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Jaiprakash Engineering And Steel Co. ... vs State Of Karnataka
2025 Latest Caselaw 11638 Kant

Citation : 2025 Latest Caselaw 11638 Kant
Judgement Date : 19 December, 2025

[Cites 13, Cited by 0]

Karnataka High Court

Jaiprakash Engineering And Steel Co. ... vs State Of Karnataka on 19 December, 2025

                                           -1-
                                                     WA No. 1659 of 2024
                                                 C/W WA No. 1661 of 2024
                                                     WA No. 1703 of 2024


                    IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                       DATED THIS THE 19TH DAY OF DECEMBER, 2025

                                         PRESENT
                      THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
                                           AND
                           THE HON'BLE MR. JUSTICE C M JOSHI
                        WRIT APPEAL NO. 1659 OF 2024 (GM-KIADB)
                                           C/W
                        WRIT APPEAL NO. 1661 OF 2024 (GM-KIADB)
                        WRIT APPEAL NO. 1703 OF 2024 (GM-KIADB)

               IN W.A. No. 1659/2024

               BETWEEN:

               1.   JAIPRAKASH ENGINEERING AND STEEL CO. LTD.,
                    A COMPANY INCORPORATED UNDER
                    THE COMPANIES ACT 1956
                    HAVING ITS REGISTERED OFFICE AT
                    No.510, 3RD A CROSS, 3RD BLOCK
                    2ND MAIN, RAJ MAHAL VILAS - II
Digitally
signed by           DOLLARS COLONY
SUMATHY             BANGALORE - 560 094
KANNAN
                    REPRESENTED BY ITS
Location:
High Court          AUTHORIZED SIGNATORY
of Karnataka        MR. KAMALAKSHA
                                                           ...APPELLANT
               (BY SRI C.K. NANDAKUMAR, SENIOR ADVOCATE A/W
                SRI PRASHANTH V.G., ADVOCATE)

               AND:

               1.   STATE OF KARNATAKA
                    REPRESENTED BY ITS
                             -2-
                                       WA No. 1659 of 2024
                                   C/W WA No. 1661 of 2024
                                       WA No. 1703 of 2024


      ADDITIONAL CHIEF SECRETARY COMMERCE &
      INDUSTRIES DEPARTMENT GOVERNMENT OF
      KARNATAKA
      VIKASA SOUDHA
      BENGALURU - 560 001

2.    KARNATAKA INDUSTRIAL
      AREAS DEVELOPMENT BOARD
      O/A. NO 49
      4TH AND 5TH FLOOR EAST WING
      KHANIJA BHAVAN
      RACE COURSE ROAD
      BENGALURU - 560 001
      REPRESENTED BY ITS CEO & EM

3.    INDIAN COAST GUARD
      HEADQUARTER
      NO 3, COAST GUARD DISTRICT
      PB No.19, PANAMBUR
      NEW MANGALURU - 575 011
                                           ...RESPONDENTS
(BY SRI C.S. PRADEEP, AAG A/W
 SRI K.S. HARISH, GOVERNMENT ADVOCATE FOR R-1,
 SRI BASAVARAJ V. SABARAD, SENIOR ADVOCATE A/W
 SRI H.L. PRADEEP KUMAR, ADVOCATE FOR C/R-2,
 SRI K. ARVIND KAMATH, ASGI,
 SRI H. SHANTHI BHUSHAN, DSGI A/W
 SMT. RESHMA THAMMAIAH, ADVOCATE FOR R-3)


       THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE
COMMON ORDER DATED 26/09/204 IN W.P. NO.41829/2019
AND    CONSEQUENTLY      ALLOW     W.P.   NO.41829/2019   AS
PRAYED FOR, AND PASS ANY OTHER ORDER OR ORDERS.
                              -3-
                                          WA No. 1659 of 2024
                                      C/W WA No. 1661 of 2024
                                          WA No. 1703 of 2024


IN W.A. NO. 1661/2024

BETWEEN:

1.   JAIPRAKASH ENGINEERING AND STEEL CO. LTD.,
     A COMPANY INCORPORATED UNDER
     THE COMPANIES ACT, 1956
     HAVING ITS REGISTERED OFFICE AT
     NO. 510, 3RD A CROSS, 3RD BLOCK
     2ND MAIN, RAJ MAHAL VILAS-II
     DOLLARS COLONY
     BANGALORE - 560 094
     REPRESENTED BY ITS AUTHORIZED SIGNATORY
     MR. KAMALAKSHA
                                                ...APPELLANT

(BY SRI C.K. NANDAKUMAR, SENIOR ADVOCATE A/W
 SRI PRASHANTH V.G., ADVOCATE)

AND:

1.   STATE OF KARNATAKA
     REPRESENTED BY ITS
     ADDITIONAL CHIEF SECRETARY
     COMMERCE AND INDUSTRIES DEPARTMENT
     GOVERNMENT OF KARNATAKA
     VIKASA SOUDHA
     BANGALORE - 560 001

2.   KARNATAKA INDUSTRIAL
     AREAS DEVELOPMENT BOARD
     O/AT NO. 49, 4TH AND 5TH FLOOR
     EAST WING, KANIJA BHAVAN
     RACE COURSE ROAD
     BENGALURU - 560 001
     REPRESENTED BY ITS CEO & EM

3.   DEVELOPMENT OFFICER &
     EXECUTING ENGINEERING
     O/AT KARNATAKA INDUSTRIAL AREAS
     DEVELOPMENT BOARD
                             -4-
                                       WA No. 1659 of 2024
                                   C/W WA No. 1661 of 2024
                                       WA No. 1703 of 2024


     ZONAL OFFICE, BIKAMPADY INDUSTRIAL AREA
     MANGALURU - 575 011

4.   INDIAN COAST GUARD
     O/AT HEADQUARTER
     No. 3, COAST GUARD DISTRICT
     P.B No.19, PANAMBUR
     NEW MANGALURU - 575 010
                                          ...RESPONDENTS

(BY SRI C.S. PRADEEP, AAG A/W
 SRI K.S. HARISH, GOVERNMENT ADVOCATE FOR R-1,
 SRI BASAVARAJ V. SABARAD, SENIOR ADVOCATE A/W
 SRI H.L. PRADEEP KUMAR, ADVOCATE FOR C/R-2 & 3,
 SRI K. ARVIND KAMATH, ASGI,
 SRI H. SHANTHI BHUSHAN, DSGI A/W
 SMT. RESHMA THAMMAIAH, ADVOCATE FOR R-4)

    THIS WRIT APPEAL FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE
COMMON ORDER DATED 26.09.2024 IN WRIT PETITION No.
566 OF 2018 AND CONSEQUENTLY ALLOW WP No. 566 OF
2018 AS PRAYED FOR & ETC.

IN W.A. NO. 1703/2024

BETWEEN:

1.   JAIPRAKASH ENGINEERING AND STEEL CO. LTD.,
     A COMPANY INCORPORATED UNDER
     THE COMPANIES ACT, 1956
     HAVING ITS REGISTERED OFFICE AT
     NO. 510, 3RD A CROSS, 3RD BLOCK
     2ND MAIN, RAJ MAHAL VILAS-II
     DOLLARS COLONY, BANGALORE-560 094
     REPRESENTED BY ITS AUTHORIZED SIGNATORY
     MR. KAMALAKSHA.
                                             ...APPELLANT

(BY SRI C.K. NANDAKUMAR, SENIOR ADVOCATE A/W
 SRI PRASHANTH V.G., ADVOCATE)
                              -5-
                                          WA No. 1659 of 2024
                                      C/W WA No. 1661 of 2024
                                          WA No. 1703 of 2024


AND:

1.   STATE OF KARNATAKA
     REPRESENTED BY ITS ADDITIONAL CHIEF SECRETARY
     COMMERCE AND INDUSTRIES DEPARTMENT GOVERNMENT
     OF KARNATAKA
     VIKASA SOUDHA
     BANGALORE - 560 001

2.   KARNATAKA INDUSTRIAL
     AREAS DEVELOPMENT BOARD
     O/AT NO. 49, 4TH AND 5TH FLOOR
     EAST WING, KANIJA BHAVAN
     RACE COURSE ROAD
     BENGALURU - 560 001
     REPRESENTED BY ITS CEO & EM

3.   DEVELOPMENT OFFICER &
     EXECUTING ENGINEERING
     O/AT KARNATAKA INDUSTRIAL AREAS
     DEVELOPMENT BOARD ZONAL OFFICE
     BIKAMPADY INDUSTRIAL AREA
     MANGALURU - 575 011

4.   INDIAN COAST GUARD
     O/AT. HEAD QUARTERS
     No.3, COAST GUARD DISTRICT
     P.B No.19, PANAMBUR
     NEW MANGALURU - 575 010
                                             ...RESPONDENTS

(BY SRI C.S. PRADEEP, AAG A/W
 SRI K.S. HARISH, GOVERNMENT ADVOCATE FOR R-1,
 SRI BASAVARAJ V. SABARAD, SENIOR ADVOCATE A/W
 SRI H.L. PRADEEP KUMAR, ADVOCATE FOR C/R-2 & 3,
 SRI K. ARVIND KAMATH, ASGI,
 SRI H. SHANTHI BHUSHAN, DSGI A/W
 SMT. RESHMA THAMMAIAH, ADVOCATE FOR R-4)
                               -6-
                                         WA No. 1659 of 2024
                                     C/W WA No. 1661 of 2024
                                         WA No. 1703 of 2024


    THIS WRIT APPEAL FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE
COMMON ORDER DATED 26.09.2024 IN WRIT PETITION
No.52937/2017 AND CONSEQUENTLY ALLOW THE W.P.
No.52937/2017 AS PRAYED FOR & ETC.


    THESE WRIT APPEALS HAVING BEEN HEARD AND
RESERVED  FOR   JUDGMENT,   COMING  ON   FOR
PRONOUNCEMENT    THIS  DAY,   JUDGMENT   WAS
PRONOUNCED AS UNDER:


CORAM: HON'BLE MR. VIBHU BAKHRU ,CHIEF JUSTICE
       and
       HON'BLE MR. JUSTICE C M JOSHI


                       CAV JUDGMENT

(PER: HON'BLE MR. VIBHU BAKHRU ,CHIEF JUSTICE)

INTRODUCTION

1. These three Writ Appeals arise from a common judgment

and order dated 26.09.2024 [the impugned order] passed by the

learned Single Judge of this Court in W.P.No.41829 of 2019 (GM-

KIADB) captioned Jaiprakash Engineering & Steel Co.Ltd. v. State

of Karnataka & Ors., Connected with W.P.No.52937 of 2017, and

W.P.No.566 of 2018, whereby these petitions were dismissed.

