Mr Tejraj Gulecha vs Karnataka Industrial Areas ...
2023 Latest Caselaw 2398 Kant

                           1



       IN THE HIGH COURT OF KARNATAKA AT BENGALURU

           DATED THIS THE 16TH DAY OF MAY, 2023

                          BEFORE

         THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

        WRIT PETITION No.18952 OF 2021 (GM - KIADB)

                           C/W

        WRIT PETITION No.18986 OF 2021 (GM - KIADB)

IN WRIT PETITION No.18952 OF 2021

BETWEEN:

MR.TEJRAJ GULECHA
AGED ABOUT 67 YEARS
S/O MR.PUKHRAJ GULECHA
RESIDING AT
NO.1101, EKKA,
11TH FLOOR,
PLATINUM ANANDA, CHAMARAJPET,
BENGALURU - 560 018.
                                              ... PETITIONER

(BY SRI C.K.NANDAKUMAR, SR.ADVOCATE A/W
    SMT.ANNAPOORNA S., AND SRI ABRAHAM JOSEPH,
    ADVOCATES)

AND:

1.   KARNATAKA INDUSTRIAL AREAS
     DEVELOPMENT BOARD
     A STATUTORY BODY UNDER
     THE KARNATAKA INDUSTRIAL
     AREAS DEVELOPMENT ACT, 1966
                            2




     HAVING ITS OFFICE AT:
     NO.49, 4TH AND 5TH FLOORS
     'EAST WING', KHANIJA BHAVAN
     RACE COURSE ROAD
     BENGALURU - 560 001
     REPRESENTED BY ITS
     CHIEF EXECUTIVE OFFICER AND
     EXECUTIVE MEMBER.

2.   EMBASSY EAST BUSINESS
     PARK PRIVATE LIMITED
     (FORMERLY KNOWN AS
     CONCORD INDIA PRIVATE LIMITED)
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
     EMBASSY POINT, 1ST FLOOR
     150, INFANTRY ROAD
     BENGALURU - 560 001
     REPRESENTED BY ITS
     MANAGING DIRECTOR.

3.   IDBI TRUSTEESHIP SERVICES LIMITED
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
     ASIAN BUILDING, GROUND FLOOR
     17, R.KAMANI MARG
     BALLARD ESTATE
     MUMBAI - 400 001
     MAHARASHTRA
     REPRESENTED BY ITS
     MANAGING DIRECTOR.

4.   INDIABULLS HOUSING FINANCE LIMITED
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
                            3



     M-62 AND 63, FIRST FLOOR
     CONNAUGHT PLACE
     NEW DELHI - 110 001
     DELHI
     REPRESENTED BY ITS
     MANAGING DIRECTOR.

5.   EMBASSY INN PRIVATE LIMITED
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
     I FLOOR, EMBASSY POINT,
     150, INFANTRY ROAD,
     BENGALURU - 560 001
     KARNATAKA
     REPRESENTED BY ITS
     MANAGING DIRECTOR.

6.   EMBASSY PROPERTY DEVELOPMENTS
     PRIVATE LIMITED
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
     I FLOOR, EMBASSY POINT,
     150, INFANTRY ROAD,
     BENGALURU - 560 001
     KARNATAKA
     REPRESENTED BY ITS
     MANAGING DIRECTOR.

7.   EMBASSY SERVICES PRIVATE LIMITED
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
     I FLOOR, EMBASSY POINT
     150, INFANTRY ROAD
     BENGALURU - 560 001
     KARNATAKA
                            4



    REPRESENTED BY ITS

    MANAGING DIRECTOR.

                                            ... RESPONDENTS

(BY SRI BASAVARAJ V.SABARAD, SR.ADVOCATE A/W
    SRI H.L.PRADEEP KUMAR, ADVOCATE FOR R-1;
    SRI K.G.RAGHAVAN, SR.ADVOCATE A/W
    SRI AJESH KUMAR S., ADVOCATE FOR R-2, R-5 TO R-7;
    SRI NITIN PRASAD, ADVOCATE FOR R-3;
    SRI CHINTAN CHINAPPA, ADVOCATE FOR R-4)


      THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE
CONSTITUTION OF INDIA PRAYING TO DIRECT R1 TO TAKE
APPROPRIATE ACTION AGAINST R2 FOR VIOLATION OF THE TERMS
AND CONDITION ON THE LEASE CUM SALE AGREEMENT DATED
07.06.2007 (AS AT ANNEXURE-D) INCLUDING INITIATION OF
ACTION PURSUANT TO SECTIONS 34 AND SECTION 38 OF THE
KARNATAKA INDUSTRIAL AREAS DEVELOPMENT ACT, 1966 AND
ETC.,

