IN THE HIGH COURT OF KARNATAKA AT BENGALURU ON THE 29TH DAY OF MARCH, 2019 BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH AND THE HON'BLE MR. JUSTICE S. G. PANDIT WRIT APPEAL NO.5180 OF 2016 (GM-KIADB) BETWEEN:
M/S. PRATEEK CNC PLOT NO.222/1, 4TH STAGE BOMMASANDRA INDUSTRIAL AREA BENGALURU-560105 REPRESENTED BY ITS PROPRIETOR MR.JAYAPRAKASH SHETTY.
... APPELLANT (BY SRI.NITHYANANDA K R, ADVOCATE) AND:
1. KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD REPRESENTED BY CEO AND EXECUTIVE MEMBER NO.49, 4TH AND 5TH FLOOR EAST WING KHANIJA BHAVAN RACE COURSE ROAD BENGALURU-560001.
2. THE DEVELOPMENT OFFICER KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD ARVIND BHAVAN NRUPATHUNGA ROAD BENGALURU-560001.
3. STATE OF KARNATAKA REPRESENTED BY ITS SECRETARY DEPARTMENT OF COMMERCIAL INDUSTRIES M.S.BUILDING BENGALURU -560001.
... RESPONDENTS (BY SRI.SOMASHEKAR T, ADVOCATE FOR SRI B.B. PATIL, ADVOCATE FOR RESPONDENT Nos.1 AND 2 SRI.LAXMINARAYANA, AGA FOR RESPONDENT No.3) THIS APPEAL FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED IN THE WRIT PETITION 62740/2016 DATED 16/12/2016.
THIS APPEAL COMING ON FOR ADMISSION THIS DAY, S.G.PANDIT J., DELIVERED THE FOLLOWING:
JUDGMENT Aggrieved by the impugned order dated 16.12.2016 in W.P.No.62740 of 2016 passed by the learned Single Judge, by which, the writ petition was dismissed, the petitioner is in appeal.
2. The petitioner filed writ petition under Articles 226 and 227 of the Constitution of India praying to quash letter dated 21.11.2016 Annexure-A and notice dated 21.07.2016 issued under Section 34B of Karnataka Industrial Area Development Act, 1966 (hereinafter referred to as ‘the Act’ for short) . The petitioner was allotted industrial plot bearing No.221, Harohalli II Phase, Kanakapura Taluk, Ramanagara District, measuring 4015 Sq.mtrs. Lease-cum-Sale Agreement was also executed on 13.01.2010 in favour of the petitioner. It is stated that the petitioner applied for Building Plan on 26.10.2013, which was sanctioned on 13.03.2014. Due to litigation between the land owner and the respondent, the petitioner was prevented from implementing the project. One of the conditions of Lease-cum-Sale Agreement was that the petitioner shall implement the project on or before 01.09.2012 i.e., two years from the date of Lease-cum- Sale Agreement or handing over possession. The petitioner had taken possession of the land in question on 02.09.2010. As the petitioner could not implement the project within the stipulated time, he made representation on 28.10.2013 seeking extension of time for implementation of the project. The first respondent by letter dated 13.02.2014 extended the time for implementation of the project by one year. Thereafter, the respondent issued notice dated 21.07.2016 to the petitioner under Section 34B of the Act to show cause as to why the land should not be repossessed for failure to comply with the terms and conditions of the lease and for not implementing the project within the stipulated time. The petitioner by his letter dated 25.08.2016 again sought for extension of time by one more year for implementing the project. The first respondent-Board by its letter dated 24.09.2016 called upon the petitioner to appear before the CEO and EM on 03.10.2016 for personal hearing. The petitioner made one more representation dated 01.10.2016 stating that they have already started construction activity and will be able to complete construction within 6 to 8 months time. The first respondent-Board after hearing the petitioner by its order dated 11.11.2016 extended the time by one more year subject to the petitioner depositing a sum of Rs.89,29,122/- within thirty days, failing which, the allotment would automatically stand cancelled. The petitioner was also issued with demand notice dated 21.11.2016 to pay a sum of Rs.89,29,122/- within thirty days. Aggrieved by the same, the petitioner filed the instant writ petition.