2. The appellant [hereinafter referred to as JESCO or the

appellant) has filed these appeals assailing the impugned order.

The present appeals were filed on 07.11.2024. Writ Appeal

No.1703/2024 assails the impugned order insofar as it relates to

Writ Petition No.52937/2017; Writ Appeal No.1661/2024 assails the

impugned order insofar as it relates to Writ Petition No.566/2018;

And, Writ Appeal No.1659/2024 arises from the impugned order

insofar as it relates to Writ Petition No.41829/2019.

3. The writ petitions were filed by the appellant in respect of the

grievance relating to the decisions of the Karnataka Industrial

Areas Development Board [hereinafter referred to as 'KIADB' or

Respondent No.2] in respect of lands situated in Kenjar, Thokur

and Kulai villages of Mangaluru Taluk, Dakshina Kannada District

[hereinafter 'the Subject lands'], the possession of which was

handed over to JESCO.

4. The possession of the subject lands was handed over to

JESCO between the years 1995-2000 and it claims that it had paid

a sum of Rs.30.79 crores towards the tentative costs of land and

service charges to the KIADB, as and when the lands were handed

over.

5. In W.P.No.52937/2017, the appellant, inter alia, challenged

the notice dated 14.11.2017 issued by KIADB under Section

34-B(4) of the Karnataka Industrial Areas Development Act, 1966

[hereinafter referred to as 'the KIAD Act'], whereby the appellants

were directed to surrender possession of certain portions of the

subject lands. The appellants also sought for quashing of the order

dated 11.11.2013, passed by the respondent No.1 [Government of

Karnataka].

6. In W.P.No.566/2018, the appellant had assailed the minutes

of the 48th meeting of the State High Level Clearance Committee

[hereafter referred to as 'the SHLCC'] held on 31.08.2017 insofar

as it relates to the appellant. The appellant also impugned the

Mahazar dated 22.11.2017 and claimed that the Mahazar process

was in violation of the principles of natural justice and the order of

status quo passed by this Court.

7. In W.P.No.41829/2019, the appellant challenged the

corrigendum dated 08.03.2018 issued by respondent No.1 [the

Government of Karnataka], as illegal and contrary to the decision

made in the 35th meeting of the SHLCC dated 14.05.2014.

PREFATORY FACTS

8. Before considering the import of the reliefs sought by the

appellant in various writ petitions and the challenge in the present

appeals, it is relevant to set out the factual context in which the

controversy involved in the writ petitions and the present appeals

arise.

9. JESCO, which is stated to be a company belonging to a

group engaged in major civil construction of Irrigation and power

projects, cement manufacturing, etc., had submitted a proposal to

establish an Integrated Steel Plant in Mangaluru. It was proposed

that the project would have an initial capacity of 0.5 million tonnes

in the first phase with an investment of Rs.1200 crores, which

would be subsequently upgraded to One million tonne capacity with

additional investment in the second phase. The cumulative

investment would be Rs. 2000 crores. The said proposal was

considered in the Sixth High Level Committee Meeting for

Clearance of Projects of more than Rs.50 crores investment, held

on 07.05.1992 under the Chairmanship of the Minister for Medium

and Large Industries. The said Committee examined the said

proposal and had made various recommendations.

10. Respondent No.1 [Government of Karnataka], had examined

the said recommendations of the High Level Committee, and by an

order dated 15.06.1992, accorded its sanction for KIADB to acquire

and provide 1600 acres of land out of total of 1842.51 acres to be

acquired in Panambur, Kenjar, Thokur, Baikampady and Kulai

- 10 -

villages. The Government of Karnataka also granted approval for

the following:

i. Two hundred and eighty six (286) acres of the Government

land forming a part of the total land identified for the project

would be provided free of cost.

ii. Housing and Urban Development Department would take

effective steps for change of land use in respect of 792

acres, which was classified as "agricultural zone" to

"industrial purposes". Suitable modifications would be made

in the CDP / ODP of the Mangaluru Urban Development

Authority.

iii. KIADB would provide water to the project through combined

water-supply-cum-power generation project to be

implemented by KPC / KUWS & DB at Sarapadi across

Netravathi river. It is further case that if the project did not

come through, industries like MRPL, JESCO and Canara

Steels could jointly implement the water supply project to

meet their requirements.

iv. KIADB shall provide 4 MW power during the construction

period.

- 11 -

v. Karnataka Electricity Board [KEB] to provide grid support of

25 MV for start / stop operations and in time of emergencies.

vi. Necessary action would be initiated for recommendation to

the Government of India under Section 11(4) of the Mines

and Minerals (Development and Regulation) Act, 1957 for

allocation of mining areas containing about 100 million

tonnes of iron ore to meet JESCO's captive iron ore needs

for production purposes only for a maximum period of 20

years out of the area forming part of Ramanadurga Mines at

Sandur Taluk, Bellary District.

vii. For executing mining leases under Rule 31 of the Karnataka

Minor Mineral Concession Rules, subject to the conditions.

viii. Necessary action for recommending grant of need-based

mining leases to meet the JESCO's requirement of steel

making grade limestone of 40 million tonnes at Bagalkot.

ix. Additional grant of incentives / concessions and 100%

exemption from payment of Karnataka Sales tax Act and

Central Sales tax Act on finished goods for a period of twelve

years.

x. And, exemption from payment of purchase tax and entry tax.

- 12 -

11. On 31.10.1992, the KIADB allotted 160 acres of land at

Baikampady and Panambur villages of Mangaluru Taluk. The

allotment of land was subject to various conditions as set out in the

said allotment letter.

12. Admittedly, the JESCO did not pay the amount as set out in

the aforementioned allotment letter and therefore, the 160 acres of

land, which were to be handed over to JESCO pursuant to the

allotment letters, were not handed over1.

13. On 21.12.1993, the Government of Karnataka issued a

notification approving the transfer of 217.83 acres of Government

land at Kenjar and 62 acres at Thokur and Baikampady villages of

Mangaluru Taluk, to KIADB.

14. A preliminary notification dated 26.07.1993 was issued under

Sections 1(3), 3(1), and 28(1) of the KIAD Act for acquisition of

land to the extent of 867.82 acres in Kenjar, Thokur, Kulai and

Baikampady villages. The final notification under Section 28(4) of

the KIAD Act was issued on 23.05.1995 for acquisition of 708.74

Stated in the affidavit affirmed on 14.10.2025 on behalf of the CEO & Executive Member of the KIADB, Mangalore

- 13 -

acres of land at aforesaid locations, pursuant to the Government

Order dated 15.06.1992.

15. The possession of acquired lands was handed over to the

appellant through multiple Possession Certificates issued by

KIADB as follows:

(a) Possession Certificate dated 07.10.1996 for an extent of

204.75 acres of Government land in Kulai, Baikampady, Thokur

and Kenjar villages. This was accrued land from the previous two

Government Orders dated 15.06.1992 and 21.12.1993;

(b) Possession Certificate dated 28.04.1997 for an extent of

598.52 acres in Baikampady, Thokur and Kenjar villages of

Mangalore Taluk;

(c) Possession Certificate dated 20.09.1999 for an extent of

32.86 acres in Kulai village; and

(d) Possession Certificate dated 26.06.2000 for an extent of

150.39 acres in Baikampady, Kulai and Thokur villages.

16. Cumulatively, land to the extent of 986.52 acres at

Baikampady, Thokur, Kenjaru and Kulai villages, Mangalore Taluk,

was handed over to the appellant. The appellant states that it paid

an aggregate sum of Rs.30.79 Crores towards tentative land cost

- 14 -

and service charges amounting to 11% payable to KIADB. The

payments were made during the period between 1995 and 2000.

17. It is pertinent to note that possession of land was handed

over to the appellant as and when payment towards land cost was

received, without issuing any letter of allotment or setting out terms

and conditions. KIADB and the appellant did not enter into any

documentation for allotment of the subject lands and the parties did

not execute any lease, lease-cum-sale agreement or sale deed in

respect of the subject lands. It appears that the acquisition and

handing over of lands extended over a period between 1992 to

2000.

18. JESCO informed KIADB that due to recession in the steel

industry, it would not implement the project to set up the steel plant.

JESCO also claims that it offered to surrender the entire 986.52

acres of land, which was handed over to it on mutually agreed

terms.

19. It is material to note that the possession of the subject lands

was taken over on behalf of JESCO by the employees of the

Nagarjuna Chemicals and Fertilizers Limited [NCFL]. JESCO is a

Group Company of the same group.

- 15 -

20. A meeting of the KIADB was held on 22.05.2001. The extract

of the minutes of said meeting, which has been placed on record,

indicates that a proposal to take over possession of 986.25 acres

which was handed over to its Group Company NCFL on behalf of

JESCO, was considered. And, it was decided that JESCO be paid

pro-rata rate paid to the consultant along with pro-rata land cost

excluding service charges and including interest at the rate of 12%

per annum in respect of land to be taken over by KIADB for re-

allotment to other industries. It was also resolved that the cost of

land including expenditure incurred by JESCO and the amount paid

by it towards land cost was computed at Rs.30.79 crores. Thus, in

terms of the said decision, KIADB agreed to not only repay the

amounts paid by JESCO but also the interest on the said amount

as well as costs incurred by it for furnishing the Consultant's report.

21. Thereafter, JESCO surrendered 204.96 acres of land to

KIADB, which was allotted to other industrial units. KIADB paid the

consideration for the land calculated at Rs.5,62,449/- per acre.

That is, an aggregate amount of Rs.11,52,79,547/- for land

measuring 204.96 acres. It is stated additional 32.86 acres of land

was taken over by KIADB for development of Rehabilitation and

Resettlement colony.

- 16 -

22. At the 254th meeting of the KIADB held on 06.12.2003, it was

further resolved that no amount was required to be paid to JESCO

in respect of 204.75 acres as the same was granted free of cost to

JESCO. In the meantime, JESCO furnished proposal dated

07.02.2007 to utilize 250 acres out of the land provided by KIADB

for the steel plant, for the purpose of establishing an IT / ITES -

SEZ at Baikampady, Kenjar, Kulai, Thokur, Mangaluru Taluk.

JESCO sought approval to establish a 'Free Trading and

Warehousing SEZ' at over 125 acres of land, on the land provided

by KIADB at Baikampady, Kenjar, Kulai and Thokur villages of

Mangaluru Taluk. Thus, it proposed to use an aggregate of 375

acres of land for setting up the said two SEZs.

