Karnataka High Court
M/S. Ir Multimedia Solutions Pvt. Ltd vs M/S.Karnataka State Electronics on 27 January, 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF JANUARY, 2023
BEFORE
THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA
WRIT PETITION No.23669/2015 (GM-RES)
BETWEEN:
M/S. IR MULTIMEDIA SOLUTIONS PVT. LTD.,
HAVING ITS REGISTERED OFFICE AT
NO.952, III MAIN, VIJAYANAGARA,
BENGALURU - 560 040,
REPRESETNED BY ITS DIRECTOR,
MR. R. RAJASHEKAR. ... PETITIONER
(BY SRI B.N. PRAKASH, ADVOCATE)
AND:
1. M/S. KARNATAKA STATE ELECTRONICS
DEVELOPMENT CORPORATION LTD.,
A GOVERNMENT OF KARNATAKA ENTERPRISE
HAVING ITS REGISTERED OFFICE AT
2ND FLOOR, TTMC, A BLOCK,
BMTC, SHANTHINAGAR,
BENGALURU - 560 027,
REPRESENTED BY ITS
MANAGING DIRECTOR.
2. THE DIRECTOR (OPERATIONS)
M/S. KARNATAKA STATE ELECTRONICS
DEVELOPMENT CORPORATION LTD.
A GOVERNMENT OF KARNATAKA ENTERPRISES,
HAVING ITS REGISTERED OFFICE AT
2ND FLOOR, TTMC, A BLOCK,
BMTC, SHANTHINAGAR,
BENGALURU - 560 027.
3. THE MANAGER-IDC
M/S. KARNATAKA STATE ELECTRONICS
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DEVELOPMENT CORPORATION LTD.,
A GOVERNMENT OF KARNATAKA ENTERPRISE
HAVING ITS REGISTERED OFFICE AT
2ND FLOOR, TTMC, A BLOCK,
BMTC, SHANTHINAGAR,
BENGALURU - 560 027. ... RESPONDENTS
(BY SRI NISHANTH A.V., ADVOCATE FOR R-1;
SRI V.Y. KUMAR, ADVOCATE FOR R-2;
R-3 SERVED AND UNREPRESENTED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
QUASH THE CANCELLATION ORDER DATED 27.03.2015 PASSED
BY THE 1ST RESPONDENT VIDE ANNEXURE-L; AND QUASH THE
LETTER DATED 26.05.2015 ISSUED BY THE 1ST RESPONDENT
VIDE ANNEXURE-N.
THIS WRIT PETITION HAVING BEEN HEARD AND
RESERVED ON 13/01/2023 FOR ORDERS AND COMING FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
ORDER
The issue involved in this petition is, whether the cancellation order issued by the respondents is contrary to the terms and conditions accepted by the parties in terms of the settlement entered in W.P. No.1932/2003.
2. The petitioner in this writ petition is questioning the cancellation order dated 27.03.2015 in No.REF:Keonics/E-City/IRMM/2014-15, seeking for quashing the letter No.KSEDC/MD/IRCS/2015-16 dated -3- 26.05.2015 issued by the 1st respondent at Annexure-L and Annexure-N and also seeking a writ of mandamus seeking extension of time for a period of 12 months to complete the construction work.
3. It is the case of the petitioner that, the petitioner had applied for allotment of an industrial site with the 1st respondent and was allotted plot Nos.27/D and part 27/E of Electronic City and possession certificate was issued in favour of the petitioner. It appears that the 2nd respondent had cancelled the allotment in favour of the petitioner and challenging the same, W.P. No.1932/2003 was filed before this Court. The learned Single Judge dismissed the writ petition and against the said order, W.A. No.566/2007 c/w W.A. No.1370/2011 preferred, was allowed and remanded to the learned Single Judge for a fresh disposal. After the remand, the parties settled the dispute by filing a joint memo and accordingly, W.P. No.1932/2003 came to be disposed of accordingly.
