[Cites 12, Cited by 0]
Karnataka High Court
Reddy Veeranna vs Karnataka Industrial Areas ... on 22 January, 2026
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
1
Reserved on : 08.12.2025
Pronounced on : 22.01.2026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22ND DAY OF JANUARY, 2026
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
WRIT PETITION No.25744 OF 2025(GM - KIADB)
C/W
WRIT PETITION No.25894 OF 2025(GM - KIADB)
IN WRIT PETITION No.25744 OF 2025
BETWEEN:
TEJRAJ GULECHA
S/O PUKHRAJ GULECHA,
AGED ABOUT 71 YEARS,
RESIDING AT NO.1101, EKKA,
11TH FLOOR, PLATINUM ANANDA,
CHAMRAJPET,
BENGALURU - 560 018.
... PETITIONER
(BY SRI SAJAN POOVAYYA, SR.ADVOCATE A/W
SRI P.B.AJIT, ADVOCATE)
AND:
1. KARNATAKA INDUSTRIAL AREAS
DEVELOPMENT BOARD
2
A STATUTORY BODY CONSTITUTED
UNDER THE KARNATAKA INDUSTRIAL
AREAS DEVELOPMENT ACT, 1966,
HAVING ITS OFFICE AT NO.49,
4TH AND 5TH FLOORS, EAST WING,
KHANIJA BHAVAN, RACE COURSE ROAD,
BENGALURU - 560 001,
REPRESENTED BY ITS
CHIEF EXECUTIVE OFFICER AND
EXECUTIVE MEMBER.
2. EMBASSY EAST BUSINESS PARK PRIVATE LIMITED
(FORMERLY KNOWN AS CONCORD
INDIA PRIVATE LIMITED,
AND PREVIOUSLY STEYR INDIA LTD.)
A COMPANY AS PER THE PROVISIONS OF
THE COMPANIES ACT, 2013,
EMBASSY POINT, 1ST FLOOR,
NO.150, INFANTRY ROAD,
REPRESENTED BY ITS
MANAGING DIRECTOR.
BENGALURU - 560 001.
3. LAM RESEARCH (INDIA) PRIVATE LIMITED
A COMPANY AS PER THE PROVISIONS
OF THE COMPANIES ACT, 2013,
HAVING ITS REGISTERED OFFICE AT
GROUND FLOOR, CROWN BUILDING,
NO.65/2-1, BAGMANE TECH PARK,
KRISHNAPPA GARDEN, CV RAMAN NAGAR,
BENGALURU - 560 093,
REPRESENTED BY ITS
MANAGING DIRECTOR.
... RESPONDENTS
(BY SRI B.B.PATIL, ADVOCATE FOR R-1;
SRI K.G.RAGHAVAN, SR.ADVOCATE A/W
SRI AJESH KUMAR S., ADVOCATE FOR R-2;
3
SRI SRINIVASA RAGHAVAN, SR.ADVOCATE A/W
SRI V.J.ACHALANAND, ADVOCATE FOR R-3)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO A) ISSUE A
WRIT OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT, ORDER,
OR DIRECTION, QUASHING THE IMPUGNED LETTER DATED
07.02.2025 BEARING NO.KIADB/HO/ALLOT/AS-143/19911/2024-25
ISSUED BY RESPONDENT NO.1; B) ISSUE A WRIT OF CERTIORARI
OR ANY OTHER APPROPRIATE WRIT, ORDER, DIRECTION,
QUASHING THE RESIGTERED SUB-LEASE DEED DATED
20.03.20254 BEARING NO. BNG(V)-VRT/9366/2024-25/1-73
(ANNEXURE-A) EXECUTED BETWEEN RESPONDENT NO.2 AND
RESPONDENT NO.3, BEING WHOLLY ILLEGAL, ARBITRARY, AND IN
VIOLATION OF CLAUSE 11(a) AND OTHER MATERIAL PROVISIONS
OF THE LEASE CUM SALE AGREEMENT DATED 07.06.2007; C)
ISSUE A WRIT OF MANDAMUS OR ANY OTHER APPROPRIATE WRIT,
ORDER, OR DIRECTION, DIRECTING RESPONDENT NO.1 TO
FORTHWITH TAKE ALL STEPS AS ARE WARRANTED IN LAW,
INCLUDING INITIATION OF ACTION UNDER SECTIONS 34 AND 38
OF THE KIAD ACT, AGAINST RESPONDENT NO.2 FOR BREACH OF
THE TERMS AND CONDITIONS OF THE LEASE CUM SALE
AGREEMENT DATED 07.06.2007 VIDE ANNEXURE- C.
IN WRIT PETITION No.25894 OF 2025
BETWEEN:
REDDY VEERANNA
S/O LATE R.SANJEEVAPPA,
AGED ABOUT 69 YEARS,
RESIDING AT NO.109,
10TH MAIN, 7TH CROSS,
RMV EXTENSION,
SADASHIVANAGAR,
BENGALURU - 560 080.
... PETITIONER
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(BY SRI SAJAN POOVAYYA, SR.ADVOCATE AND
SRI C.K.NANDAKUMAR, SR.ADVOCATE A/W
SRI P.B.AJIT, ADVOCATE)
AND:
1. KARNATAKA INDUSTRIAL AREAS
DEVELOPMENT BOARD
A STATUTORY BODY CONSTITUTED
UNDER THE KARNATAKA INDUSTRIAL
AREAS DEVELOPMENT ACT 1966,
HAVING ITS OFFICE AT NO.49,
4TH AND 5TH FLOORS,
EAST WING, KHANIJA BHAVAN
RACE COURSE ROAD,
BENGALURU - 560 001
REPRESENTED BY ITS
CHIEF EXECUTIVE OFFICER AND
EXECUTIVE MEMBER.
2. EMBASSY EAST BUSINESS PARK PRIVATE LIMITED
(FORMERLY KNOWN AS CONCORD
INDIA PRIVATE LIMITED, AND PREVIOUSLY
STEYR INDIA LTD.)
A COMPANY AS PER THE PROVISIONS OF
THE COMPANIES ACT, 2013,
EMBASSY POINT, 1ST FLOOR,
NO.150, INFANTRY ROAD,
BENGALURU - 560 001,
REPRESENTED BY ITS
MANAGING DIRECTOR.
3. LAM RESEARCH (INDIA) PRIVATE LIMITED
A COMPANY AS PER THE PROVISIONS OF
THE COMPANIES ACT, 2013,
HAVING ITS REGISTERED OFFICE AT
GROUND FLOOR, CROWN BUILDING,
5
NO.65/2-1, BAGMANE TECH PARK,
KRISHNAPPA GARDEN,
CV RAMAN NAGAR,
BENGALURU - 560 093,
REPRESENTED BY ITS
MANAGING DIRECTOR.
... RESPONDENTS
(BY SRI B.B.PATIL, ADVOCATE FOR R-1;
SRI K.G.RAGHAVAN, SR.ADVOCATE A/W
SRI AJESH KUMAR S., ADVOCATE FOR R-2;
SRI SRINIVASA RAGHAVAN, SR.ADVOCATE A/W
MS.TAMARRA SEQUEIRA, ADVOCATE FOR R-3)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 OF THE
CONSTITUTION OF INDIA PRAYING TO A. QUASHING THE
IMPUGNED LETTER DATED 07.02.2025 BEARING NO. KIADB /
HO/ALLOT/AS-143/19911/2024-25 ISSUED BY RESPONDENT NO.1;
B. QUASHING THE REGISTERED SUB-LEASE DEED DATED
20.03.2025 BEARING NO. BNG(V)-VRT/9366/2024-25/1-73
(ANNEXURE-A) EXECUTED BETWEEN RESPONDENT NO.2 AND
RESPONDENT NO.3, BEING WHOLLY ILLEGAL, ARBITRARY, AND IN
VIOLATION OF CLAUSE 11(A) AND OTHER MATERIAL PROVISIONS
OF THE LEASE-CUM-SALE AGREEMENT DATED 07.06.2007; C.
DIRECTING RESPONDENT NO.1 TO FORTHWITH TAKE ALL STEPS
AS ARE WARRANTED IN LAW, INCLUDING INITIATION OF ACTION
UNDER SECTIONS 34 AND 38 OF THE KIAD ACT, AGAINST
RESPONDENT NO.2 FOR BREACH OF THE TERMS AND CONDITIONS
OF THE LEASE-CUM-SALE AGREEMENT DATED 07.06.2007, VIDE
ANNEXURE-C.