3. It was contended before the learned Single Judge that petitioner is a Small Scale Industry, with great difficulty the petitioner is running the industry in a rented building. It is contended that the demand notice is wholly illegal, arbitrary and violative of Article 14 of the Constitution of India. There is no basis for the demand made by the respondents as they have not incurred any expenditure subsequent to allotment of land to the petitioner. The learned Single Judge by his reasoned order dismissed the writ petition holding that in contractual matters, the Court would not entertain the writ petition under Article 226 of the Constitution of India. Further observed that the petitioner having taken extension of time, again sought for time which was granted subject to deposit of the amount stated in the demand notice, which is not unreasonable in the facts and circumstances of the present case. Aggrieved by the order of the learned Single Judge the petitioner is in appeal.
4. Heard the learned counsel for the petitioner and learned counsel for the respondents. Perused the writ papers.
5. The petitioner was allotted industrial land by allotment letter dated 03.12.2009. Lease-cum-Sale Agreement was executed on 13.10.2010. One of the conditions of allotment and the terms and conditions of lease was that the petitioner shall implement the project for which the industrial site is allotted within two years from the date of taking possession. The petitioner took possession of the industrial unit on 02.09.2010. As he could not implement the project within two years, he made representation dated 28.10.2013 which was considered in favour of the petitioner extending time by one year from the date of the letter dated 13.02.2014. In spite of extension of time, the petitioner failed to implement the project. Therefore, the first respondent-Board issued notice under Section 34B of the Act, to show cause as to why the industrial land should not be resumed for violation of terms and conditions of the lease. The petitioner was also given personal hearing and thereafter, respondent No.1 passed order dated 11.11.2016 extending time by one year subject to petitioner paying a sum of Rs.89,29,122/- within thirty days. A demand notice dated 21.11.2016 was also issued in pursuance of the said order. The petitioner and the respondents are bound by the terms and conditions of the Lease Agreement entered into between them on 13.10.2010. Clause 10(1)(e) of the Lease Agreement reads as follows:
“10(1)(e): In the event lessee fails to take one of the effective steps as indicated at (a), extension of time for implementing the project will be granted only on payment of difference in land cost between the tentative cost of land at the allotted rate, extension of time will be granted by levying a penalty of 10% of the cost of land at the allotted rate. Failure to fulfill any of the conditions (a) to (c) mentioned above shall result in allotment being cancelled and agreement being terminated under clause 14. The refund of amount and forfeiture shall be in accordance with the provisions contained in the Clause 15 of the agreement.”
In accordance with the above clause, the respondents demanded a sum of Rs.89,29,122/- for extension of time by one year.
6. Admittedly, the petitioner has not implemented the project within the stipulated time nor within the extended time. The petitioner was allotted the industrial plot in the year 2009 and petitioner has taken possession on 02.09.2010. Even as on the date of hearing this appeal to a specific question of the Court as to whether the petitioner has implemented the project, learned counsel for the petitioner stated that the petitioner is yet to implement the project. As the petitioner and respondents are bound by terms of the contract, the petitioner could not have invoke jurisdiction of this Court under Article 226 of the Constitution of India. Moreover, even after more than six years of taking possession of the industrial land, the petitioner has not implemented the project hence, it is not open for the petitioner to contend that he is not liable to pay any additional price as demanded under Annexure-A. The learned Single Judge was gracious enough to given an opportunity to the petitioner to deposit Rs.30,00,000/- against the demand made so as to ask the respondents to reconsider the request of the petitioner. But, the petitioner refused to accept the same. Even during the hearing of this appeal, we specifically asked the learned counsel whether the petitioner is ready to deposit a sum of Rs.30,00,000/-, the learned counsel submitted that the petitioner is not ready to deposit any amount. When the petitioner is not ready to deposit any amount for consideration of his prayer as against the demand made by the respondents he would not be entitled for any discretionary relief under Article 226 of the Constitution of India. The learned Single Judge has rightly dismissed the writ petition.
7. The order of learned Single Judge is neither perverse nor erroneous so as to call for interference. No ground is made out to interfere with the order of the learned Single Judge. Accordingly, the writ appeal is dismissed.
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JUDGE JUDGE mpk/-*CT:bms