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4. In pursuance of the memorandum of settlement and order in the writ petition, the respondent executed lease-cum-sale agreement on 16.03.2012 and the same was registered on 21.03.2012. It is the case of the petitioner that for the reasons beyond its control, the construction could not be completed thereby, the petitioner sought for extension of time vide letter dated 05.04.2013 and the respondent on consideration of the said request, granted time till 21.03.2014 and accordingly, the construction activities were continued. It appears that the petitioner further sought for extension of time for another period of 12 months for completion of construction work vide letters dated 06.02.2014 and 29.03.2014. However, the 1st respondent issued a final notice holding that the allotment of Plot Nos.27/D and part 27/E measuring 1 acre of land in Sy. No.13 Konnappana Agrahara Village, Begur Hobli, Bengaluru South Taluk, Bangalore, cancelled for not fulfilling the standard fulfillments and lease-cum-sale agreement and the order of this Court -5- and ordered to handover the possession and all other documents issued along with original lease-cum-sale agreement dated 21.03.2012 within a period of 15 days. The petitioner replied to the said notice stating the circumstances under which the constructions could not be completed. The 1st respondent without considering the explanation tendered by the petitioner, issued the cancellation order dated 26.05.2015 informing the petitioner that revocation of the cancellation would be considered only if the company is willing to pay the present allotment price at the rate of 2,550/- per Sq. Ft. within the next four months and complete the project within 12 months i.e., May 2016.
5. The petitioner aggrieved by the cancellation order has preferred the present writ petition.
6. The respondents filed their statement of objections inter alia contended that as the petitioner did not fulfill the conditions stipulated in the joint memo on which basis the order dated 23.01.2012 was passed by -6- the learned Single Judge in W.P. No.1932/2003. It is stated that the petitioner also failed to fulfill the terms enumerated in the lease-cum-sale agreement dated 21.03.2012, wherein the time stipulated to complete the civil construction work was within a period of one year from the date of plan of approval as per Clause 2 as stipulated in the joint memo. It is stated by the respondent that the petitioner having not completed the project within a period of one year having left with no option and though the time was extended on earlier occasion and in spite of according sufficient time to complete the project, the petitioners have not completed the construction work and as such, the cancellation order was issued canceling the allotment of the petitioner for not fulfilling the standard condition of allotment and lease-cum-sale agreement. Stating these grounds, the 1st respondent sought to dismiss the writ petition.
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7. Heard the learned counsel for the petitioner and learned counsel for the 1st respondent and perused the material on record.
8. Sri. B.N. Prakash, learned counsel for the petitioner in addition to reiterating the various contentions raised in the writ petition would mainly contend that the cancellation order and letter issued by the 1st respondent at Annexure-L and Annexure-N are contrary to the joint memo recorded by this Court in W.P. No.1932/2003 and would contend that the criteria stipulated in the joint memo is that the commencement of construction is to be commenced within a period of one year from the date of approval of the building plans and there is no time stipulation for completing the construction to be a ground for cancellation of the allotment order as stated in the cancellation order dated 27.03.2015 at Annexure-L and letter dated 26.05.2015 at Annexure-N. Learned Counsel would vehemently contend that the demand made by the 1st respondent -8- that the cancellation order would be revoked provided that the demand made for payment of the present allotment price at the rate of Rs.2,550/- per Sq. Ft. is wholly arbitrary and illegal.
9. The learned counsel would contend that the petitioner had the benefit of interim order before this Court and the order of cancellation dated 27.03.2015 and the letter dated 26.05.2015 at Annexure-L and Annexure-N were stayed and the petitioner has completed the project during the pendency of the writ petition and the petitioner by way of additional documents have produced the photographs and documents at Annexure-R1 to R10 and S for having completed the construction of total area of around 44,000 Sq. Ft. including the basement and the total cost incurred is around Rs.9,50,00,000/-. It is also stated that the civil construction work has completed and the electricity connection to the capacity of 99 kw has been connected to the premises. Stating these grounds, it is -9- submitted that the writ petition needs to be allowed and order of cancellation to be set-aside.
