Karnataka High Court
M/S R S Kalyani Hotels Pvt Ltd vs The State Of Karnataka on 2 December, 2025
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NC: 2025:KHC:50255-DB
WA No. 1886 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF DECEMBER, 2025
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE C.M. POONACHA
WRIT APPEAL NO. 1886 OF 2025 (GM-KIADB)
BETWEEN:
1. M/S R.S. KALYANI HOTELS PVT LTD
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT
REPRESENTED BY ITS DIRECTOR
R.RAVICHANDRA AND HAVING ITS
REGISTERED OFFICE AT
NO.7,100 FEET ROAD
4TH B BLOCK,
KORAMANGALA
Digitally BENGALURU - 560 034
signed by
SUMATHY ...APPELLANT
KANNAN
(BY SRI DHYAN CHINNAPPA, SENIOR ADVOCATE A/W
Location:
High Court of SRI RAJESWARA P.N., ADVOCATE)
Karnataka
AND:
1. THE STATE OF KARNATAKA
BY ITS PRINCIPAL SECRETARY
AND ADDITIONAL CHIEF SECRETARY
COMMERCE AND INDUSTRIES DEPARTMENT
VIKAS SOUDHA,
BENGALURU - 560 001
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NC: 2025:KHC:50255-DB
WA No. 1886 of 2025
HC-KAR
2. THE KARNATAKA INDUSTRIAL AREA
DEVELOPMENT BOARD
4TH AND 5TH FLOOR, EAST WING
KHANIJA BHAVAN,
RACE COURSE ROAD
BENGALURU - 560 001
REPRESENTED BY ITS
CHIEF EXECUTIVE OFFICER
3. THE JOINT DIRECTOR
THE KARNATAKA INDUSTRIAL AREA
DEVELOPMENT BOARD,
4TH AND 5TH FLOOR
EAST WING, KHANIJA BHAVAN
RACE COURSE ROAD
BENGALURU - 560 001
...RESPONDENTS
(BY SMT. NAMITHA MAHESH, AGA FOR R-1)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE
ORDER DATED 25.10.2025 IN W.P. No. 25036/2015 (GM-KIADB),
PASSED BY THE LEARNED SINGLE JUDGE AND ETC.
THIS APPEAL, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN
AS UNDER:
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NC: 2025:KHC:50255-DB
WA No. 1886 of 2025
HC-KAR
CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
and
HON'BLE MR. JUSTICE C.M. POONACHA
ORAL JUDGMENT
(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
1. The appellant has filed the present appeal, impugning an order dated 25.10.2025 [impugned order] passed by the learned Single Judge in W.P.No.25036/2015 (GM-KIADB) captioned, 'M/s. R.S. Kalyani Hotels Pvt. Ltd. v. The State of Karnataka & Others.'
2. The appellant had filed the said petition, inter alia impugning a communication dated 22.05.2015 / 23.05.2015 issued by respondent No.3, whereby the allotment of 'three acres of land in Plot No.51 (Corner) of Bengaluru IT Park near Devanahalli, Bengaluru Rural District' [subject land], was cancelled. The appellant also sought a declaration to the effect that the respondents had no right to change the mode of allotment from lease-cum-sale for a period of ten years to a lease for a period of 99 years after the subject land was allotted. The appellant also impugned the Government order dated 07.08.2014 directing the change in the policy of allotment. Additionally, the appellant prayed -4- NC: 2025:KHC:50255-DB WA No. 1886 of 2025 HC-KAR that directions be issued to the respondents to abide by the terms of the allotment letter dated 15.02.2013.
3. The learned Single Judge rejected the writ petition by the impugned order for the reason that the appellant had failed to pay the consideration within the time as stipulated. The learned Single Judge found that the appellant had lost its right to claim allotment of the subject land.
Prefatory facts:
4. In the year 2010, the appellant had sought for allotment of land for establishing a Hotel on the proposed Bengaluru IT Park in the Bengaluru Rural District. The appellant had also deposited a sum of Rs.1.08 crore by way of tentative cost of the land.
