Karnataka High Court
M/S Perk Inn International Ltd vs Karnataka Industrial Areas Developm on 17 January, 2025
Author: Hemant Chandangoudar
Bench: Hemant Chandangoudar
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NC: 2025:KHC:1994
WP No. 31327 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 17TH DAY OF JANUARY, 2025
BEFORE
THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR
WRIT PETITION NO. 31327 OF 2024 (GM-KIADB)
BETWEEN:
M/S PERK INN INTERNATIONAL LTD
PLOT NO.2 AND 32, KIADB INDUSTRIAL AREA
PHASE-2, ELECTRONIC CITY PHASE II,
BENGALURU-560 100, REPRESENTED BY
IT'S MANAGING DIRECTOR, MR K.KARUNAKARAN,
REGISTERED UNDER COMPANY ACT, 1956,
REGISTERED OFFICE:
#3/555, KARUNAI NAGAR, JAGADEVIPALAYAM,
PO BARUGUR, TK, KRISHNAGIRI DISTRICT,
TAMIL NADU - 635 203.
...PETITIONER
(BY SRI. ISMAIL MUNEEB MUSBA, ADVOCATE)
AND:
1. KARNATAKA INDUSTRIAL AREAS
DEVELOPMENT BOARD (GOVT OF KARNATAKA
Digitally signed by B UNDERTAKING), #49, 4TH AND 5TH FLOOR,
K
MAHENDRAKUMAR 'EAST WING', KHANIJA BHAVAN,
Location: HIGH
COURT OF
KARNATAKA
RACE COURSE ROAD, BENGALURU - 560 001,
DHARWAD BENCH
Date: 2025.01.21
REPRESENTED BY ITS CHAIRMAN.
07:28:56 +0530
2. THE CHIEF EXECUTIVE OFFICER AND
EXECUTIVE MEMBER ,
KARNATAKA INDUSTRIAL AREAS
DEVELOPMENT BOARD (GOVT OF INDIA
UNDERTAKING), #49, 4TH AND 5TH FLOOR,
'EAST WING', KHANIJA BHAVAN,
RACE COURSE ROAD, BENGALURU - 560 001.
3. THE EXECUTIVE ENGINEER -2,
KIADB ZONAL OFFICE NO.14/3,
KIADB ZONAL OFFICE, ARAVINDA BHAVAN,
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NC: 2025:KHC:1994
WP No. 31327 of 2024
NT ROAD, BENGALURU-560 001.
4. THE SECRETARY-2
KARNATAKA INDUSTRIAL AREAS DEVELOPMENT
BOARD, #49, 4TH AND 5TH FLOOR, 'EAST WING',
KHANIJA BHAVAN, RACE COURSE ROAD,
BENGALURU - 560 001.
5. THE CHIEF SECRETARY TO GOVT
GOVT OF KARNATAKA.
ROOM NO. 110, GATE II, M S BUILDING,
AMBEDKAR VEEDHI, BENGALURU-560001.
6. THE DEPUTY SECRETARY TO GOVT (OPPN-2)
ROOM NUMBER 227, 2ND FLOOR, MS BUILDING,
BENGALURU -560001.
7. STATE HIGH LEVEL CLEARANCE
COMMITTEE (SHLCC), MANAGED BY
UDYOG MITRA KHANIJA BHAVAN,
RACE COURSE ROAD, BENGALURU-560 001.
8. THE LEGAL ADVISOR,
KARNATAKA INDUSTRIAL AREAS
DEVELOPMENT BOARD, #49, 4TH AND 5TH FLOOR,
'EAST WING', KHANIJA BHAVAN,
RACE COURSE ROAD, BENGALURU - 560 001.
9. THE PRINCIPLE SECRETARY
LAW DEPARTMENT, GROUND FLOOR,
VIDHANA SOUDHA, BANGALORE 560001.
