner has violated the terms and conditions is satisfactorily hopeless. I may venture to say that the Board has utterly failed to keep up its promise. Hence, the cancellation is bad. Furthermore, the Board in the allotment

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letter, has agreed to refund the eligible amount to the petitioner.

¶160

As a last resort, the learned senior counsel submitted that the Board has caused the delay in providing infrastructural facilities, hence, the petitioner is no longer interested in retaining the plots. On behalf of the petitioner, it is also submitted that a mandamus may be issued directing the Board to refund the 40% of the land cost amounting to Rs.1,06,96,000/- (Rupees One Crore Six Lakh Ninety-Six Thousand only) paid by the petitioner at the rate of 18% per annum.

¶161

The submission made on behalf of the petitioner is placed on record. It is not in dispute that the petitioner has made the payment to the Board and the details are as under:

¶162

EMD Amount	Rs.5,000/-	Annexure-D
Initial Deposit	Rs.2,00,000/-	Annexure-D1
	Rs.61,00,000/-	Annexure-F
	Rs.45,96,000/-	Annexure-F1

¶163

It is pivotal to note that the Board while canceling the allotment of plots has agreed to refund the eligible amount to

¶164

28 -

¶165

WP No. 65254 of 2016

¶166

the petitioner. Because of the delay caused by the Board, the petitioner is no longer interested in retaining the plots. Hence, he has sought to refund 40% of the land cost. I believe the petitioner is justified in seeking 40% of the land cost amounting to Rs.1,06,96,000/- (Rupees One Crore Six Lakh Ninety-Six Thousand only).

¶167

Therefore a Writ of Mandamus is ordered. The second and third respondents are directed to refund the amount of Rs.1,06,96,000/- (Rupees One Crore Six Lakh Ninety-Six Thousand only) with interest at the rate of 6% per annum from the date of deposit till realization.

¶168

Resultantly, the Writ Petition is partly allowed .

¶169

Sd/JUDGE

¶170

TKN

¶171

List No.:19 Sl No.:1

M/S Chantilly Group v. State of Karnataka

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M/S Chantilly Group v. State of Karnataka

Case brief

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