[Cites 3, Cited by 0]
Karnataka High Court
M/S P M Infrastructure Pvt Ltd vs State Of Karnataka on 6 February, 2026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 06TH DAY OF FEBRUARY, 2026
PRESENT
THE HON'BLE MRS. JUSTICE ANU SIVARAMAN
AND
THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL
WRIT APPEAL NO.503 OF 2023 (GM-KIADB)
BETWEEN:
M/S. P.M. INFRASTRUCTURE PVT. LTD.
A COMPANY REGISTERED UNDER
THE COMPANIES ACT, 1956
REPRESENTED BY ITS DIRECTOR
MR. M. BABANNA
No.129, 7TH MAIN
V BLOCK, JAYANAGAR
BENGALURU-560 041
...APPELLANT
(BY SRI. RAJESWARA P.N., ADVOCATE)
AND:
1. STATE OF KARNATAKA
REPRESENTED BY ITS PRINCIPAL SECRETARY
COMMERCE AND INDUSTRIES DEPARTMENT
VIKASA SOUDHA
BENGALURU-560 001
2. THE COMMISSIONER FOR
INDUSTRIAL DEVELOPMENT AND
DIRECTOR OF INDUSTRIES AND
COMMERCE
2ND FLOOR, SOUTH WING
KHANIJA BHAVANA
RACE COURSE ROAD
BENGALURU-560 001
2
3. KARNATAKA UDYOG MITRA
REPRESENTED BY ITS
MANAGING DIRECTOR
3RD FLOOR
KHANIJA BHAVAN (SOUTH WING)
No.49, RACE COURSE ROAD
BENGALURU-560 001
4. KARNATAKA INDUSTRIAL
AREAS DEVELOPMENT BOARD
REPRESENTED BY ITS
CHIEF EXECUTIVE OFFICER
AND EXECUTIVE MEMBER
No.5, FOURTH FLOOR
KHANIJA BHAVAN
RACE COURSE ROAD
BENGALURU-560 001
...RESPONDENTS
(BY SMT. PRAMODHINI KISHAN, AGA FOR R1 & R2;
SMT. RUPA V. RON, ADVOCATE FOR R3;
SRI. B.B. PATIL, ADVOCATE FOR C/R4;
SRI. AJAY J.N, ADVOCATE FOR IMPLEADING APPLICANT
ON I.A.No.2/2024)
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT, 1961, PRAYING TO SET ASIDE THE ORDER
DATED 16.03.2023 IN W.P.No.11510/2020 (GM-KIADB), PASSED
BY THE LEARNED SINGLE JUDGE.
THIS WRIT APPEAL HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 19.01.2026 AND COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, ANU SIVARAMAN
J., PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN
and
HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL
3
CAV JUDGMENT
(PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN)
This writ appeal is preferred challenging the order
dated 16.03.2023 passed by the learned Single Judge in
Writ Petition No.11510/2020 (GM-KIADB).
2. We have heard Shri Rajeswara P.N, learned
counsel appearing for the appellant, Smt. Pramodhini
Kishan, learned Additional Government Advocate appearing
for respondents No.1 and 2, Smt. Rupa V. Ron, learned
counsel appearing for respondent No.3 and Shri. B.B. Patil,
learned counsel appearing for caveator/respondent No.4.
Shri. Ajay J.N, learned counsel appearing for the impleading
applicant in I.A.No.2/2024.
3. The brief facts of the case are as follows:-
The appellant applied for project clearance on
17.04.2010. As the project cost exceeded Rs.100 Crores, it
was considered by the State High Level Clearance
Committee ('SHLCC' for short). In the meeting dated
24.05.2010, the SHLCC cleared the appellant's project and
directed the Karnataka Industrial Areas Development Board
('KIADB' for short) to acquire and allot 163 acres of land as
a Single Unit Complex ('SUC' for short). The Government
issued an order dated 02.06.2010 directing KIADB to
acquire and allot SUC 163 acres of land in Sy.No.125 of
Chikkahullur Village. In the 23rd SHLCC held on 19.06.2010,
the survey number was corrected and a corrigendum dated
16.07.2010 rectified the land description as Sy.No.25 of
Chikkahullur Village, a Government land, to be allotted to
the appellant as SUC.