THESE WRIT PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 08.12.2025, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-
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CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA
CAV ORDER
The petitioners, who are different in both these petitions,
seek the following prayer:
(a) "Issue a writ of certiorari or any other appropriate writ,
order or direction, quashing the impugned letter dated
07-02-2025 bearing No.KIADB/HO/Allot/AS-143/19911
/2024-25 issued by respondent No.1;
(b) issue a writ of certiorari or any other appropriate writ,
order, or direction, quashing the registered Sub-Lease
Deed dated 20-03-2025 bearing No.BNG(V)-VRT/9366
/2024-25/1-73 (Annexure-A) executed between
respondent No.2 and respondent No.3, being wholly
illegal, arbitrary and in violation of Clause 11(a) and other
material provisions of the Lease-cum-Sale Agreement
dated 07-06-2007;
(c) issue a writ of mandamus or any other appropriate writ,
order, or direction, directing Respondent No.1 to forthwith
take all steps as are warranted in law, including initiation
of action under Sections 34 and 38 of the KIAD Act,
against Respondent No.2 for breach of the terms and
conditions of the Lease-cum-Sale Agreement dated
07-06-2007 vide Annexure-C;
(d) pass such other and further orders as this Hon'ble Court
may deem fit in the interest of justice and equity."
2. Heard Sri Sajan Poovayya and Sri C.K.Nandakumar,
learned senior counsel appearing for the petitioners; Sri B.B. Patil,
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learned counsel appearing for respondent No.1; Sri K.G. Raghavan,
learned senior counsel appearing for respondent No.2 and
Sri Srinivasa Raghavan, learned senior counsel appearing for
respondent No.3.
3. Facts, in brief, germane are as follows: -
3.1. The petitioners are said to have paid respondent No.2
₹9,25,00,000/- in the year 2004. The payment is made to the
erstwhile shareholders as consideration for transfer of 50% of the
share holding in respondent No.2. On 07-06-2007 the Karnataka
Industrial Areas Development Board ('the Board' for short)
executed a lease-cum-sale agreement in favour of Embassy East
Business Park Private Limited/2nd respondent in respect of Schedule
'A' property measuring 78 acres situated in Kadugodi Industrial
Area, Bengaluru. 15 years thereafter, the petitioners in Writ
Petition Nos. 25744 of 2025 and 25894 of 2025 approaches this
Court in Writ Petition Nos. 18952 of 2021 c/w 18986 of 2021
projecting violations of the principal agreement and repeated
charges created by the 2nd respondent with respect to Schedule 'A'
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property. This Court had granted an interim order of stay on 29-10-
2021. On 16-05-2023, the writ petitions come to be disposed
directing the 1strespondent/Board to take appropriate action against
the 2nd respondent under the provisions of the Karnataka Industrial
Areas Development Act, 1966.
3.2. The said judgments were challenged before the Division
Bench in Writ Appeal Nos.686 and 689 of 2023. The Division Bench
modifies the judgment and directs enquiry to be conduced as was
directed by this Bench. The writ appeals come to be disposed of on
26-07-2023. On 03-09-2024 the 1st respondent resumed
proceedings and further granted time to the 2nd respondent to
commence construction, despite noting violations by the 2nd
respondent. Petitioners have also filed Writ Petition Nos. 25857 of
2024 c/w 25851 of 2024 challenging the order of the Board dated
03-09-2024. A coordinate Bench of this Court dismisses the said
writ petitions on the ground of want of locus. Writ Appeals thereof
are preferred in Writ Appeal No.1772 of 2024 c/w Writ Appeal
No.1797 of 2024 and the Division Bench has directed the parties to
abide by the principal agreement till the next date. There is no stay
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of the order. On 05-02-2025 the Division Bench referred the
parties for mediation and the mediation is said to have failed.
3.3. When things stood thus, on 07-02-2025 the 1st
respondent/Board permits the 2nd respondent to sub-lease a portion
of the schedule property in favour of the 3rd respondent and the 2nd
respondent executes sub-lease in favour of the 3rd respondent in
respect of 25 acres of Schedule 'A' property which now becomes
Schedule 'B' property for a transaction of ₹1,125/- crores. The
petitioners are again before this Court in the subject petition,
calling in question permission so granted by the Board and
execution of sub-lease agreement thereon.
3.4. The matters were heard on a threshold ground of the
petitioners having locus or otherwise to call in question the
impugned proceedings or impugned order, as the case would be.
In the event it was found that the petitioners did have locus, the
matters would be heard further on their merit is what was observed
by this Court while reserving the matters only on the threshold bar
of locus.
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4. The learned senior counsel Sri Sajan Poovayya and
Sri C. K. Nandakumar appearing for the petitioners would
vehemently contend that this Court on an earlier occasion had
projected that the 2nd respondent has in fact misutilized public
lands that were allotted to the 2nd respondent by the Board by
creating charge after charge. The Division Bench did not modify the
same. Despite the directions of the Division Bench, no enquiry
worth the name was even conducted, but permission is granted to
sub-lease the area of 25 acres out of the lands that were allotted in
the year 2007 without even complying with the directions of this
Bench or the Division Bench. The learned senior counsel further
contend that if this would be permitted, the 2nd respondent would
barter away the entire land allotted to it by entering into sub-lease
agreements.
5. Per contra, the learned senior counsel Sri K.G.Raghavan
appearing for the 2nd respondent would vehemently refute the
submissions in contending that the petitioners will have to first
cross the threshold bar of proving that they do have the locus to
challenge the impugned order/proceedings. The petitioners are not
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allottees. The petitioners are not the ones who approached the
KIADB seeking allotment. The petitioners and the 2nd respondent
have a private dispute with regard to certain investments made in
the year 2004. That private dispute cannot become subject matter
of proceedings before this Court invoking its extraordinary
jurisdiction under Article 226 of the Constitution of India. He would
submit that the judgment rendered by this Bench earlier has been
completely diluted by the Division Bench, if not reversed and in the
2nd round of proceedings a coordinate Bench clearly holds on
identical facts that the petitioners do not have locus, which is now
pending consideration before the Division Bench. He would,
therefore, contend that this Court must not entertain the petitions
of a private dispute invoking public law remedy.
6. The learned counsel Sri B.B.Patil representing the 1st
respondent/Board would vehemently contend that the allegation
that no enquiry is conducted is contrary to facts. He has placed on
record the enquiry conducted pursuant to the directions of the
Division Bench and the notices being issued to the parties. Sub-
lease is what is permitted under the allotment rules. Therefore, no
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fault can be found with the 2nd respondent entering into sub-lease
with the 3rd respondent.
7. The learned senior counsel representing the 3rd respondent
would submit that it is caught in the cross-fire between the
petitioners, the 2nd respondent and the Board and is now put to
huge loss having invested crores of amount for the lease and
development of scientific center. He would also seek dismissal of
these petitions. All the respective learned senior counsel have relied
on several judgments of the Apex Court or that of this Court, all of
which would bear consideration qua their relevance in the course of
the order.
8. I have given my anxious consideration to the submissions
made by the respective learned counsel and have perused the
material on record.
9. As observed hereinabove, the petitions were reserved only
on the issue of locus. In the event locus is found to be existing to
the petitioners to invoke the jurisdiction of this Court under Article
13
226 of the Constitution of India, the matters would be heard on
merits. Therefore, I now proceed to answer only the issue on locus.
The genesis of the dispute between the petitioners in both these
petitions and the 2nd respondent appears to be of the year 2004 on
certain investment in the share holdings of the 2nd respondent. In
the year 2007 certain lands are allotted by the Board. Nothing
happens up to 2021, during which year two petitions spring before
this Court. The genesis of the present dispute is from those
petitions.
10. A coordinate Bench of this Court in Writ Petition No.18952
of 2021 had passed the following interim order:
"FRIDAY THE 29TH DAY OF OCTOBER 2021
BY HON'BLE MR. JUSTICE KRISHNA S.DIXIT
As follows:
ORDER
Issue Rule.
Interim order as prayed for.
Petitioner shall not abuse the interim order.
Note:- As an interim relief, it is prayed to:
a. restrain Respondent No.2 from creating any further right,
title or interest in the Leased Property, i.e., land in plot
No.6, Kadugodi Industrial Area, comprised in Sy.No.1,
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Block No.73 within the village limits of Kadugodi
Plantation, Bidarahalli Hobli, Bengaluru East Taluk,
Bengaluru ad-measuring 78 acres and 2219 sq.mtrs.
during the pendency of the present petition; and
b. restrain Respondent No.1 from granting written consent
under Clause 11(b) of the Lease-cum-Sale Agreement
dated 07-06-2007 (as at Annexure-D), during the
pendency of the present petition."
The aforementioned petition and the connected writ petition in Writ
Petition No.18986 of 2021 come to be disposed of by this Bench in
terms of its order dated 16-05-2023. The contentions raised and
the answers rendered by this Bench are as follows:
".... .... ....