5. The respondent No.2 [KIADB] allotted the subject land to the extent of 3 acres to the appellant for establishing a Hotel and Convention Centre in terms of an allotment letter dated 15.02.2013. The allotment was on a lease-cum-sale basis for a period of 10 years. At the end of the period of 10 years, the lease would be converted into a sale, subject to the fulfillment of the terms and conditions as stipulated. The tentative price of the land was fixed -5- NC: 2025:KHC:50255-DB WA No. 1886 of 2025 HC-KAR at Rs.1.8 crore per acre plus 10%. The relevant clauses of the aforementioned allotment letter, which relate to the payment of the consideration for the subject land, are set out as under:
"4. The tentative price of the land and lease rents shall be paid as follows:
a. A sum of Rs.18,00,000=00 being the balance 20% tentative cost of land within 30 days from the date of issue of this letter, i.e. On or before 14.03.2013.
b. A sum of Rs.5,04,00,000=00 being the balance 80% tentative cost of land shall be paid within 180 days from the date of issue of this letter i.e. on or before 13.08.2013.
c. In the event of your furnishing Bank guarantee or letter of commitment from KSFC/KSIIDC/Financial Institutions agreeing to pay the cost of land indicated at 4 (b) directly to the Board, the allotment will be confirmed and documentation will be permitted subject to payment of interest of 12.75% per annum on amount due from the date of handing over possession of land to the date of payment which should be made within 180 days from the date of execution of agreement.
d. You should pay a lease rent at the rate of 1000/- per acre / per annum or part thereof or at such other rates as may be fixed by the Board from time to time.
e. Interest at 12.75% P.A. shall be levied in case the lease rents are not paid within one month from the date on which the lease rents fall due every year.
5. This Allotment Letter will be valid only for a period of 30 days from the date of its issue and in the event of failure to pay the amount indicated at para 4 (a). allotment stands automatically cancelled and E.M.D. paid stands forfeited.-6-
NC: 2025:KHC:50255-DB WA No. 1886 of 2025 HC-KAR 6 (a) In case of your failure to pay the amount mentioned at para 4 (b) before expiry of the time stipulated therein, this offer of allotment stands automatically expired and the Earnest Money Deposit and 25% of the amount paid by you towards cost of land stands automatically forfeited.
(b)If the balance land cost is not paid within 180 days from the date of execution of lease agreement in respect of cases mentioned at para 4 (c) the plot would be resumed on expiry of the time stipulated without issuing any fresh notice.
7.Soon after receipt of the payment of 100% tentative cost of land and on your acceptance of all the terms and conditions indicated herein before and also those mentioned hereinafter, the possession of land will be handed over within 30 days from the date of payment and at the time of taking over possession you should produce the original receipt, issued for the payment made to the Engineer incharge of the area.
8(a) On taking possession of land, you shall adhere to the time schedule indicated in the standard conditions appended hereto."
6. The standard terms and conditions, which were applicable to the allotment, also stipulated the following timelines:
The time schedule prescribed for various activities subsequent to payment of the tentative price.
a) For taking over possession of 30 days from the date of full land. payment towards tentative cost of land.
b) For execution of Lease-cum- 30 days from the date of receipt of Sale Agreement Possession Certificate
c) For commencement of 24 months from the date of taking Production. possession of land.-7-
NC: 2025:KHC:50255-DB WA No. 1886 of 2025 HC-KAR
7. The appellant did not make the payment in terms of the schedule as set out in the allotment letter. On the eve of the expiry of the period of one hundred and eighty-days from the date of the allotment letter, the appellant sent a letter inter alia praying that it be provided further time till 13.08.2015 to pay the balance amount without any interest or costs.
8. On 05.08.2014, KIADB sent a letter granting the appellant ninety days extension from the date of the letter for payment of the balance cost of the subject land amounting to Rs.5,04,00,000/-. The appellant was informed that delay in payment would result in levy of interest, and further steps to hand over possession of the land would be taken after the payments are made.
9. The appellant did not pay the balance consideration within the said period. In the meanwhile, on 07.08.2014, the State Government passed an order approving the allotment of land by KIADB on lease for a period of ninety-nine years. The said order also applied to projects cleared by Single Window Clearance Committees and KIADB Allotment Committee prior to 23.08.2013 in cases where the lease-cum-sale agreement had not been signed -8- NC: 2025:KHC:50255-DB WA No. 1886 of 2025 HC-KAR for the reasons stated in the said order. By virtue of the said order, the terms of allotment of subject land would stand altered to the said extent.