IN WRIT PETITION No.18986 OF 2021


BETWEEN:

MR.REDDY VEERANNA
S/O R.SANJEEVAPPA
AGED ABOUT 65 YEARS
RESIDING AT NO.109
10TH MAIN, 7TH CROSS
RMV EXTENSION
SADASHIVA NAGAR
BENGALURU - 560 080.
                                              ... PETITIONER

(BY SRI C.K.NANDAKUMAR, SR.ADVOCATE A/W
                            5



     SMT.ANNAPOORNA S., AND SRI ABRAHAM JOSEPH,
     ADVOCATES)

AND:

1.   KARNATAKA INDUSTRIAL AREAS
     DEVELOPMENT BOARD
     A STATUTORY BODY UNDER
     THE KARNATAKA INDUSTRIAL
     AREAS DEVELOPMENT ACT, 1966
     HAVING ITS OFFICE AT:
     NO.49, 4TH AND 5TH FLOORS,
     'EAST WING'
     KHANIJA BHAVAN,
     RACE COURSE ROAD,
     BENGALURU - 560 001
     REPRESENTED BY ITS
     CHIEF EXECUTIVE OFFICER
     AND EXECUTIVE MEMBER.

2.   EMBASSY EAST BUSINESS PARK
     PRIVATE LIMITED
     (FORMERLY KNOWN AS
     CONCORD INDIA PRIVATE LIMITED)
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
     EMBASSY POINT, 1ST FLOOR,
     150, INFANTRY ROAD,
     BENGALURU-560001
     REPRESENTED BY ITS
     MANAGING DIRECTOR.

3.   NSL RENEWABLE POWER PRIVATE LIMITED
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
     NSL ICON, 4TH FLOOR, ROAD NO.12
                            6



     BANJARA HILLS,
     HYDERABAD - 500 034
     TELANGANA,
     REPRESENTED BY ITS
     MANAGING DIRECTOR.

4.   MANDAVA HOLDINGS PRIVATE LIMITED
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
     NSL ICON, 4TH FLOOR,
     ROAD NO.12,
     BANJARA HILLS,
     HYDERABAD - 500 034
     TELANGANA,
     REPRESENTED BY ITS
     MANAGING DIRECTOR.

5.   IDBI TRUSTEESHIP SERVICES LIMITED
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
     ASIAN BUILDING
     GROUND FLOOR,
     17, R.KAMANI MARG,
     BALLARD ESTATE,
     MUMBAI - 400 001
     MAHARASHTRA,
     REPRESENTED BY ITS
     MANAGING DIRECTOR.

6.   INDIABULLS HOUSING FINANCE LIMITED
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
     M-62 AND 63, FIRST FLOOR,
     CONNAUGHT PLACE,
     NEW DELHI - 110 001
                           7



     DELHI,
     REPRESENTED BY ITS
     MANAGING DIRECTOR.

7.   EMBASSY INN PRIVATE LIMITED
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
     I FLOOR, EMBASSY POINT
     150, INFANTRY ROAD,
     BENGALURU - 560 001
     KARNATAKA,
     REPRESENTED BY ITS
     MANAGING DIRECTOR.

8.   EMBASSY PROPERTY DEVELOPMENTS
     PRIVATE LIMITED
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
     I FLOOR, EMBASSY POINT
     150, INFANTRY ROAD,
     BENGALURU - 560 001
     KARNATAKA,
     REPRESENTED BY ITS
     MANAGING DIRECTOR.

9.   EMBASSY SERVICES PRIVATE LIMITED
     A COMPANY WITHIN THE MEANING OF
     COMPANIES ACT, 2013
     HAVING ITS REGISTERED OFFICE AT
     I FLOOR, EMBASSY POINT
     150, INFANTRY ROAD,
     BENGALURU - 560 001
     KARNATAKA,
     REPRESENTED BY ITS
                                  8



     MANAGING DIRECTOR.
                                                     ... RESPONDENTS

(BY SRI BASAVARAJ V.SABARAD, SR.ADVOCATE A/W
    SRI H.L.PRADEEP KUMAR, ADVOCATE FOR R-1;
    SRI K.G.RAGHAVAN, SR.ADVOCATE A/W
    SRI AJESH KUMAR S., ADVOCATE FOR R-2, R-7 TO R-9;
    SRI NISHAN G.K., ADVOCATE FOR R-3 AND R-4;
    SRI NITIN PRASAD, ADVOCATE FOR R-5;
    SRI CHINTAN CHINAPPA, ADVOCATE FOR R-6)


     THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT R1 TO
TAKE APPROPRIATE ACTION AGAINST R2 FOR VIOLATION OF THE
TERMS AND CONDITION OF THE LEASE CUM SALE AGREEMENT
DATED 07.06.2007 AS AT ANNEXURE-E INCLUDING INITIATION OF
ACTION PURSUANT TO SECTIONS 34 AND 38 OF THE KARNATAKA
INDUSTRIAL AREAS DEVELOPMENT ACT, 1966 AND ETC.,



     THESE WRIT PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS, COMING ON FOR PRONOUNCEMENT THIS
DAY, THE COURT MADE THE FOLLOWING:-


                                 ORDER

The petitioners, in both these petitions, have sought for a writ

in the nature of mandamus directing the 1st respondent/ Karnataka

Industrial Areas Development Board ('the Board' for short) to take

appropriate action against the 2nd respondent/Embassy East

Business Park Private Limited ('the Company' for short) for alleged

violation of terms and conditions of lease-cum-sale agreement

dated 07-06-2007 including initiation of proceedings under Sections

34 and 38 of the Karnataka Industrial Areas Development Act, 1966

('the Act' for short) and have further sought a slew of prayers in

furtherance of action to be taken against the 2nd

respondent/Company.

2. Both the petitions urge identical issues. The respective

learned counsel appearing for the parties to the lis have all

addressed their submissions referring to the facts obtaining in Writ

Petition No.18986 of 2021. Therefore, the facts obtaining in

Writ Petition No.18986 of 2021 are narrated.

3. Shorn of unnecessary details, the facts in brief germane,

are as follows:-

The petitioner along with several others claims to have paid a

sum of `9,25,00,000/- to the erstwhile shareholders of Concord

India Private Limited ('CIPL' for short), the former entity of the 2nd

respondent for transfer of 1,91,301 shares equivalent to 50% of the

share holding in CIPL. It is the averment in the petition that

consideration was paid pursuant to an understanding between the

petitioner and the group that holds the 2nd respondent that each of

them would hold 50% of the shareholding of CIPL. The

understanding between the two was to jointly develop the marquee

asset of a lease over a plot of land in Plot No.6 Kadugodi Industrial

Area comprising in Sy.No.1, Block No.73 within the village limits of

Kadugodi Plantation, Bidarahalli Hobli, Bengaluru East Taluk,

Bengaluru which was measuring 78 acres and 2219 sq.mts. It is

the averment in the petition that in furtherance of the said

understanding, the petitioner along with other entities engaged with

another group Mandava Holdings Private Limited for sub-leasing of

20 acres out of the leased property. The petitioner and the 2nd

respondent have several disputes with regard to the aforesaid

understanding between them and are parties to several disputes

amongst themselves.

4. On 06-06-2007 the 2nd respondent avails a corporate

deposit facility from HDFC against the property aforementioned. It

was at a period anterior to execution of lease-cum-sale agreement

by the Board in favour of the 2nd respondent which comes about on

the next day. On 07-06-2007 the Board and the 2nd respondent

enter into a lease-cum-sale agreement whereby the Board leases

the aforesaid property to the 2nd respondent for development

purpose. After the execution of lease-cum-sale agreement, on 03-

07-2007 the Board issues a 'no objection certificate' to the 2nd

respondent permitting it to mortgage its right title and interest in

the property to HDFC Limited.

5. It appears that after the aforesaid incidents of execution of

lease-cum-sale agreement and a no objection in favour of the HDFC

Limited, proceedings are instituted by Government of Karnataka in

the Department of Forest asserting that the land belonged to the

Forest. The litigation commences on 16-04-2008 and ends on

19-11-2020 before the Apex Court holding that the land did not

belong to the Forest Department. After dismissal of the SLP and its

account, the Board executes a supplemental deed with CIPL for a

period of 11 years. On 16-08-2021, a notice is issued to CIPL by

50% of the shareholders in CIPL i.e., the petitioner. This notice

was replied to by the 2nd respondent, the erstwhile CIPL on

02-09-2021. Immediately thereafter, the present writ petitions are

preferred seeking the aforesaid prayers and this Court in

W.P.No.18952 of 2021 by an order dated 29-10-2021 admitted the

petition for its hearing and granted interim order as prayed for. It

is later the companion petition is filed.