7. The learned senior counsel appearing for the
petitioners would vehemently contend that the petitioners and
the 2nd respondent/erstwhile CIPL have disputes between them
which are being agitated in appropriate fora. What drives the
petitioners to this Court in the subject petition is the acts of the
2nd respondent in misusing the property allotted to it by the
State/Board. It is the submission of the learned senior counsel
that between the dates on which the litigation commenced
between Government of Karnataka and the 2nd respondent
contending that it was a forest land, and the end of litigation
before the Apex Court, the 2nd respondent has created several
charges on the property without the consent of the Board. He
would submit that the Board in its statement of objections has
clearly admitted that only consent it gave for creation of a
mortgage was with regard to HDFC Limited and, to no other
charge the 2nd respondent has created there is consent of the
Board. He would submit that the Board ought to have initiated
action for violation of the terms of lease-cum-sale agreement
and its silence is what is to be contested before this Court.
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8. On the other hand, the learned senior counsel
appearing for the 2nd respondent would vehemently refute the
submissions to contend that the petitioners have no locus standi
to seek the prayer that he has sought in the petition. If a writ
of mandamus is to be issued at the behest of a person like the
petitioners, they have to demonstrate that they are the persons
aggrieved. If they are not the persons aggrieved by any action
of any public Authority, the writ petition would not be
maintainable. The learned senior counsel would further seek to
project that the petitioners are wanting to settle their personal
scores as there is a dispute between the petitioners and the 2nd
respondent with regard to share holdings in CIPL as the
petitioners are the erstwhile shareholders. He would
emphatically submit and admit that if there is any violation of
the terms and conditions of lease-cum-sale agreement, the
Board will take action, and if the Board wants to take any
action, the 2nd respondent would be ready and willing to co-
operate with the Board for any action to be taken by it, which it
would suitably justify before the Board. It is his submission that
the petitioners are nobody to invoke the extraordinary
jurisdiction of this Court under Article 226 of the Constitution of
India for a direction to the Board to take appropriate action.
9. The learned senior counsel representing the Board
would take this Court through the statement of objections filed
by the Board to contend that only one consent was given by the
Board in the year 2007 for creating a mortgage with HDFC
Limited and no other consent was obtained and any other
charge created by the 2nd respondent will be dealt with in
accordance with the provisions of the Act. He would submit that
action would definitely be taken.
10. In reply, the learned senior counsel representing the
petitioners would submit on the technical plea of locus, a case of
this nature should not be ignored by this Court as the 2nd
respondent has played fraud by creating, charge after charge,
without the consent of the Board and has generated several
crores of revenue contrary to the lease-cum-sale agreement.
The lease-cum-sale agreement was entered into by the Board
with the 2nd respondent for a particular purpose of development.
Not an inch of development of land has taken place even as on
date. He would submit that the 2nd respondent has indulged in
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real estate by holding the public property and treating it to be
his private property.
11. The learned senior counsel for the 2nd respondent
joining the issue would refute by contending that the moment
the lease-cum-sale agreement was entered into, litigation began
and it ended only in the year 2020 before the Apex Court, and
therefore, no development could take place. He would admit
that, if the Board were to take any action, the 2nd respondent
would fight it out with the Board with regard to alleged creation
of charge, without the consent of the Board.
12. The remaining respondents who are the other
holdings in favour of whom CIPL or the present 2nd respondent
have agreements have filed their common objection to both
these petitions, sitting on the fence.
13. I have given my anxious consideration to the
submissions made by the respective learned senior counsel
representing the parties and have perused the material on
record.
14. The afore-narrated facts are not in dispute as they lie
in a narrow compass. Disputes between the petitioners and the
2nd respondent, as observed hereinabove, galore. The
petitioners along with certain other entities claims to have paid
certain amount to the erstwhile 2nd respondent, CIPL. All the
disputes pertain to the holding of schedule property which
belongs to the Board. Application had already been made by the
2nd respondent seeking allotment of land in the aforesaid plot of
land in Plot No.6, Kadugodi Industrial Area, comprised in
Sy.No.1, Block No.73 within the village limits of Kadugodi
Plantation, Bidarahalli Hobli, Bengaluru East Taluk, Bengaluru
admeasuring 78 acres and 2219 sq.mts. for joint development
of land by both groups. During the pendency of the application,
the 2nd respondent creates first charge of availing finance from
the Housing Development Finance Corporation Limited (HDFC)
on 06-06-2007. This is in public domain. On the next day the
lease-cum-sale agreement was executed by the Board in favour
of M/s Concord India Private Limited (CIPL) the erstwhile entity
of the 2nd respondent. Certain clauses of the lease-cum-sale
agreement are germane to be noticed and are therefore,
extracted hereunder for the purpose of quick reference:
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"Agreement made at Bangalore the Seventh day
of June month Two Thousand Seven between the
Karnataka Industrial Areas Development Board having
its Head Office at No: 14/3, lInd Floor, Rastrothana
Parishath Building, Nrupathunga Road, Bangalore-
560001 represented by Sri. M C Nagaraju, Assistant
Secretary, hereinafter called the 'lessor' (which term
shall wherever the context so permits, mean and include
its successors in interest) of the one Part AND M/S
Concord India Ltd, I Floor, Embassy Point, 150,
Infantry Road Bangalore-560 001 represented by
Sri. Narpat Singh Choraria, Director hereinafter
called the 'lessee' (which term shall wherever the
context so permits, mean and include his/her/its heirs,
executors, administrators, assignee and legal
representatives) of the other part.
Whereas the lessee has applied to the lessor
for allotment of land for setting up of an Industrial
Infrastructure project, and in pursuance thereof,
the lessor has agreed to lease the plot of land
herein described, upon terms and conditions
herein contained.
..... .... ....
10. (a) The lessor may, if the lessee so desires,
shall permit implementation of the project in a phased
manner, but not exceeding in three phases, in
accordance with the time schedule prescribed as under:
Phase No. For approval of building To commence civil To complete the civil
plans works works & Implement
the project
I Phase 3 months from the date of 6 months from the 36 months from the
taking possession of schedule date of approval of date of taking
property building plans possession of schedule
property
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II Phase Within 3 months after the 6 months from the 54 months from the
expiry of initial 36 months. date of approval of date of taking
building plans possession of schedule
property
Final Phase Within 3 months after the 3 months from the 72 months from the
expiry of 54 months date of approval of date of taking
building plans possession of schedule
property.
.... .... ....
d) The Lessor shall have the right to terminate the
lease and resume the possession of the schedule property or
any part thereof, in the event the Lessee has failed to
implement the project, within the stipulated period. or
extended period, if any.
11. a) On written request from the lessee, the lessor
may permit the sub lease of lease hold nights of the scheduled
property or any part thereof in favour of a project developer
solely for the construction of buildings and allied purposes in
pursuance of the implementation of the project as cleared by
the Government in the C&I Department, or, any other agency
constituted by it in this behalf.
(b) The lessee may mortgage the right, title and interest
in the Schedule Property after obtaining consent in writing
from the lessor to secure loans for erection of building, plant
and machinery on the schedule property or to avail working
capital facilities for the purposes of the project on the schedule
property from financial institutions and banks."
(Emphasis added)
The purpose for execution of lease-cum-sale agreement
was on the application made by the 2nd respondent for setting
up a industrial infrastructure project. The extent of land was 78
acres and 2219 sq.mts. The Schedule reads as follows:
".... .... ....
FIRST SCHEDULE
(DESCRIPTION OF LAND)
19
All that piece of land known as Plot No. 6 in Sy.No. 1,
Block 73 in the Kadugodi Industrial Area within the limits of
Kadngodi Plantation Village, Bidarahali Hobli,, Bangalore East
Taluk, Bangalore District containing by admeasurement 78
acres 2219 sqmtrs or thereabouts and bounded as follows
that is to say:-
On or towards North by Agricultural land & Part of Sy
No.1
On or towards South by Bangalore-Whitefield Main
Road
On or towards East by Agricultural Land
On or towards West by M/s Herbert India Ltd &
KIADB Road"
The aforesaid land would be hereinafter referred to as the
schedule property. On 16-04-2008 after execution of lease-
cum-sale agreement certain proceedings are instituted by the
State Government contending that the land that was allotted to
the 2nd respondent was a forest land. This became a subject
matter of Writ Petition No.7200 of 2008 and connected cases
before this Court. A learned single Judge in terms of his order
dated 25-05-2012 allowed the writ petitions and set aside those
Government orders which had declared the said land to be a
forest land. This was called in question by the State Government
before the Division Bench in Writ Appeal No.4283 of 2012 and
connected cases. A Division Bench of this Court dismissed the
writ appeals in terms of its order dated 23-07-2019. State again
tossed the said order before the Apex Court, only to be
dismissed. Therefore, the litigation that began pursuant to the
order of the Assistant Conservator of Forests on 09-09-2009
ended in the year 2020 by the Apex Court rejecting the appeal
filed by the State. At no point in time there was any order in
favour of the State. They were all against the State. What
happens between the date of lease-cum-sale agreement dated
07-06-2007 and dismissal of the SLP forms the fulcrum of the
allegations in the case at hand.
