Allowed

A.R. Jatrate S/O. Ramachandra Jatrate v. Karnataka Industrial Areas

Karnataka HC10 Jul 2024WP/79213/2013

Case brief

AI extract

What is this about?

The High Court quashed an order terminating a lease agreement for failing to utilize an industrial plot, finding the authority violated Section 34-B of the Karnataka Industrial Areas Development Act by skipping mandatory inquiry steps. The matter was remitted to the respondent to redo the enquiry.

What did the court decide?

The writ petition allowed; impugned order dated 23.05.2013 quashed; matter remitted to respondent No.2 to redo the enquiry under Section 34-B of the 1966 Act within three months.

A.R. Jatrate S/O. Ramachandra Jatrate Vs… — Contract and Commercial Disputes | Karnataka HC (2024)

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NC: 2024:KHC-D:9552 WP No. 79213 of 2013

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 10^TH DAY OF JULY, 2024 BEFORE

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THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO. 79213 OF 2013 (GM-KIADB)

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BETWEEN:

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SRI. A.R. JATRATE, S/O. RAMACHANDRA JATRATE, AGED 60, OCC: BUSINESS, R/O. PLOT NO.77, VIDYAGIRI, BELGAUM.

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…PETITIONER

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(BY SRI. RAMACHANDRA MALI, ADVOCATE)

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AND:

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KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD, 143/3, 2^ND FLOOR, R.P. BUILDING, NRUPTHUNGA ROAD, BANGALORE-01, REP. BY ITS CHIEF EXECUTIVE OFFICER & EXECUTIVE MEMBER.

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YASHAVANT NARAYANKAR

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Location: HIGH COURT OF KARNATAKA, DHARWAD BENCH

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THE DEVELOPMENT OFFICER, KIADB BELGAUM, PLOT NO.7/B-3, BK KANGRALI INDUSTRIAL AREA, P.B. ROAD, BELGAUM-10.

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(BY SMT. SHARMILA M. PATIL, ADV. FOR R1 & R2)

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…RESPONDENTS

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE RECORDS IN THE IMPUGNED ORDER DATED: 23/05/2013 AND ISSUE A WRIT OF CERTIORARI OR ANY OTHER WRIT OR ORDER IN THE LIKE NATURE QUASHING THE IMPUGNED ORDER DATED: 23/05/2013 MADE IN NO. IADB/BGM/297/2013-14 PASSED BY THE 2^ND RESPONDENT HEREIN PRODUCED AT ANNEXURE-J AS THE SAME BEING ARBITRARY, ILLEGAL AND NOT SUSTAINABLE IN LAW AND ETC.

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THIS PETITION, COMING ON FOR FINAL HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

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2 - NC: 2024:KHC-D:9552 WP No. 79213 of 2013

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ORDER

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1. The petitioner is assailing the impugned order dated 23.05.2013 passed by respondent No.2 vide Annexure-J, terminating the lease agreement dated 10.08.2005 on the ground that, the petitioner has failed to utilize the industrial plot allotted to him.

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2. The petitioner assailing the said order has averred in the petition that, with great difficulty he has set up a small scale industry unit. The petitioner claims that, despite the financial constraints he was able to start the unit during 2008 by investing huge amounts. The petitioner contends that, he has availed loan. To substantiate that, the industrial unit is in operation, the petitioner has produced photographs vide Annexures-G to G4. The petitioner contends that, he is engaged in manufacturing and production of electroplating products. Petitioner is challenging the action of respondent No.2 in arbitrarily terminating the agreement on the premises that, the petitioner has failed to utilize the land and establish the industrial unit within 72 months from the date of handing over the possession of the land.

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3 - NC: 2024:KHC-D:9552 WP No. 79213 of 2013

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3. The respondents on receipt of notice issued by this Court, have filed statement of objections and seriously refuted the averments made in the petition. The respondents on the contrary alleged that, the petitioner has not completed the construction of civil work from the date of allotment or issuance of possession certificate. The learned counsel for the respondent No.2 has filed a memo and has produced photographs along with rejoinder.