23. KIADB permitted JESCO to set up the two SEZs. However,

the approval was subject to the condition that JESCO surrenders

200 acres of land to the District Administration for construction of

offices and the stadium and further 80.91 acres (later modified to

69.706 acres) to Mangaluru SEZ Limited.

24. This Court is informed that thereafter, KIADB passed a

resolution on 05.04.2008 for JESCO to surrender 200 acres of

land. However, it is stated that JESCO did not comply with the

same.

- 17 -

25. JESCO submitted an additional proposal for setting up seven

different projects. The details of the same as noted in the Minutes

of the SHLCC at its 16th meeting held on 19.11.2008. The relevant

extract of the said minutes setting out the proposed projects is

reproduced:

Sl.No. Project & Location Extent Investment Employment of Land (Rs. in - Nos.

- Acres crores) 1 Logistics and Warehousing Facility KIADB allotted land at Sy. Nos. 60 48.00 5000 49,51,53,54,66,67,68,78,79,80,8 2 and 154 at Kulai Village, Mangalore Taluk, Dakshina Kannada District 2 Hi-tech Healthcare Complex KIADB land at Sy.Nos. 56, 57, 60, 61, 68, 69 & 141 at Thokur 20 37.00 600 village, Mangalore Taluk, Dakshina Kannada District.

      3     Holiday     Village,    Amusement
            Park
            KIADB land at Sy. Nos. 121,             27      46.00      1300
            139,140 & 141 at Thokur village.
            Mangalore Taluk,     Dakshina
            Kannada District
      4     Multi   Utility    Commercial
            Complex consisting of Multiplex
            Shopping Mall and Industrial
            Mall.                                   17      42.00       600

            KIADB land at Sy. Nos. 44,
            48,49 & 50 at Thokur village,
            Mangalore Taluk,   Dakshina
            Kannada District.
      5     Resort & 3 Star Hotel
            KIADB land at Sy. Nos.30, 36,37
            & 49 at Kulai Village, Mangalore
                                 - 18 -





      Taluk,     Dakshina    Kannada       14    46.00         800
      District
6     Modern Industrial/Technical &
      Vocational Training Centre
      KIADB      allotted  land     at 25.69     45.00         300
      Sy.Nos.76, 77,78,79 & 82 at
      Thokur village, Mangalore Taluk,
      Dakshina Kannada District.
7     Gem and Jewellery Park
      KIADB allotted land at Sy.Nos.
      39,40,41,42,43,44 & 48 at            10    38.00        2500
      Thokur village, Mangalore Taluk,
      Dakshina Kannada District.
                                         Total   173.69        302




Mr.N.Prabhakar, Head (Corporate Affairs) appeared before the Committee and explained the project. The Committee enquired why the carlier approved Steel Plant was not established. The representative of the company informed that there was recession at that time and as per their International Banker's advise they had shelved the project. He further informed that the company after dropping their carlier project has surrendred 237acres of land to KIADB and also given 200 acres of land to District Administration on free of cost as decided in earlier SHLCC and also they have given the land requested by MSEZ. He further requested to approve the above proposed projects.

The Committee advised the company not to change the activities again and to implement the project within 2 years.

Decision of SHLCC:

After detailed discussions the Committee approved the following 7 proposals of the company. The infrastructure assistance / incentives & concessions and the conditions of approvals are:

- 19 -






Sl   Project & Location           Extent  Invest Water        Power    Incentives
                                  of Land ment    (in                  and
N                                 - Acres (Rs. in Ipd)                 Concessions
o.                                        crores)
1    Logistics and Warehousing 60            48.00   5 lakh   1 MW     Not eligible
     Facility                   acres                to be    to be    for
                                already              suppli   servic   incentives
     KIADB allotted land at Sy. allotted             ed by    ed by    and
     Nos.                       by                   KIADB    MESC     concessions
     49,51,53,54,66,67,68,78,79 KIADB                         OM
     ,80,82 and 154 at Kulai
     Village, Mangalore Taluk,
     Dakshina Kannada District
2    Hi-tech          Healthcare 20          37.00   5 lakh   1MW      As       per
     Complex                     already             to be    to be    Tourism
                                 allotted            suppli   servic   Policy, GOK
     KIADB land at Sy.Nos. 56, by                    ed by    ed by    for      the
     57, 60, 61, 68, 69 & 141 at KIADB               KIADB    MESC     Medical
     Thokur village, Mangalore                                OM       Tourism
     Taluk, Dakshina Kannada                                           Component
     District.
3    Holiday           Village, 27           46.00   5 lakh   1 MW As          per
     Amusement Park             already              to be    to be Tourism
                                allotted             suppli   servic Policy, GOK
     KIADB land at Sy. Nos. by                       ed by    ed by
     121, 139,140 & 141 at KIADB                     KIADB    MESC
     Thokur village. Mangalore                                OM
     Taluk, Dakshina Kannada
     District
4    Multi Utility Commercial     17         42.00   5 lakh   1 MW     Not eligible
     Complex     consisting of    already            to be    to be    for incentive
     Multiplex Shopping Mall      allotted           suppli   servic   and
     and Industrial Mall.         by                 ed by    ed by    concession
                                  KIADB              KIADB    MESC
     KIADB land at Sy. Nos. 44,                               OM
     48,49 & 50 at Thokur
     village, Mangalore Taluk,
     Dakshina Kannada District.
5    Resort & 3 Star Hotel        14         46.00   5 lakh   1 MW     As        per
                                  already            to be    to be    Tourism
     KIADB land at Sy. Nos.30, allotted              suppli   servic   Policy,
     36,37 & 49 at Kulai Village, by                 ed by    ed by    Government
     Mangalore Taluk, Dakshina KIADB                 KIADB    MESC     of Karnataka
     Kannada District                                         OM
6    Modern Industrial/Technical 25.69       45.00   4 lakh 1 MW As         per
     &   Vocational     Training already             to be to be Industrial
                                 allotted            suppli servic
                                    - 20 -





    Centre                        by                 ed by ed by Policy 2006
                                  KIADB              KIADB MESC
    KIADB allotted land at                                 OM
    Sy.Nos.76, 77,78,79 & 82
    at     Thokur      village,
    Mangalore Taluk, Dakshina
    Kannada District.
7   Gem and Jewellery Park    10            38.00    4 lakh   1 MW As          per
                              already                to be    to be Industrial
    KIADB allotted land at allotted                  suppli   servic Policy 2006
    Sy.Nos. 39,40,41,42,43,44 by                     ed by    ed by
    & 48 at Thokur village, KIADB                    KIADB    MESC
    Mangalore Taluk, Dakshina                                 OM
    Kannada District.
                                  Total     173.69   11100


Water: Unit to minimize the usage of water and shall establish structure/facility for rainwater harvesting and groundwater recharge. Conducting an annual Water Audit is also recommended.

Environment: The promoters to obtain CFE and CFO from KSPCB for each of the above proposed projects separately. The company shall also obtain environmental clearance from DFEE, Government of Karnataka/MOEF, Government of India as applicable. No works shall commence prior to obtaining EC, as per prevailing law.

The company shall also take CRZ clearance for all the above proposed projects.

Employment: The company shall prepare a plan for development of human resource required for the project, train local people and provide employment to these trained local youth and comply with Government policy of employment to local people. A copy of human resource development plan shall be s sent to the Commissioner for I.D & Director of Industries & Commerce for monitoring. Vendor Development: Where ever there is scope for vendor development for the project, the company shall prepare a vendor development plan, develop local vendors and procure the required inputs, components and sub assemblies from these local vendor units. A copy of the vendor development plan shall be sent to the Commissioner for I.D & Director of Industries & Commerce for monitoring.

- 21 -

Social Infrastructure Development: The company is advised to take up social infrastructure development projects in the vicinity of proposed location of the unit A copy of such projects shall be sent to the Commissioner for I.D & Director of Industries & Commerce for monitoring. Others: The promoter shall take all statutory and other necessary clearances and shall submit milestones/progress in implementation of the project regularly, which will be monitored by the Departments concerned including GOI."

26. SHLCC approved the said proposals. However, JESCO did

not surrender 200 acres of land as required. The minutes of the

meeting of KIADB held on 21.05.2010 indicate that the same was

considered by KIADB and it was directed and resolved that notice

be issued to JESCO requesting to surrender the lands as identified

by KIADB. It was also, noted that JESCO had not taken any

effective steps for implementation of the projects till date.

27. It is stated that in the meanwhile, on 24.03.2010, 19.08.2010

and 14.09.2010, JESCO requested KIADB to execute the sale

deed in respect of 550 acres of land.

28. In terms of the letter dated 24.03.2010, JESCO stated that it

had several discussions with co-investors and strategic partners to

develop the project for which approval was granted, but the

projects could not get the desired response from prospective

investors, as JESCO did not have the land registered in its favour.

- 22 -

In view of the above, it requested KIADB to execute sale deeds for

550 acres of land which was handed over to JESCO between the

period 1996 - 2000 to implement the nine projects (two SEZ

projects and seven non-SEZ projects). JESCO sent a letter dated

19.08.2010 stating that it had already surrendered 200 acres of

land falling in Survey Nos.(4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15, 16,

18, 26, 28 and 108) of Baikampady village and Survey Nos.71, 73,

74, 75, 76, 77, 83, 84, 88, 140) of Thokur village.

29. It is stated that the 151.61 acres of land and 17.81 acres of

land in Kenjar village was identified by KIADB for the formation of a

new industrial layout and the approach road respectively. Thus it

required those parcels of land, and not the parcels of land stated to

have been surrendered by JESCO.

30. On 15.10.2010, JESCO was directed to surrender 193.57

acres of land; implement the projects approved by the SHLCC; and

to return the original possession certificates dated 07.10.1996,

25.04.1997, 20.09.1999 and 26.02.2000, so as to enable the

Development Officer, KIADB Zonal Office, Mangaluru, to execute a

lease-cum-sale agreement.