15. It is not in dispute that what is allotted to the 2nd
respondent by way of lease-cum-sale agreement was a public
20
property and is allotted for a particular purpose on certain terms
and conditions albeit, for a consideration. The terms and
conditions as ascribed in the lease-cum-sale agreement are
already extracted hereinabove. The 2nd respondent/Company
avails working capital of `150/- crores from HDFC Limited on
28-11-2014. The said charge created by a document depicting
the charge is appended to the petition. This creation of charge
or drawing of working capital of `150/- crores from HDFC limited
is admittedly not with the consent of the Board. The dates of
creation of charge and the amount drawn in terms of the said
mortgage, mortgaging the schedule property in favour of
several persons are as follows:
"Charges Registered
Company
CIN/FCRN/LLPIN/FLLPIN U51101KA1973PTC002298
Company / LLP Name EMBASSY EAST BUSINESS PARK PRIVATE LIMITED
Charges Registered
SN SRN Charg Charge Date Date of Date Amount Address
o e Id Holder of Modific of
Name Creati ation Satisfa
on ction
1 T362532 10046 IDBI 12/08/ - - 47800000 Asian Building,
76 8522 TRUSTEE 2021 00.0 Ground Floor, 17,
SHIP R.Kamani Marg
SERVICE Ballard Eastate
S Mumbai
LIMITED MH400001 IN
2 T344246 10046 IDBI 31/07/ 02/08/ - 84000000 Asian Building,
22 4827 TRUSTEE 2021 2021 00.0 Ground Floor, 17,
SHIP R.Kamani Marg
SERVICE Ballard
S EstateMumbaiMH
LIMITED 400001IN
3 T338705 10008 IDBI 27/03/ 06/07/ 02/08/ 10000000 Asian Building,
02 5955 TRUSTEE 2017 2018 2021 000.0 Ground Floor, 17,
SHIP R.Kamani Marg
SERVICE Ballard
S Estate,MumbaiMH
LIMITED 400001IN
4 G389714 1056118 HOUSING 28/11/ - 23/03/ 15000000 RAMON HOUSE
79 0 DEVELOP 2014 2017 00.0 169BACKBAY
MENT RECLAMATION
FINANCE H T PAREKH
CORPOR MARGMUMBAIMH
ATION 400020IN
LIMITED
5 G390850 1000843 HOUSING 27/02/ - 23/03/ 10000000 RAMON HOUSE
21
71 66 DEVELOP 2017 2017 00.0 169BACKBAY
MENT RECLAMATION
FINANCE H T PAREKH
CORPOR MARGMUMBAIMa
ATION 400020IN
LIMITED
6 G389725 1000843 HOUSING 16/11/ - 23/03/ 20000000 RAMON HOUSE
68 69 DEVELOP 2016 2017 00.0 169BACKBAY
MENT RECLAMATION
FINANCE H T PAREKH
CORPOR MARGMUMBAIMa
ATION 400020IN
LIMITED
7 G390826 1000843 HOUSING 06/01/ - 23/03/ 15000000 RAMON HOUSE
23 76 DEVELOP 2017 2017 00.0 169BACKBAY
MENT RECLAMATION
FINANCE H T PAREKH
CORPOR MARGMUMBAIMa
ATION 400020IN
LIMITED
8 G389736 1000844 HOUSING 07/09/ - 23/03/ 25000000 RAMON HOUSE
73 19 DEVELOP 2016 2017 00.0 169BACKBAY
MENT RECLAMATION
FINANCE H T PAREKH
CORPOR MARGMUMBAIMa
ATION 400020IN
LIMITED
9 A828284 1008382 HOUSING 06/06/ 06/11/ 31/03/ 39264772 RAMON HOUSE
35 0 DEVELOP 2007 2007 2010 7.0 169BACKBAY
MENT RECLAMATION
FINANCE H T PAREKH
CORPOR MARGMUMBAIMH
ATION 400020IN"
LIMITED
The aforesaid charge is drawn from the website of the Ministry
of Corporate Affairs, Government of India under the head, index
of charges created by Embassy East Business Park Private
Limited, the 2nd respondent herein. These are the charges
created not only up to the date of the SLP getting dismissed, but
a few even after that, and the latest being on 31-07-2021 and
12-08-2021 for an amount of `840/- crores and `478/- crores
respectively. Therefore, a property that was the subject matter
of lease-cum-sale agreement on certain terms and conditions
has been held by the 2nd respondent and has been the subject
matter of several charges being created without the consent of
the Board.
16. It now becomes germane to notice the statement of
objections initially filed by the Board to the writ petition. The
objections are filed on 12-01-2022. Certain paragraphs become
germane to be noticed. Paragraphs 6 and 7 of the statement of
objections read as follows:
22
".... .... ....
6. It is submitted, in response to allegations of nine
charges stated to be created right from the year
2006 to 2021 as stated in paragraphs 11 & 26 of
Writ Petition, it is submitted that the answering
Respondent has issued only one NOC dated
31.08.2019 in favour of 3rd Respondent (IDBI
Trusteeship Services Ltd., Mumbai) on a specific
request made by the allottee. No other NOC is
issued in favour of any other entity. If any other
transactions are entered into, it will not bind the
interest of KIADB and action will be taken as per
the terms of lease agreement. Hence, statements
made in these paragraphs are incorrect.
7. It is submitted in response to other averments
made in the writ petition alleging payment of
Rs.9,25,00,000/- by the Petitioner to 2nd
Respondent in the year 2004 for transfer of
1,91,301 shares in CIPL and breach of such
contract, it is submitted that the answering
Respondent is not aware of such contract between
them......"
(Emphasis added)
At paragraph 6 in response to the allegation of creation of 9
charges, the Board would contend that it is not aware of 9
charges that are created between 2006 and 2021. The Board is
aware that only one no objection was given on 31-08-2019 in
favour of the IDBI Trusteeship Services Limited, Mumbai on a
specific request made by the allottee, the 2nd respondent. No
other NOC is issued in favour of any other entity. It is again
averred that if any other transactions are entered into it will not
bind the interest of the Board and action will be taken as per the
terms of lease agreement. The aforesaid is the emphatic
averment, on oath by the Board.
17. If the allegations in the petition against the 2nd
respondent are read in tandem with the objections filed by the
Board, what would unmistakably emerge is that, the 2nd
respondent has created certain charge on several occasions
holding the schedule property without the consent of the board,
at least in 8 of the charges that are created. The consent that
the Board refers to is also appended to the statement of
23
objections along with the request of CIPL for issuance of NOC.
The request dated 21-08-2019 reads as follows:
"Date: 21St August 2019
To,
The Chief Executive Officer & Executive Member
Kamataka Industrial Area Development Board (KIADB)
4 & 5 floor, Khanja Bhavan
No. 49, Race Course Road,
Bengaluru-560001
Dear Sir,
Sub: Request for issue of NOC for mortgage of the
property bearing Plot No. 6 in the Kadugodi Industrial
Area, comprised in Sy No. 1, Block No. 73 within the
village limits of Kadugodi Plantation, Bidarahalli Hobli,
Bangalore East Taluk, Bangalore District admeasuring 78
acres 2219 sqmtrs or thereabouts to IDBI Trusteeship
Services Limited.
Ref: Lease cum sale Agreement dated 7th June 2007 in
respect of 78 acres 2219 sqmtrs or thereabouts
With reference to the above, we hereby bring to your
kind notice that we are in the process of mortgaging
approximately 60.55 acres of Land situated in Plot No. 6
in the Kadugodi Industrial Area, comprised in Sy No. 1,
Block No. 73 within the village limits of Kadugodi
Plantation, Bidarahall Hobli, Bangalore East Taluk,
Bangalore District to IDBI Trusteeship Services Ltd.
The above said land has been allotted to us and we are
given possession of the same in accordance with the
lease cum sale agreement dated 7th June 2007 executed
in favour of Concord India Private Limited. We here by
request your good self to accord the permission for the
same and issue the NOC at the earliest.
Thanking you,
Yours truly,
For Concord India Private Limited
Sd/-
Authorised Signatory"
24
The request is acceded to and NOC is issued by the following
communication:
"No. KIADB/Sec-3/AS-143 Vol-IV/7842/2019-20
Date: 31.08.2019
RPAD
M/s Concord India Pvt Ltd,
#150, Embassy Point,
Infantry Road,
Bangalore-560 001
Sir,
Sub: Issue of NOC in respect of the Plot No.6 Sy. No. 1
Block No.73 of 78.548 Acres of land at Kadukodi
I.A, Whitefield, Bangalore.
Ref: 1. Lease Agreement dt: 07.06.2007.