...RESPONDENTS
(BY SRI. B.B.PATIL ASSOCIATES FOR R1 TO R4 AND R8;
SRI.M.R.PATIL, HCGP FOR R5, R6 AND R9)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO, QUASH THE
ORDER DATED 24/10/2024, PASSED BY THE R2 I.E. CHIEF
EXECUTIVE OFFICE AND EXECUTIVE MEMBER, KIADB UNDER
SECTION 34-B(3) OF KIADB ACT, DIRECTING THE PETITIONER TO
SURRENDER POSSESSION OF THE LAND IN RESPECT OF PLOT
NO. 32 AND PLOT NO. 2 SITUATED AT ELECTRONIC CITY, 2ND
PHASE INDUSTRIAL AREA, BENGALURU RURAL DISTRICT, ON OR
BEFORE 30 DAYS, PRODUCED HERETO AS ANNEXURE-A, ALONG
WITH A COVERING LETTER DATED 24/10/2024 (RECEIVED ON
07/11/2024) PRODUCED HERETO AS ANNEXURE-B.
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NC: 2025:KHC:1994
WP No. 31327 of 2024
THIS PETITION, COMING ON FOR ORDERS, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR
ORAL ORDER
The petitioner, an allottee of the lands acquired under the KIAD Act, 1966, seeks a writ of certiorari to quash the order dated 24.10.2024 issued by respondent No. 2 under Section 34-B(3) of the KIAD Act. This order directs the petitioner to surrender possession of Plot No. 32 and Plot No. 2, located in Electronic City, 2nd Phase Industrial Area, Bengaluru Rural District, within 30 days. The order and the accompanying cover letter are attached as Annexures A and B.
2. The lands involved in this petition are a total of 16 acres and 22¾ guntas and are described in detail below:
• Plot No. 32: A parcel of land measuring 11 acres and 15 ¾ guntas (46,109 sq. meters) situated in Sy. Nos.
36/1A(P), 37/1C(P), 37/2(P), 37/1(D), 37/1(E), 37/1(E2), 38/1A(P), 38/1B(P), 43(P), and 39(P).
• Plot No. 2: A parcel of land measuring 5 acres and 7 guntas (20,930 sq. meters) situated in Sy. Nos. 36/1A(P), 36/1B(P), 37/1B(P), 37/1C(P), 37/2(P), 43(P), and 37/1A(P) in Konappanna Agrahara Village, Begur Hobli, Bangalore South Taluk, Electronic City - 2nd Phase.
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3. Plot No. 2 originally belonged to the promoter of teh petitioner and was re-allotted under a lease-cum-sale agreement dated 30.11.1998 after the petitioner paid the required service charge. The remaining portion of land in Plot No. 2 was allotted to the petitioner at a rate of INR 20,00,000 per acre under another lease-cum-sale agreement dated 22.02.2000. The entire land, measuring 16 acres and 22¾ guntas, was acquired by the State and vested in the Karnataka Industrial Areas Development Board (KIADB) under Section 28(8) of the KIAD Act, 1966.
4. The lands were allotted to the petitioner for establishing a Hotel and Resort Project, to be completed within two years, with deadlines of 30.11.2000 and 22.02.2002, respectively. However, the petitioner failed to complete the project within the stipulated time. As a result, the KIADB resumed the lands in Plot No. 32 and Plot No. 2 through an order dated 07.05.2004. This resumption order was later quashed by this Court in W.P. No. 21984/2004 on 04.08.2005. The Court noted that the petitioner's replies to the show-cause notices preceding the resumption order were not properly considered. The Court also directed the Board to reconsider the petitioner's willingness to complete the project within 24 months.
5. The Board granted the petitioner a two-year extension through an order dated 06.12.2005. At the petitioner's request, the Board executed a fresh lease-cum-sale agreement in July 2006, replacing a supplementary agreement dated 09.03.2001, which had been executed in favor of the petitioner's sister company. This -5- NC: 2025:KHC:1994 WP No. 31327 of 2024 was done for Plot No. 2 in favor of M/s. Karunai Software International Ltd., as approved by the State Level Single Window Clearance Committee (SLSWCC) in its meeting on 27.12.1999.
