Karnataka High Court
Karnataka Industrial Areas ... vs Nanjangud Industries on 23 November, 2024
Author: Jyoti Mulimani
Bench: Jyoti Mulimani
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RSA No. 494 of 2018
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF NOVEMBER, 2024
BEFORE
THE HON'BLE MS. JUSTICE JYOTI MULIMANI
REGULAR SECOND APPEAL NO. 494 OF 2018 (DEC)
BETWEEN:
KARNATAKA INDUSTRIAL
AREAS DEVELOPMENT BOARD,
KRS ROAD, MYSORE,
KIADB ZONAL OFFICER,
MYSORE-570 016.
REPRESENTED BY DEVELOPMENT OFFICER,
MYSORE.
...APPELLANT
(BY SRI. H.L.PRADEEP KUMAR., ADVOCATE)
AND:
NANJANGUD INDUSTRIES
ASSOCIATION (R) WITH ITS
REGISTERED OFFICE AT NO.63,
1ST CROSS ROAD,
Digitally signed by KIADB INDUSTRIAL AREA,
THEJASKUMAR N NANJANGUD-571 302.
Location: High
Court of REPRESENTED BY ITS HONORARY SECRETARY,
Karnataka SRI. PCS RAGHAVAN.
...RESPONDENT
(SERVED AND UNREPRESENTED)
THIS REGULAR SECOND APPEAL IS FILED UNDER
SECTION 100 OF THE CODE OF CIVIL PROCEDURE, 1908.
THIS REGULAR SECOND APPEAL IS LISTED FOR
HEARING, THIS DAY, THE JUDGMENT IS DELIVERED AS
UNDER:
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RSA No. 494 of 2018
ORAL JUDGMENT
Sri.H.L.Pradeep Kumar., counsel for the appellant has
appeared in person.
2. An emergent notice to the respondent was ordered
on 11.11.2019. A perusal of the office note depicts that the
respondent is served and unrepresented. The respondent has
neither engaged the services of an advocate nor conducted the
case as a party in person.
3. For the sake of convenience, the parties are
referred to as per their status and rankings before the Trial
Court.
4. The short facts are these:
The Nanjangud Industries Association (Registered) at
Nanjangud, represented by its Honorary Secretary filed a suit in
O.S.No.890/2011 on the file of II Addl. Senior Civil Judge,
Mysore seeking the relief of declaration that the Resolution
passed by the KIAD Board in its 302nd meeting dated
28.10.2010 revising the water tariffs in relation to the industrial
areas located in Nanjanagud and Thandya from Rs.12/- to
Rs.25/- per kilo liter is null, void, illegal, irrational, illogical,
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abnormal and unscientific and does not bind the plaintiff and its
member industries, for consequential permanent injunction
restraining the defendant Board or its officers from giving effect
to the Resolution dated 28.10.2010 passed in 302nd meeting
revising water tariffs from Rs.12/- to Rs.25/- per kilo liter and
recover water tariffs from the member industries of the plaintiff
association at the rate of Rs.25/- per kilo liter, award costs,
grant such other reliefs as the circumstances necessitates.
After service of the suit summons, the defendant could
not represent on the date given before the Court and was
placed ex-parte but taking note of the reasons, the order
placing the defendant ex-parte was set-aside on 09.02.2012.
The defendant filed an application under Order 7 Rule 11 of
CPC as the suit was not maintainable in view of Arbitration
clause contained in the agreement between the Board and the
allottee - lessee. Written statement was filed and was taken on
record. It was specifically contended by the defendant that the
plaintiff association has no locus standi, arbitration clause was
not invoked by the allottees of the industrial plots before filing
a suit, there was no dispute between individual allottees and
the KIAD Board as the rate of water tariff revised by the Board
has been accepted by the allottees and also that the association
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cannot espouse cause of individual members or allottees.
Among other grounds, it prayed for dismissal of the suit.
Based on the above pleadings, the Trial Court framed
issues. The parties led evidence and got exhibited the
documents. On the trial of the action, the Trial Court vide
Judgment dated 28.08.2015 decreed the suit. The defendant
assailed the Judgment of the Trial Court before the First
Appellate Court in R.A.No.264/2015 on the file of VII Addl.
District Judge, Mysuru. On appeal, the First Appellate Court
vide Judgment dated 19.08.2017 dismissed the appeal and
confirmed the Judgment passed by the Trial Court. Hence, this
Regular Second Appeal is filed by the defendant under Section
100 of CPC.
5. Sri.H.L.Pradeep Kumar., counsel for the appellant
submits that the Judgment and Decree of the Trial Court and
the First Appellate Court are contrary to the law and facts and
the evidence available on record.
Next, he submits that the Courts have failed to appreciate
the important question of jurisdiction of the Court and
competence of the plaintiff association to file a suit espousing
the alleged grievance of the allottees when the allottees are
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governed by the terms and conditions of the concluded contract
between them. He contended that if at all the allottees had any
grievance, the arbitration clause in the agreement was to be
invoked against the Board.
A further submission is made that the suit was not filed
against the Board which is vested with the power under KIADB
Act and Regulations, however the same was filed as against the
subordinate official of the Board i.e., the Development Officer
who has not passed any order or resolution.