10. It is also material to note that the said order also specifies that if the land is not utilized for the project for which it is allotted within a period of three years, the allotment of the lease will get cancelled. It also specifies that if the land is not utilized within the stipulated period as approved, the allotment of the lease would be automatically cancelled and the land would be resumed by the Government.
11. On 07.02.2015, KIADB sent a letter once again calling upon the appellant to pay the balance consideration amount towards the cost of land along with interest at the rate of 12.75 % per annum from 05.11.2014 till the date of payment. The appellant was put to notice that in case of failure to remit the amount within thirty days from the date of receipt of the said letter, the allotment made in its favour will stand automatically cancelled and no further correspondence will be made in this regard. The appellant did not make any payment within the said stipulated period as well. -9-
NC: 2025:KHC:50255-DB WA No. 1886 of 2025 HC-KAR However, it sent a cheque for a sum of Rs.30 lakhs under cover of its letter dated 22.05.2015 further stating that it would pay the balance costs along with interest before 31.08.2015.
12. In the aforesaid circumstances, KIADB passed an order dated 22.05.2015 cancelling the allotment of the subject land in favour of the appellant. The appellant was also called upon to return the original allotment letter along with the original receipts to enable KIADB to refund the amount deposited by the appellant after forfeiting the amount as stipulated.
13. However, KIADB encashed the appellant's cheque of Rs.30 lakhs on 27.05.2015.
14. On 16.06.2015, the appellant filed a writ petition being W.P.No.25036/2015, which was rejected by the impugned order.
15. It is material to note that on 23.06.2015, the learned Single Judge passed an interim order restraining KIADB from giving effect to the cancellation order. The Court also observed that it would be open for the appellant to pay the amount demanded and get the
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NC: 2025:KHC:50255-DB WA No. 1886 of 2025 HC-KAR lease executed. The same would be subject to the outcome of the petition.
16. On 11.06.2022, that is after almost seven years after filing the writ petition, the appellant deposited a sum of Rs.1 crore on 11.06.2022 and a further sum of Rs.1 crore on 22.06.2022.
17. The appellant states that the Government order dated 07.08.2014 was effectively withdrawn on 01.01.2022 and the terms of allotment were restored to a lease-cum-sale for a period of 10 years. In view of the above, the appellant filed a memo seeking withdrawal of the writ petition, and the petition was dismissed by an order dated 05.07.2023. The appellant claims that thereafter, it deposited further sums of Rs. 1,00,00,000/- on 28.07.2022 and Rs.1,18,00,000/- on 01.10.2022.
18. On 13.11.2024, KIADB sent a letter and Demand Draft for a sum of Rs.4,38,00,000/- to the appellant, inter alia stating that the appellant had deposited various amounts after issuance of the cancellation order, without any demand notice from KIADB. However, the appellant did not accept the same. It sent a communication dated 20.11.2024 returning the demand draft and
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NC: 2025:KHC:50255-DB WA No. 1886 of 2025 HC-KAR claiming that it had paid the balance tentative cost in terms of the interim order passed by this Court.
19. The appellant thereafter filed an application for recall of the order of dismissal dated 05.07.2023, venting its grievance that it had paid the entire amount, but KIADB had not executed the lease- cum-sale agreement. Appellant claimed that in similar circumstances, KIADB had executed lease-cum-sale agreement in respect of similarly situated persons. Apparently, the said application was heard and accepted by order dated 29.02.2024. The learned Single Judge heard the petition on merits and disposed of the same in terms of the impugned order. Reasons & Conclusions
20. Mr. Dhyan Chinnappa, learned Senior counsel earnestly contended that the appellant had paid the entire consideration for the allotment of the subject land and therefore, was entitled to the same. He further stated that the appellant was ready and willing to pay interest for the belated payment. In the alternative, it was also willing to pay the current value for the subject land. He also contend that at the time of allotment, the area was not developed
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NC: 2025:KHC:50255-DB WA No. 1886 of 2025 HC-KAR and therefore, there was little possibility of utilizing the same for establishing a Hotel or a Convention Centre.