6. Heard Sri C.K. Nandakumar, learned senior counsel

appearing for petitioners; Sri Basavaraj V.Sabarad, learned senior

counsel appearing for respondent No.1 in both the petitions; Sri

K.G. Raghavan, learned senior counsel along with Sri S. Ajesh

Kumar, learned counsel appearing for respondents 2, 5 to 7 in Writ

Petition No.18952 of 2021 and respondents 2, 7 to 9 in Writ Petition

No.18986 of 2021; Sri Nitin Prasad, learned counsel appearing for

respondent No.3 in Writ Petition No.18952 of 2021 and respondent

No.5 in Writ Petition No.18986 of 2021 and Sri Chintan Chinappa,

learned counsel appearing for respondent No.4 in Writ Petition

No.18952 of 2021 and respondent No.6 in Writ Petition No.18986 of

2021.

7. The learned senior counsel appearing for the petitioners

would vehemently contend that the petitioners and the 2nd

respondent/erstwhile CIPL have disputes between them which are

being agitated in appropriate fora. What drives the petitioners to

this Court in the subject petition is the acts of the 2nd respondent in

misusing the property allotted to it by the State/Board. It is the

submission of the learned senior counsel that between the dates on

which the litigation commenced between Government of Karnataka

and the 2nd respondent contending that it was a forest land, and the

end of litigation before the Apex Court, the 2nd respondent has

created several charges on the property without the consent of the

Board. He would submit that the Board in its statement of

objections has clearly admitted that only consent it gave for

creation of a mortgage was with regard to HDFC Limited and, to no

other charge the 2nd respondent has created there is consent of the

Board. He would submit that the Board ought to have initiated

action for violation of the terms of lease-cum-sale agreement and

its silence is what is to be contested before this Court.

8. On the other hand, the learned senior counsel appearing

for the 2nd respondent would vehemently refute the submissions to

contend that the petitioners have no locus standi to seek the prayer

that he has sought in the petition. If a writ of mandamus is to be

issued at the behest of a person like the petitioners, they have to

demonstrate that they are the persons aggrieved. If they are not

the persons aggrieved by any action of any public Authority, the

writ petition would not be maintainable. The learned senior counsel

would further seek to project that the petitioners are wanting to

settle their personal scores as there is a dispute between the

petitioners and the 2nd respondent with regard to share holdings in

CIPL as the petitioners are the erstwhile shareholders. He would

emphatically submit and admit that if there is any violation of the

terms and conditions of lease-cum-sale agreement, the Board will

take action, and if the Board wants to take any action, the 2nd

respondent would be ready and willing to co-operate with the Board

for any action to be taken by it, which it would suitably justify

before the Board. It is his submission that the petitioners are

nobody to invoke the extraordinary jurisdiction of this Court under

Article 226 of the Constitution of India for a direction to the Board

to take appropriate action.

9. The learned senior counsel representing the Board would

take this Court through the statement of objections filed by the

Board to contend that only one consent was given by the Board in

the year 2007 for creating a mortgage with HDFC Limited and no

other consent was obtained and any other charge created by the

2nd respondent will be dealt with in accordance with the provisions

of the Act. He would submit that action would definitely be taken.

10. In reply, the learned senior counsel representing the

petitioners would submit on the technical plea of locus, a case of

this nature should not be ignored by this Court as the 2nd

respondent has played fraud by creating, charge after charge,

without the consent of the Board and has generated several crores

of revenue contrary to the lease-cum-sale agreement. The lease-

cum-sale agreement was entered into by the Board with the 2nd

respondent for a particular purpose of development. Not an inch of

development of land has taken place even as on date. He would

submit that the 2nd respondent has indulged in real estate by

holding the public property and treating it to be his private

property.

11. The learned senior counsel for the 2nd respondent joining

the issue would refute by contending that the moment the lease-

cum-sale agreement was entered into, litigation began and it ended

only in the year 2020 before the Apex Court, and therefore, no

development could take place. He would admit that, if the Board

were to take any action, the 2nd respondent would fight it out with

the Board with regard to alleged creation of charge, without the

consent of the Board.

12. The remaining respondents who are the other holdings in

favour of whom CIPL or the present 2nd respondent have

agreements have filed their common objection to both these

petitions, sitting on the fence.

13. I have given my anxious consideration to the submissions

made by the respective learned senior counsel representing the

parties and have perused the material on record.

14. The afore-narrated facts are not in dispute as they lie in a

narrow compass. Disputes between the petitioners and the 2nd

respondent, as observed hereinabove, galore. The petitioners along

with certain other entities claims to have paid certain amount to the

erstwhile 2nd respondent, CIPL. All the disputes pertain to the

holding of schedule property which belongs to the Board.