2. Your letter dt: 22.08.2019.
****
With reference to your request, vide letter cited
under ref (2), you are hereby permitted to mortgage the
right, title and interest you derive under the Lease cum
Agreement dated: 07.06.2007 in favour of M/s IDBI
Trusteeship Services Ltd, Asian Building, Ground Floor
17, R Kamani Marg. Ballard Estate, Mumbai - 400 001 to
secure money to be advanced by them for erection of
Building / Plant and Machinery / Working Capital in
respect of Plot No.6 Sy. No.1 Block No.73 of 78.548
Acres of land at Kadukodi I.A, Whitefield, Bangalore.
"Subject to the conditions stipulated in Allotment
Letter/Lease agreement and First Charge on the said
asset lies with the Board"
Yours faithfully
Sd/-31.8.2019
Secretary - 3"
Therefore, the only NOC that is issued to M/s Concord India
Private Limited is on 31-08-2019 by the Board as averred by the
Board in the statement of objections and the document
appended to the statement of objections. Therefore, the Board
25
itself accepts that the 2nd respondent has not sought any NOC
for creation of any charge on the schedule property. Even after
filing of the present writ petitions, the averment in the
additional affidavit filed by the petitioners is that one M/s
Indiabulls has filed its disclosure with the National Stock
Exchange depicting that the 2nd respondent would become a
wholly owned subsidiary of Indiabulls pursuant to the Scheme of
Amalgamation which is again in violation of the lease
agreement. Even to this there is no consent obtained from the
hands of the Board by the 2nd respondent.
18. To all the aforesaid allegations, submissions and
contra-submissions, the learned senior counsel for the 2nd
respondent would reiterate his submissions that if there is any
violation of lease-cum-sale agreement or if this Court finds that
there is violation of the lease-cum-sale agreement, it is for the
Board to issue a notice and the 2nd respondent to contest the
proceedings of the Board, either by justification or availing of
such remedy as is available in law.
19. If the afore-narrated facts, glaring enough they
are, are noticed, what would emerge is that the Board is
silent on the alleged violation of its property that was
leased to the 2nd respondent for a particular purpose
albeit, on consideration. The purpose is deviated and not
stopping at that using the schedule property, the land
which belonged to the Board, the 2nd respondent has
created several charges on the said property in violation
of the terms of lease. In such glaring facts, what is
involved is inaction of the Board, a State under Article 12
of the Constitution of India, qua the property that
belonged to the Board and the question of locus standi of
the person who brings before the constitutional Court
such illegality gets blurred as the issue that is brought
before the Court masks over the issue of locus.
20. Though there are several judgments relied on by the
learned senior counsel appearing for the petitioners and the
learned senior counsel representing the 2nd respondent, making
reference to them will only add to the bulk of this judgment, in
the teeth of the submission made by the learned senior counsel
representing the 2nd respondent and the affidavit filed by the
Board. To iterate, the Board in its statement of objections
quoted supra has stated on oath that it is not aware of any
26
charge created except the one that is appended to the
statement of objections and it also states that action will be
taken in accordance with law, for violation of the lease-cum-sale
agreement.
21. The learned senior counsel Sri. K.G.Raghavan also
accepts that, if the Board issues a notice to it, alleging violation,
the 2nd respondent would undoubtedly reply to justify or take
necessary action on the said notice. Since the petitioners have
brought the issue before this Court and have
projected/highlighted the silence of the Board pursuant to which
a direction now becomes necessary to be issued to the Board, to
take up proceedings against the 2nd respondent, I deem it
appropriate to permit the petitioners to participate in the
proceedings that would be initiated by the Board against the 2nd
respondent.
22. For the aforesaid reasons, I pass the following:
ORDER
(i) Writ Petitions stand disposed of.
(ii) A mandamus issues to the 1st respondent/Board to
initiate action against the 2nd respondent, in
accordance with the provisions of the Act, for the
alleged violation of the terms and conditions of
lease-cum-sale agreement dated 07-06-2007, as
expeditiously as possible and at any rate within
three months from the date of receipt of a copy of
this order and further proceedings shall be
regulated in accordance with law.
(iii) The petitioners shall have an opportunity to
participate in the proceedings so initiated by the
Board against the 2nd respondent.
(iv) Till the conclusion of the proceedings, interim
orders, if any subsisting, shall stand continued.
27
Pending applications, if any, also stand disposed as a
consequence."
(Emphasis supplied)
This judgment was tossed before the Division Bench in Writ Appeal
Nos.686 and 689 of 2023. The Division Bench passes the following
order:
"Heard Sri.K.G.Raghavan, learned Senior counsel
appearing on behalf of Sri.Ajesh Kumar S., learned counsel for
the appellants, Sri.C.K.Nandakumar, learned Senior counsel
appearing on behalf of Sri.Manu Prabhakar Kulkarni, learned
counsel for respondent No.1 and Sri.B.V.Sabarad, learned
Senior counsel appearing on behalf of Sri.H.L.Pradeep Kumar,
learned counsel for respondent No.2.
2. The impugned order dated 16.05.2023 passed in
W.P.No.18952/2021 (GM-KIADB) connected with
W.P.No.18986/2021 (GM-KIADB) raise common facts and issues
for consideration in these appeals. Therefore both these appeals
are taken up together for hearing and disposal.
3. The aforesaid writ petitions were filed seeking direction
to the respondent-Board to take appropriate action against the
appellant No.1 herein for alleged violation of terms and
conditions of lease-cum-sale agreement dated 07.06.2007 and
for initiating consequent actions thereof.
4. After hearing learned Senior counsel appearing for the
respective parties, we are of the opinion that instead of
recording detailed reasoning or referring to the facts and
submissions and counter submissions in detail, these appeals
can be disposed of in view of observations made by the learned
Single Judge in paragraph 20 of the impugned order.
5. Learned Single Judge taking note of the submissions
made by learned Senior counsel on behalf of the appellant No.1
herein which was arrayed as respondent No.2 in the writ
petitions and also taking note of the affidavit filed by Board, has
observed that the Board in its statement of objections on oath,
28
has stated that it was not aware of any charge created and that
it would take action in accordance with law. Thus the Board
propose to enquire into the matter and it was submitted before
this Court that certain factual aspects was not made known to
the Board as such Board will conduct enquiry adhering to the
provisions of the Act and may initiate action within the
stipulated period of three months.
6. In view of the specific stand taken by the Board to
enquire into the matter regarding violation of terms of lease on
its own, the question of issuing mandamus would not arise. That
apart in our opinion there is no need and necessity for the
petitioners to participate in the enquiry proceedings to be
conducted by the Board.
7. At this juncture, learned counsel for the Board by
inviting our attention to the memo filed in this Court submits
that during the pendency of the writ petition two notices were
issued to the appellant namely notices dated 08.03.2023 and
04.07.2023 and since the writ petition and appeal being
disposed of by this Court, the respondent-Board be permitted to
withdraw these notices. Accordingly Board is permitted to
withdraw these notices with further liberty to the Board to issue
fresh comprehensive notice to appellant and others as required
adhering to the provisions of law. Needless to state the Board is
at liberty to consider the entire material available with the Board
in the form of its own records, representations, applications etc.
8. Learned Senior counsel appearing for the appellant on
instructions made a statement before this Court that till the
enquiry is completed by the Board, the appellant will not create
any charge without permission of the Board. This statement is
taken as an undertaking to this Court.
In view of the above, appeals are partially allowed by
modifying the order of the learned Single Judge as under:
(a) Clause (ii) of the operative portion of the order of the
learned Single Judge is modified and respondent No.1/Board is
directed to initiate action against the respondent No.2, needless
to state as per the provisions of the Act for the alleged violation
of terms and conditions of the lease- cum-sale agreement dated
07.06.2007.
29
(b) The respondent -Board shall conclude the enquiry as
expeditiously as possible and not later than four months from
today i.e., date of order passed by this Court.
(c) The respondent-Board is at liberty to pass appropriate
orders to protect its interest needless to state by adhering to
provisions of law.
(d) It is made clear that the respondent-Board shall carry
out the exercise of enquiry into the matter without being
influenced by the findings and observations made by learned
Single Judge in the impugned order. This however shall not
affect the rights of the parties to seek appropriate remedy as
may be available under law before the competent legal forum.
(d) Clause (iii) and Clause (iv) of the operative portion of
the order of the learned Single Judge are deleted."
The Division Bench modifies the order passed by this Bench. Clause
(ii) of the operative portion of the order of this Bench was modified
and the Board was directed to initiate action against the 2nd
respondent and 4 months' time for completion of enquiry was
granted. The Board was further directed that the exercise of
enquiry should be carried out without being influenced by the
observation made by the Division Bench. Pursuant to the disposals
of the writ appeals on 26-07-2023, proceedings are initiated albeit
after delay, by issuing a notice on 10-09-2024. The communication
reads as follows:
"No.:KIADB/HO/Allot/AS-143-VOL-VIII/10327/2024-25
30
Date: 10.09.2024
M/s Embassy East Business Park Pvt Ltd.,
(Formerly known as concord India (P) Ltd.