21. We find no merit in the present appeal. There is no dispute as to the essential facts. The appellant was allotted the subject land in terms of the allotment letter dated 15.02.2013. There is no ambiguity in the terms and conditions of the allotment. In terms of the of the said letter, the appellant was required to pay a sum of Rs.18,00,000/- on or before 14.03.2013 and the balance 80% consideration on or before 13.08.2013. Clause 5 of the allotment letter clearly stipulated if the payment of a sum of Rs.18,00,000/- was not made within the period of thirty days as stipulated in clause 4(a), the allotment would stand automatically cancelled and the earnest money [EMD] would stand forfeited.
22. The appellant was given another opportunity to pay the amount in terms of the letter dated 05.08.2014, whereby the appellant was granted further ninety days from the date of the letter to make the balance payment. However, the appellant failed to make the payment as required. The appellant was granted yet another opportunity in terms of the letter dated 07.02.2015,
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NC: 2025:KHC:50255-DB WA No. 1886 of 2025 HC-KAR whereby it was called upon to make the balance payment along with interest at the rate of 12.75% from 05.11.2014 till the date of payment. The appellant was clearly put to notice that failure to remit the amount within a period of thirty days of receipt of the said letter would result in automatic cancellation of the allotment made in its favour.
23. Concededly, the appellant had not made the payment within the said period. Thus, the allotment in its favour was cancelled by an order dated 22.05.2015, which was communicated to the appellant by a letter dated 22.05.2015 / 23.05.2015.
24. We do not think that the appellant can draw any benefit of having sent the sum of Rs.30 lakhs under the cover of its letter dated 22.05.2015 or KIADB having encashed the same. The said payment was not in conformity with the letter dated 07.02.2015 and therefore, the appellant did not acquire any right for sustaining the said allotment on account of such payment. The appellant's challenge to the order dated 07.08.2014 issued by the Government changing the terms of the allotment to a lease for a period of 99
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NC: 2025:KHC:50255-DB WA No. 1886 of 2025 HC-KAR years, is insubstantial. The appellant had not acquired any interest in the subject land as on the date of the said order, as the appellant had not paid the consideration, which was a pre-condition for execution of the lease-cum-sale agreement. The appellant thus acquired no right to insist that the terms of allotment be adhered to. However, if the appellant did not wish to accept the lease for 99 years, it was open for the appellant to take steps for avoiding the allotment. It is also material to note that the changed terms would be applicable to allotments made prior to 23.08.2013 only in cases where lease-cum-sale agreement had not been signed due to the reasons stipulated in the Government Order. In the present case, the lease-cum-sale agreement was not signed on account of failure on the part of the appellant to pay the consideration as required.
25. The appellant had secured an interim order on 23.06.2015 whereby it was permitted to pay the amount as demanded and obtain the lease-cum-sale agreement in its favour, subject to the outcome of the petition. However, the appellant did not make any payment for a period of almost seven years after having secured the said interim order. However, it made certain payments in June
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NC: 2025:KHC:50255-DB WA No. 1886 of 2025 HC-KAR and July 2022 (Rs. 1 crore on 11.06.2022; Rs.1 crore on 22.06.2022; Rs.1 crore on 28.07.2022 and Rs.1.18 crore on 01.10.2022).
26. Admittedly, the said payments were made without any demand or notice. In the meanwhile, the appellant had after making payments, withdrawn the writ petition as per order dated 05.07.2023. Notwithstanding the same, it claimed that it had made payments in terms of the interim order dated 23.06.2015. However, the said order clearly stipulated that the sale was subject to the appellant ultimately succeeding. In terms of the interim order, the appellant was permitted to pay the amount demanded and obtain the lease agreement which would "remain subject to the result of this petition". Since, the petition was dismissed as withdrawn, the interim order did not survive. The appellant can draw no benefit out of the said interim order.
27. We find no grounds to set aside the cancellation of the allotment of subject land in favour of the appellant. The learned Single Judge rightly declined the challenge to the cancellation
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NC: 2025:KHC:50255-DB WA No. 1886 of 2025 HC-KAR letter. We find no ground to fault the impugned order. The appeal is unmerited. The same is accordingly, dismissed.
Sd/-
(VIBHU BAKHRU) CHIEF JUSTICE Sd/-
(C.M. POONACHA) JUDGE KS List No.: 2 Sl No.: 29