By Government order dated 26.03.2015, 167 acres of
land in Sy.No.25 of Chikkahullur Village were transferred to
KIADB for allotment to the appellant as SUC, subject to
KIADB remitting payment of land value at prevailing market
guidelines. By letter dated 16.04.2015, the Deputy
Commissioner directed KIADB to remit Rs.65 lakhs per acre
for 109 acres and Rs.45 lakhs per acre for 58 acres. The
transfer was completed on 08.05.2015 as evidenced by the
Tahasildar's letter. Though the project was cleared on
24.05.2010, land came into the possession of the KIADB
only on 08.05.2015. KIADB's allotment file recorded that no
demand had been raised earlier as the land had not been
transferred by the Government to the KIADB.
Despite this, KIADB neither issued a demand notice nor
allotted the land, instead raising a technical objection that
the project clearance under Government Order dated
02.06.2010 was valid only for a period of two years and that
the appellant was required to seek extension. In reply, the
appellant sought extension and possession by letter dated
01.10.2015, which was not considered and therefore filed
Writ Petition No.47952/2015 on 04.11.2015 seeking
allotment of 163 acres, extension of time and to restrain
against third party allotment. The KIADB filed its statement
of objections contending that the project was not SUC and
hence the appellant was not entitled to SUC rates.
By an interim order dated 06.11.2015, this Court
restrained consideration of third party applications for
allotment, which interim protection continued until disposal
of the writ petition. In view of KIADB's contrary stand and to
avoid further delay, the appellant agreed, without prejudice
to seek allotment of 50 acres, while reserving its right to the
entire 163 acres. On 06.06.2019, the appellant was assured
that 50 acres of land would be allotted immediately upon
request and accordingly the appellant submitted a letter
seeking allotment of 50 acres of land without prejudice.
On 15.06.2019, the State Level Single Window
Clearance Committee ('SLSWCC' for short) accepted the
request of the appellant, directed the KIADB to allot 50
acres, granted a two year extension for implementation of
the project and retained all other terms and conditions. The
Government order dated 08.07.2019 reiterated that all
terms of the Government order dated 02.06.2010 would
continue. However, in its 362nd meeting, KIADB unilaterally
treated the project as a bulk allotment and fixed the price at
Rs.152.25 Lakhs per acre, despite a sub-committee
recommendation dated 10.07.2019 fixing Rs.111 Lakhs per
acre and issued no demand notice.
The appellant submitted representations dated
19.07.2019, 31.08.2019 and 14.10.2019 invoking Section 8
of the Facilitation Act and seeking SUC based allotments. As
no action followed, the appellant filed an application seeking
allotment of 50 acres as SUC. During the pendency of the
application, in the 365th meeting, KIADB encahnced the price
to Rs.2 Crores per acre. Suppressing this resolution, KIADB
filed objections on 04.08.2020 stating the tentative cost as
Rs.142.25 Lakhs per acre. Thereafter, on 18.09.2020, nearly
15 months after the SLSWCC clearance, KIADB issued a
demand letter requiring payment of pay Rs.2 Crores per
acre within 30 days. This escalating increased the project
land cost from Rs.215.83 Crores to nearly Rs.500 Crores,
which defeats the object of the Facilitation Act.
The appellant filed Writ Petition No.11510/2020 on
13.10.2020 challenging the demand notice dated
18.09.2020 and the resolution dated 19.06.2020, seeking
allotment as SUC at the cost paid by KIADB to the
Government with service charges. The Karnataka Udyoga
Mitra contended that the project was not cleared as SUC by
SLSWCC. Consequently, the appellant withdrew its letter
dated 06.06.2019 by communication dated 09.01.2021,
detailing denial of SUC benefits for over five years and even
allotment of 50 acres.