- 23 -

31. JESCO responded to the said letter by reply dated

23.10.2010 controverting the facts as stated therein and claiming

that it had surrendered 200 acres of land in various survey

numbers in the villages Baikampady and Thokur in Mangaluru

Taluk, D.K. District. The said letter sets out the status of the land

as claimed by JESCO. The same is reproduced below:

Status of Land:

1 Land acquired and handed over to JESCO by 986.52 acres KIADB 2 Land repossessed to KIADB by JESCO for 237.82 acres allotment to the new industries 3 Land surrendered to KIADB by JESCO for 200.00 acres constructions of Office & Stadium by the District Administration at free of cost 4 Balance land available with JESCO 548.70 acres

5 Land approved for 2 SEZ projects 375.00 acres

6 Land approved for 7 other non-SEZ projects 173.70 acres

Balance Nil

32. Apparently, the projects as proposed were not implemented

by JESCO and this was considered by KIADB at its 303rd Meeting

held on 27.09.2010. It was resolved by KIADB to call upon JESCO

to surrender 193.57 acres of land identified by KIADB out of 742.26

- 24 -

acres of unutilized land for subsequent allotment of 48.39 acres to

M/s. MSEZ Limited; 127.37 acres of land for use by KIADB; and

17.81 acres of land for the formation of an approach road to the

Industrial area.

33. JESCO was put to notice that if there was any further delay,

KIADB would initiate resumption proceedings and that the request

of JESCO to execute the sale deed, was rejected.

34. Thereafter, JESCO submitted yet another proposal dated

07.02.2011, this time to establish a Fertilizer & Chemical Unit at

Kenjar and Thokur villages of Mangaluru Taluk at an investment of

Rs.1500 crores. It claimed that the same would generate

employment to about 6,000 persons. The proposal was to set up

the project over an extent of land measuring 423.45 acres out of

the land of 742.26 acres and excluding 193.57 acres in Kenjar and

Thokur villages as required by KIADB.

35. The Government of Karnataka approved the said proposal in

terms of an order dated 18.08.2011. The said approval was valid

for a period of two years.

36. However, this project was also not implemented. On

07.05.2012, Government of Karnataka issued a revised order

- 25 -

modifying the Government Order dated 18.08.2011 by withdrawing

the condition regarding surrender of 193.57 acres of land,

considering that JESCO had already surrendered 200 acres of

land.

37. On 11.11.2013, the Government of Karnataka issued an

order for resumption of 742.26 acres of land lying unutilized for 25

years. The said letter was impugned by JESCO in

W.P.No.57644/2013.

38. Thereafter on 10.01.2014, KIADB issued a notice under

Section 34-B(1) of the KIAD Act for resumption of the lands in

question.

39. JESCO's writ petition being W.P.No.57644/2013, was

disposed of by an order dated 14.06.2017, in view of the statement

made on behalf of the Government of Karnataka that it would

consider JESCO's applications dated 16.08.2013 and 19.11.2013.

It is material to note that JESCO withdrew its prayer for setting

aside the Government order dated 11.11.2013 by which JESCO

was directed to resume the land which was lying unutilized.

40. Applications dated 16.08.2013 and 19.11.2013 filed by

JESCO seeking extension of time for implementation of the project,

- 26 -

were considered by the SHLCC at its 48th Meeting held on

31.08.2017, and the same were rejected.

41. Thereafter on 14.11.2017, the KIADB passed an order under

Section 34-B(4) to resume the subject lands. KIADB claims that

immediately thereafter, took over possession of the land to the

extent of 548.70 acres on 22.11.2017 and Mahzar was drawn.

42. On 05.01.2018, the Government of Karnataka issued an

order allotting 160 acres of land to establish Indian Coast Guard

Training Centre at Baikampady village. The said Government

Order was subsequently rectified by issuing a corrigendum dated

08.03.2018 for reading the name of the village as Kenjaru instead

of Baikampady.

43. In the aforesaid context, we may now note the reliefs sought

by JESCO in various writ petitions.

43.1 In W.P.No.52937 of 2017, the Appellant sought:

(a) quashing of the order dated 11.11.2013 bearing No. CI

175 SPI 2011 passed by Respondent No. 1 cancelling the

allotment;

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(b) quashing of the notice dated 14.11.2017 bearing No.

KIADB/Allot/AS-170-A-11/11959/2017-18 issued by Respondent

No. 2 under Section 34-B(4) of the Karnataka Industrial Areas

Development Act, 1966 directing the Petitioner to surrender

possession of the schedule property within 7 days;

(c) a declaration that the action of Respondent No. 2 in

issuing the notice dated 14.11.2017 bearing No. KIADB/Allot/AS-

170-A-11/11959/2017-18 under Section 34-B(4) of the KIAD Act,

1966 is highly arbitrary, illegal and in gross violation of principles of

natural justice;

(d) directions to Respondent Nos. 1 & 2 to consider

applications dated 16.08.2013 and online application dated

19.11.2013 for consideration of representations dated 06.11.2013;

(e) directions to Respondent No. 1 to consider representation

dated 31.07.2017 submitted on 03.08.2017 requesting for

execution of the Lease cum Sale Deed and thereby extend the

validity of Government Orders dated 18.08.2011 and the revised

Government Order dated 07.05.2012 for a period of 3 years from

the date of execution of the Lease cum Sale Deed; and

- 28 -

(f) directions to Respondent No. 2 to issue allotment order

and execute Lease cum Sale Deed in favour of Petitioner for an

extent of 548.70 acres of land as per Petitioner's representation

dated 02.08.2017 submitted on 03.08.2017, by conducting Field

Measurement Survey Work/Cadastral Survey work along with

Revised Possession Certificates to Petitioner.

43.2 In W.P. No. 566 of 2018, the Appellant sought:

(a) quashing of the 48th minutes of meeting of State High

Level Clearance Committee dated 31.08.2017 passed by

Respondent No. 1 in so far as concerning the Petitioner at

SI.No.5.2;

(b) quashing of the Mahazar dated 22.11.2017 drawn by

Respondent No. 3 at 1.00 PM as being highly arbitrary, illegal and

in teeth of interim order dated 22.11.2017 made in WP No.

52937/2017 passed by this Court;

(c) a declaration that the action of Respondent No. 3 to draw

Mahazar dated 22.11.2017 at 1.00 PM despite the interim order

granted by this Court in WP No. 52937/2017 around 11.30 am on

22.11.2017 directing to maintain status quo in so far as possession

- 29 -

is highly arbitrary, illegal and in gross violation of principles of

natural justice and also abuse of process of law;

(d) a declaration that the action of Respondent No. 1 in not

considering Petitioner's applications dated 16.08.2013 and online

application dated 19.11.2013 for consideration of representations

dated 06.11.2013 and thereby conducting meeting dated

31.08.2017 and taking impugned decision for resumption of land

from Petitioner without giving any opportunity of hearing to

Petitioner is highly arbitrary, illegal and in gross violation of natural

justice; and

(e) a declaration that the action of Respondent No. 1 in not

considering Petitioner's representation dated 31.07.2017 before

Respondent No. 1 and representation dated 02.08.2017 before

Respondent No. 2 and thereby conducting the meetings dated

31.08.2017 and 04.11.2017 and passing the impugned decision for

resumption of land from Petitioner without giving any opportunity of

hearing to Petitioner is highly arbitrary, illegal and in gross violation

of natural justice.

43.3 In W.P. No. 41829 of 2019, the Appellant sought:

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(a) quashing of the Corrigendum bearing No. CI 04 SPI 2018

dated 08.03.2018 issued by Respondent No. 1 as highly arbitrary,

illegal and contrary to decision made under the Proceedings of

35th SHLCC dated 14.05.2014;

(b) quashing of the communication bearing No.

KIADB/HO/Allot/C.No.21837/2619/2018-19 dated 22.05.2018

addressed by Respondent No. 2 in favour of Respondent No. 3 as

highly arbitrary, illegal and contrary to law; and

(c) a declaration that the action of Respondent Nos. 1 & 2 in

changing the name of village from Baikampady to Kenjaru village

and thereby allotting 160 Acres of Petitioner's land at Kenjaru

Village in favour of Respondent No. 3 is highly arbitrary, illegal and

contrary to law.

IMPUGNED JUGDMENT

44. The learned Single Judge examined the relevant facts and

has observed that the appellant had shown no commitment or

conviction to utilise the subject land for the purpose for which it

sought and provided. It had abandoned the project for which the

lands were handed over. It had submitted proposal for other

- 31 -

projects without there being any conviction to implement them. The

learned Single Judge also faulted SHLCC for blindly approving the

projects without ascertaining the appellant's capability, and KIADB

for handing over the subject lands in favour of Nagarjuna

Chemicals and Fertilizers Limited [NCFL] without there being any

arrangement. The learned Single Judge held that it was a blatant

misuse of statutory power and authority.

45. The court held that after the appellant had expressed its

inability to continue with establishing the steel plant, there was no

Justification for the SHLCC to clear further twelve projects. The

court observed that there was no due diligence, due care and good

faith exercised by SHLCC.

46. The learned Single Judge also observed as under:

"32. Undisputedly the said provision becomes invocable in the cases where there has been violation of terms and conditions of allotment or lease or holding of the land without any authority. In the instant case admittedly there has been no execution of deed of lease or deeds of sale in favour of the petitioner pursuant to the purported first allotment. After voluntary cancellation of the first allotment, the petitioner had surrendered portions of land in terms of the proceedings dated 22.05.2001 and had even admittedly received substantial portion of cost of land paid by it to the KIADB. Though while approving the second and

- 32 -

third project, the land which remained with the petitioner is sought to be read as subsequent allotments, the same runs contrary to the very contention of the petitioner that the first allotment remained intact. Thus, there is inherent mutually destructive inconsistency in the stand taken by the petitioner. However, by the impugned order dated 11.11.2013, the State Government has put at rest the issue of allotment by formally canceling the same and seeking to resume the land which order has attained finality in view of withdrawal of the writ petition in W.P.No.57644/2013 as noted hereinabove."

47. The learned Single Judge found that the Government Order

dated 11.11.2013 directing cancellation of any allotment and

resumption of the land, had attained finality as the appellant had

withdrawn the writ petition, being WP No.57644/2013.

48. The appellant had complained that the status quo order was

passed at 12.30 P.M and the possession of the subject land was

taken over at 1.00 P.M. The contention that the status quo order

passed by this court had been violated was countered on behalf of

the KIADB. It was submitted on behalf of KIADB that the process

of drawing mahazar was completed prior to the communication of

the said status quo order, which would be effective only on

communication. The court observed that it was open for the

appellant to take any action for disobedience of the order.

- 33 -

However, the order dated 11.11.2013 for resumption of the land

had attained finality in view of the appellant withdrawing its earlier

petition, the appellant's challenge to the resumption of the land,

was unsustainable.

49. The learned Single Judge deprecated the manner in which

the entire process of allotment was undertaken and also directed

that enquiry be held by an authority not less than the Principal

Secretary of the State considering the magnitude, the extent of

land, and the manner in which it was dealt with.