10. Per contra, Sri. Nishanth A.V, learned counsel for the 1st respondent would submit that the order of cancellation and subsequent order is in light of the directions of this Court in W.P. No.1932/2003 dated 23.01.2012 and the lease-cum-sale agreement executed on 21.03.2012. According to the learned counsel the cancellation order issued by this respondent is in view of not fulfilling the standard conditions of allotment and it is also contended that the cancellation order was passed and resolved that the revocation of the cancellation order would be permitted, if the petitioner-company is willing to pay the present allotment rate at Rs.2,550/- per sq. ft. within a period of four months and complete the project by May, 2016, thus would contend that the order of cancellation is justified in light of the lapses on the part of the petitioner and sought to dismiss the writ petition.
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11. The petitioner is a company incorporated under the provisions of the Companies Act, 1956 and carrying on the business of developing software. The sister concern of the petitioner namely, M/s. IR Computer Solutions Private Limited had applied for allotment of an industrial site and accordingly, Plot Nos.27/D and Part 27/E of Electronic City was allotted to the sister concern of the petitioner. However, it appears that the allotment had been cancelled by the 2nd respondent on 02.01.2003 and challenging the said cancellation order, the petitioner and the sister concern had preferred W.P. No.1932/2003. At the first instance, the writ petition came to be dismissed against which, W.A. No.566/2007 c/w W.A. No.1370/2011 had preferred and the Division Bench of this Court vide order dated 22.06.2011 remanded the matter back to the learned Single Judge for fresh disposal. On remand, the parties settled the matter by filing a joint memo dated 23.01.2012 and accordingly, the Co-Ordinate Bench of this Court disposed of the writ petition by its order dated
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23.01.2012 recording the settlement. The relevant portion of the order dated 23.01.2012 incorporating the joint memo reads as under:
"2. Learned Counsel for the parties submit that the matter has been amicably settled between the parties. They have filed a joint memo today reporting the terms of settlement, which is as under:
"JOINT MEMO The petitioners in the above petition have challenged the order in No.DO/EC/IRMM/02-03 dated 2.1.2003 passed by the respondents vide Annexure-Z2 under which the respondents have cancelled the allotment of approximately 1.00 acre of land in Plot No.27/D and Part 27/E of Electronic City.
Now the parties to the above petition have arrived at a settlement on certain terms and the same are as follows:
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1. The petitioners undertake to submit a fresh building plan for approval within a period of 3 weeks from today.
2. The petitioners shall complete the construction as per the sanctioned plan and commence the project within a period of one year from the date of approval of the building plans and the execution and registration of the lease- cum-sale agreement.
3. In view of the above stated terms, the order in No.DO/EC/IRMM/02-03 dated 2.1.2003 passed by the respondents vide Annexure 'Z2' impugned in the above petition may kindly be quashed.
4. In the event of the petitioners not completing the construction as per the sanctioned plan and commencing the project within a period of one year from the date of approval of the building plans and the execution and registration of the lease-cum-sale agreement, then the order in No.DO/EC/IRMM/02-03 dated 2.1.2003 passed by the respondents vide Annexure 'Z2' stands revived unless the
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authority extends the time for commencement of the project. The
petitioners shall pay the development costs, interest and any other legally payable dues to the respondents.
5. Further, it is agreed between the parties that the petitioners shall not alienate the land approximately 1.00 acre of land in Plot No.27/D and Part 27/E of Electronic City, which is allotted to the petitioners during the prohibited period prescribed under the lease-cum- sale agreement.
WHEREFORE, it is prayed that this Hon'ble Court may be pleased to dispose of the above writ petition in the above stated terms, in the interest of justice and equity."
3. The joint memo is placed on record. Consequently, the order at Annexure 'Z2' dated 2.1.2003 is hereby quashed. Writ petition is disposed of in terms of the joint memo. No costs."
(Emphasis supplied)
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12. Pursuant to the joint memo entered into between the parties, the 1st respondent directed the petitioner to pay the payments towards the plan approval charges, balance interest amount as on 29.10.1994 and towards development cost for the plot Nos.27/D and part 27/E. Pursuant to which, the petitioner paid the said amount and requested to execute the lease-cum-sale agreement. Subsequently, the parties entered into lease-cum-sale agreement dated 16.03.2012 and the same was registered on 21.03.2012 and the sanction plan was approved on 22.03.2012.