On 28.01.2021, the appellant filed I.A.No.1/2021
seeking amendment of the writ petition to claim allotment of
163 acres of land instead of 50 acres, while stating
willingness to accept 50 acres as SUC. On 25.02.2021,
learned counsel for KIADB assured allotment on SUC basis
as per extant norms, but KIADB thereafter insisted the
appellant to pay Rs.2 Crores per acre. I.A.No.1/2021 was
allowed on 26.07.2021.
In the amended writ petition, the appellant sought
allotment of 163 acres of land at the price paid pursuant to
the Deputy Commissioner's letter dated 16.04.2015. In an
additional Statement of Objections filed on 08.12.2022,
KIADB admitted that the original allotment approved by
SLSWCC was on SUC basis, but contended that the present
allotment was not SUC basis and formed part an industrial
layout, contrary to its earlier stand and further contended
that 331 acres and 20 guntas of land had been transferred
under Government Order dated 26.03.2015, of which 163
acres pertained to the appellant, justifying fixation of price
by the Board.
4. The learned Single Judge observed that it was an
admitted position that, whether in respect of allotment of
163 acres or the reduced extent of 50 acres, the petitioner
had not paid a single rupee to the KIADB for over 13 years,
either pursuant to the Government Order or the demand
letter. It was noted that 2010 onwards, the petitioner
consistently insisted that the land to be allotted at a
particular price and on account of such insistence, the
allotment did not materialise. It was further observed that in
the year 2015, the petitioner approached this Court seeking
a direction for allotment of land and the allotment process
could not proceed due to the operation of an interim order.
Thereafter, the petitioner altered its stand by withdrawing
the request for allotment of 163 acres and seeking allotment
of 50 acres and subsequently withdrew the request for
cancellation of the original claim of 163 acres. Throughout
these proceedings and changes in position, the petitioner
had not made any payment whatsoever to the KIADB. On
these grounds, the learned Single Judge held that the writ
petition lacked merit and dismissed the same.
5. The learned counsel appearing for the appellant
contended that the learned Single Judge failed to appreciate
the true nature of the writ petition, which was for allotment
of land as a SUC, under which the allottee is required to pay
only the actual cost of Government land plus Board Service
Charges. Consequently, the demand of Rs.2 Crores per acre,
treating the project as a bulk allotment is illegal. The
possession of the Government land was handed over to
KIADB as early as 05.05.2015, and therefore, immediately
after 08.05.2015, KIADB was required to issue an allotment
letter and demand notice calling upon the appellant to pay
the actual land cost and Board Service Charges. The
deliberate failure of KIADB to issue such demand notice is
wholly unjustified and cannot be attributed to the appellant.
It is further contended that, the learned Single Judge, while
noticing that the appellant had agreed without prejudice to
accept allotment of 50 acres, erroneously denied relief on
the ground that the appellant was "blowing hot and cold",
without considering the appellant's letter dated 09.01.2021,
the proceedings dated 25.02.2021, or the circumstances
necessitating the amendment application to restore the
claim for 163 acres.
6. It is contended that the learned Single Judge
failed to appreciate that "without prejudice" request was
made when the appellant was being denied its lawful
entitlement. Even after the SLSWCC clearance dated
15.06.2019 for allotment of 50 acres, no demand notice was
issued for over 15 months, which delay is arbitrary and
discriminatory. The learned Single Judge failed to notice the
inconsistent stand of KIADB. The fault, therefore, lay
entirely with the respondents and not with the appellant. It
is further contended that no provision of the KIADB Rules or
Regulations supporting the reasoning of the learned Single
Judge was adverted to, nor was the KIADB's SUC policy
considered.
