Allowed

M/S Anand Ginning Factory v. the State of Karnataka

Karnataka HC2 Jul 2024WP/14518/2017

Case brief

AI extract

What is this about?

Petitioner challenged a KIADB communication demanding Rs.40,65,940/- towards difference in land cost at present rate plus 20% penalty for regularising an additional one-acre allotment. The Court found the cost determination lacked rationale and disclosed no basis, quashed the communication, barred interest and penalty, and directed re-determination proportionate to adjacent land rates and consider

What did the court decide?

Impugned Annexure-P communication quashed; no interest or penalty payable; KIADB to re-determine land cost proportionate to adjacent land rate and sanction building plan within two months.

M/S Anand Ginning Factory Vs the State of Karnataka — Land Acquisition | Karnataka HC (2024)

¶1

1 - NC: 2024:KHC:25141 WP No. 14518 of 2017

¶2

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

¶3

DATED THIS THE 2^ND DAY OF JULY, 2024

¶4

BEFORE

¶5

THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR

¶6

WRIT PETITION NO. 14518 OF 2017 (GM-KIADB)

¶7

BETWEEN:

¶8

M/S ANAND GINNING FACTORY A PARTNERSHIP FIRM HAVING ITS OFFICE AT PLOT NO.85-P K.I.A.D.B, ALYABAD BLOCK-1 INDUSTRIAL AREA, VIAJAYAPURA 586 104 REPRESENTED BY ITS MANAGING PARTNER SRI. ASHOK G. SAJJAN.

¶9

SRI. SHIVARAJ S/O SRI. ASHOK G. SAJJAN A/A 25 YEARS, PARTNER OF M/S ANAND GINNING FACTORY RESIDING AT SINGHAGI ROAD, BIJAPUR 586 104.

¶10

…PETITIONERS

¶11

(BY SRI. ASHOK B PATIL, ADVOCATE)

¶12

AND:

¶13

Digitally signed by R HEMALATHA Location: HIGH COURT OF KARNATAKA

¶14

THE STATE OF KARNATAKA REPRESENTED BY ITS SECRETARY COMMERCE AND INDUSTRIAL DEPARTMENT GOVERNMENT OF KARNATAKA VIKAS SOUDHA, BANGALORE 560 001.

¶15

THE CHIEF EXECUTIVE OFFICER & EXECUTIVE MEMBER KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD NO.49, KHANIJA BHAVAN 4TH FLOOR, EAST WING RACE COURSE ROAD BANGALORE 560 001.

¶16

2 - NC: 2024:KHC:25141 WP No. 14518 of 2017

¶17

THE SECRETARY KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD NO.29, KHANIJA BHAVAN 4TH FLOOR, EAST WING RACE COURSE ROAD BANGALORE 560 001.

¶18

THE DEVELOPMENT OFFICER KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD, FLAT NO.7/B-3 BK KANGRALI INDUSTRIAL AREA P.B. ROAD, BELGAVI-10.

¶19

…RESPONDENTS

¶20

(BY SRI. MANJUNATH K, HCGP FOR R1; SRI. B B PATIL, ADVOCATE FOR R2 TO R4)

¶21

THIS WP IS FILED UNDER ARTICLES 226 ND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER DTD.7.2.2017 IN ORDER PASSED BY THE R-4 VIDE ANNEXURE-P TO THE W.P. DIRECT THE R-2 TO 4 TO APPROVE THE BUILDING PLAN AS PER THE LETTER DTD.26.7.2013 VIDE ANNEX-M.

¶22

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

¶23

ORDER

¶24

The petitioner, intending to establish an industry, sought the allocation of 4 acres of land in the industrial layout of Vijayapura. Initially, 2 acres of land were allotted to the petitioner, and a leasecum-sale agreement was executed on October 6, 2010, subject to the terms and conditions outlined in the agreement. Subsequently, an additional 1 acre of land was allotted to the petitioner in the same industrial layout, and an additional deed was executed on September 24, 2011. As per the lease-cum-sale agreement, the

¶25

3 - NC: 2024:KHC:25141 WP No. 14518 of 2017

¶26

petitioner was required to implement the project within two years from the date of possession of the industrial plots.

¶27

The petitioner asserts that a plan for sanctioning the construction on the additional allotted land measuring 1 acre was submitted on July 26, 2013. However, the Karnataka Industrial Area Development Board (KIADB) canceled the additional allotment on July 26, 2014, citing that the petitioner had not obtained the necessary clearance from the competent authorities for setting up the industry on the additional land. This cancellation prompted the petitioner to approach the Court in W.P.No.39141/2014. The Court, by order dated September 12, 2014, allowed the writ petition, quashing the communication dated July 26, 2014, which withdrew the allotment, stating that the withdrawal was without prior notice to the petitioner, violating the principles of natural justice.