Application had already been made by the 2nd respondent seeking

allotment of land in the aforesaid plot of land in Plot No.6, Kadugodi

Industrial Area, comprised in Sy.No.1, Block No.73 within the

village limits of Kadugodi Plantation, Bidarahalli Hobli, Bengaluru

East Taluk, Bengaluru admeasuring 78 acres and 2219 sq.mts. for

joint development of land by both groups. During the pendency of

the application, the 2nd respondent creates first charge of availing

finance from the Housing Development Finance Corporation Limited

(HDFC) on 06-06-2007. This is in public domain. On the next day

the lease-cum-sale agreement was executed by the Board in favour

of M/s Concord India Private Limited (CIPL) the erstwhile entity of

the 2nd respondent. Certain clauses of the lease-cum-sale

agreement are germane to be noticed and are therefore, extracted

hereunder for the purpose of quick reference:

"Agreement made at Bangalore the Seventh day of June month Two Thousand Seven between the Karnataka

Industrial Areas Development Board having its Head Office at No: 14/3, lInd Floor, Rastrothana Parishath Building, Nrupathunga Road, Bangalore-560001 represented by Sri. M C Nagaraju, Assistant Secretary, hereinafter called the 'lessor' (which term shall wherever the context so permits, mean and include its successors in interest) of the one Part AND M/S Concord India Ltd, I Floor, Embassy Point, 150, Infantry Road Bangalore-560 001 represented by Sri. Narpat Singh Choraria, Director hereinafter called the 'lessee' (which term shall wherever the context so permits, mean and include his/her/its heirs, executors, administrators, assignee and legal representatives) of the other part.

Whereas the lessee has applied to the lessor for allotment of land for setting up of an Industrial Infrastructure project, and in pursuance thereof, the lessor has agreed to lease the plot of land herein described, upon terms and conditions herein contained.

..... .... ....

10. (a) The lessor may, if the lessee so desires, shall permit implementation of the project in a phased manner, but not exceeding in three phases, in accordance with the time schedule prescribed as under:

Phase For approval of To commence To complete the No. building plans civil works civil works & Implement the project I Phase 3 months from the date 6 months from 36 months from of taking possession of the date of the date of taking schedule property approval of possession of building plans schedule property

II Phase Within 3 months after 6 months from 54 months from the expiry of initial 36 the date of the date of taking months. approval of possession of building plans schedule property

Final Within 3 months after 3 months from 72 months from Phase the expiry of 54 months the date of the date of taking approval of possession of building plans schedule property.

                          ....    ....    ....

              d)    The Lessor shall have the right to terminate

the lease and resume the possession of the schedule property or any part thereof, in the event the Lessee has failed to implement the project, within the stipulated period. or extended period, if any.

11. a) On written request from the lessee, the lessor may permit the sub lease of lease hold nights of the scheduled property or any part thereof in favour of a project developer solely for the construction of buildings and allied purposes in pursuance of the implementation of the project as cleared by the Government in the C&I Department, or, any other agency constituted by it in this behalf.

(b) The lessee may mortgage the right, title and interest in the Schedule Property after obtaining consent in writing from the lessor to secure loans for erection of building, plant and machinery on the schedule property or to avail working capital facilities for the purposes of the project on the schedule property from financial institutions and banks."

(Emphasis added)

The purpose for execution of lease-cum-sale agreement was on the

application made by the 2nd respondent for setting up a industrial

infrastructure project. The extent of land was 78 acres and 2219

sq.mts. The Schedule reads as follows:

".... .... ....

FIRST SCHEDULE (DESCRIPTION OF LAND)

All that piece of land known as Plot No. 6 in Sy.No. 1, Block 73 in the Kadugodi Industrial Area within the limits of Kadngodi Plantation Village, Bidarahali Hobli,, Bangalore East Taluk, Bangalore District containing by admeasurement 78 acres 2219 sqmtrs or thereabouts and bounded as follows that is to say:-

On or towards North by Agricultural land & Part of Sy No.1

On or towards South by Bangalore-Whitefield Main Road

On or towards East by Agricultural Land

On or towards West by M/s Herbert India Ltd & KIADB Road"