7. It is further contended that the finding of the
learned Single Judge that the appellant had not paid a single
rupee ignored the fact that no lawful demand was raised
until 18.09.2020, that assurances regarding SUC allotment
were recorded by the Court on 25.02.2021 and that the
appellant consistently expressed readiness and willingness
to pay SUC rates of Rs.58.05 lakhs per acre, later Rs.65.20
lakhs per acre inclusive of 12% Board service charges, as
reflected in Court proceedings and the rejoinder dated
27.01.2023. The learned Single Judge also failed to examine
the plea of discrimination and violation of Article 14 of the
Constitution of India, despite the specific pleading that
similarly situated third party cases were SUC allotments,
while, the appellant alone was treated as a bulk allotment
and despite the Board's failure to justify the demand of Rs.2
Crores per acre for a project admittedly cleared as an SUC,
where no infrastructure facilities were provided by KIADB
and the entire burden is on the allottee.
8. The learned counsel appearing for the appellant
has placed reliance on the following decisions:-
• Karnataka Industrial Area Development Board
v. Cornerstone Property Developers Private
Limited and Others, by Order dated 12.01.2024
passed in Special Leave to Appeal (C)
No(s).461/2024;
• Karnataka Industrial Area Development Board
v. Cornerstone Property Developers Private
Limited and Others, by Order dated 01.12.2023
passed in Writ Appeal No.1483 of 2023 (LA-
KIADB);
• Cornerstone Property Developers Private
Limited v. Karnataka Industrial Areas
Development Board and Others, by Order dated
11.10.2022 passed in Writ Petition No.8362 of
2022 (LA-KIADB);
• The Karnataka Industrial Area Development
Board v. M/s. Lightsquare Designs Pvt. Ltd.,
and Another, by Order dated 08.10.2025 passed
in Writ Appeal No.530/2025 (GM-KIADB) a/w
connected matters;
• Superintendent (Tech.1) Central Excise, I.D.D.
Jabalpur and Others v. Pratap Rai, reported in
(1978) 3 SCC 113;
9. The learned Additional Government Advocate
appearing for respondents No.1 and 2 contended that the
approval granted by the Committees constituted under the
Facilitation Act is only an in-principle approval of the project
and does not, by itself, result in an automatic or binding
allotment of land in favour of the applicant. The actual
allotment of land must be made only by KIADB in
accordance with the provisions of the Karnataka Industrial
Areas Development Act, 1966, Rules and Regulations and
that the Board is not divested of its statutory discretion
merely because a project is cleared by the Facilitation
Committee. It is further contended that the
recommendations of the Facilitation Committee are not
binding in nature and cannot be construed as compelling the
Board to allot land at the same price or on the same terms
without reference to other statutory provisions. Even if
multiple applications are approved by the Facilitation
Committee, the availability of land is limited and the burden
of allocation necessarily lies with the Board. Therefore,
clearance of a project by the Committee cannot ipso facto
result in an allotment in favour of an applicant.
10. It is further contended that the demand of Rs. 2
Crores per acre made by the KIADB was legally valid and in
accordance with prevailing rates. The appellant had initially
sought allotment for 163 acres of land and subsequently
withdrew the said request and sought allotment of 50 acres
and thereafter reverted to seeking 163 acres claiming that
all such communications were issued "without prejudice".
Such a conduct amounts to approbating and reprobating
which is impermissible in law. It is further contended that
the expression "without prejudice" cannot be stretched to an
indefinite extent so as to defeat the statutory scheme of the
Facilitation Act or to bind the Board contrary to law.
11. The learned counsel appearing for respondent
No.3 contended that although the appellant's project was
approved, it was not implemented within the stipulated
period of two years. The learned Single Judge noted that the
appellant sought allotment of only 50 acres of land, which
KIADB was willing to allot but at the prevailing price, but the
appellant was unwilling to pay the revised price and insisted
on rates which prevailing nearly 10 years earlier. The learned
Single Judge held that an allottee is required to pay the
prevailing price at the time of allotment and further
observed that the appellant continued to retain the benefit
of the land from the year 2015 onwards by virtue of an
interim order and had not paid a single rupee towards the
land cost for nearly 13 years. It is further contended that
the delay and the resultant situation were entirely
attributable to the appellant's conduct, that the appellant's
sole grievance related to fixation of price which it was
unwilling to pay, while simultaneously seeking allotment of
land at outdated rates and that upon appreciation of these
facts, the learned Single Judge rightly held that the
appellant could not approbate and reprobate at the same
time.