6. After the extended deadline to complete the project expired on 31.12.2007, the Board issued a notice dated 02.06.2018 under Section 34-B(1) of the KIAD Act, giving the petitioner 90 days to address the breaches. Later, on 06.03.2020, the Board issued another notice, allowing the petitioner an opportunity for a personal hearing.
7. On 03.05.2020, the petitioner attended the hearing and requested respondent No. 2 to issue a revised certificate of possession and execute a revised lease-cum-sale agreement for the reduced land extent. The petitioner also requested a nine-year extension or the maximum permissible period under the single-unit scheme for infrastructure development projects, as legally allowed. This request was made on the grounds that the project had already been approved as an Integrated Infrastructure Development Project during the 24th SHLCC meeting held on 24.01.2011.
8. However, based on the Development Officer's report dated 03.09.2022, which highlighted the non-utilization of the land despite the extended period and building approval granted on 01.08.2007, the Board issued another resumption order under Section 34-B(3) of the KIAD Act on 19.11.2022. This resumption order was challenged before this Court in W.P. No. 940/2023. The Court, in its order dated 31.01.2023, remanded the matter for fresh -6- NC: 2025:KHC:1994 WP No. 31327 of 2024 adjudication and directed the Board to restart the process from the stage of Section 34-B(1) of the KIAD Act.
9. Following this, the Board issued a detailed show-cause notice dated 03.02.2024 under Section 34-B(2) of the KIAD Act, requiring the petitioner to address the breaches of the lease-cum- sale agreement and supplementary agreements within 30 days concerning Plot No. 2.
10. Respondent No. 4, Secretary-2 to the Board, submitted a report dated 24.06.2024 stating that, apart from unauthorized hoardings used for advertisements, Plots No. 32 and 2 were physically vacant. On 25.06.2024, the petitioner provided a timeline of events to the Board, explaining the reasons for the non- implementation of the project.
11. After reviewing the petitioner's reply and the reports submitted by the Executive Engineer and Secretary-2, Respondent No. 2 concluded that the failure to implement the approved project was due to intentional delay and negligence by the petitioner. It was further noted that the petitioner had not communicated with the Board or any authority to request an extension after the original deadline of 31.12.2007. The petitioner also failed to provide a satisfactory explanation for the non-implementation of the project and the non-utilization of the plots for 27 years.
12. As a result, Respondent No. 2 issued the impugned resumption order dated 24.10.2024, directing the petitioner to -7- NC: 2025:KHC:1994 WP No. 31327 of 2024 surrender possession of the lands within 30 days to Respondent No. 3, the Executive Engineer, KIADB Zonal Office.
13. Shri Ismail M. Musba, counsel for the petitioner, submitted that the petitioner successfully challenged the resumption order dated 07.05.2004 regarding both plots in W.P. No. 21984/2004. Subsequently, the respondent-Board extended the time to implement the project, but this extension was communicated to the petitioner only on 31.12.2005. The extension was issued without disclosing that the National Highway Authority of India (NHAI) had issued a preliminary notification dated 10.10.2005 to acquire 19,731 sq. m. of land in Plot No. 32 and 1,300 sq. m. in Plot No. 2 for widening NH-7 and constructing an entry-exit loop road. As a result, the petitioner contends that there was no road access to the allotted plots.
13.1 The learned counsel further stated that the petitioner challenged this acquisition in W.A. No. 1912/2007, which was amicably resolved on 26.08.2009. In the settlement, NHAI reduced the land acquisition in Plot No. 32 from 19,731 sq. m. to 4,310 sq. m., subject to the petitioner bearing INR 2 crore for reconfiguring lanes on the proposed elevated road. The KIADB was not a party to the settlement and did not separately challenge the acquisition.