Counsel vehemently contended that there was no dispute
between the individual allottees and the KIAD Board.
He submits that the revised rate of water tariff was
accepted by the allottees and as such, the plaintiff association
could not have espoused the cause of individual members or
allottees.
Lastly, he submits that viewed from any angle the
Judgments and Decrees of both the Courts lack judicial
reasoning. Counsel therefore, submits that the appeal may be
allowed.
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Heard the arguments and perused the appeal papers and
the records with care.
6. This Court vide order dated 15.11.2024 admitted
this appeal and framed following substantial questions of law:
1. Whether the findings by Court of Facts is
vitiated by non-consideration of relevant
evidence on record or by essentially wrong
approach?
2. Whether the plaintiff has locus to question
the resolution of the Board for fixing / hiking
water tariff for supply of water when the
allottees are governed by the terms and
conditions of agreement/ contract entered
into with the KIAD Board?
3. Whether the suit filed by Association is
maintainable when the individual allottees of
industrial plots have not questioned the
water tariff fixed by the KIAD Board?
4. Whether the suit filed against the
Development Officer, KIADB is maintainable?
7. The facts are sufficiently stated and they do not
require reiteration. The issue revolves around a narrow
compass and relates to locus of the plaintiff association to
question the resolution of the Board and also espousing the
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alleged cause on behalf of the individual members or allottees
of the Board. The Trial Court extenso referred to the material
on record and made hectic effort to give a finding about the
scientific and unscientific way for fixing water tariff rates. This
is untenable. The reason is apparent. It is not in dispute that a
meeting was held on 28.10.2010 and the water tariff was
revised in relation to the industrial areas located in Nanjanagud
and Thandya from Rs.12/- to Rs.25/- per kilo liter. It is pivotal
to note that the revised water tariff was accepted by the
allottees and they had no grievance about the same. A perusal
of the entire records would reveal that the defendant had
questioned the locus of the plaintiff association to espouse the
alleged cause on behalf of the individual members or allottees
of the Board. Hence, what was required to be considered by the
Court of Facts was whether there was a cause of action and
whether the plaintiff association could have maintained the suit
against the Development Officer of the Board. In my opinion,
there was no cause of action and the plaintiff had no locus to
question the resolution. The water tariff rate was revised by the
Board and the same was accepted by the allottees and they
continued to pay the revised water tariff. Hence, the plaintiff
association could not have espoused the alleged cause of
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individual member or allottees. There was no cause of action
for the plaintiff association to seek relief against the Board,
much less against the Development Officer who had not passed
any order or resolution.
A perusal of the entire record reveals that the plaintiff
initiated action against the KIAD Board represented by its
Development Officer. The plaint averments reflects that the
plaintiff had a grievance about the Resolution passed by the
KIAD Board in its 302nd meeting dated 28.10.2010 and the
Resolution was passed by the Chief Executive Officer of the
Board. However, the plaintiff filed a suit against the
Development Officer who had not passed any order or
resolution. Hence, a suit could not have been filed as against
the Development Officer.
Furthermore, Section 41 of the Karnataka Industrial Area
Development Board Act, 1960 gives power to make
Regulations. The power to make regulations also includes
power to pass resolution. Exercising the statutory powers, the
KIAD Board has revised the water tariff from time to time
based on the expenditure incurred by the Board. As already
noted above, the allottees had no grievance about revision of
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water tariff. When the allottees have accepted the same and
are continuing to pay the revised water tariff, the plaintiff
association cannot have any grievance and thus it has no right
to question the resolution passed by the Board.
Lastly, counsel for the appellant submits that a memo has
been filed furnishing the copy of tippani/ letter dated
05.02.2018 and 352nd Board meeting resolution dated
05.01.2018, wherein the KIAD Board has revised the water
tariff to Rs.40/- per kilo liter. Counsel on instruction submits
that the allottees have accepted the same and are paying the
revised water tariff as of today. Counsel therefore, submits that
the memo may be placed on record and a suitable order may
be passed.
Submission is noted. Memo along with tippani/ letter
dated 05.02.2018 and 352nd Board meeting resolution dated
05.01.2018 are placed on record. A perusal of the same reflects
that the KIAD Board has revised the water tariff to Rs.40/- per
kilo liter and the allottees have accepted the same and are
paying the revised water tariff as of today.
I may venture to say that the Court of Facts have failed
to have regard to relevant consideration and disregarded
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relevant matters. Therefore, it can be safely concluded that the
Court of Facts have not appreciated the material evidence on
record from the right perspective. The plaintiff had no locus to
espouse the alleged cause of action on behalf of the individual
member or allottees of the Board and the suit ought to have
been rejected as not maintainable. The substantial questions of
law framed by this Court are answered accordingly.
8. For the reasons stated above, the Judgment and
Decree dated 19.08.2017 passed by the VII Addl. District
Judge, Mysuru in R.A.No.264/2015 is set-aside. The suit is
dismissed. Consequently, the Judgment and Decree dated
28.08.2015 passed by the II Addl. Senior Civil Judge, Mysore in
O.S.No.890/2011 is also set-aside.
9. Resultantly, the Regular Second Appeal is allowed.
Sd/-
(JYOTI MULIMANI)
JUDGE
TKN
