Puravankara Projects Limited Vs the State of Karnataka

KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD, NO.14/3, 2^ND FLOOR RASTROTHANA PARISHAT BUILDING NRUPATHUNGA ROAD BANGALORE - 560 002 BY ITS CHIEF EXECUTIVE OFFICER/EXECUTIVE MEMBER.

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KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD ZONAL OFFICE, K R S ROAD, METAGALLY, MYSORE - 570 016 BY ITS ASSISTANT SECRETARY.

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…RESPONDENTS

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(BY SMT. B.P. RADHA., AGA FOR R1; SRI. SANDESH C.R., ADVOCATE FOR R2; SRI. B.B. PATIL.,ADVOCATE FOR R3 AND R4)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE COMMUNICATIONS DATED 01.09.2015 VIDE ANNEX-T THE LETTER DATD 03.08.2016 VIDE ANNEX-Y, LETTER DATED 24.11.2016 VIDE ANNEX-Y1 AND LETTER DATED 10.02.2017 VIDE ANNEX-Z TO THE W.P AND ETC.

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THIS PETITION, COMING ON FOR FURTHER HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE M.G.S. KAMAL

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ORAL ORDER

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Petitioner is before this Court seeking following reliefs:

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'' (i) Issue a Writ, Order or Direction in the nature of a Certiorari and quash the bearing No. communications dated 01.09.2015 IADB/Mys/15835/2354/2015-16, vide ANNEXURE: T, the letter bearing No.IADB/HO/Allot/Secy2/15835/7150/16-17 dated 03.08.2016 vide ANNEXURE:Y, letter bearing No.IADB/HO/Allot/Secy-2/15835/12282/16-17 dated 24.11.2016 vide ANNEXURE:Y1 and letter bearing No. No.IADB/HO/Allot/Secy-2/15835/16832/16-1710.02.2017. vide ANNEXURE: Z to the Writ Petition:

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(i.a) Issue a Writ, Order or Direction in the nature of Certiorari and quash the letter dated 19.07.2017 bearing No. IADB/HO/Allot/Secy-2/15835/6649/2017-18 vide ANNEXURE: AD to the Writ Petition;

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(ii) Issue a Writ, Order or Direction in the nature of Mandamus directing the Respondent Nos. 1 and 2, to consider the Petitioner's request under their representation dated 29.07.2011 and 26.05.2016 vide ANNEXURES: S3 & W for change of land use: and

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(iii) Consequently, issue a Writ, Order or Direction in the nature of a Mandamus directing the Respondent No. 3 to execute a Lease cum Sale Agreement in aid of the Project proposed to be put up by the Petitioner

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(iv) Pass any other order or writ as this Hon'ble Court may deem fit and necessary under the facts and circumstances of the Petition.''

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Petitioner was allotted an industrial Plot bearing No.3 measuring 6 acres, situated at 2^nd Phase, Hebbal Industrial Area (Hanagalli and Pura Villages of Srirangapatna Taluk), Mysore in terms of letter of Allotment dated 08.06.2007 produced at Annexure-C for the purpose of setting up of industry for manufacture of ''Software Development Centre''. The said letter

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of allotment provided certain terms and conditions to be fulfilled by the petitioner. In that, petitioner was required to pay a sum of Rs.48,00,000/- on or before 08.12.2005 and another sum of Rs.48,00,000/- on or before 08.12.2007. Admittedly, the said amount has been paid on the dates stipulated. It also contemplates petitioner taking possession of the Plot within 30 days which was also complied by the petitioner by taking over possession on 21.06.2007.

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However, petitioner was required to enter into a leasecum-sale agreement within 30 days from the date of taking over the possession of the Plot in terms of standard condition attached to the allotment letter (Condition-1.B), which has not been done. It is this non-compliance by the petitioner which has led to this present stalemate.

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Learned counsel for the petitioner taking this Court through the records submits;

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(a). that though initially the project as approved by the respondent No.2-Karnataka Udyog Mitra, was for the purpose of establishment of Software Development Centre, petitioner sought to change the said purpose into development of a commercial and residential project.

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Several correspondence ensued between the petitioner and the respondent No.3-KIADB, which ultimately culminated in issuance of a communication dated 17.09.2010 produced at Annexure-M, in terms of which respondent No.3-KIADB while considering the request of the petitioner for change of the project granted six months time for implementing the project. By the very same letter it also called upon the petitioner to execute the lease-cum-sale agreement within a period of one month. The said letter also indicated petitioner was required to approach respondent No.2-Karnataka Udyog Mitra and obtain clearance from the State level Single Window Clearance Committee ('Committee' for short) for change of the activities. Thereafter, petitioner followed up the matter with respondent No.2-Karnataka Udyog Mitra. In terms of correspondence produced Annexures-N, P and S series.

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(b). That by letter dated 29.07.2011, produced at Annexure-S3, respondent No.2-Karnataka Udyog Mitra informed the petitioner, that the Committee had taken note of the request of the petitioner company for change of activity from Software Development Centre to Software Incubation Centre, commercial complex and residential development. That the Committee had decided to obtain detailed report and opinion from the respondent No.3KIADB as to whether commercial complex and residential development could be considered in an industrial area.