The aforesaid land would be hereinafter referred to as the schedule

property. On 16-04-2008 after execution of lease-cum-sale

agreement certain proceedings are instituted by the State

Government contending that the land that was allotted to the 2nd

respondent was a forest land. This became a subject matter of Writ

Petition No.7200 of 2008 and connected cases before this Court. A

learned single Judge in terms of his order dated 25-05-2012

allowed the writ petitions and set aside those Government orders

which had declared the said land to be a forest land. This was called

in question by the State Government before the Division Bench in

Writ Appeal No.4283 of 2012 and connected cases. A Division

Bench of this Court dismissed the writ appeals in terms of its order

dated 23-07-2019. State again tossed the said order before the

Apex Court, only to be dismissed. Therefore, the litigation that

began pursuant to the order of the Assistant Conservator of Forests

on 09-09-2009 ended in the year 2020 by the Apex Court rejecting

the appeal filed by the State. At no point in time there was any

order in favour of the State. They were all against the State. What

happens between the date of lease-cum-sale agreement dated

07-06-2007 and dismissal of the SLP forms the fulcrum of the

allegations in the case at hand.

15. It is not in dispute that what is allotted to the 2nd

respondent by way of lease-cum-sale agreement was a public

property and is allotted for a particular purpose on certain terms

and conditions albeit, for a consideration. The terms and conditions

as ascribed in the lease-cum-sale agreement are already extracted

hereinabove. The 2nd respondent/Company avails working capital

of `150/- crores from HDFC Limited on 28-11-2014. The said

charge created by a document depicting the charge is appended to

the petition. This creation of charge or drawing of working capital of

`150/- crores from HDFC limited is admittedly not with the consent

of the Board. The dates of creation of charge and the amount drawn

in terms of the said mortgage, mortgaging the schedule property in

favour of several persons are as follows:

"Charges Registered

Company

CIN/FCRN/LLPIN/FLLPIN U51101KA1973PTC002298

Company / LLP Name EMBASSY EAST BUSINESS PARK PRIVATE LIMITED

Charges Registered

SN SRN Charg Charge Date Date of Date Amount Address o e Id Holder of Modific of Name Creati ation Satisfa on ction 1 T362532 10046 IDBI 12/08/ - - 47800000 Asian Building, 76 8522 TRUSTEE 2021 00.0 Ground Floor, 17, SHIP R.Kamani Marg SERVICE Ballard Eastate S Mumbai LIMITED MH400001 IN 2 T344246 10046 IDBI 31/07/ 02/08/ - 84000000 Asian Building, 22 4827 TRUSTEE 2021 2021 00.0 Ground Floor, 17, SHIP R.Kamani Marg SERVICE Ballard S EstateMumbaiMH LIMITED 400001IN 3 T338705 10008 IDBI 27/03/ 06/07/ 02/08/ 10000000 Asian Building, 02 5955 TRUSTEE 2017 2018 2021 000.0 Ground Floor, 17, SHIP R.Kamani Marg SERVICE Ballard

S Estate,MumbaiMH LIMITED 400001IN 4 G389714 1056118 HOUSING 28/11/ - 23/03/ 15000000 RAMON HOUSE 79 0 DEVELOP 2014 2017 00.0 169BACKBAY MENT RECLAMATION FINANCE H T PAREKH CORPOR MARGMUMBAIMH ATION 400020IN LIMITED 5 G390850 1000843 HOUSING 27/02/ - 23/03/ 10000000 RAMON HOUSE 71 66 DEVELOP 2017 2017 00.0 169BACKBAY MENT RECLAMATION FINANCE H T PAREKH CORPOR MARGMUMBAIMa ATION 400020IN LIMITED 6 G389725 1000843 HOUSING 16/11/ - 23/03/ 20000000 RAMON HOUSE 68 69 DEVELOP 2016 2017 00.0 169BACKBAY MENT RECLAMATION FINANCE H T PAREKH CORPOR MARGMUMBAIMa ATION 400020IN LIMITED 7 G390826 1000843 HOUSING 06/01/ - 23/03/ 15000000 RAMON HOUSE 23 76 DEVELOP 2017 2017 00.0 169BACKBAY MENT RECLAMATION FINANCE H T PAREKH CORPOR MARGMUMBAIMa ATION 400020IN LIMITED 8 G389736 1000844 HOUSING 07/09/ - 23/03/ 25000000 RAMON HOUSE 73 19 DEVELOP 2016 2017 00.0 169BACKBAY MENT RECLAMATION FINANCE H T PAREKH CORPOR MARGMUMBAIMa ATION 400020IN LIMITED 9 A828284 1008382 HOUSING 06/06/ 06/11/ 31/03/ 39264772 RAMON HOUSE 35 0 DEVELOP 2007 2007 2010 7.0 169BACKBAY MENT RECLAMATION FINANCE H T PAREKH CORPOR MARGMUMBAIMH ATION 400020IN"

LIMITED

The aforesaid charge is drawn from the website of the Ministry of

Corporate Affairs, Government of India under the head, index of

charges created by Embassy East Business Park Private Limited, the

2nd respondent herein. These are the charges created not only up

to the date of the SLP getting dismissed, but a few even after that,

and the latest being on 31-07-2021 and 12-08-2021 for an amount

of `840/- crores and `478/- crores respectively. Therefore, a

property that was the subject matter of lease-cum-sale agreement

on certain terms and conditions has been held by the 2nd

respondent and has been the subject matter of several charges

being created without the consent of the Board.