12. The learned counsel appearing for respondent
No.4 contended that the appellant despite being fully aware
of the approval conditions, failed to approach KIADB for land
acquisition during the two year validity period of the project
approval. During this period, the appellant neither deposited
the requisite amount nor complied with mandatory
prerequisites. Mere submission of an application for
allotment, without undertaking the acquisition process, does
not amount to compliance and consequently no accrued
right arose in favour of the appellant. It is also contended
that the clearance granted by SHLCC did not automatically
entitle the appellant to allotment of land as it is conditional
in nature and amounted only to a recommendation for
acquisition of land for SUC purposes. An application for
allotment could be considered only after the land was duly
acquired and made ready for allotment. The contention that
the land had been earmarked exclusively for the appellant's
project is denied and since the clearance lapsed by efflux of
time, no right could be claimed under the expired approval.
13. It is further contended that the appellant's
present allotment of 50 acres to the appellant is not on SUC
basis, and the allotments made to third parties were all on
SUC basis and since the appellant is not similarly situated,
no parity can be claimed. It is further contended that
excluding the 163 acres initially proposed for the appellant,
the remaining land was developed as an industrial estate.
The 50 acres approved by the SLSWCC for allotment to the
appellant form part of this industrial layout and the cost was
accordingly calculated and levied. The allotment approved
by the SLSWCC is not on an SUC basis but as part of an
industrial layout. It is further submitted that upon
considering rival contentions, the appellant restricted claim
to 50 acres and the remaining 113 acres earmarked for the
project of the appellant have since been allotted to other
projects, resulting in the entire extent of 163 acres being
integrated into the industrial area and all allotments
including that of the appellant being on an industrial layout
basis and not on a SUC basis.
14. We have considered the contentions advanced on
either side. It is noticed that SHLCC had initially granted
clearance for the appellant's project in its meeting held on
24.05.2010. The Committee approved the request of the
appellant and recommended to the KIABD to allot the land
to an extent of 163 acres. The Government by its Order
dated 02.06.2010 also accorded in-principle approval to the
project. The said order specifically provided that the
infrastructure facilities would include 163 acres of land which
the KIADB would acquire and allot as SUC to the appellant.
The specific and general terms were also clearly provided in
the order, including the facilities of water, power, incentives
and concessions. Thereafter, corrections were carried out
and steps were taken to procure the land from the
Government. On the land being made available, in the year
2015, the KIADB did not take any steps to allot the land to
the appellant. However, an objection was raised that the
clearance granted by Government Order dated 02.06.2010
was only for a period of two years. Subsequently, on a
request by the appellant, the Government Order dated
08.07.2019, recommended to the KIADB to allot 50 acres of
land to the appellant and also granted extension of time by
two years to implement the project with a condition that
further request for extension of time will not be considered.
It was also specifically provided in the Government Order
dated 08.07.2019 which is produced as Annexure - AX, that
all other terms and conditions indicated in the Government
Order dated 02.06.2010 would remain unaltered. The
appellant's contention is that the condition of the land being
allotted to the appellant on an SUC basis, being one of the
conditions of the Government Order dated 02.06.2010 and
the Government Order dated 08.07.2019, having clearly
provided that the conditions of the earlier order would
prevail, the allotment of land on SUC basis should also
prevail as far as the allotment of the 50 acres of land to the
appellant is concerned.