13.2 The counsel also highlighted that the petitioner's project was approved as part of the Integrated Infrastructure Development Project by the 24th SHLCC on 24.01.2011, granting two years for implementation. The petitioner made several representations to -8- NC: 2025:KHC:1994 WP No. 31327 of 2024 KIADB on dates including 16.03.2011, 23.06.2011, and as recently as 06.05.2019 and 03.11.2019, requesting:
i) Revised possession certificates;
ii) A revised lease-cum-sale agreement for the reduced land extent due to NHAI's acquisition;
iii) An extension of nine years to complete the project, given that all previous statutory approvals had expired.
13.3 The learned counsel argued that the resumption order is unjustified as KIADB has consistently refused to issue the requested documents since 2013. The refusal is based on the pending case (W.P. No. 31907/2011), now LAC No. 44/2023, concerning the refund of compensation paid by NHAI to the petitioner for the acquired land. This case is pending before the VI Additional District Judge, Bengaluru Rural District. The petitioner has received compensation of INR 2,67,73,700 from NHAI, upon executing an indemnity bond in respect of the same.
14 On the other hand, Shashikiran Shetty, the learned senior counsel for the respondent, argued that the resumption order was justified due to the petitioner's failure to implement the project or utilize the land even after 27 years. He pointed out that the petitioner did not communicate with the Board or any other authority to request an extension of time after the stipulated two- year period expired on 31.12.2007, which was granted following the order in W.P. No. 21984/2004.
-9-NC: 2025:KHC:1994 WP No. 31327 of 2024 14.1 The learned counsel further stated that the land remained vacant, and the petitioner neither secured approval nor applied for it as of the date of the resumption order. He added that the petitioner violated the terms of the lease-cum-sale agreement by erecting advertising hoardings and excavating the land to a depth of 10-12 meters, creating a large pond that polluted groundwater and posed a safety hazard to passersby.
14.2 Responding to the petitioner's claims, the counsel argued that the resumption order was based on reports from the Development Officer of KIADB (dated 03.09.2022) and the Executive Engineer, which revealed that the petitioner had failed to utilize the plots or address the breaches despite the extended timeline and obtaining building plan approval by 01.08.2007.
14.3 The learned counsel also noted that the resumption order was issued after considering the petitioner's reply dated 25.06.2024 to multiple show cause notices issued by KIADB starting from 25.05.2023, with the latest notice dated 19.06.2024 inviting the petitioner to a personal hearing on 25.06.2024. He argued that while the petitioner attributed the delay in implementing the project to KIADB's failure to issue revised documents since 2013, the petitioner failed to substantiate these claims with adequate evidence or documents.
15. In conclusion, the learned counsel maintained that the challenge to the resumption order was baseless, as the petitioner's allegations of delay caused by KIADB were unsupported and could not justify overturning the order.
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16. After considering the arguments presented by the learned counsels and examining the materials on record, the key issue for determination is whether this Court, under Article 226 of the Indian Constitution, should interfere with the resumption order dated 24.10.2024, issued by respondent No. 2 under Sections 34- B(3) and (4) of the KIAD Act, 1966.
17. Before addressing the issue under consideration, certain relevant facts are outlined below:
17.1 The petitioner originally owned land in Plot No. 32 and obtained clearance from the Department of Tourism for a Hotel and Resort Project. Due to acquisition proceedings by KIADB, the petitioner surrendered Plot No. 32 to KIADB, with the assurance of reconveyance upon payment of developmental charges. The petitioner was redelivered possession of the plot in 1996 and entered into a lease-cum-sale agreement in 1998.
17.2 In 2001, a supplementary lease-cum-sale agreement was executed, and Plot No. 2 was also allotted to the petitioner.
After failing to implement the project, KIADB terminated the lease in 2004, but the petitioner successfully challenged this decision, and a two-year extension was granted in 2005.