16. It now becomes germane to notice the statement of

objections initially filed by the Board to the writ petition. The

objections are filed on 12-01-2022. Certain paragraphs become

germane to be noticed. Paragraphs 6 and 7 of the statement of

objections read as follows:

".... .... ....

6. It is submitted, in response to allegations of nine charges stated to be created right from the year 2006 to 2021 as stated in paragraphs 11 & 26 of Writ Petition, it is submitted that the answering Respondent has issued only one NOC dated 31.08.2019 in favour of 3rd Respondent (IDBI Trusteeship Services Ltd., Mumbai) on a specific request made by the allottee. No other NOC is issued in favour of any other entity. If any other transactions are entered into, it will not bind the interest of KIADB and action will be taken as per the terms of lease agreement. Hence, statements made in these paragraphs are incorrect.

7. It is submitted in response to other averments made in the writ petition alleging payment of Rs.9,25,00,000/- by the Petitioner to 2nd Respondent in the year 2004 for transfer of 1,91,301 shares in CIPL and breach of such contract, it is submitted that the answering Respondent is not aware of such contract between them......"

(Emphasis added)

At paragraph 6 in response to the allegation of creation of 9

charges, the Board would contend that it is not aware of 9 charges

that are created between 2006 and 2021. The Board is aware that

only one no objection was given on 31-08-2019 in favour of the

IDBI Trusteeship Services Limited, Mumbai on a specific request

made by the allottee, the 2nd respondent. No other NOC is issued in

favour of any other entity. It is again averred that if any other

transactions are entered into it will not bind the interest of the

Board and action will be taken as per the terms of lease agreement.

The aforesaid is the emphatic averment, on oath by the Board.

17. If the allegations in the petition against the 2nd

respondent are read in tandem with the objections filed by the

Board, what would unmistakably emerge is that, the 2nd respondent

has created certain charge on several occasions holding the

schedule property without the consent of the board, at least in 8 of

the charges that are created. The consent that the Board refers to

is also appended to the statement of objections along with the

request of CIPL for issuance of NOC. The request dated

21-08-2019 reads as follows:

"Date: 21St August 2019

To,

The Chief Executive Officer & Executive Member Kamataka Industrial Area Development Board (KIADB) 4 & 5 floor, Khanja Bhavan No. 49, Race Course Road, Bengaluru-560001

Dear Sir,

Sub: Request for issue of NOC for mortgage of the property bearing Plot No. 6 in the Kadugodi Industrial Area, comprised in Sy No. 1, Block No. 73 within the village limits of Kadugodi Plantation, Bidarahalli Hobli, Bangalore East Taluk, Bangalore District admeasuring 78 acres 2219 sqmtrs or thereabouts to IDBI Trusteeship Services Limited.

Ref: Lease cum sale Agreement dated 7th June 2007 in respect of 78 acres 2219 sqmtrs or thereabouts

With reference to the above, we hereby bring to your kind notice that we are in the process of mortgaging approximately 60.55 acres of Land situated in Plot No. 6 in the Kadugodi Industrial Area, comprised in Sy No. 1, Block No. 73 within the village limits of Kadugodi Plantation, Bidarahall Hobli, Bangalore East Taluk, Bangalore District to IDBI Trusteeship Services Ltd.

The above said land has been allotted to us and we are given possession of the same in accordance with the lease cum sale agreement dated 7th June 2007 executed in favour of Concord India Private Limited. We here by request your good self to accord the permission for the same and issue the NOC at the earliest.

Thanking you,

Yours truly,

For Concord India Private Limited Sd/-

Authorised Signatory"

The request is acceded to and NOC is issued by the following

communication:

"No. KIADB/Sec-3/AS-143 Vol-IV/7842/2019-20

Date: 31.08.2019 RPAD

M/s Concord India Pvt Ltd, #150, Embassy Point, Infantry Road, Bangalore-560 001

Sir,

Sub: Issue of NOC in respect of the Plot No.6 Sy. No. 1 Block No.73 of 78.548 Acres of land at Kadukodi I.A, Whitefield, Bangalore.

