M/S. 24/7 Customer Pvt. Ltd. Vs State of Karnataka

CHIEF EXECUTIVE OFFICER AND EXECUTIVE MEMBER KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD 14/3, 2^ND FLOOR, R P BUILDING NRUPATHUNGA ROAD BENGALURU-560 001.

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…RESPONDENTS

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(BY SMT. B.P. RADHA., AGA FOR R1; SRI. SOMASHEKAR T., ADVOCATE FOR SRI. B.B. PATIL., ADVOCATE FOR R2 & R3)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE SAID LETTER DATED 01.04.2019 ANNEXURE-P NO.KIADB/HC/ALLOT/SEC-1/20197/150/2019-20 ISSUED BY R-2 DENYING REFUND OF RS.85,50,000/- (RUPEES EIGHTYFIVE LAKH FIFTY THOUSAND ONLY) AND ETC.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, 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 who had applied for allotment of 9 acres or 36,422 square meters of land in the industrial area of Bengaluru, IT and BT Park, Devanahalli, Bengaluru North District, is before this Court seeking following reliefs;

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1. Issue a writ of certiorari or any other appropriate writ, order or direction quashing the said Letter dated 01.04.2019 in NO:KIADB/HO/Allot/secy-1/20197/150/2019-20 (Annexure-P) issued by Respondent No.2 denying refund of

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Rs.85,50,000/- (Rupees Eighty-Five Lakh Fifty Thousand Only);

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2. Issue a Writ in the nature of Mandamus, or any other appropriate writ, order or direction, directing the Respondent Nos.2 and 3 to refund the Petitioner a sum of Rs.85,50,000/(Rupees Eighty-Five Lakh Fifty Thousand Only) with interest at 24% P.A., from the date of receipt till its payment to the Petitioner;

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3. Issue a Writ in the nature of Mandamus, or any other appropriate writ, order or direction, directing the Respondents No.2 and 3 to pay to the Petitioner a sum of Rs.11,03,79,551/- (Rupees Eleven Crores Three Lakhs Seventy Nine Thousand Five Hundred and Fifty One Only) being interest at 12% P.A., calculated on the total amount of Rs.17,10,00,000/- from the date of payment of monies by the Petitioner till the date of refund;

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4. Grant such other and further relief/s, including costs of this Petition, as this Hon'ble Court deems fit, in the facts and circumstances of the case, in the interests of justice and equity."

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That upon the application made by the petitioner for allotment of land, respondent No.3 by Allotment Letter dated 30.08.2012 had allotted full extent of land measuring 9 acres in Plot Nos.31 and 32-P of Bengaluru IT Park at Devanahalli in favour of the petitioner for the purpose of establishment of 'Contact Centre Solutions (BPO)' subject to certain Standard Terms and Conditions attached to the Letter of Allotment. That petitioner in furtherance to said allotment and in compliance with the terms of payment in aggregate paid a sum of Rs.17,10,91,055/- before the time stipulated under the Letter

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of Allotment dated 30.08.2012. Respondent No.2, having received the entire payment made by the petitioner, did not initiate any action in handing over the possession of the entire extent of allotted land to the petitioner. This resulted in several correspondence being exchanged between the parties.

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It is contented that the respondent/KIADB by its letter dated 03.10.2016 had admitted that an extent of 1,300 square meters forming part of the land allotted to the petitioner in Sy.No.7 (JMC Block No. 14) of B.K.Palya village had not been acquired. That when the petitioner inspected and surveyed the plot, it was found that more than 1.14 acres being the corner portion of the plot was in possession of some third parties duly enclosed by a compound wall. Petitioner had not only paid the entire amount with respect to the land which was not even acquired by the KIADB, but had also paid additional 10% of the value of the plot as the same being the corner plot.

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That being aggrieved by the inaction on the part of the respondent Nos. 2 and 3, a letter dated 08.02.2017 was issued by the petitioner, requesting them for a joint inspection in the presence of petitioner. Petitioner thereafter issued

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another letter dated 31.03.2017 to respondent No.2 pointing out the extent of more than 1 acre land was yet to be acquired inasmuch as the proposed project envisages employing more than 9000 people in the Information Technology Enabled Services for Banking and financial sectors which required stringent physical and information security, and the plot allotted less the area, as promised was not suitable.

