- 1 - NC: 2025:KHC-D:234 WP No. 106498 of 2017 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 8TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR. JUSTICE B.M.SHYAM PRASAD WRIT PETITION NO.106498 OF 2017 (GM-KIADB) BETWEEN: M/S CHOUGULE TRUCK MOTOR BODY BUILDING, A PROPRIETORSHIP CONCERN REPRESENTED BY IT’S PROPRIETOR SRI. MALLAPPA K. CHOUGULE, AGE: 64 YEARS, OCC: BUSINESS, R/O 818, KUDACHI CROSS, P.B. ROAD, BELAGAVI. - PETITIONER (BY SRI. SRINAND A. PACHHAPURE, ADVOCATE) AND: 1. THE GOVERNMENT OF KARNATAKA REP. BY ITS PRINCIPAL SECRETARY, DEPARTMENT OF COMMERCE & INDUSTRIES AND THE CHAIRMAN OF THE KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD, RASHTROTHAN PARISHAD BUILDING, NRUPATUNGA ROAD, BENGALURU-01. 2. THE EXECUTIVE MEMBER AND CHIEF EXECUTIVE OFFICER, KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD (KIADB), RASHTROTHAN PARISHAD BUILDING, NRUPATUNGA ROAD, BENGALURU-01. 3. THE DEVELOPMENT OFFICER KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD, PLOT NO.7/B-3, B.K. KANGRALI INDUSTRIAL AREA, P.B. ROAD, BELAGAVI. - RESPONDENTS (BY SRI. PRAVEEN K. UPPAR, AGA FOR R1; SRI. P.N. HATTI, ADVOCATE FOR R3; NOTICE TO R2 IS SERVED) Digitally signed by VINAYAKA B V Location: High Court of Karnataka, Dharwad Bench - 2 - NC: 2025:KHC-D:234 WP No. 106498 of 2017 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO, QUASHING THE ORDER BEARING NO. (PÀ.PÉÊ.¥Àæ.ªÀÄA/PÉÃA.PÀ/ºÀAaPÉ/1049/ 3075/17-18) DATED 20.05.2017 PASSED BY THE RESPONDENT NO.2 MARKED AT ANNEXURE-A & ETC. THIS WRIT PETITION, COMING ON FOR HEARING ON INTERLOCUTORY APPLICATION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: THE HON'BLE MR. JUSTICE B.M.SHYAM PRASAD ORAL ORDER (PER: THE HON'BLE MR. JUSTICE B.M.SHYAM PRASAD) The petitioner, who is allotted plot no. 1049 in Sy No. 620, admeasuring 446 sq.mt., within the limits of KIADB industrial area, Kanabaragi, Belagavi [‘the subject property’], has called in question the second respondent’s order dated 20.05.2017 [Annexure-A]. The second respondent, by this order dated 20.05.2017 under Section 34B of the Karnataka Industrial Area Development Act, 1966 [‘the Act’], has cancelled the allotment of the subject property to the petitioner directing it to hand over vacant possession of the - 3 - NC: 2025:KHC-D:234 WP No. 106498 of 2017 property on or before 24.06.2017 lest coercive measures be taken under such provision. 2. Admittedly, the petitioner, as of the impugned order dated 20.05.2017, has begun construction of a shed in the subject property, but it is not complete, and the status is seen in Annexure-G and G2. The photographs read as under: - 4 - NC: 2025:KHC-D:234 WP No. 106498 of 2017 On 29.06.2017, this Court has granted interim order staying the operation of the impugned order of cancellation. The petitioner, consequent to such interim order, continues to hold possession of the subject property and the contesting respondent [M/s KIADB] has not taken any action to allot the subject property to any third person. 3. Sri Srinand A Pachhapure, the learned counsel for the petitioners, submits that it was incumbent upon the second respondent, who is enjoined under Section 34B[1], [2] of Act to issue notice to remedy any breach and to show cause notice against an order for resumption under Section 34B[3] of the Act with opportunity of hearing, should have placed on record material to show that such notice and opportunity of personal hearing is extended to the petitioner, but M/s KIADB has placed on record only copies of the notice without producing the acknowledgement of due service. The learned counsel emphasizes that this bespeaks of the lack of opportunity that is envisaged under the Act and this Court must therefore intervene especially with the - 5 - NC: 2025:KHC-D:234 WP No. 106498 of 2017 materials showing that the petitioner had begun construction of a shed. 4. On the other hand, Sri P.N. Hatti, the learned counsel for M/s KIADB, submits that [i] the petitioner is allotted the subject property in the year 1997 on the condition that construction in the subject property must be made within two years; [ii] the petitioner is permitted extension as is contemplated under the terms of the lease with the petitioner undertaking to complete construction before 30.12.2010 but the petitioner has not applied for approval of the plan for construction even as on the date of issuance of notice under Section 34B [2] of the Act in the year 2016. The learned counsel contends that there are certain pleadings about lack of amenities to the subject property, but these are false because the subject property is one of the industrial plots in the industrial area and almost all the other allottees have begun their operation many decades back. - 6 - NC: 2025:KHC-D:234 WP No. 106498 of 2017 5. In rejoinder, Sri Srinand Pachhapure submits that this Court may consider the petitioner’s grievance as is canvassed but also in the light of the petitioner’s specific undertaking before this Court that: [a] The petitioner is willing to pay value of the subject property at the rate notified by the Government as of the year 2016, [b] the petitioner will offer this amount within three from the date he receives a communication from M/s KIADB, [c] the petitioner will complete the construction that is stopped underway within three months from the day the amount is paid and the plan is sanctioned by the KIADB, [d] That the petitioner will also start operations within such time as permitted by M/s KIADB. In response, Sri P.N. Hatti submits this Court may not interfere with the impugned order even in the light of the statements now made, but if ultimately the Court is persuaded, this Court may not permit the petitioner to pay - 7 - NC: 2025:KHC-D:234 WP No. 106498 of 2017 value for the subject property in terms of the values notified by the Government for the year 2016-17. 