SUBMISSIONS

50. Mr. Nandakumar C. K, learned Senior Counsel appearing for

the appellant contended that the appellant had volunteered to

surrender the entire subject land to the extent of 986.52 acres to

KIADB in the year 2001 since it had decided not to set up the

integrated steel plant. However, the KIADB had expressed its

inability to accept the surrender due to lack of demand and the

budget. He submitted that it was agreed that the KIADB would

facilitate allotment of surrendered portions of the land to third

parties. He contended that in the given circumstances the appellant

could not be faulted for retaining the subject lands.

- 34 -

50.1 He contended that KIADB and the Government of

Karnataka had encouraged the appellant to submit the proposal as

it could not be disposed of. He contented that on being

encouraged by the KIADB and the Government, the appellant had

submitted proposal for setting up nine projects, which were

approved.

50.2 He contended that as per the agreement, JESCO had

released 200 acres of land for construction of offices and stadium

in terms of letter dated 07.05.2008. However, the KIADB had

stalled the projects by demanding surrender of land measuring

193.57 acres from the lands that was approved for various projects,

instead of accepting the land already surrendered. He contended

that the KIADB was illegally demanding land from the approved

projects and failed to issue revised possession certificates or

execute lease-cum-sale deeds. Therefore, the appellant was

compelled to approach this Court by filing a writ petition in WP

No.41727/2010. He contended that since the approval for the nine

projects was due to expire, the appellant had approached the State

Government to extend the validity of the government orders and

execute the lease deeds or approve the revised project comprising

- 35 -

a fertilizers and chemicals complex and an Integrated Township

Project over an area spanning 548.69 acres of land.

50.3 He contended that, therefore, the Government Order

dated 18.08.2011 was issued approving the revised project. He

contended that since 200 acres of land had already been

surrendered in terms of the letter dated 15.04.2008, the State

Government issued a revised Government Order dated 07.05.2012

deleting the conditions for surrender of 193.57 acres of land.

Therefore, the said writ petition was disposed of on 05.06.2012.

50.4 Mr. Nandakumar also contended that the State and

KIADB had violated the statutory provisions under the KIAD Act

and it had failed to issue revised possession certificates, execute

lease-cum-sale deeds and had stalled the projects by demanding

the return of part of the subject land.

50.5 He contended that it was mandatory for KIADB to

follow the procedure as prescribed under Section 34-B(1) of the

KIAD Act. However, KIADB had not afforded the appellant. He

further contended that the subject land was validly allotted in favour

of the appellant and the possession certificated are required to be

considered as valid allotments. On the aforesaid premise, he

- 36 -

contended that the action taken by the KIADB for resuming lands

without following the process under Section 34B of the KIAD Act.

was illegal.

50.6 He referred to the decision of the Supreme Court in

Krishna Ram Mahale vs. Shobha Venkat Rao: (1989) 4 SCC

131, Maria Margarida Sequeira Fernandes and others vs.

Erasmo Jack De Sequeira: (2012) 5 SCC 370 and contended that

the possession once lawfully handed over could not be unilaterally

disturbed. He also contended that the KIADB's failure to execute

lease-cum-sale deeds and revise possession certificates infringed

Article 300A of the Constitution of India.

51. Mr.Basavaraj V. Sabarad, learned Senior Counsel advanced

contentions on behalf of KIADB. He submitted that there were no

allotment letters in respect of the subject lands and in absence of

any allotment letter or execution of the lease, no notice was

required to be issued under Section 34B of the KIAD Act to resume

the subject lands. He referred to the decision of the Supreme Court

in Orissa Industrial Infrastructure Development Corporation Vs

MESCO Kalinga Steel Ltd. and others: (2017)5 SCC 86 in

support of his contention. He also relied on the decision of this

- 37 -

Court in M/s. Kamalalayaa Real Estates LLP vs. The Karnataka

Industrial Areas Development Board and another: Writ Petition

No.279/2024 decided on 12.01.2024 and M/s. Naveen Infotech

vs. State of Karnataka and others: NC 2024 KHC 32647.

52. Mr. Aravind Kamath, learned ASG appearing on behalf of the

Union of India contended that the Indian Coast Guards were

handed over possession of 160 acres of land for construction of

training center, which was of vital national importance. He

submitted that construction of boundary wall had been completed

and civil works are being undertaken.

REASONS and CONCLUSION

53. It is apparent from the given facts that JESCO had come into

possession of the subject land pursuant to its proposal to establish

an integrated steel plant in Mangaluru with an investment of `1,200

crores in the first phase and further, `800 crores in the second

phase. SHLCC had considered the appellant's proposal for setting

up the integrated steel plant and had made various

recommendations in the said regard. The Government of

Karnataka accepted the said recommendations and issued a

Government Order dated 15.06.1992, inter alia, according its

- 38 -

sanction to KIADB to provide 1600 acres of land out of 1842.51

acres of land to the appellant. KIADB was, thus, required to make

the allotment and provide the subject lands. Further other

departments were also required to accord approvals that may be

required.

54. It is material to note that immediately thereafter, KIADB had,

allotted 160 acres of land in several survey numbers of

Baikampady and Panambur villages of Mangalore in terms of the

letter dated 31.10.1992 issued pursuant to JESCO's application

dated 25.08.1992. It is important to note that the said allotment

letter set out various conditions of allotment. The relevant extract of

the said letter setting out some of the terms and conditions are set

out below:

"1. This letter of allotment shall become effective if the allottee fulfils the following conditions, namely:-

a) The allottee shall pay the initial deposit as required under paragraph (5) of this letter within three months from the date of receipt of this letter.

b) The allottee shall fulfil any one of the following requirements within a period of three months from the date of receipt of this letter, namely:-

(i) Loan has been sanctioned or assured either by any approved financing institution or any commercial bank; and copy of the sanction of assurance is furnished to the Board.

(ii) Firm orders for supply of major portion of plant and machinery and other equipment are placed by the allottee

- 39 -

with the suppliers and a copy of the order is furnished to the Board.

(iii) In cases requiring industrial licence from the Government of India, a copy of letter of Intent/industrial licence furnished to the Board, and

(iv) In case the allottee who propose to enter into foreign collaboration or import capital goods/raw materials clearance from the concerned Ministry of the Government of India as obtained and a copy of such clearance is furnished to the Board.

*** *** *** *** If the allottee fails to pay the initial deposit as provided under condition (a) or fails to fulfil at least one of the requirements as required under condition (b) within the stipulated period or the extended period as the case may be, this letter of allotment shall be treated as automatically cancelled.

2. (a) Within 15 days after the allotment became effective, a letter confirming the allotment shall be issued:

(b) If the allotment does not become effective, 50% of the amount paid shall be forfeited, provided in respect of allotments exceeding 10 acres the Board may, in its discretion, reduce the forfeiture amount to 25%.

3. The allotment of land will be on lease-cum-sale basis. The price of the land allotted is payable as follows:-

4. 99% down payment and the balance payable in 20 equal annual instalments with interest at a rate of 13% per annum or such other rate as may be fixed by the Board from time to time on the unpaid balance subject to a rebate of 3% for prompt payment. The annual instalment will be treated as rent for the purpose of the lease.

5. The price of the land shall be determined by the Board and intimated to the allottee after finalisation of the compensation payable to the land owners. However, for the purpose of this allotment, the cost of the land is fixed at the tentative rate of Rs.18,201 per acre On this basis. you are

- 40 -

requested to remit a sum of Rs.28,83,039/- towards the 99% cost and an annual rent, at a nominal rate of 1,457/- per annum for a period of 20 years together with interest at the rate mentioned in para (4) above. Suitable bank charges for clearance shall be included in respect of cheque drawn on outstation banks. At the end of 21 years, the lease shall be converted into a sale subject to fulfillment of all other conditions of the lease and payment of the full price of the land as finally fixed by the Board, subject to adjustment of initial deposit and rents already paid.

6. The lease agreement with the Board shall be executed in the first instance within one month from the date of confirmatory letter of allotment issued under par.

7. The time schedule given shall be adhered to-

1. For execution of lease One month from the date of receipt agreement and taking possession of confirmatory 1 letter of allotment. of the land.

2. For getting the approval of the Six months from the date of receipt Board for blue prints. of this letter.

3. For commencement of civil Three months from the date of engineering works. approval of the blue prints.

4. For completion of works and Twenty months from the date of erection of the factory. this letter.

5. For commencement of Twenty four months from the date production of this letter.

8. Failure to fulfil any of the condition (1) to (5) of para 7 shall result in the allotment being cancelled and 28% of the amount paid till then shall be forfeited.

9. The industry should be started after obtaining necessary licences/clearances/approvals from the concerned, such as Government of India, State Government etc..

- 41 -

10. Plans of the proposed factory should be got approved by the apex Board before starting construction.

11. Written approval of the Engineer-In charge about the alignment of the fencing of the compound wall should be obtained before its erection.

12. The valley, if any running across the plot shall not be disturbed till such time as suitable alternative for the drainage with the approval of the proper authorities is devised.

13. The Board reserves the right to cancel the allotment for violation of all, or any of the conditions.

14. On being satisfied that the land is not put to the use for the purpose for which it was asked for, the Board will be free to re-enter upon and take possession of the whole or that part of the land which has not been put to propose use,

15. If necessary, the interest in this plot of land may be offered as security in order to obtain financial assistance from the Government or Corporate bodies, like Life Insurance Corporation of India, Karnataka State Financial Corporation, Trustees of Debentures Stock or Banks with the previous permission of the Board.

16. It should be distinctly understood that this letter of allotment does not amount to any commitment on the part of the Board.

17. The Board reserves its right to increase the tentative price of the land indicated at para 5 of page 3 of this letter after completion of all development works and finalisation of court awards if any.

18. The allotment is subject to the condition that you should give right of way to officials of Kudremukh Iron Ore Company Limited, and Mangalore Refineries and Petro Chemicals Limited for maintenance works of pipe line in respect of lends in location No.1 indicated in the sketch.

19. The company should obtain necessary clearance for the project from Karnataka State Pollution Control Board and Environment and Ecology Department and furnish a copy before commencement of work."

- 42 -

55. Admittedly, the conditions as set out in the said allotment

letter were not complied with. It is also not dispute that 160 acres of

land, as mentioned in the said letter, was not provided to the

appellant. However, the said letter is important because it sets out

the terms and conditions which were required to be complied with

by the appellant. It is not disputed that these are the general

conditions, which are imposed by KIADB for allotment of lands. The

allotment letter refers to appellant's application dated 25.08.1992

and it is not disputed that the said application was made in respect

of the integrated steel plant proposed to be set up by JESCO.