¶28

Following the Court's decision, the KIADB sought a legal opinion and resolved not to cancel the allotment, recognizing that the petitioner had utilized the additional land. However, it decided to collect the difference in the land cost at the present rate along with a 20% penalty. Consequently, a communication dated February 7, 2017, was issued, calling upon the petitioner to pay a sum of Rs. 40,65,940/- to regularize the allotment. The petitioner filed the present petition taking exception to this demand.

¶29

The learned counsel for the petitioner argues that there is no basis for fixing the present market value of the additional

¶30

¶31

NC: 2024:KHC:25141 WP No. 14518 of 2017

¶32

allotment at Rs. 40,65,940/-. Furthermore, there is no provision for imposing a penalty on the difference in the land cost based on the current allotment rate. The petitioner also argues that for the initially allotted 2 acres, the current allotment rate was determined at Rs. 16,21,349/-, whereas for the additional 1 acre, it was arbitrarily determined at Rs. 26,25,085/-, which is discriminatory.

¶33

The learned counsel for the respondents-KIADB submits that the petitioner did not implement the project within the stipulated time. After determining the current allotment rate, the KIADB rightly imposed the penalty, which does not warrant interference.

¶34

Arguments from both parties were duly considered.

¶35

Initially, 2 acres of land in plot No.85-P in Sy. No.218 of Alyabad Industrial Area was allotted, and a lease-cum-sale agreement was executed on October 6, 2010. Subsequently, an additional 1 acre abutting 2 acres of land was allotted, and an additional deed was executed on September 24, 2011. The respondent-KIADB later canceled the allotment, stating that the petitioner had not obtained the necessary clearance. This cancellation was quashed by the Court, deeming it a violation of natural justice.

¶36

Before issuing the impugned communication, calling upon the petitioner to pay Rs.40,65,940/- towards the difference in land cost at the present allotment rate along with a 20% penalty, the KIADB produced file notes indicating that the land cost was

¶37

5 - NC: 2024:KHC:25141 WP No. 14518 of 2017

¶38

determined at Rs.26,25,085/-. This included the earnest money deposit and Slum Cess, totaling Rs.26,35,703/-, from which Rs.5,00,000/- already paid by the petitioner was deducted. The current allotment rate was thus determined at Rs.21,35,703/-. Interest from September 24, 2011, to November 3, 2016, amounted to Rs.14,05,022/-, and a penalty of Rs.5,25,017/- was imposed for the 2 acres allotted in 2010.

¶39

For the 2 acres of adjacent land allotted in 2010, the current allotment rate was determined at Rs.26,25,085/- after deducting the initial payment, resulting in Rs.16,21,349/-. However, in the present case, the cost determination at Rs.26,25,085/- for the additional 1 acre lacks logic and rationale. The impugned communication does not disclose the basis for assessing the difference in land cost, making it arbitrary, discriminatory, and legally unsustainable.

¶40

Accordingly, the writ petition is allowed. The impugned communication dated December 7, 2017, issued by the 4th respondent at Annexure-P, is hereby quashed.

¶41

The KIADB is at liberty to re-determine the land cost and collect the difference proportionate to the adjacent land. The petitioner is not liable to pay interest or any penalty as no proceedings were initiated against the petitioner for not implementing the project within the stipulated time.

¶42

¶43

NC: 2024:KHC:25141 WP No. 14518 of 2017

¶44

Respondents No.2 to 4 are directed to consider the representation dated July 26, 2013, submitted by the petitioner at Annexure-M and pass appropriate orders within two months regarding the sanctioning of the building plan. The sale deed is to be executed in favor of the petitioner, subject to the petitioner depositing the arrears of the difference in the cost of land within two months from the date of re-calculation by the KIADB.

¶45

Respondents are to raise the demand for the difference in the land cost within one month from the date of receipt of a certified copy of this order.

¶46

Sd/JUDGE

¶47

M/S Anand Ginning Factory v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

M/S Anand Ginning Factory v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Roshni Mathan Pereira Vs State of Karnataka

K Ramesh Sastry Vs the Director General & Inspector General of Police

Karnataka Right to Information (R) Vs the Station House Officer

Sri Kalabyraweshwara Transport Vs Union of India

Sri. Lohith.L Vs the Commissioner

M v Bhaskar Vs the State of Karnataka