6. In the light of the rival submissions, the question for consideration is: Whether this Court must interfere with the second respondent’s impugned order dated 20.05.2017, and if there must be interference, the terms on which such interference must be. 7. This Court finds considerable force in Sri Srinand Pachhapure’s submissions that because M/s KIADB has not placed on record any material to show due service of notice and the opportunity of hearing except the notices themselves, the petitioner is not extended with due opportunity before the impugned order is issued. M/s KIADB has placed on record copies of the notice dated 16.06.2016 under Section 34B [1] of the Act and copies of the notice for personal hearing dated 30.11.2016 and 10.01.2017. M/s KIADB contends these notices were served through RPAD to the petitioner’s residential address, but the acknowledgements are not placed on record. The outcome of - 8 - NC: 2025:KHC-D:234 WP No. 106498 of 2017 the personal hearing is also not placed on record. M/s KIADB should have placed on record some material to show that indeed the personal hearing was extended to the petitioner after due service of notice, but he did not take part. 8. Further, the petitioner is extended an opportunity to complete building by 30.12.2010, but action is taken only in June 2016, and it is possible, as seen from the photographs now produced, that the petitioner in the meantime has begun construction after such extension but has not completed for bona fide reasons. These reasons would require consideration before it could be opined that the resumption of land is just and reasonable, but with the petitioner now placing on record that he will tender the value for the property within certain timeline and complete the construction as well, this Court must defer the implementation of the order of cancellation extending reasonable opportunity to the petitioner. 9. This Court must next consider whether it would be just and reasonable to permit the petitioner to pay - 9 - NC: 2025:KHC-D:234 WP No. 106498 of 2017 value at the rate notified for the year 2016-17. The allotment of the petitioner is on terms and notwithstanding its difficulties should have implemented. If the petitioner is granted some opportunity, M/s KIADB cannot be denied the benefit that it would receive if the subject property is now brought to sale. M/s KIADB indisputably incurs expenses in acquiring the land and developing an industrial area. These will also have to be considered in deciding the question as aforesaid. This Court therefore is of the view that if the petitioner proposes to keep possession of the subject property and be entitled to the benefits of allotment, must offer the value for the subject property at the rate notified by the State Government for the area [or the area in the immediate vicinity] in the year 2024-25 or the rate notified in the immediately preceding period subject to deduction of the amount already offered. 10. The petitioner, in terms of the undertaking given to this Court, must offer the value as aforesaid, complete construction and start operation, as this Court’s interference and conclusions are also because of such - 10 - NC: 2025:KHC-D:234 WP No. 106498 of 2017 undertaking. If the petitioner defaults in any of the afore, the order for resumption, which is now deferred, shall be implemented clarifying that if any default after additional amount offered, the land shall be resumed under the impugned order dated 20.05.2017 subject to refund of the additional amount. Hence, the following order: ORDER The petition is allowed in part quashing the second respondent’s order dated 20.05.2017 [Annexure-A] deferring resumption subject to the following conditions. [a] The petitioner shall, within two [2] weeks from the date of receipt of a certified copy of this order, file the same with the second respondent along with an affidavit of undertaking stating that it shall offer the value of the subject property in terms of the value notified in the year 2024-25 or the - 11 - NC: 2025:KHC-D:234 WP No. 106498 of 2017 value notified for the immediately preceding years. [b] The second respondent on receipt of a certified copy of the order and the undertaking shall communicate to the petitioner, within four [4] weeks under RPAD the value that the petitioner must pay in terms of such letter of undertaking. [c] The petitioner without exception shall offer the value by an instrument drawn as required by M/s KIADB within two [2] months from the receipt of intimation. [d] The second respondent, on receipt of such amount, shall consider any plan submitted for completion of the construction and grant necessary approvals. The petitioner, within four - 12 - NC: 2025:KHC-D:234 WP No. 106498 of 2017 months from such approval, complete construction. The petitioner shall, within such further time as allowed by the second respondent, begin business operations. Sd/- (B.M.SHYAM PRASAD) JUDGE BVV LIST NO.: 1 SL NO.: 14