Embassy Point, 1st Floor,
150, Infantry Road,
Bangalore-560001.
Sub: 34-B Order in respect of 78 Acres and 2219
Sqmtrs of land in Plot NO.06 at Sy. No.01 of
Kadugodi Industrial Area, Bengaluru Urban
District. - Reg.
Ref: 1. Lease cum sale agreement dtd.
21.09.1979 & 07.06.2007.
2. Order No:KIADB/HO/ALLOT/AS-
143-Vol-VII/10301/2024-25, dtd:
03.09.2024
*-*-*-*-
With reference to the above, this is to inform that,, The
Chief Executive Office & Executive Member, KIADB, on
03.09.2024 has passed an 34-B Order for land in respect of 78
Acres and 2219 Sqmtrs of land in Plot NO.06 at Sy. No.01 of
Kadugodi Industrial Area, Bengaluru Urban District which was
allotted to you. A copy of the order dtd. 03.09.2024 is enclosed
to this letter for your information.
Yours faithfully,
Sd/-
Secretary - 2
Copy to: The Executive Engineer-2 KIADB, Zonal Office,
No.14/3, KIADB Zonal Office, Aravinda Bhavan, NT
Road, Bengaluru-560001 for information & further
action.
Sd/- 10/9/24
Secretary-2"
31
The following order is passed by the Board under Section 34-B(3) of
the KIADB Act, 1966, in furtherance of the liberty granted by the
Division Bench.
".... .... ....
25. The allottee submitted his reply on 12-01-2024
reiterating the contentions raised in the statement of
objections already filed and denied the various breaches
alleged in the notice.
26. Notice u/s 34-B(3) was issued on 01-02-2024, the
allottee along with his team of lawyers appeared before
the CEO & EM, KIADB, submitted the records and written
submissions. It is contended bin the written submissions
that-
a) The KIADB was requested to sanction the plan as per the
request letter of the Company dated 14-12-2019, 23-05-
2022, 19-10-2023 and 12-12-2023.
b) The Company will able to commence the construction
Within 1 year of the plan sanction being issued by the
KIADB.
c) There is no violation of the Agreement from the
Company's side.
d) The Company has borrowed loans and has paid a sum of
INR 840 crores (Rupees Eight hundred forty crores) to
NAM Estates Private Ltd., and they are ready to
commence development the moment the plan is
sanctioned by the KIADB. M/s. NAM Estates Private Ltd.
was awarded the turnkey contract for civil core and shell
and finishing works and also turnkey contract for supply
installation of plant and machinery. and
e) The following pre-construction activities have been
undertaken:
32
i. Site Cleaning/Clearing Debris of the Land
ii. Deployment of Security personnel / Construction of
Security Sheds
iii. Securing Approvals from the concerned Authorities.
f) The Company submitted and stated it has complied with
each and every term and condition. Company has
requested KIADB to sanction the plan so that the
Company can commence its development on the subject
land.
27. In the enquiry, having considered the statement
submitted by the allottee during the hearing and the
report submitted by the Executive Engineer, the
arguments, the records and examining the replies and
written submissions submitted by the allotee the following
facts are to be observed:
a. The allottee defended the title of the Board to the
allotted property from 2008 as against the Forest
Department till 19.11.2020.
b. The Allottee has submitted an application to the
Board for approval for undertaking the project as
on 23.05.2022. Thereafter once again on 12-12-
2023 by securing all the approval from the
concerned authorities. Further allottee undertakes
to commence the construction within 1 year, if the
plan sanction being issued by the Board. However,
the plan sanction is pending with the Board.
c. The allottee has borrowed the loans with prior
approvals of the NOC's of the Board dated 03-07-
2007 & 31-08-2019..
d. The allottee have been undertaken
site/cleaning/clearing debris of the lands and
deployment of security personnel/construction of
the security sheds.
33
e. The Board recognising the above, has executed the
Rectification Deed dated 21-04-2008 and
Supplementry Deed 15-01-2021 granting time upto
06-06-2029 to complete the project.
f. The allottee has undertaken to commence the
project immediately and assured that the project
will be completed as soon as possible.
28. In view of the forgoing observations, I am of the
considered view to extend the time of 2 years to
commence the project by the allottee on the condition
that an undertaking be given by the allottee that all the
monies taken as loan as against this property will be
utilised for completing the proposed project by the
allottee. Hence, I passed the following order:
ORDER
In exercise of the powers conferred u/s. 34-B, the
time for implementation of the project in Plot. No:06
Kadugodi Industrial Area comprised in SY.No:01 within
the village limits of Kadugodi Plantation Bidarahalli Hobli
Bengaluru East Taluk measuring 78 Acres and 2219
Sqmtrs is hereby extended by two years from the date of
the approval of the sanctioned plan subject to withdrawal
of the Com OS.No:71/2024 before the XI th Additional
District and Sessions Judge Bengaluru Rural District
(Commercial Court) at Bengaluru. All other terms and
conditions of the Lease Cum Sale Deed dated 07-06-2007
shall remain unaltered.
Send this order to the allottee through Registered Post
Receipt (RPAD).
This order is pronounced today dated: 03.09.2024
Sd/-
(Dr. Mahesh.M, IAS)
Chief Executive Officer
& Executive Member."
(Emphasis added)
34
11. Against this, springs the second set of petitions by these
petitioners in Writ Petition Nos.25857 of 2024 c/w 25851 of 2024. A
coordinate Bench, by a detailed order dated 30-10-2024, rejects
the petition on the ground of want of locus. Identical submissions
were projected by the respective parties. I, therefore, deem it
appropriate to notice the entire order and it reads as follows:
"The petitioners are before this Court seeking a writ in the
nature of Certiorari to quash the order No. KIADB/HO/Allot/AS-
143-Vol. VII/10301/2024-25, dated 03.09.2024, issued by
respondent No.1 - Karnataka Industrial Areas Development
Board (KIADB) under Section 34-B(3) of the Karnataka
Industrial Areas Development Act, 1966 ("KIAD Act"). Through
this order, the time for implementing the infrastructural project
on the scheduled property, allotted to respondent No. 2 under a
Lease-cum-Sale Deed dated 07.06.2007, was extended by two
years from the date of approval of the sanctioned plan.
2. The petitioners contend to be 50% shareholders of
Concord India Private Limited ('CIPL'), the predecessor entity of
respondent No. 2, M/s. Embassy East Business Parks Pvt. Ltd.
('Allottee'). The petitioners assert that they acquired
shareholding rights by making a payment of INR 9,25,00,000/-
with the objective of jointly developing the scheduled property
as a marquee asset. The agreement between the petitioners and
respondent No. 2 is subject to ongoing disputes and is currently
contested before appropriate forums.
2.1. The scheduled property described below was allotted
to respondent No. 2 on a Lease-cum-Sale basis, with an initial
lease period of 11 years for establishing infrastructure facilities
for MNTC IT & ITES companies. On 21.01.2008, respondent No.
1 - KIADB, executed a Rectification Deed extending the lease
period from 11 to 20 years.
35
2.2. Subsequently, upon the request of respondent No. 2,
a Supplementary Agreement dated 15.01.2021 extended the
lease term by an additional 11 years, from 07.06.2018 to
06.06.2029.
The scheduled property is "all that piece and parcel of
Plot No.6, Kadugodi Industrial Area, comprised in Sy.
No. 1, Block 73, within the village limits of Kadugodi
Plantation, Bidarahalli Hobli, Bengaluru East Taluk,
Bengaluru, measuring 78 acres and 2219 sq.mtrs.,
bounded:
East - Agricultural Land
West - Herbert India Ltd. and KIADB
Road
North - Agricultural Land and Part of Sy.
No. 1
South - Bangalore-Whitefield Main Road."
3. Upon execution of the Lease-cum-Sale Agreement on
16.04.2008, certain proceedings were initiated by the State,
asserting that the scheduled property constituted forest land.
This contention, however, became the subject of litigation
before this Court in W.P. No. 7200/2008, wherein a coordinate
Bench rejected the State's claim, vide order dated 25.05.2012.
This decision was reaffirmed in W.A. No. 4283/2012, dated
23.07.2019, and the matter ultimately concluded in 2020 with
the dismissal of the Special Leave Petition (SLP) filed by the
State before the Apex Court.
4. Subsequently, the present petitioners again
approached this Court in W.P. No. 18986/2021, connected with
W.P. No. 18952/2021, dated 16.05.2023, challenging the
creation of nine charges over the scheduled property by
respondent No. 2 - Allottee from 07.06.2007 until the dismissal
of the SLP, without obtaining consent from respondent No. 1 -
KIADB. The petitioners sought a Writ of Mandamus, directing
KIADB to take appropriate action against the Allottee for
violating the terms of the Lease-cum-Sale Agreement dated
07.06.2007, including initiating proceedings under Sections 34
and 38 of the KIAD Act, 1966.