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Though, the petitioner had repeatedly requested for a joint inspection and survey, the same was not responded to by the respondent Nos.2 and 3. In that view of the matter, the petitioner had by letter dated 26.09.2017 sought for cancellation of the allotment and refund of entire amount paid. That without refunding the entire amount paid by the petitioner, the respondents forfeited 5% of the entire amount which is about Rs.85,50,000/- and returned only a balance sum of Rs.16,24,50,000/- to the petitioner via RTGS on 21.05.2018.

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Being aggrieved by the aforesaid act of respondent No.2 in denying to refund the entire amount petitioner is before this Court.

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Sri. Srinivas Raghavan V, learned Senior Counsel

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appearing Sri. Sanjay Nair for the petitioner submits that petitioner was constrained to seek for cancellation of the allotment and refund of the entire amount as the plot which was allotted was not to the requirement of the petitioner. He submits though the petitioner was promised and assured allotment of 9 acres of land, and an area less than that was not practical and conducive for the purpose of implementing project of the petitioner, it had sought for refund of the amount. The refund of the amount paid was for the bona fide reasons and the respondent/ authorities have forfeited 5% of the amount which is arbitrary and malafide . Hence, seeks for allowing of the petition.

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In response, Sri. Somashekar T, learned counsel appearing for Sri. B.B.Patil for the respondent Nos.2 and 3/KIADB submits that the grounds urged by the petitioner justifying refund of the amount and the question of suitability of land are only for the purpose of maintaining the petition. He submits that on inspection by the respondent/KIADB, it was found that the land allotted to the petitioner was very much

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suitable for the purpose of construction of the building to the requirements of the petitioner.

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Further taking this Court through the Standard Conditions attached to the Allotment Letter dated 30.08.2012 produced at Annexure-C, more particularly, clause 13 under the headings 'Standard Conditions Attached to the Allotment Letter', he submits that since the petitioner had voluntarily surrendered the plot allotted to it, in terms of the said conditions, the respondent was entitled to forfeit 2% of the amount paid. He further refers to the Board Resolution dated 14.08.2015 produced at Annexure-R10 to the statement of Objection and contend that the respondent/KIADB has resolved to enhance the amount of forfeiture from 2% to 5%. That followed by the same, a Circular also has been issued on 31.08.2015 providing for forfeiting 5% instead of 2% of the amount remitted. Therefore, he submits that the amount which is withheld by the respondent/KIADB in a sum of Rs.85,50,000/- is neither arbitrary nor malafide , inasmuch as the same is traceable to the very terms of the allotment and the subsequent resolution passed by the respondent/KIADB.

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Therefore, he insists no grounds are made out for refund of the entire amount. Hence, seeks for dismissal of the petition.

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Heard. Perused the records. The only question that requires consideration is;

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"Whether under the factual circumstances, the respondent/KIADB could insist for forfeiture of 5% of the amount paid by the petitioner".

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There is no dispute of the fact that the petitioner was entitled for allotment of 9 acres of land in plot Nos.31 and 32-P of Bengaluru IT Park, at Devanahalli for the purpose of setting up of Contact Centre Solutions (BPO). Though the allotment was for 9 acres of land, Respondent/KIADB could not hand over the possession of the entire extent of land as portion of the land had not been acquired. Though there is a dispute with regard to the extent of land which has not been acquired, the fact remains that the possession of entire 9 acres of land has not been handed over to the petitioner.

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Clause 13 of the Standard Terms of Allotment reads as under;

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"13. If the allottee surrenders the plot allotted to him voluntarily, before cancellation of allotment, or, resumption of land by the Board for violation of terms and

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conditions of allotment, 2% of the amount paid towards the cost of the land entire amounts paid towards interest, penal interest, penalties and earnest money deposits shall be forfeited to the Board."

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The resolution which is sought to be relied upon by

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the respondent/KIADB is produced at Annexure-R10, in which following is provided;

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"To forfeit 5% of the amount remitted instead of 2% in the cases where the allottees voluntarily surrender the land after issuance of possession certificate due to inability to implement the project."