Admittedly, the said conditions so stipulated were not fulfilled.

56. However, it transpires that thereafter, KIADB acquired and

handed over parcels of land to JESCO without any allotment letter

by simply issuing any possession certificates, which merely stated

that the possession of the lands were handed over. The appellant

also paid the tentative costs. It is stated that 986.52 acres of land

was handed over to the appellant in this manner.

57. The appellant has set out a tabular statement in its affidavit

filed on 27.10.2025, setting out the details of handing over

- 43 -

possession of 986.52 acres of land. The same is reproduced

below:

Possession (PC) of Land handed over to JESCO by KIADB (Land in Acres) Village PC PC PC PC Total dated dated dated dated 07.10.96 25.04.97 20.09.99 26.06.00 Land Govt. Pvt. Pvt. Pvt.

                   Land       Land              Land       Land
                      1            2                 3          4      5=1+2+3+4
      Baikampady      95.81      68.27                        45.88            209.96
      Thokur          83.07     205.96                          1.40           290.43
      Kenjar          14.25     324.29                        16.66            355.20
      Kulai           11.62                        32.86      86.45            130.93
      Total         204.75      598.52             32.86     150.39            986.52


58. The appellant did not set up the integrated steel plant and

decided not to go ahead with the project. JESCO claims that in the

year 2001, it had volunteered to surrender the subject land.

However, the record does not indicate that there is any letter

communicating it desire the said effect. However, the record

indicates that a meeting of KIADB was held on 22.05.2001 in which

the issue of taking over of lands from JESCO was considered. The

minutes of the meeting also indicate that 986.52 acres in

Mangaluru Taluk was handed over to NCFL as a part of the

commitment given to JESCO. The possession of the lands was

handed over as and when payments towards land costs were

- 44 -

received without issuing any letter of allotment setting out the terms

and conditions. Further, no lease-cum-sale agreement executed

between the parties.

59. It is material to note that 204.75 acres of land had been

handed over to JESCO free of cost. Notwithstanding the same, the

KIADB was of the view that "in the absence of the terms and

conditions of allotment, it would be difficult to resume the land and

such an action might result in litigation, the clearance was likely to

consume lot of time."2 The minutes of the KIADB meeting held on

22.05.2001 does not support the contention that there was any

voluntary offer by the KIADB to hand over possession of 986.52

acres of land. It appears that JESCO had offered to surrender the

land but on certain terms. The minutes also indicate that JESCO

had made a claim of `1566.42 lakhs on account of alleged

expenditure incurred by it towards costs of reports and manpower.

It is clear from the said minutes that there was no offer for JESCO

to voluntarily surrender the subject lands against refund of the

amount paid to KIADB. On the contrary, it appears that JESCO had

demanded higher. The said minutes indicate that JESCO had

The minutes

- 45 -

incurred `30.79 crores towards the cost of land, including

expenditure incurred. The minutes also indicate that it was also

deliberated that the costs of development would be high and

further, KIADB would not be in a position to repay the payments

made and the expenditure incurred by JESCO.

60. KIADB had expressed its intention to take over 500 acres of

land for a proposed township and directed that steps be taken for

the same. It also considered desirable that the report be submitted

by the consultant to enable KIADB to propose a price for the said

land. At the material time there were various proposals by various

companies and accordingly, the lands admeasuring 204.96 acres

were taken over and provided to other industries. It is however

material to note that the land allotted to other industries were at

significantly of higher costs.

61. JESCO surrendered 204.96 acres of land and was paid

consideration calculated at `5,62,449/- per acre. This was

significantly higher than the price paid by JESCO to KIADB. It also

surrendered an additional 32.86 acres of lands for development of

rehabilitation and resettlement colony for which it states that it did

not receive any consideration.

- 46 -

62. As noted above, 204.75 acres of land was provided to

JESCO free of cost. However, JESCO was paid for the lands

allocated to other industries.

63. It also appears that the appellant continued to be in

possession of the subject land to pursuant to the possession

certificates, which were only to enable JESCO to establish the

Integrated Steel Plant. Since, JESCO decided not to pursue the

said project, the subject land was required to be surrendered. It is

JESCO's case KIADB had committed default in not handing over

revised possession certificates pursuant to the approvals granted

for the projects that were proposed subsequently. It is implicit that

the earlier possession certificates were not sufficient.

64. The appellant had furnished an affidavit on 27.10.2025,

which was at the fag end of the hearing and after the oral

submissions on behalf of the respondents was completed. The said

affidavit contains averments to the effect that the KIADB had failed

to comply with the KIAD Act, inter alia, by failing to issue revised

possession certificates.

65. Notwithstanding that it was not pursuing the project for which

it had taken over the lands, the appellant submitted another

- 47 -

proposals for setting up the Free Trading and Warehousing SEZ

over an area of 125 acres to set up IT / ITES - SEZ over 250 acres

of land. At the material time, JESCO had claimed that it was

holding 748.70 acres of land.

66. The SHLCC approved the said proposals as well. However,

the same were subject to the condition that the appellant would

provide 200 acres of land to the District Administration for

constructing offices and stadium and further, 80.91 acres to

Mangalore SEZ Limited.

67. There is a controversy whether the appellant had

surrendered 200 acres of land as required. According to the

appellant, it had done so in terms of the letter dated 07.05.2008.

68. The letter dated 07.05.2008 issued by JESCO indicates that

it had surrendered possession of 200 acres, out of which 134.87

acres were in Baikampady village and 65.13 acres were in Thokur

village. It is material to note that the JESCO was provided 95.81

acres in Baikampady village free of cost and 83.07 acres in Thokur

village, free of cost. Thus, essentially, it claims to have

surrendered only 39.06 acres in Baikampady village, which were

not provided free of cost to JESCO. However, it continued to retain

- 48 -

part of the lands in Thokur, Kenjar and Kulai villages that were

provided free of cost.

69. It is stated on behalf of the KIADB that KIADB did not accept

the surrender of 200 acres of land as offered but, the KIADB had

identified another parcel of land, which was required to be

surrendered. The minutes of the three hundredth meeting of the

KIADB held on 21.05.2010 are placed on record. The said minutes

indicate that the land proposed to be offered by the appellant for

the cricket stadium was covered in a CRZ area and therefore, the

same was not acceptable. KIADB resolved that notice be issued to

JESCO to surrender the parcels of lands identified out of the

748.70 acres of land. Subsequently, on 27.09.2010, the KIADB

directed JESCO to surrender 193.57 acres out of the lands

remaining with the appellant. There is some mismatch in the extent

of lands referred to in various minutes. Whereas, the minutes of the

meeting of the KIADB held on 21.05.2010 record that 748.70 acres

of land were with the appellant, the minutes of the meeting held on

27.09.2010 indicate the area as 742.26 acres of land.

- 49 -

70. Admittedly, the appellant did not implement the projects for

setting up of the IT/ITES- SEZ and free trading and warehousing

SEZ over a land measuring 375 acres of land.

71. In the meanwhile, JESCO also furnished proposal for setting

up seven other projects over lands measuring 173.69 acres.

These proposals were also approved by SHLCC at the meeting

held on 19.11.2008. Admittedly, none of these projects were

implemented.

72. It is contended on behalf of the appellant that KIADB had

stalled the projects by demanding 193.52 acres of lands that were

required for the approved projects and refusing to issue the revised

possession certificates. However, at the material time, there were

nine approved projects: two SEZs, one over 125 acres and the

other over 250 acres; and seven other projects over 173.69 acres.

No work was executed on the ground in respect of any of these

nine projects.

73. On 15.10.2010, KIADB directed the appellant to surrender

possession of 193.57 acres of land as identified by it and to return

the original possession certificates to enable them to issue a

revised possession certificate. The appellant did not comply with

- 50 -

the same and responded by a letter dated 23.10.2010 contending

that it had already surrendered 200 acres of land and called upon

the KIADB to withdraw the said demand for surrendering 193.57

acres of land in Kenjar and Thokur villages. At that stage, KIADB

did not relent and issued another letter dated 03.11.2010 setting

out the particulars of 193.57 acres of land in Kenjar and Thokkur

villages, which were required, and called upon the appellant to

surrender the same by 05.01.2011. The said communication was

followed by a letter dated 16.12.2010, whereby KIADB once again

directed the appellant to surrender the specified areas of land

measuring 193.57 acres in Kenjar and Thokur Villages by

05.01.2011. The appellant was also put to notice that on failure to

surrender the said land, KIADB would take steps for forcible

possession of the same.

74. The appellant filed a writ petition (being W.P.No.41727/2010)

challenging the order dated 16.12.2010 directing it to surrender

193.57 acres of land. In the said petition, an interim order was

granted directing that the appellant's possession would not be

disturbed.

- 51 -

75. Thereafter, the appellant sought approval of two new

projects, one for setting up a fertilizer and chemical complex over

an area of 447 acres and the second for an integrated township

complex over an area of 101 acres. The SHLCC granted the

approval for the fertilizer project to the extent of 423.45 acres

subject to the condition of the appellant surrendering of 193.57

acres. The Government of Karnataka issued a Government order

dated 18.08.2011 to the aforesaid effect.

76. The appellant represented against the said order on

23.08.2011. It submitted a request to the Hon'ble Minister of Large

and Medium Industries, Government of Karnataka, seeking waiver

of the condition requiring it to hand over 193.57 acres of land as

identified by KIADB.

77. It is material to note that the KIADB required 193.57 acres of

identified land for setting up an industrial area. On 14.09.2011, the

Chief Executive Officer and The Executive Members of the KIADB

furnished their response to the appellant's request for waiver of the

said condition. They opposed the same on the ground that 193.57

acres was necessary to develop in the industrial area of Mangalore

District.

- 52 -

78. Notwithstanding the above, the Hon'ble Minister of Large and

Medium Industries, Government of Karnataka, recommended that

the condition imposed in the Government order dated 18.08.2011

requiring surrender of 193.57 acres of land be waived. Following

the said recommendation, the Government issued an order dated

07.05.2012 waiving the condition imposed by KIADB to hand over

193.57 acres of land required for KIADB for setting up an industrial

area. The said order indicates that out of the 200 acres of land,

which was surrendered by JESCO, 48.39 acres of land was found

suitable for starting a boundary fee office. The same was directed

to be handed over to Mangalore SEZ Limited. Thereafter, the

appellant withdrew its writ petition in W.P.No.41727/2010 on

05.06.2012.