36
5. The coordinate Bench, vide order dated 16.05.2023,
observed that respondent No. 2 - Allottee had indeed violated
the terms of the Lease-cum-Sale Agreement dated 07.06.2007
by creating nine charges over the scheduled property without
the consent of the KIADB. Taking cognizance of the submissions
of the respondent No. 1-KIADB, to take appropriate action in
accordance with law for the violation of the Agreement, and
recognizing that the petitioners had highlighted KIADB's inaction
regarding the misuse of the allotted public property, the Single
Bench allowed the petition, permitting the petitioners to
participate in the proceedings to be initiated by respondent No.
1 - KIADB under Section 34 and 38 of the KIAD Act , 1966.
6. Aggrieved by this order, respondent No. 2 - Allottee
and others filed an appeal in W.A. No. 686/2023, connected
with W.A. No. 689/2023, dated 26.07.2023, against the
petitioners and respondent No. 1 - KIADB. The Division Bench of
this Court modified the Single Bench's order, stating that, given
the specific undertaking by KIADB to investigate the alleged
violations independently, a Mandamus was unnecessary. The
Division Bench further opined that "no need and necessity"
existed for the petitioners to participate in the KIADB's inquiry
proceedings and directed that the said inquiry be concluded
within four months.
The Division Bench also noted that respondent No. 1 -
KIADB was at liberty to issue appropriate orders according to
law to protect its interests, uninfluenced by the findings and
observations of the Single Bench.
7. Pursuant to the order dated 26.07.2023 passed by the
Division Bench, respondent No. 1 conducted an inquiry and
issued an order dated 03.09.2024 under Section 34-B(3) of the
KIAD Act, 1966, extending the timeline for implementing the
infrastructural project on the scheduled property by two years
from the date of approval of the sanctioned plan.
8. Aggrieved by this development, the petitioners are
before this Court, seeking to quash the impugned order on the
grounds that it is vitiated by malice, lacks reasonable or
probable cause, and is, therefore, ultra vires Section 34-B of the
KIAD Act, 1966.
37
9. Learned Senior Counsel, Sri S. Poovayya, representing
counsel for the petitioner, Sri Manu Prabhakar Kulkarni in W.P.
No. 25851/2023, and Shri C.K. Nandakumar, representing
counsel for the petitioner, Sri Manu Prabhakar Kulkarni in W.P.
No. 25857/2023, have argued that despite a finding by the
Single Bench vide order dated 16.05.2023 that Respondent No.
2 - Allottee had violated the terms of the Lease-cum-Sale
Agreement dated 07.06.2007 by creating nine charges over the
scheduled property without the consent of Respondent-KIADB,
and despite the specific submission by KIADB before the
Division Bench in W.A. No. 686/2023 and connected matters to
investigate the alleged violations and pass appropriate orders in
accordance with law, Respondent-KIADB has made an
inexplicable volte-face. It has issued the impugned order,
extending the continuing leasehold rights over the scheduled
property while overlooking the violations of the Lease
Agreement dated 07.06.2007.
9.1 The learned Senior Counsels primarily contended that
the impugned order issued by Respondent-KIADB was exercised
based on extraneous and irrelevant considerations. The order
granting continued leasehold to Respondent No. 2 - Allottee
neither provides adequate explanations or clarifications from the
Allottee regarding the charges created over the scheduled
property nor offers any undertaking or corrective action to
remedy the breaches of the Lease-cum-Sale Agreement dated
07.06.2007. The learned Senior Counsels further brought to the
Court's attention a discrepancy in the dates within the impugned
order--appearing as 10.09.2024 at the start and as 03.09.2024
in the operative portion--and contended that this inconsistency
indicates an improper and irregular exercise of statutory
authority.
9.2 Furthermore, the learned Senior Counsels argued that
the scope of the present petitions is limited to protecting the
inchoate right of the petitioners concerning their 50%
shareholding interest in Respondent No. 2 - Allottee, which is
currently under consideration before the appropriate forum. The
learned Counsels further submit that these petitions were filed
to prevent the Allottee from dissipating the scheduled property
to the detriment of the petitioners, as has previously occurred
through mortgage/creation of charges over the property by the
Allottee in favour of third parties, without the consent of KIADB
38
and in violation of the Lease-cum-Sale Agreement dated
07.06.2007. Therefore, the extension of continued leasehold
rights to the Allottee in respect of the scheduled property leaves
the petitioners' inchoate rights unprotected. Consequently, the
impugned order is arbitrary, unreasonable, and liable to be
quashed.
In support, reliance is placed upon the following:
(An order passed by a quasi-judicial authority must be
supported by adequate and cogent reasoning)
1. A.K. Kraipak v. Union of India, (1969) 2 SCC 262 -
para 13
2. Union of India v. Mohan Lal Capoor, (1973) 2 SCC 836
- para 28
3. Siemens Engg. & Mfg. Co. of India Lts. v. Union of
India, (1976) 2 SCC 981- para 6
4. Indian National Congress (I) v. Institute of Social
Welfare, (2002) 5 SCC 685 - paras 21 to 28
5. Kranti Associates (P) Ltd. v. Masood Ahmed Khan,
(2010) 9 SCC 496 - para 47
6. State of Gujarat v. Gujarat Revenue Tribunal Bar
Assn., (2012) 10 SCC 353- para 18
(The words "as it seems fit" must be read in context of the
provision and not in isolation)
7. Raja Ram Mahadev Paranjype v. ABA Maruti Mali,
1962 Supp (1) SCR 739- para 14
8. Reserve Bank of India v. Peerless General Finance &
Investment Co. Ltd., (1987) 1 SCC 424- para 33
9. Balasinor Nagrik Coop. Bank Ltd. v. Babubhai
Shankerlal Pandya, (1987) 1 SCC 606- para
39
(Instrumentalities of State must act fairly and without ill will
or malice)
10. Kalabharati Advertising v. Hemant Vimalnath
Narichania, (2010) 9 SCC 437 - para 25
(Unreasonableness is akin to violation of natural justice)
11. National Buildings Construction Corpn. v. S.
Raghunathan, (1998) 7 SCC 66 para 18
12. NOIDA Entrepreneurs Assn. v. NOIDA, (2011) 6 SCC
508- paras 39 to 41
(The Petitioner is a person aggrieved by the impugned order
and has locus standi to file this Writ Petition)
13. Gadde Venkateswara Rao v. Govt. of A.P., 1965 SCC
OnLine SC 25- para 8
14. Pamidimarri Chenchulakshamma v. Estates Abolition
Tribunal Nellore 1970 SCC OnLine AP 79- para 17
15. Jasbhai Motibhai Desai v. Roshan Kumar, Haji Bashir
Ahmed, (1976) 1 SCC 671- paras 34, 35
16. Fertilizer Corpn. Kamgar Union v. Union of India,
(1981) 1 SCC 568- para 48
17. Shivajirao Nilangekar Patil V. Mahesh Madhav Gosavi,
(1987) 1 SCC 227- para 36
18. Indian Banks' Assn. v. Devkala Consultancy Service
(2004) 11 SCC 1- para 34
19. Bangalore Medical Trust v. B.S. Muddappa, (1991) 4
SCC 54- para 35
20. Hari Krishna Kanoi v. Appropriate Authority, (1994)
207 ITR 743- paras 48, 49, 50, 60, 61 and 62
21. Ghulam Qadir v. Special Tribunal, (2002) 1 SCC 33-
para 38
40
22. Bannari Amman Sugars Ltd. v. CTO, (2005) 1 SCC
625- para 8
23. Arjunappa vs. State of Karnataka and others, Writ
Petition No. 49958 of 2019- para 14
24. Reddy Veeranna vs. Jitendra Virwani and others,
Commercial Appeal No. 325 of 2022- para 13
25. D.D. Basu, Commentary on the Constitution of India,
Eighth Edn., pg. 8086 to 8088
10. Sri Sashikiran Shetty, learned Senior Counsel
appearing for Respondent No.1 - KIADB, argued that the
impugned order was passed in pursuance of the order dated
26.07.2023 in W.A. No. 686/2023 and connected matters, and
is in consonance with the provisions of Section 34-B of the
KIADB Act, 1966. He further contended that the impugned order
was issued after due deliberation and is a reasoned order.
Therefore, given the settled principles of judicial review and the
limited scope of supervisory jurisdiction under Article 226, this
Court cannot assume appellate jurisdiction and issue a writ of
Certiorari unless the impugned order is shown to be arbitrary
and irrational, or if the findings of the Board were vitiated by a
lack of substantial evidence.
10.1. Further rebutting the contentions of the petitioners,
the learned Senior Counsel submitted that the impugned order
was passed on 03.09.2024 and that this order was provided
under an RTI application filed by the petitioner, with an
endorsement dated 10.09.2024. He contended that there is no
issue of irregularity or impropriety in passing the order due to
any purported discrepancy in its dates.
