- 1 - HC-KAR NC: 2025:KHC:29119 WP No. 50180 of 2017 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE R. NATARAJ WRIT PETITION NO. 50180 OF 2017 (GM-KIADB) BETWEEN: M/S. MAHAVEER FIRE SAFETY NO.644/A, 9TH MAIN, 3RD CROSS, 3RD STAGE, MANJUNATHANAGAR, BENGALURU-560010 REPRESENTED BY ITS PROPRIETRIX, SMT. KAMALA BAI …PETITIONER (BY SMT. BHAVANA G.K., ADVOCATE) AND: 1. KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD NO.49, 4TH AND 5TH FLOOR, EAST WING, KANIJA BHAVAN, RACECOURSE ROAD, BENGALURU-560001 REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER AND E M 2. SECRETARY II KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD NO.49, 4TH AND 5TH FLOOR, EAST WING, KANIJA BHAVAN, RACECOURSE ROAD, BENGALURU-560001 …RESPONDENTS (BY SRI. SHIRALLI DILDAR JAINUSAB, ADVOCATE FOR RESPONDENT NOS.1 AND 2 (VK NOT FILED IN R/O R2)) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE CANCELLATION LETTER NO.KIADB/HO/ALLOT/21244/9639/2017-18 DATED Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:29119 WP No. 50180 of 2017 22.09.2017 ISSUED BY THE 2ND RESPONDENT VIDE ANNEXURE-E AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE R. NATARAJ ORAL ORDER The petitioner has challenged an order bearing No.KIADB/HO/Allot/21244/9639/2017-2018 dated 22.09.2017 by which, allotment of an industrial plot to the petitioner by the respondent No.2 was cancelled. 2. The petitioner contends that it had applied for allotment of two acres of land at Dabbaspet Industrial Area for setting up of an industrial unit for manufacture of fire fighting equipments. Therefore, the 2nd respondent after approval from respondent No.1/KIADB allotted two acres of land in Plot No.172 at Dabbaspet Industrial Area in terms of a letter of allotment dated 03.03.2017. The petitioner contends that it had paid a sum of Rs.90,10,000/- towards 30% of tentative value of the industrial plot and balance of Rs.2,10,00,000/- being the balance tentative premium of land had to be paid within 90 days from the date of the letter of allotment i.e., on 03.03.2017. The petitioner contends that it approached the bank for financial assistance and there was a delay on the part - 3 - HC-KAR NC: 2025:KHC:29119 WP No. 50180 of 2017 of the bank in sanctioning the loan. However, the respondent No.2 cancelled the allotment in terms of the impugned letter dated 22.09.2017 and called upon the petitioner to surrender the original letter of allotment, the receipts and also stated that 20% of the amount already deposited would be forfeited. The petitioner is therefore, before this Court challenging the said order. 3. This Court in terms of an order dated 13.11.2017, stayed the impugned order dated 22.09.2017 and directed the petitioner to pay the balance amount which however, was subject to result of this writ petition. 4. It is now stated by the learned counsel for the petitioner that the petitioner has paid the balance sum of Rs.2,10,00,000/- in the following manner: Sl.No. Date Amount in (Rs.) Receipt No. 1. 31.03.2018 Rs.25,00,000/- 0041284 2. 31.03.2018 Rs.25,00,000/- 0041283 3. 04.06.2018 Rs.50,00,000/- 0041690 4. 30.03.2019 Rs.21,00,000/- 0044510 5. 30.03.2019 Rs.19,00,000/- 0044516 6. 30.03.2020 Rs.60,00,000/- 0048113 7. 27.08.2020 Rs.10,00,000/- 0048881 - 4 - HC-KAR NC: 2025:KHC:29119 WP No. 50180 of 2017 The petitioner therefore contends that it had deposited the entire sum of Rs.3,00,10,000/- as per the letter of allotment and prays that suitable directions be issued to the respondents to restore the allotment of the industrial plot by setting aside the order of cancellation. 5. The learned counsel for the petitioner reiterated the above contentions and contended that in similar circumstances, the Coordinate benches of this Court in W.P.Nos.30790/2019, 105492/2018 and 28965/2015 had directed allotment of fresh plots and ordered to restore the original letter of allotment. She therefore, prays that suitable directions be issued to the respondents to restore the letter of allotment to the petitioner by canceling the impugned order. 6. The learned counsel for the respondents has filed a statement of objections inter alia contending that as per Clause - 4(a) of the letter of allotment, if the petitioner failed to deposit the amount within the time stipulated, the allotment of plot stood automatically cancelled and 20% of the amount already deposited by the petitioner would be forfeited. It is stated that since the petitioner did not pay the entire allotment price within the time stipulated, the respondents were forced to - 5 - HC-KAR NC: 2025:KHC:29119 WP No. 50180 of 2017 cancel the letter of allotment. He contends that the cancellation of allotment is neither arbitrary nor illegal but is strictly in accordance with terms of letter of allotment. 7. It appears that the project of the petitioner was approved by a Single Window Agency, consequent to which, the petitioner was allotted an industrial plot for manufacturing fire fighting equipments. In the project report submitted by the petitioner, it was shown that the investment to be made was a sum of Rs.15,76,00,000/- and had the ability to generate direct employment to nearly 75 persons. The petitioner was required in law and as per the letter of allotment, to deposit Rs.3,00,10,000/- being the allotment price. If the petitioner did not deposit the amount in time and the respondents invoked the power vested in them under the agreement and cancel the allotment. No fault could be found in the respondent No.1 doing so. 8. However, since this Court had permitted the petitioner to deposit the entire allotment price during the pendency of this writ petition and the petitioner having complied with the same, the petitioner cannot be deprived of the benefit of allotment, more particularly, when it has - 6 - HC-KAR NC: 2025:KHC:29119 WP No. 50180 of 2017 proposed a project which is commercially viable and is capable of generating employment. The interest of the respondents can be met by directing the petitioner to pay interest at the rate of 10% per annum on the balance from the respective dates when the petitioner had deposited part of allotment price as mentioned in paragraph No.4 above. It is also made clear that the respondents shall be entitled to collect back any final cost of the land in accordance with law. 9. In view of the above, this writ is disposed off. The impugned order dated 22.09.2017 is set aside and the letter of allotment dated 03.03.2017 is restored subject to the petitioner paying interest at the rate of 10% per annum on the balance allotment price from the respective dates when portions of which were deposited. The petitioner shall also undertake to pay the difference in the tentative price as well as the final cost of the land allotted to the petitioner. Sd/- (R. NATARAJ) JUDGE HJ List No.: 1 Sl No.: 24