79. The aforesaid events pose several questions. The first

relates to the surrender of 200 acres of land, which JESCO states

that it had voluntarily done. The minutes of the meeting of KIADB

held on 21.05.2010 records that the lands proposed to be offered

by JESCO for the cricket stadium, was fell in the CRZ area and

therefore, the same was not acceptable. KIADB had resolved that

JESCO be directed to surrender the lands as identified by KIADB in

its possession. Our attention was not drawn to any document on

- 53 -

record, which would explain as to why the 200 acres of land -

which were found to be not acceptable by KIADB - was

subsequently accepted by KIADB or the Government.

80. It is also material to note that 204.75 acres had been handed

over to the appellant free of cost. There could be no impediment

for recovering possession of these lands (95.81 acres in

Baikampady, 83.07 acres in Thokur, 14.25 acres in Kenjara and

11.62 acres in Kulai villages). Once it was found that JESCO was

not proceeding with the project, there could be no impediment in

taking over the said lands for which JESCO had not paid any

consideration. There could be no issue of return of compensation

insofar as the said 204.75 acres of lands are concerned. The

extracts of the minutes of 254th meeting of KIADB held on

06.12.2003 also records that the extent of 204.75 acres of land be

excluded while arriving at the cost of land as the same were

handed over free of cost. The only cost paid by JESCO was for

private lands, which were acquired from land owners.

Notwithstanding the said minutes, there is no clarity as to further

steps taken in respect of the said land.

- 54 -

81. As noted at the outset, the appellant did not implement the

project for setting up a fertilizer plan and integrated township, the

approval of which was granted in terms of the revised Government

order dated 07.05.2012.

82. It is to be noted that approval for setting up the fertilizer and

chemical unit was granted on 18.08.2011 and it was valid for two

years. The said approval was subsequently modified on

07.05.2012 at the request of the appellant, by withdrawing the

condition requiring the appellant to surrender 193.57 acres. The

approvals were valid till 17.08.2013. In the meanwhile, the

Karnataka Udyog Mitra [KUM], sought information regarding the

status of the project, by its letter dated 25.10.2012. The appellant

responded by letter dated 08.11.2012 setting out the various steps

taken by it. However, it is apparent that even as of 08.11.2012,

any concrete steps had been taken on ground to establish the

fertilizer plant. The steps taken were largely related to seeking

approvals and reports.

83. After the term of the approval had expired, the appellant sent

a letter dated 16.08.2013 seeking extension of three years to

complete the project. It stated that it had been unable to achieve

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the desired level of progress in implementing the two projects -

fertilizer and chemical complex over an extent of 447.70 acres and

an integrated township over an extent of 101.00 acres. The said

letter indicates that the only steps taken by the appellant were

regarding "survey work, soil investigation, water analysis, land

filling, fencing, appointment of consultants and financial tie-up and

filing applications for seeking approvals".

84. The appellant stated in its letter that it was making sincere

and vigorous efforts for early clearance and approvals. It

acknowledged that it had not been able to achieve the desired level

of progress. It claimed that the same was on account of various

factors including land documentation, execution of lease-cum-sale

deed, recession in the economy, waiting clearance from the

Ministry of Environment and Forest. It is material to note that the

projects would entail investments of 1984 crores (1500 crores of

fertilizer and chemical complex and 484 crores for integrated

township). However, there was no indication as to the amount

invested. JESCO's letter did not indicate as to the extent of

investments already made or any evidence of incurring the same.

- 56 -

85. After receipt of the said recommendation, the KUM by a letter

dated 25.10.2012 requested CEO and EM of KIADB to conduct a

spot investigation and send a report regarding the development

work carried out by JESCO on the subject lands. The Joint

Director, Dakshina Kannada submitted a report dated 06.12.2013

stating that no development work had been carried out by the

JESCO on the property in question. In the meanwhile, the

Government issued a communication dated 11.11.2013 directing

KIADB to resume the land from JESCO to the extent of 742.26

acres. A plain reading of the said order indicates that it is based on

the fact that no industrial activity had been undertaken by JESCO

for the last 25 years. It is material to note that the said order also

records that JESCO had not surrendered 200 acres of land.

86. On 17.12.2013, the appellant filed a writ petition being

W.P.No.57644/2013 impugning the order dated 11.11.2013. On

09.12.2013, this Court passed an ad-interim order directing the

appellant not to be dispossessed of the said lands. It is material to

note that the appellant had sought two reliefs in the said petition

namely, (a) to quash the order dated 11.11.2013 directing

resumption of the land; and (b) for a writ in the nature of

mandamus to the Government of Karnataka to consider the

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appellant's representation dated 16.08.2013 and an online

application dated 19.11.2013, inter alia seeking extension of the

approval.

87. During the course of the proceedings, on 14.06.2017, the

petitioner unconditionally withdrew the relief seeking quashing of

the order dated 11.11.2013 (prayer a) and confined the petition to

the relief as seeking consideration of his representation dated

16.08.2013 and online application dated 19.11.2013. The said

petition was accordingly disposed of by an order dated 14.06.2017

in view of the submissions made by the learned Additional

Government Advocate that the application would be considered, in

accordance with law.

88. In the meanwhile, KIADB had issued a notice dated

10.01.2014 under Section 34-B of the KIAD Act. In terms of the

said notice, it was noted that the appellant had failed to utililze the

land, which was handed over after a lapse of more than 17 years.

The appellant was called upon to remedy the specific breach within

a period of ninety days, failing which steps would be taken to

terminate the allotment. The said notice continued to be

outstanding. However, no steps could be taken for resuming the

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land in view of the interim orders dated 17.12.2013 passed by this

Court in W.P.No.57644/2013. The appellant continued to enjoy the

protection of the said order till it was vacated with the disposal of

the writ petition on 14.06.2017. As noted above, the petition was

disposed of as the appellant had accepted the order dated

11.11.2013 and had withdrawn the relief seeking setting aside of

the said order.

89. The appellant's representation was considered by the

SHLCC in its 48th meeting held on 31.08.2017. The minutes of the

meeting indicate that the SHLCC had examined the course of

events that had transpired after it had approved JESCO's proposal

to set up the integrated plant on 07.05.1992. Considering the

same, SHLCC resolved to reject the request and the representation

for extension dated 16.08.2013 and the appellant's online

application dated 19.11.2013 seeking extension of time for

implementation of the projects (Fertilizer and Chemical Project and

Integrated Township project). The SHLCC also resolved to take

necessary action for resumption of the total extent of land provided

to JESCO.

- 59 -

90. In the aforesaid backdrop, the KIADB passed an order dated

14.11.2017 under Section 34B(4) of the KIAD Act, directing the

appellant to surrender the land within a period of seven days. As

noted above, the appellant challenged the said order by filing a writ

petition (being W.P.No.52937/2017). On 22.11.2017, this Court

passed an order directing status quo. As noted above, it is the

respondent's contention that the possession of the lands was taken

over at 1.00 p.m. on 22.11.2017 and the mahazar to the aforesaid

effect has been placed on record. The appellant contends that the

said mahazar is liable to be set aside, as it was passed in violation

of the status quo order dated 22.11.2017. This is countered by the

State on the ground that the order dated 22.11.2017 was received

after the possession of the land was taken over. The learned

Single Judge had rightly found that it was not necessary to

examine the same in the writ petition for essentially two reasons.

First that the order directing resumption of land - order dated

11.11.2013 - had attained finality. The appellant having withdrawn

his challenge to the said order, could not resist the implementation

of the same.

91. The appellant's relief was now confined to the question

whether it was entitled to extension of time as sought for in its

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representation dated 16.08.2013 and its online application dated

19.11.2013. The same was rejected by SHLCC in its 48th meeting.

92. The appellant thus challenged the same by filing a writ

petition (being W.P.No.566/2018) challenging the decision of the

SHLCC rejecting the representation dated 16.08.2013 and the

online application dated 19.11.2013. The appellant also challenged

the mahazar dated 22.11.2017.

93. The learned Single Judge passed an order dated 08.01.2018

staying further proceedings pursuant to the minutes of the meeting

dated 31.08.2017 and mahazar dated 22.11.2017. These orders

were subsequently modified.

94. KIADB had filed an application seeking permission to allot

160 acres of land at Baikampady village in favour of Coast Guard.

This Court modified the status quo order passed in

W.P.No.52937/2017 and W.P.No.566/2018 granting liberty to the

KIADB to proceed with the allotment of land for establishing Indian

Coast Guard Training Centre. The Indian Coast Guard had

submitted an application seeking change in the name of the village

from Baikampady to Kenjaru and on 08.03.2018, a corrigendum to

the aforesaid effect was issued and the allotment letter was

- 61 -

modified. The KIADB also filed an application in W.P.No.566/2018,

seeking modification, which was allowed by an order dated

23.04.2018.

95. The appellant filed yet another petition (being

W.P.No.41829/2019) impugning the corrigendum. As noted above,

these petitions were disposed of by the impugned order.

96. The principal question that requires to be examined is as to

the appellant's right in respect of the subject lands. We concur with

the findings of the learned Single Judge that the appellant had no

right, title or interest in the subject lands. The possession of the

subject lands was handed over on issuance of certificate of

possession. Although no allotment was made, any allotment of land

by KIADB would necessarily require to be made for the purposes of

the Act. In this case, KIADB had issued an allotment letter in

respect of 160 acres of land, which set out detailed conditions to be

complied with. However, no lands were handed over pursuant to

the said allotment letter. And, the subject lands were handed over

albeit without executing any allotment letter or any other document

setting out the conditions on which such allotment could be made.

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Plainly, the terms of allotments of the subject lands could not be

any different, if the same had been articulated.

97. Indisputably KIADB had handed over possession to JESCO

without following any statutory requirements or norms.

98. Karnataka Industrial Areas Development Board Regulations,

1969 [the Regulations] set out the manner in which the

applications for allotment are required to be made and the manner

in which the allotment is to be made. In terms of clause (a) of

Regulation 10 of the Regulations, the allotment can be made by

KIADB on being satisfied that the person who has made an

application is likely to start production within a reasonable period.

In terms of clause (c) of Regulation 10 of the Regulations, the

application to whom allotment is made is required to be notified to

execute an agreement in Form 3 or 4 or 5, as the case may be,

with certain modifications.

99. In the present case, no documents were executed for either

allotting the said land or setting out the conditions for the allotment.

The possession of the subject land was handed over merely on

JESCO's proposal that it would set up an integrated steel plant.

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KIADB did not undertake any review of the steps taken by JESCO

for implementing the project.