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(c) As pointed out by the learned counsel for the petitioner, thereafter the matter was put in a cold storage only to be reopened by a letter dated 01.09.2015 issued by the respondent No.3-KIADB, reminding the petitioner of its failure to obtain lease-cum-sale agreement even after lapse of 8 years and 2 months from the date of handing over the possession.

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(d). That by the said letter, the respondent No.3-KIADB sought to cancel the allotment and called upon the petitioner to hand over the original allotment letter enabling them to refund the amount in accordance with law. This led to further correspondence being issued by the petitioner as per Annexures-T and H.

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(e). That this time the petitioner sought for further change of the activity citing the market condition not being conducive for his earlier proposal of the project activity. Petitioner proposed to set-up a warehousing project on the land so allotted. The respondent No.3-KIADB apparently lent its ear to the said request by providing an option for restoration of a land subject to petitioner paying the then tentative market value as could be seen from its communication dated 03.08.2016, 24.11.2016 produced at Annexures-Y and Y1. It however added a caveat that the revised project would be subject to approval by the Single Window Clearance Committee. Not being happy with the said offer, petitioner rushed to this Court filing the above petition.

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On 27.01.2026, upon the submission made by learned counsel for the petitioner, this Court passed the following:

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ORDER

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'' Learned counsel for the petitioner submits that though the petitioner had sought for change of usage of the plot which was originally allotted for the purpose of setting up 'Software Development Center' into a 'commercial and residential complex', petitioner would prefer to implement the project as originally approved. ''

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In furtherance to which, today, an affidavit is filed on behalf of the petitioner, expressing its readiness and willingness to execute and register the agreement as called upon by the respondent No.3-KIADB with an intent to take up and continue the original project as conceived.

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Objection statement to the said affidavit is filed by the respondent No.3- KIADB declining to consider the revised offer, more particularly, referring to Regulation 10(c) and 10(d) of the Karnataka Industrial Areas Development Regulations, 1969.

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Learned counsel for the respondent No.3-Karnataka Industrial Areas Development Board vehemently submits that the petitioner who has changed his stand throughout, is not entitled for any consideration. Inasmuch as, despite showing indulgence by the respondent No.3-KIADB, petitioner has shown no

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inclination to take up the project. He submits that in the facts and circumstances of the matter, letter of allotment has remained only as an offer, not accepted by the petitioner till date. Offer and acceptance has to culminate in the execution of lease-cum-sale agreement, in terms of Regulation 10(d) of the Karnataka Industrial Areas Development Regulations, 1969. That not having been done, there is no concluded contract between the petitioner and the respondent No.3-KIADB. Cancellation of the allotment, withdrawal of the cancellation was subject to conditions which also have not been fulfilled by the petitioner. He submits that the petitioner is therefore not entitled for any relief at the hands of this Court.

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Heard and perused the records.

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Regulation 10(c) and 10(d) of the Karnataka Industrial Areas Development Regulations, 1969, reads as under:

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10. Allotment.-

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'' (c) The Executive Member shall notify such applicant to whom an allotment is made to execute the agreement in Form 3 or 4 or 5 as the case may be with such modification as may be necessary in each case on such date, time and place as may be fixed by the Executive Member and to pay the consideration for the occupancy of the land as fixed by the Board within the time fixed by the Board;

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(d) Failure to execute the agreement or to pay the sums demanded by the Executive Member as per the notice given under Regulation 10(c) will render the allottee to have deemed to have declined the allotment; ''

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Facts narrated above, do not require reiteration. It is not in dispute that land was allotted, possession was taken and the tentative amount/cost was paid by the petitioner as per the terms of letter of allotment. Project originally conceived was for establishment of Software Development Centre, which was given up by the petitioner seeking change of the activity, which aspect of the matter was discussed amongst the respondent No.3-KIADB and respondent No.2-Karnataka Udyog Mitra with continuous flurry of correspondence between the years 2006 and 2011. As already noted above, respondent No.2-Karnataka Udyog Mitra by its communication dated 29.07.2011, though not declined the request, had merely indicated that the report from the respondent No.3-KIADB would be obtained regarding feasibility of the change of project as sought for by the petitioner.

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Petitioner did not pursue the matter thereafter. Nothing seemed to have transpired until issuance of a notice dated 01.09.2015 by respondent No.3-KIADB i.e., after a period of more than four years. Only when it received said notice from the respondent No.3-KIADB, petitioner instead of complying with the

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demand, citing the "market condition not being conducive" for its earlier proposals of the project activities again proposed a new project to set-up a warehousing project on the land so allotted which was also being considered by the he respondent No.3KIADB subject to petitioner paying the then tentative market value. Clearly, petitioner seems to have given up its aspiration for the industrial plot as according to its own communication found at Annexure-T on the premise of same not being conducive for the ‘adverse market conditions’.

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Necessary to note, the object of Karnataka Industrial Area Development Act is to encourage and ensure industrial development in the State of Karnataka. It cannot be a premium for an allottee, to change the purpose to suit its convenience subject to so-called 'market conditions', which is clearly emanating from the correspondence admittedly issued by the petitioners in the present writ petition. Clearly from 2006 till date which is for over 20 years, petitioner has done nothing except holding on to the allotment on its terms and conditions and prevaricating its stand as and when respondent No.3-KIADB called upon to execute the agreement in terms of Regulation 10 as above, which is impermissible. By it’s own conduct Petitioner shall

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