13. Accordingly, the petitioner started the construction work in the allotted site. After commencing the construction upon the sanction of the building plan, the petitioner faced certain difficulties to complete the construction and thus, sought for extension of time for a period of 12 months by its letter dated 05.04.2013. The 1st respondent extended the time for implementation of
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the project in plot Nos.27/D and part 27/E in KEONICS Electronic City and for completion of the same, by 21.03.2014. The petitioner by its letter dated 06.02.2014 sought for further extension of time to complete the construction work which could not be carried out due to unavoidable circumstances as stated in its letter at Annexure-H and sought for further extension of time for a period of 12 months to complete the building and further a reminder was also sent to the respondent by its letter dated 29.03.2014. The 1st respondent without considering the letter seeking for an extension of time in its proper perspective, issued a final notice stating that the petitioner has not completed the project as per the directions in W.P. No.1932/2003 dated 23.01.2012 and sought explanation from the petitioner as to why the allotment cannot be cancelled.
14. The petitioner vide letter dated 11.03.2015 gave a detailed reply to the said notice explaining the untold circumstances and bonafide reasons for which the
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construction could not be completed. The 1st respondent not yielding to the request of the petitioner by its order dated 27.03.2015 cancelled the allotment in respect of Plot Nos.27/D and Part 27/E measuring one acre of land in Sy. No.13 Konnappana Agrahara Village, Begur Hobli, Bengaluru South Taluk, Bangalore, stating that the conditions of the allotment and lease-cum-sale agreement and order of this Court have not been fulfilled. The petitioner to the said cancellation order also replied stating to reconsider the decision to cancel the allotment and also sought for 12 months time to complete the construction of the building. The 1st respondent issued the final order stating that the revocation of the cancellation order would be permitted if the company is willing to pay the present allotment rate.
15. The perusal of the joint memo would make it clear that there are three conditions emphasized:
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(i) That the petitioner-company has to complete the construction as per the sanctioned plan;
(ii) Commence the project within a period of one year from the date of approval of the building plans and execution and registration of the lease-cum-sale agreement;
(iii) In the event,
(a) the petitioner does not complete the construction as per the sanctioned plan;
(b) Commenced the project within a period of one year from the date of the approval of the building plans and execution and registration of the lease-cum-
sale agreement Then, the order passed by the respondents dated 02.01.2003 canceling the allotment would stand revived.
16. Thus, making it clear that the petitioner has to complete the construction as per the sanctioned plan and commence the project within a period of one year from the date of approval. Undisputedly, in terms of the joint memo the petitioner has commenced the project
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within a period of one year from the date of approval i.e., 21.03.2012 and it is not the case of the respondent that the petitioner has not commenced the project as agreed in the joint memo within a period of one year from the date of approval nor that the constructions carried is not as per the sanctioned plan. The order and the perusal of the letters addressed by the petitioner and the reply given by the respondents would clearly depict that the time was extended for completion of the construction and not for the commencement of the project and thus, the conditions as enumerated in the joint memo are not violated. This being so, respondents were not right and justified in issuing the impugned cancellation order at Annexure-L and further were not justified in asking the petitioners to pay the present allotment rate at Annexure-N. Therefore, the approach of the 1st respondent in issuing the impugned order is clearly illegal and unsustainable.
17. It is also relevant to note that the petitioner had the benefit of interim order before this Court and
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operation of the order dated 27.03.2015 and the letter dated 26.05.2015 was stayed. It is also not in dispute that the petitioner has completed the construction work in the year 2017 and the photographs of the construction produced by the petitioner at Annexure-R1 to R10 depict that the civil construction work has been has completed and the same is not been disputed by the respondents.
18. Accordingly, this Court for the reasons stated supra, pass the following:
ORDER i. The writ petition is allowed. ii. The impugned cancellation order dated 27.03.2015 at Annexure-L and the letter dated 26.05.2015 at Annexure-N issued by the 1st respondent are hereby quashed.
No order as to costs.
Sd/-
JUDGE MBM