17.3 Meanwhile, the National Highways Authority of India (NHAI) issued notifications to acquire land from both plots for widening NH-7. The petitioner challenged the acquisition, and an amicable settlement was reached, reducing the acquired land in Plot No. 32. NHAI paid the compensation to the petitioner in 2011.
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NC: 2025:KHC:1994 WP No. 31327 of 2024 17.4 In 2006, KIADB executed a lease-cum-sale agreement for Plot No. 2 in favor of the petitioner's sister concern. The petitioner submitted project building plans to KIADB, which were approved in 2007.
17.5 Despite these developments, the petitioner faced delays in obtaining revised lease-cum-sale deeds for the reduced land areas after NHAI's acquisition. KIADB continued to refuse the request, citing the pendency of legal proceedings regarding the compensation paid by NHAI. The matter remains unresolved, with the petitioner continuing to seek the necessary documentation to proceed with the project.
17.6 The KIADB issued a notice on 02.06.2018 under Section 34-B(1) of the KIAD Act, directing the petitioner to remedy breaches related to excavation on Plots No. 32 and 2 within 90 days. After the petitioner failed to comply, KIADB passed an order of resumption on 19.11.2022, which was quashed by the Court in W.P. No. 940/2023 on 31.01.2023, with directions to proceed from Section 34-B(1) and address all contentions.
17.7 Subsequently, on 03.02.2024, KIADB issued a show- cause notice under Section 34-B(2) for non-compliance. The impugned order of resumption dated 24.10.2024 was based on the misconception that only Plot No. 2 was involved, overlooking the acquisition of Plot No. 32.
16.8. The petitioner attributed the delay in the project's implementation to KIADB during a personal hearing on 25.06.2024.
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NC: 2025:KHC:1994 WP No. 31327 of 2024 However, the petitioner did not provide adequate evidence to support this claim. The respondent KIADB, based on the Secretary's report, concluded that the delay was intentional, highlighting unauthorized hoardings and excavation in violation of the lease agreements, and that the petitioner had neither secured a building plan sanction nor applied for one.
18. Therefore, a bare perusal of the above leads us to understand that the petitioner was granted an extension until 31.12.2005 to implement the project. However, the NHAI issued a preliminary notification in 2005 and a final notification in 2006 to acquire land in Plots No. 32 and 2, which the petitioner challenged. The matter was amicably settled in 2009, with the NHAI reducing the acquisition in Plot No. 32 from 19731 sq.mtrs. to 4310 sq.mtrs., subject to the petitioner paying INR 2,00,00,000 towards reconfiguration of lanes. The KIADB did not contest the acquisition.
19. After the NHAI compensated the petitioner in 2011, the petitioner repeatedly requested revised lease cum sale agreements due to the reduced land areas in both plots. However, the KIADB consistently refused these requests, citing the ongoing proceedings concerning compensation and the reference petition in LAC No. 44/2023. The KIADB first conveyed this refusal to the petitioner in 2012 and reiterated it in 2013, stating that the requests would not be addressed until the reference petition and surrender of the original lease agreements were resolved.
20. However, the petitioner contends that the petitioner's project proposal for 'Integrated Infrastructure Development' was
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NC: 2025:KHC:1994 WP No. 31327 of 2024 approved in the 24th SHLCC meeting dated 24.01.2011, and furthermore, the petitioner was granted two years of time to complete the project. Therefore, it appears that the respondent- KIADB was in concurrence with the time frame sought by the petitioner to implement the project until the release of the compensation payable by the NHAI in favour of the petitioner - on 18.03.2011. Furthermore, the KIADB vide letter dated 05.04.2011 had requested the petitioner to return all original documents to facilitate the issue of revised possession certificates and further revise the lease cum sale deeds to the reduced extent of land in Plots No. 32 and 2. In pursuance thereof, the petitioner submits that the available original documents of Plot No. 2 were surrendered to the KIADB.
