- 1 - HC-KAR NC: 2025:KHC:31862 WP No. 34113 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE M.I.ARUN WRIT PETITION NO. 34113 OF 2024 (LB-RES) BETWEEN: SHIVANNA K. R. S/O RAJEGOWDA, AGED ABOUT 47 YEARS, R/AT KUDLURU VILLAGE, KUSHALANAGAR TALUK, KODAGU DISTRICT - 571 231. …PETITIONER (BY SRI. G. K. BHAT., SENIOR COUNSEL FOR SMT. SUDHA D., ADVOCATE) AND: 1. THE STATE OF KARNATAKA, REP: BY ITS PRINCIPAL SECRETARY, RURAL DEVELOPMENT AND PANCHAYATH RAJ DEPARTMENT GATE NO.3, 3RD FLOOR, M.S. BUILDING, BENGALURU - 560 001. 2. THE DIRECTOR AND EX-OFFICIO, DEPUTY SECRETARY TO THE GOVERNMENT (RURAL DEVELOPMENT AND PANCHAYATH RAJ DEPARTMENT) GATE NO.3, 3RD FLOOR, M. S. BUILDING, BENGALURU - 560 001. 3. KARNATAKA STATE SMALL INDUSTRY CORPORATION LTD., A GOVERNMENT OF KARNATAKA UNDERTAKING REGISTERED OFFICE AT INDUSTRIAL ESTATE, RAJAJINAGAR, WEST OF CHORD ROAD, Digitally signed by GEETHA P G Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:31862 WP No. 34113 of 2024 BENGALURU - 560 010, REP BY ITS MANAGING DIRECTOR. 4. THE ASSISTANT CHIEF MANAGER (I/C), KARNATAKA STATE INDUSTRIAL CORPORATION LTD., INDUSTRIAL ESTATE, YADAVAGIRI, MYSURU - 575 008. 5. THE PANCHAYATH DEVELOPMENT OFFICER, GRAMA PANCHAYATH, KUDAMANGALURU, KUSHALNAGAR TALUK, KODAGU DISTRICT - 571 232. …RESPONDENTS (BY SRI. H K KENCHEGOWDRU., AGA FOR R1 AND R2; SRI. B. A. CHANDRASHEKAR., ADV FOR R3 AND R4; SRI. P. B. ACHAPPA, ADV FOR R5) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE CIRCULAR DTD. 16.07.2024 IN NO.RDPR/279/GPA/2024 AS PER ANNX-S PASSED BY THE R-2 AND CONSEQUENTLY THE COMMUNICATION / LETTER DTD. 19.07.2024 IN NO. MY.VI/KAIVA/KUSHALANAGARA/NIVESHANA/Q-9/2024 AS PER ANNX-T ISSUED BY THE R-4 RESPECTIVELY. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE M.I.ARUN - 3 - HC-KAR NC: 2025:KHC:31862 WP No. 34113 of 2024 ORAL ORDER Respondent No.4 allotted an industrial shed to one Smt.T. Rama Devi on 19.12.2001 for the purposes of putting up a Tyre Retrading, cold process unit. Subsequently, a sale deed has been executed in favour of the allottee. Presently the petitioner is said to be the owner of the industrial shed. 2. The petitioner has now requested respondent No.4 for permitting to run a hotel and restaurant in the said premises. The same has been refused on the ground that the plot can be utilized only for industrial purposes. Aggrieved by the same, the present writ petition is filed. 3. The case of the petitioner is that a hotel is also an industry and what is prayed by the petitioner is only a permission for change of business and respondent No.4 herein is refusing the requested permission. 4. Learned counsel for respondent No.4 submits that the hotel and restaurant business cannot be considered as an industry in the instant case and prays for dismissal of the writ petition. - 4 - HC-KAR NC: 2025:KHC:31862 WP No. 34113 of 2024 5. The issue that arises for consideration in the instant writ petition is whether hotel and restaurant businesses can be considered as an industry. 6. Respondent No.4 is a wholly-owned State of Karnataka undertaking and it is established to promote the interests of Micro, Small and Medium Industries in the State of Karnataka. It is a limited company incorporated under the provisions of Companies Act, 1956. 7. It forms an industrial layout, where plots are allotted to several industrial units for running a business. 8. The Karnataka State Small Industries Development Corporation Ltd. Allotment Rules, 2004 (“the Rules” for short), defines industry, estate, plot and shed as follows: xi) "Industry" :- means any economic/commercial activity either in the manufacturing or services sector for the purposes of generating employment and wealth: xii) "Industrial Estate" :- means a definite area of land on which a conglomerate of Industrial sheds / - 5 - HC-KAR NC: 2025:KHC:31862 WP No. 34113 of 2024 plots / flats / godowns / shops are constructed / formed by KSSIDC Ltd. xv) "Plot" :- Means a de-marcated piece of land within the Industrial Estate suitable for housing an Industry there on. xvii) " Shed" :- Means a structure built by KSSIDC in an Industrial Estate which can be used for purpose of housing an Industry there-in together with the land appurtenant there-to and includes a Flat, a Godown and a shop. 9. A hotel and restaurant business will have to be considered as an economic/ commercial activity in the service sector for the purposes of generating employment and wealth. 10. Under the said circumstances, the decision of respondent No.4, as per the letter dated 19.07.2024 (vide Annexure-T to the writ petition), cannot be sustained and the same is liable to be set aside. 11. However, mere setting aside of the impugned letter does not give a right to the petitioner to establish a hotel over the property and the same shall be subject to other permissions that may be required in law to be obtained from - 6 - HC-KAR NC: 2025:KHC:31862 WP No. 34113 of 2024 various other authorities. Nevertheless, for the purposes of the Rules, hotel and restaurant business will have to be considered as an industry. 12. Further, in respect of the circular issued by the State (Annexure-S to the writ petition), it stipulates that any construction may be constructed within an industrial area established by respondent No.4, necessary plan approval has to be obtained from respondent No.4 also. I do not see any error in the same. The petitioner is not entitled for quashing of the same. However, while interpreting, the respondent No.4 is required to consider the hotel and restaurant business as an industry and take appropriate decisions in accordance with law. 13. Hence, the following: ORDER i. The impugned letter dated 19.07.2024 issued by respondent No.4 (Annexure-T to the writ petition) is hereby set aside. ii. Respondent No.4 is directed to consider the request of the petitioner by treating the hotel and restaurant business as an industry for the - 7 - HC-KAR NC: 2025:KHC:31862 WP No. 34113 of 2024 purposes of KSSIDC Allotment Rules, 2004 and take appropriate decisions in accordance with law. iii. It is hereby made clear that the petitioner is entitled to run a hotel and restaurant business on the property only after obtaining all the required permissions from various authorities and not otherwise. The writ petition is disposed of accordingly. Sd/- (M.I.ARUN) JUDGE AMA List No.: 1 Sl No.: 71