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Though under the letter of allotment as well as the resolution referred to above, there is a provision and scope for respondent/ KIADB to forfeit portion of the amount while refunding the amount paid by the allottee, it clearly provides that such forfeiture would be only in the event of the allottee surrendering the land after issuance of the possession certificate.

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In the instant case by letter dated 03.10.2016, respondent/KIADB had indeed called upon the petitioner to take possession of the Plot Nos. 31 and 32-P. The said letter also clarifies that out of 9 acres of land an extent of 1,300

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square meters is yet to be acquired by the respondent and the petitioner was called upon to take possession of the remaining extent of the land which is 35,123 square meters.

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In response to the said letter, the petitioner had issued a communication letter dated 26.09.2017 expressing its inability to utilise the plot lesser than what was allotted. In that it is specifically pleaded that at the time of allotment, petitioner had only 3000 persons employed and it wished to increase the said numbers to 6000 and unless the possession of entire extent of land as allotted was handed over, the project would not be feasible. Another correspondence dated 13.08.2018 produced at Annexure-M further indicates that the petitioner has in categorical terms indicated that the land less than 9 acres was unavailable. Hence sought for refund of the entire sum of Rs.17,10,91,055/-. This demand for refund of the entire amount paid by the petitioner and forfeiture of 5% has led to the present petition.

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As already noted above, Clause 13 of the Allotment Letter provides for forfeiture of the amount in the event of

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allottee seeking cancellation of the Allotment after handing over the possession which was sought to be revised by the respondent/KIADB enhancing from 2% of amount to 5%. Act of respondent/ KIADB in forfeiting the amount, whether 2% or 5% would have been justified if it had delivered the possession of entire extent of land and thereafter petitioner had failed either to implement the project or to make the payment, as the case may be.

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Facts narrated above indicate that the petitioner

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though was promised allotment of 9 acres of land, an extent of 1.14 acres as per the petitioner and an extent of 1,300 square meters as per the respondent/KIADB was yet to be acquired. Petitioner expressed its inability to take the possession, though called upon by the respondent/KIADB, on the premise of the implementation of project in the land less than 9 acres would be unavailable. Clearly the circumstances providing for forfeiture of amount are not existing in the instant case and the petitioner has soon after receiving intimation from Respondent/ KIADB for taking possession of the land has brought to its notice regarding inability to take possession. In that view of

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the matter, this Court do not see any reason justifying the action of the respondent/KIADB in forfeiting the amount.

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At this juncture, learned Senior counsel appearing for the petitioner brings to the notice of the Court the order passed by the Division Bench of this Court dated 04.04.2025 in the case of Karnataka Industrial Area Development

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Authority Another vs. M/s Sangamesh Sugars Ltd in W.A.No.100027/2022, in terms of which the Division Bench of this Court, under similar facts and circumstance of the matter, directed the respondent /KIADB to refund the entire amount and also directed for payment of interest at 9% per annum from the date when the respondent/KIADB had refused to refund the entire amount. Referring to the same, learned Senior counsel submits that petitioner also being similarly situated as that of the petitioner in the said matter, seeks for direction of respondent/ KIADB to pay the interest on the amount forfeited on and from the date of forfeiture.

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Since this Court has already held that respondent/ KIADB could not have forfeited the amount as sought to be

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done in the instant case, the respondent/ KIADB is required to pay interest at 9% on the amount retained on and from 21.05.2018. It is made clear as against the payment of Rs.17,10,91,055/the respondent/KIADB has refunded Rs.16,24,50,000/- and has retained only Rs.85,50,000/-. The refund as noted above has been made on 21.05.2018. Therefore, the petitioner is entitled for the interest at 9% on and from the date from which the amount of Rs.85,50,000/was retained.

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With the above observation, petition is disposed of.

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Sd/(M.G.S. KAMAL) JUDGE

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RU, List No.: 1 Sl No.: 15

M/S. 24/7 Customer Pvt. Ltd. v. State of Karnataka

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M/S. 24/7 Customer Pvt. Ltd. v. State of Karnataka

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