15. Though several arguments have been raised by
the respondents with regard to the fact that no amount had
been paid by the appellant pursuant to the allotment of the
land, it is pertinent to note that there is no pleading that any
demand had been made by the KIADB for the payment of
the amount towards the price of the land on SUC basis as
ordered by the Government. The appellant specifically
contends that it is only on a quantification and demand
being made that the appellant could have made the
payments and such quantification and demand was never
made by the KIADB.
16. Further, though the parties have placed on record
their contention with regard to the binding nature of the
recommendations of the SLWCC, we notice that the said
question does not arise for consideration in this appeal. We
are of the opinion that in the light of the facts as noticed by
the learned Single Judge, the contention of the appellant
that the entire 163 acres of land has now to be allotted to
the appellant on SUC basis cannot be accepted. The
appellant itself had sought and obtained the allotment of a
lesser extent of 50 acres of land which had been approved
by the Government by its Order dated 08.07.2019. At this
distance of time, we are clear that the appellant cannot be
permitted to contend that the said request was without
prejudice to their rights and that the claim for allotment of
the entire 163 acres of land is to be considered by the
Government afresh. This is also in view of the fact that no
payments had been made by the appellant towards the price
of the land. Though, the learned counsel for the appellant
has raised vehement contentions that it is only on a demand
being made by the KIADB that amount could have been
deposited by the appellant, we are of the opinion that the
appellant cannot be permitted to seek the allotment of the
entire extent of land which has thereafter been allotted to
other persons by the KIADB on the ground that the
reduction of its request to 50 acres was without prejudice to
their claim for 163 acres.
17. Though the KIADB has raised contentions that the
value of the land has to be calculated taking note of all the
infrastructural developments which have been carried out by
the KIADB, we notice that the Order of the Government
dated 02.06.2010 had specifically directed the handing over
of the land on SUC basis. If that be so, the amount that is to
be paid would only be the price of the land that has been
handed over by the Government with 20% addition as
service charge. It is contended that an amount of
Rs.34,00,000/- has already been deposited by the
appellants before this Court and that the appellant is willing
to pay the price of the land with service charge as required
by law. The Government by its Order dated 08.07.2019 has
acquiesced to the request of the appellant and has granted
50 acres of land on the same terms as provided in the order
dated 02.06.2010. In the above factual situation, we are of
the opinion that the KIADB cannot now contend that the 50
acres of land which has been granted to the appellant
cannot be granted on an SUC basis. Since the Government
Order dated 08.07.2019 specifically states that all the
conditions provided in the Government Order dated
02.06.2010 would apply to grant of the lesser extent of 50
acres as well. We are clear that the said extent of 50 acres
of land has also to be granted to the appellant on SUC basis
itself.
18. In the above view of the matter, we are of the
opinion that the appeal is to succeed in part. Accordingly:-
(i) The appeal is allowed in part.
(ii) The judgment dated 16.03.2023 passed by
the learned Single Judge in Writ Petition
No.11510/2020, is set aside.
(iii) There will be a direction to the KIADB to
allot 50 acres of land to the appellant on
the basis of the Government Order dated
08.07.2019 on SUC basis as provided in the
Government Order dated 02.06.2010.
(iv) The KIADB shall calculate the amount
payable by the appellant for 50 acres of
land on SUC basis taking note of the price
of the land and the service charges and
shall make a demand to that effect within a
period of three weeks from the date of
receipt of copy of this judgment.
(v) The amount deposited by the appellant
before this Court shall be adjusted against
the demand so made. In case, any further
amount is to be paid by the appellant, the
same shall be paid within a period of two
weeks thereafter, failing which, the
appellant shall loose the benefit of these
directions.
(vi) In case, such demand is met in full by the
appellant, the land shall be allotted and the
conditions as provided in the Government
Orders dated 08.07.2019 and 02.06.2010
will be complied with by the appellant.
Pending interlocutory applications shall stand disposed
of.
Sd/-
(ANU SIVARAMAN)
JUDGE
Sd/-
(VIJAYKUMAR A. PATIL)
JUDGE
cp*