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4. The respondents claim that, a small portion is utilized by the petitioner while substantial portion of the industrial plot has gone unutilized and therefore, this amounts to clear breach of terms and conditions of the lease agreement. The respondents contend that, a notice under Section 34-B was issued to the petitioner calling upon the petitioner to remedy the breaches within stipulated period of 120 days. The respondents have justified the order on the premises that, inspite of issuing a show-cause notice, the petitioner has failed to remedy the breaches indicated in the notice. The petitioner while countering statement of objections, has filed rejoinder and have contended that, the

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respondents having issued notice under Section 34-B(1) of the Karnataka Industrial Areas Development Act, 1966, (for short ‘1966 Act’) were required to proceed under Subclauses 2 and 3 of Section 34-B of 1966 Act. Respondents have failed to comply the mandate under sub-clause 2 and 3 of Section 34-B of 1966 Act. The action of respondent No.2 in ordering resumption of a portion of the industrial site allotted clearly contravenes the mandate under Section 34-B of 1966 Act. To further substantiate that, the petitioner is running a full-fledged industrial unit, and it is fully operational, several photographs are produced indicating the production and also the stocks, supported by electricity bills to the tune of Rs.1,61,084/- for the month of July, 2021. Similar electricity bills are also furnished to substantiate that the petitioner’s industrial unit is fully operational and the entire portion allotted to the petitioner is utilized.

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5. Heard the learned counsel for the petitioner and

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learned standing counsel appearing for the respondent Nos.1 and 2.

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5 - NC: 2024:KHC-D:9552 WP No. 79213 of 2013

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6. The impugned order is clearly in contravention of the procedure contemplated under Section 34-B of the 1966 Act. Sub-clause 2 of Section 34-B of the 1966 Act mandates that, in the event, the allottee fails to remedy the breaches within time, pursuant to the notice issued under sub-clause 1 of Section 34-B of 1966 Act, the authority is required to affod an opportunity to allottee to show cause as to why the possession of the premises or part thereof of the industrial tenement should not be resumed. It is only after considering explanation, if any, offered by the allottee under sub-clause 3 of Section 34-B of 1966 Act, the authority after affording an opportunity of being heard, can pass appropriate orders. The grounds urged in the rejoinder are not seriously refuted by the respondents. On meticulous examination of the order under challenge, there is infraction of the mandate provided under sub-clause 2 and 3 of Section 34-B of the 1966 Act.

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7. Be that as it may, the latest photographs which are produced along with the Rejoinder indicate that, the petitioner prima-facie has utilized the entire industrial plot. As the order under challenge is clearly in violation of the

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mandate provided under sub-clause 2 and 3 of Section 34-B of the 1966 Act, this Court deems it fit to remit back the matter to the respondent No.2.

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8. Respondent No.2 shall take cognizance of the grounds urged in the writ petition and rejoinder. After affording opportunity to the petitioner, respondent No.2 is required to redo the entire enquiry contemplated under Section 34-B of the 1966 Act.

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9. For the foregoing reasons, this Court passes the

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following:

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ORDER

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(i) The writ petition is allowed;

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(ii) The impugned order dated 23.05.2013 passed by the respondent No.2 vide Annexure-J, is hereby quashed. The matter stands remitted back to the respondent No.2;

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(iii) The respondent No.2 shall hear the petitioner and after examining the materials that would be placed by the petitioner, shall pass appropriate orders strictly adhering to the

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mandate provided under Section 34-B of the 1966 Act;

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(iv) This exercise shall be completed within a period of three months from the date of receipt of the order;

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(v) It is open for the respondent No.2 to hold an enquiry and ascertain whether the petitioner has sublet the site or portion of the site, by contravening the conditions provided in the lease-cum-sale agreement;

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(vi) Since the petition is disposed of, pending applications if any do not survive for consideration. Accordingly, the same are dismissed.

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Sd/JUDGE

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SVH

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List No.: 1 Sl No.: 39

A.R. Jatrate S/O. Ramachandra Jatrate v. Karnataka Industrial Areas

Case brief

What is this about?

What did the court decide?

A.R. Jatrate S/O. Ramachandra Jatrate v. Karnataka Industrial Areas

Case brief

What is this about?

What did the court decide?

What the court decided

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