Ref: 1. Lease Agreement dt: 07.06.2007.

2. Your letter dt: 22.08.2019.

****

With reference to your request, vide letter cited under ref (2), you are hereby permitted to mortgage the right, title and interest you derive under the Lease cum Agreement dated: 07.06.2007 in favour of M/s IDBI Trusteeship Services Ltd, Asian Building, Ground Floor 17, R Kamani Marg. Ballard Estate, Mumbai - 400 001 to secure money to be advanced by them for erection of Building / Plant and Machinery / Working Capital in respect of Plot No.6 Sy. No.1 Block No.73 of 78.548 Acres of land at Kadukodi I.A, Whitefield, Bangalore. "Subject to the conditions stipulated in Allotment Letter/Lease agreement and First Charge on the said asset lies with the Board"

Yours faithfully. Sd/-31.8.2019 Secretary - 3"

Therefore, the only NOC that is issued to M/s Concord India Private

Limited is on 31-08-2019 by the Board as averred by the Board in

the statement of objections and the document appended to the

statement of objections. Therefore, the Board itself accepts that the

2nd respondent has not sought any NOC for creation of any charge

on the schedule property. Even after filing of the present writ

petitions, the averment in the additional affidavit filed by the

petitioners is that one M/s Indiabulls has filed its disclosure with the

National Stock Exchange depicting that the 2nd respondent would

become a wholly owned subsidiary of Indiabulls pursuant to the

Scheme of Amalgamation which is again in violation of the lease

agreement. Even to this there is no consent obtained from the

hands of the Board by the 2nd respondent.

18. To all the aforesaid allegations, submissions and contra-

submissions, the learned senior counsel for the 2nd respondent

would reiterate his submissions that if there is any violation of

lease-cum-sale agreement or if this Court finds that there is

violation of the lease-cum-sale agreement, it is for the Board to

issue a notice and the 2nd respondent to contest the proceedings of

the Board, either by justification or availing of such remedy as is

available in law.

19. If the afore-narrated facts, glaring enough they are, are

noticed, what would emerge is that the Board is silent on the

alleged violation of its property that was leased to the 2nd

respondent for a particular purpose albeit, on consideration. The

purpose is deviated and not stopping at that using the schedule

property, the land which belonged to the Board, the 2nd respondent

has created several charges on the said property in violation of the

terms of lease. In such glaring facts, what is involved is inaction of

the Board, a State under Article 12 of the Constitution of India, qua

the property that belonged to the Board and the question of locus

standi of the person who brings before the constitutional Court such

illegality gets blurred as the issue that is brought before the Court

masks over the issue of locus.

20. Though there are several judgments relied on by the

learned senior counsel appearing for the petitioners and the learned

senior counsel representing the 2nd respondent, making reference

to them will only add to the bulk of this judgment, in the teeth of

the submission made by the learned senior counsel representing

the 2nd respondent and the affidavit filed by the Board. To iterate,

the Board in its statement of objections quoted supra has stated on

oath that it is not aware of any charge created except the one that

is appended to the statement of objections and it also states that

action will be taken in accordance with law, for violation of the

lease-cum-sale agreement.

21. The learned senior counsel Sri. K.G.Raghavan also

accepts that, if the Board issues a notice to it, alleging violation, the

2nd respondent would undoubtedly reply to justify or take necessary

action on the said notice. Since the petitioners have brought the

issue before this Court and have projected/highlighted the silence

of the Board pursuant to which a direction now becomes necessary

to be issued to the Board, to take up proceedings against the 2nd

respondent, I deem it appropriate to permit the petitioners to

participate in the proceedings that would be initiated by the Board

against the 2nd respondent.

22. For the aforesaid reasons, I pass the following:

ORDER

(i) Writ Petitions stand disposed of.

(ii) A mandamus issues to the 1st respondent/Board to

initiate action against the 2nd respondent, in accordance

with the provisions of the Act, for the alleged violation

of the terms and conditions of lease-cum-sale

agreement dated 07-06-2007, as expeditiously as

possible and at any rate within three months from the

date of receipt of a copy of this order and further

proceedings shall be regulated in accordance with law.

(iii) The petitioners shall have an opportunity to participate

in the proceedings so initiated by the Board against the

2nd respondent.

(iv) Till the conclusion of the proceedings, interim orders, if

any subsisting, shall stand continued.

Pending applications, if any, also stand disposed as a

consequence.

Sd/-

JUDGE

bkp CT:MJ