100. Since JESCO decided had not pursue the project; the

fundamental premise on which land was provided to did not

survive. The question whether JESCO would be entitled to recover

any amount against the tentative cost paid by it, is a separate

issue. Since the subject land was never transferred to JESCO and

the very purpose for which the JESCO had taken possession of the

lands was admittedly not pursued, it had no right to retain the

possession of the same. The subject lands continued to vest with

the Government/KIADB.

101. Regulation 5 of the Regulations expressly requires KIADB to

decide the manner of disposal of the land. The said regulation is

set out below:

"5. Manner of disposal of land.-- The Board shall decide the manner of disposal of land / shed in each industrial area or part thereof, i.e., whether by lease, lease-cum- sale, sale, auction-sale, auction-lease, assignment or otherwise. In each case, the Board will also have the discretion to decide the detailed conditions which shall be binding on the applicant."

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102. In the present case, there appears to be no particular

decision on record regarding the manner of disposal of land to the

appellant. However, the allotment letter dated 31.10.1992 clearly

sets out the manner in which the KIADB had decided disposing the

land in favour of the appellant. It is also not disputed that the

conditions as set out in the said letter are ordinarily imposed by the

KIADB.

103. It is a matter of concern as to how the JESCO had acquired

the possession of the land without any formal allotment letter and

without KIADB setting out the manner of disposal. Copies of the

possession certificates, which have since been placed on record,

merely record that possession of the subject lands have been

handed over to JESCO. We may refer to one such Possession

Certificate, Possession Certificate dated 07.10.1996, the same is

set out below:

"POSSESSION CERTIFICATE

Sub: Handing over of 204.75 acres of I land in favour of JESCO (Unit of NFCL) Ref: 1. INo.RD/72/LGA/92 dt. 21.12.1993.

2. Letter No.CI 84/SPI 95 dt: 4.10.96 from the Principal Secretary to I.Commerce & Industries Dept.

3. Letter No.KIADB/937/I 9002/96-97

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dt. 5.10.96 from Head Office.

4. Letter No.LAQ.1/93-94/596 dt: 18.9.95 of Spl. Land Acquisition Officer, K.I.A.D.B., Mangalore.

-----

With reference above, I am handing over an extent of 204.75 acres of Govt. land in Kulai, Baikampady, 62 Thokur and Kenjar villages as detailed in Annexure to M/s. JESCO (Unit of NFCL) today the, 7th October 1996."

104. As is apparent, the said Possession Certificate refers to

certain letters from KIADB, which are not on record. However, the

certificate simply states that the land to the extent of 204.75 acres

of Government lands are handed over to JESCO.

105. The contention that the said Possession Certificate must be

construed as an allotment letter - as was earnestly contended by

Sri Nandkumar on behalf of the appellant - is unmerited. The

possession certificate does not set out any terms of allotment. It

does not set out whether the subject land would be disposed of by

execution of a lease, lease-cum-sale agreement, or otherwise. In

each case, KIADB has the discretion to decide the conditions which

should be binding on the allottee. However, in the present case,

the possession certificates do not set out any conditions.

- 66 -

106. We are thus unable to accept that the possession certificates

can be construed as allotment letters which embody the decision of

the KIADB for disposal of the subject lands.

107. If the terms and conditions as set out in the allotment letter

dated 31.10.1992 - are accepted as the decision of KIADB as to

the terms on which allotment of the subject land was to be made -

which we are inclined to accept - it is apparent that the allotment

was required to be cancelled, as those conditions were not

complied with.

108. The subject lands, which measured totally 986.52 acres

comprised of two components - 204.75 acres of Government land

which was provided free of cost - and 781.77 acres of private land

for which certain amounts were paid by the JESCO.

109. The manner in which the possession of the said lands were

handed over to JESCO, raises serious questions as to the conduct

of the parties. In effect, the authorities have simply parted with

possession of the lands, which were acquired for specific purpose,

without ensuring that the said purpose is implemented.

- 67 -

110. Once it is clear that the JESCO was not proceeding with the

purpose for which possession of the subject lands were provided, it

was incumbent upon the KIADB to resume possession of the

same. However, the KIADB only resumed part of the land which

was then allotted to other industries. It appears that it was also

ensured that the process was one that was remunerative to

JESCO. The 244.25 acres of land which were allotted to other

industries was against the payment of compensation which far

exceeded the amount paid by JESCO to KIADB for the private

lands. This is despite the fact that the JESCO had no interest in the

subject land. And, the Government land was handed over free of

costs.

111. In the present case, agricultural lands were acquired. It is

obvious that several farmers would have lost their means of

livelihood from the said lands. The acquisition would be justified if

the public purpose for which it is acquired was fulfilled, as the same

would generate employment. However, it is apparent that instead

of acquisition of land working in public interest, it has worked quite

to the contrary. Apart from JESCO aggregating possession of

large tracts of land, which it would find extremely difficult to do

without the statutory machinery for land acquisition, no other

- 68 -

person benefited. We concur with the learned Single Judge that

the manner in which the authorities and the Government have

proceeded, requires to be enquired into. It also appears that the

conduct of certain persons may fall foul of the provisions of the

Prevention of Corruption Act, 1988. We were inclined to issue

directions in this regard. However, at this stage, we consider it

suffice to direct that an enquiry be conducted by a team of persons

headed by a person not below the rank of Secretary to the

Government of India, in order to examine the manner in which the

public property has been dealt with. Needless to state that if the

enquiry finds that any offence punishable under the Prevention of

Corruption Act or any other law has been committed, the

concerned authorities shall take necessary steps to institute

proceedings in this regard.

112. The contention that the appellant was required to be afforded

further opportunities under Section 34-B of the KIAD Act or the

belated action taken by the respondents was in violation of

principles of natural justice, is unpersuasive. First of all, Section

34B of the KIAD Act is inapplicable in the facts of this case. The

said section would be applicable only where allottee of any

premises has violated any terms and conditions of the allotment.

- 69 -

113. In the present case, it is contended on behalf the appellant

that Possession Certificates must be deemed to be allotment. It is

difficult to accept the said contention. In fact, there is no specific

order or instrument allotting the subject lands. Further, if it is

assumed that the subject lands were allotted, it would also be

necessary to assume that it was on the conditions as set out in the

allotment letter dated 31.10.1992.

114. No instrument of transfer (lease-cum-sale or sale) had been

executed and registered in favour of the appellant. Thus, the

question of the appellant acquiring any right or interest on the

subject lands does not arise. Absent any right or interest in the

subject land, and failure to use the same for the purpose for which

the possession was handed over, KIADB's resumption of the same

cannot be faulted.

115. We consider it relevant to refer to the decision in the case of

Orissa Industrial Infrastructure Development Corporation vs.

MESCO Kalinga Steel Limited and Others : (2017) 5 SCC 586.

In the said case, MESCO had applied for 2500 acres of land to

Orissa Industrial Infrastructure Development Corporation (IDCO).

IDCO in turn had requested the Government to issue necessary

- 70 -

orders for possessing the allotment. The Government of Orissa

had conveyed its principal approval for allotment of land of 2500

acres for establishing a steel plant. In the first place, IDCO had

requested MESCO to take over possession of 1756.29 acres of

land and to submit a draft lease for execution. MESCO took over

possession of the land but did not execute the lease deed. There

were other issues, which were also raised in the said case. IDCO

had issued a notice for resumption of the land and issued a notice

directing payment of consideration and resumption of land and

finally resumed the land and the possession later was cancelled.

In the said context, the Court held that the relationship of lessor

and lessee never came into being in the absence of a lease deed.

The possession was enjoyed by MESCO without execution of a

lease deed. The Court held that "MESCO had no enforceable right

for grant of any relief by mere handing over of possession."

Accordingly, the Court set aside the order of the High Court

directing to execute a lease in respect of part of the said lands.

116. In the present case as well, the appellant acquired no right or

interest in the subject land. Having stated the above, we also note

that a notice under Section 34-B of the KIAD Act was in fact issued

to the appellant on 10.01.2014 expressly calling upon the appellant

- 71 -

to remedy the breach of not undertaking the industrial work, failing

which the land would be resumed. It is the appellant's response

that the delay was inter alia attributable to recession in economy

and delay in KIADB in execution of lease-cum-sale deed. It is also

material to note that the appellant responded by stating that

Section 34-B of the KIAD Act was not applicable. It is KIADB's

stand in response to the said notice that Section 34-B is not

applicable. The appellant had claimed that,

"KIADB cannot invoke Section 34-B on JESCO under Karnataka Industrial Areas Development Act, 1966 in the absence of terms and conditions on allotment of land as KIADB has not executed Lease cum Sale Deed so far and while JESCO is executing the approved projects. Any action of KIADB in the matter is a contempt of court as the matter is before the High Court of Karnataka."

117. The contentions advanced on behalf of the appellant before

this Court are clearly contrary to the aforesaid stand as articulated

in the letter sent in response to the notice dated 10.01.2014. Thus,

the appellant cannot make a grievance of the process under

Section 34-B of the KIAD Act not being followed. It is also material

to note that the said notice had been issued after an order dated

11.11.2013 was passed for resumption of the subject lands. As

noted above, that order had been challenged and was then

- 72 -

withdrawn on 14.06.2017 and had thus attained finality. The notice

dated 10.04.2014 was outstanding as on that date and the period

of ninety days as provided in the notice was over. It is clear that

the appellant had confined its relief for seeking consideration of its

representation for extension of the approval for the project. The

said extension was duly considered by SHLCC at its meeting held

on 31.08.2017 and the same was rejected. Thereafter, KIADB had

issued a final order under Section 34-B(4) of the KIAD Act.

118. The appellant was provided sufficient opportunity spanning

over several years to address the issue as to why the lands should

not be resumed. Having confined its relief to only seeking for

consideration of the representation for extension of time for

completing the project - which was duly considered - it is not open

for the appellant now to challenge the order of resumption albeit on

the ground that Section 34-B had not been followed particularly

when it was the appellant's stand that the said section is

inapplicable in the absence of any allotment or lease-cum-sale in

its favour.

119. We find no merit in the present appeal. The same is

accordingly, dismissed.

- 73 -

120. JESCO has enjoyed the possession of the subject land for

several years till it was taken over. We clarify that this order would

not preclude the State / KIADB from making an appropriate claim

for compensation for the same. The question whether the

appellant would be entitled to refund of the amount paid or any

portion of the same, is also left open.

Sd/-

(VIBHU BAKHRU) CHIEF JUSTICE

Sd/-

(C M JOSHI) JUDGE

KS / AHB

 
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