21. The KIADB informed the petitioner on 14.03.2012 that it could not consider the request for revised lease agreements until the pending W.P. No.31907/2011 was resolved. This refusal has continued till date, until the disposal of the reference petition LAC No. 44/2023, which concerns a challenge to the distribution of compensation for the acquisition of land in Plots No. 32 and 2, totaling around INR 2.67 crore.
22. Meanwhile, the petitioner asserts to have spent approximately INR 28.53 crore on project construction at the allotted plots. The challenge to the compensation, despite the petitioner's indemnity bond, is not directly related to the refusal of the KIADB to issue revised documents. The petitioner first became
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NC: 2025:KHC:1994 WP No. 31327 of 2024 aggrieved on 14.03.2012 when request for revision of particulars was refused.
23. The KIADB issued a notice on 02.06.2018 under Section 34-B(1) of the KIAD Act, 1966, directing the petitioner to remedy the breach of excavation on lands in Plot No. 32 and 2. Subsequently, a resumption order was passed on 19.11.2022, which was quashed by this Court in W.P. No. 940/2023 on 31.01.2023. The order was quashed on the grounds that it violated the statutory provision of Section 34-B(2) of the Act, which requires the issuance of a show-cause notice before passing a resumption order under Section 34-B(3). Importantly, all contentions of the parties were kept open.
24. Therefore, when the petitioner was aggrieved for the first time on 14.03.2012 by the refusal to issue the revised particulars, it is reasonable to expect that any other project promoter, under similar circumstances, would have approached the Court at the earliest seeking a writ of Mandamus directing the KIADB to issue the revised particulars. This would have enabled the petitioner to commence with the approved Integrated Infrastructure Development, particularly since the petitioner claims to have incurred approximately INR 28,53,13,738/- in expenditure even before securing approval from the SHLCC.
25. In conclusion, as the petitioner did not avail the appropriate remedy for a long period, until the passing of the impugned order on 24.10.2024--over twelve years later--the remedy is deemed exhausted. It is settled law that courts should
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NC: 2025:KHC:1994 WP No. 31327 of 2024 not entertain stale claims or support parties who do not seek remedies promptly. Moreover, in this case, the petitioner has not provided sufficient reasons for the extraordinary delay in seeking a legal remedy against the refusal to issue the revised particulars necessary for implementing the project, despite claiming to have incurred approximately INR 28 crore in expenditure as far back as 2010. Furthermore, the petitioner in the instant case has not prayed for the issuance of the revised particulars and has only challenged the order of resumption passed under Section 34-B(3) of the said Act.
26. This case pertains to an allotment of plots of acquired lands to facilitate the establishment of industries and other amenities in industrial areas. It is pertinent to note that the petitioner has been in possession of the lands since 2001, and these lands remain physically vacant to this day. The petitioner's failure to pursue a proper remedy against the repeated refusals to grant the necessary revised particulars to implement a project approved by the SHLCC for over 10 years suggests a manifest inability to utilize the allotment for the project. Furthermore, by failing to implement the project for more than 20 years from the date of allotment, the very purpose of the allotment has been defeated. Therefore, in the present circumstances, the challenge to the resumption order cannot be upheld.
In view of the foregoing, I order the following:
ORDER
i) The instant petition stands dismissed.
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ii) The respondent No. 2 is hereby directed to award compensation to the promoter of the petitioner against the lands acquired by the KIADB, in relation to the 11 acres and 15 ¾ guntas of land in Plot No. 32, in accordance with law.
iii) Additionally, subject to the outcome of the reference petition in LAC No.44/2023 pending on the file of learned VI Addl. District and Sessions Judge, Bengaluru Rural District, the respondent No. 2 is hereby directed to compensate the legal costs incurred by the petitioner in arriving at the amicable settlement with the NHAI in W.A No.1912/2007 : D.D. 26.08.2009.
Sd/-
(HEMANT CHANDANGOUDAR) JUDGE BKM Ct:vh List No.: 19 Sl No.: 3