11. Learned Senior Counsel, Sri K.G. Raghavan,
representing the counsel for Respondent No.2 and others, Sri
Ajesh Kumar, argued that the petitioners lack locus standi to
bring forth these petitions due to the order dated 26.07.2023 in
W.A. No. 686/2023 and connected matters, where the Division
Bench modified the observations of the Single Bench and held
that the petitioners were not necessary parties to the inquiry
and investigation into alleged violations of the Lease-cum-Sale
Agreement by KIADB.
41
11.1. He further submitted that the petitioners' claim to
be aggrieved due to prejudice caused to their inchoate right of a
50% shareholding in the Allottee entity is without merit, as it is
settled law that a shareholder cannot assert any right over the
assets of a company based on a purported interest in those
assets.
11.2. Nevertheless, he submitted that the impugned
order is to the petitioners' benefit, subject to the outcome of the
commercial suit for declaration and injunction of their inchoate
rights, pending before the Commercial Court, Bengaluru, in O.S.
No. 234/2022.
11.3. Therefore, he contended that the petitioners lack
the locus standi to seek a writ of certiorari against the order
passed by Respondent No.1 - KIADB under Section 34-B(3) of
the KIADB Act, 1966.
In support, he places reliance upon the following:
1. Nagar Rice and Flour Mills and Ors. v. N. Teekappa
Gowda & Bros. and Ors. (1970) 1 SCC 575
2. Bacha F. Guzdar, Bombay v. Commissioner of
Income Tax, Bombay (1955) 1 SCR 876
3. Ayaaubkhan Noorkhan Pathan v. State of
Maharashtra (2013) 4 SCC 465
4. Ravi Yashwant Bhoir v. District Collector, Raigad
and Ors. (2012) 4 SCC 407
13. After carefully considering the submissions of the
learned counsels, and a close review of the materials on record
and the Division Bench's order dated 26.07.2023, it appears
that the primary issue for consideration is whether the
petitioners have the locus standi to file the present petitions
challenging the order dated 03.09.2024 issued by Respondent
No.1, alleging it to be ultra vires of the KIAD Act, 1966.
14. The facts leading up to the issuance of the impugned
order are sufficiently detailed in the previous paragraphs and
need not be repeated. It is necessary, however, to examine the
substance and reasoning behind the impugned order to assess
the petitioners' standing in the matter.
42
15. In compliance with this Court's order in W.A. No.
686/2023, connected with W.A. No. 689/2023, dated
26.07.2023, Respondent No.1 - KIADB had issued a
comprehensive notice under Section 34-B(1), directing
Respondent No.2 - Allottee to remedy the breaches identified by
the Single Bench and to provide the necessary explanation and
information.
16. The impugned order dated 03.09.2024, passed under
Section 34-B(3) of the KIAD Act, 1966, outlines the
clarifications, explanations, and commitments provided by
Respondent No.2 - Allottee. The order, specifically in paragraph
nos. (27) and (28), details the grounds that led KIADB to grant
the Allottee a two-year period from the date of plan sanction to
implement the Project development. A summary of the key
points are as follows:
i. The first mortgage/charge on the scheduled
property, created on 06.06.2007 in favour of HDFC
Bank Ltd., was against a loan of INR 39,26,47,727,
which was the amount paid for the property
allotment. The Allottee obtained the required NOC
from Respondent No.1 - KIADB.
ii. A mortgage/charge dated 22.07.2021 was created
on the scheduled property in favour of Indiabulls
Housing Finance (the successor to the lender, M/s.
Samman Capital, is arrayed herein as Respondent
No.6 in W.P. No. 25851/2024 and Respondent No.4
in W.P. No. 25857/2024), against a loan of INR
840 crores, used as a payment to M/s. NAM Estates
Pvt. Ltd. as part of the Allottee's liability for project
development. If the project does not proceed after
obtaining plan sanction, M/s. NAM Estates is liable
to repay the loan to the Allottee.
iii. The Allottee has provided an undertaking that all
funds borrowed against the scheduled property will
be used exclusively for the sanctioned project.
iv. The Allottee requested that KIADB approve the
plan in line with their latest letter dated
43
12.12.2023, and committed to begin construction
within one year of receiving plan approval.
v. Pre-construction activities have commenced,
including debris clearing, securing necessary
permits, and awarding a turnkey contract for civil
works and machinery supply to M/s. NAM Estates
Pvt. Ltd.
vi. Since 2008, the Allottee has defended KIADB's title
to the scheduled property against claims by the
Forest Department, concluding on 19.11.2020.
vii. KIADB executed a Rectification Deed dated
21.01.2008 and a Supplementary Agreement dated
15.01.2021, extending the Allottee's leasehold
rights over the property until June 2029.
15. Given the above facts, it is necessary to address
the issue of the petitioners' locus standi.
16. The petitioners are shareholders of Respondent
No.2 -Allottee, a fact under dispute and currently under review
by the lower courts. Through these petitions, they seek limited
relief to protect their 'inchoate rights' in the scheduled property
and prevent any dissipation of the property, which could harm
their interests through creation of further charges on the
property.
17. The petitioners contend that the continued grant of
leasehold and ownership of the scheduled property by the
KIADB to Respondent No.2 - Allottee as reflected in the
impugned order, undermines their rights. They argue that this
grant was issued despite a finding by the Single Bench on
16.05.2023 that the Allottee violated the terms of the Lease-
cum-Sale Agreement dated 07.06.2007, and despite the
KIADB's commitment to take appropriate action if there were
any violations. The petitioners assert that their rights in the
scheduled property remain unprotected and at risk, especially in
light of past incidents where charges were created over the
property without the knowledge of KIADB, in violation of the
Agreement dated 07.06.2007.
44
18. Consequently, the petitioners argue that the
impugned order of 03.09.2024, passed by Respondent No.1-
KIADB under Section 34-B(3) of the KIAD Act, 1966, which
extends the time for implementing the Project development on
the scheduled property by two years from the date of approval
of the sanctioned plan is arbitrary, illegal, and unreasonable.
Thus, they seek to quash this order and revoke the allotment
made in favour of Respondent No.2.
19. It is noteworthy that the observation in the Single
Bench's order dated 16.05.2023, which stated that 'the question
of locus standi of a party bringing an instance of State inaction
regarding a breach of the Lease-cum-Sale Agreement by an
allottee of a public property is secondary to the issue of illegality
presented before the Court,' was diluted and modified by the
Division Bench in W.A. No. 686/2023 connected with W.A. No.
689/2023, D.D. 26.07.2023. In that order, the Division Bench
clarified that the petitioners were not necessary parties to the
KIADB's inquiry proceedings and permitted the KIADB to take
appropriate actions without being influenced by the Single
Judge's findings and observations. Accordingly, the petitioners'
locus standi, if any, was negated by the Division Bench's order
dated 26.07.2023.
20. Additionally, records show that the
petitioners have filed a commercial suit, O.S. No.
234/2022, against Respondent No.2 and others before
the Commercial Court, Bengaluru, seeking a declaration
of their 50% equity shareholding in Respondent No.2 -
Allottee and a permanent injunction to prevent the
Allottee and others from creating third-party rights or
charges over the scheduled property, in respect of their
50% claimed interest. In essence, the relief sought by
the petitioners in O.S. No. 234/2022 contradicts the relief
sought in the present petitions. Thus, the impugned order
granting continued leasehold rights to Respondent No.2
over the scheduled property appears to benefit the
petitioners, as revoking the allotment would render their
suit for declaration and injunction meaningless and likely
dismissed as infructuous. Furthermore, as previously
noted, the KIADB extended the Allottee's leasehold rights
in view of the Allottee's categorical undertaking that all
45
borrowings secured against the scheduled property
would be used for the sanctioned Project development.
21. In light of the petitioners' contentions in a
prior round of litigation before this Court, and a combined
reading of their prayer in the commercial suit and the
present petitions, it may be reasonably inferred, absent
evidence to the contrary that the petitioners are
attempting to gain an unfair advantage over Respondent
No.2 - Allotee in their ongoing business negotiations by
filing these petitions.
22. The petitioners have sought to place reliance
upon a catena of decisions buttressing their contention of
being an aggrieved person and therefore, possessing
adequate locus to assail the order impugned herein.
However, the order of the Division Bench dated
26.07.2023 and the relief sought for by the petitioners in
the commercial suit in O.S. 234/2022 shall render any
reference to the precedents relied upon by the
petitioners, irrelevant and inconsequential in the
adjudication of the present petitions.
23. It is a settled principle of law that only an
aggrieved person can invoke the extraordinary writ
jurisdiction of High Courts under Article 226 of the
Constitution of India. An aggrieved person as opined in
by the English Court of Appeal in the case of Re
Sidebothem (1880) 14 Ch D 458 : 42 LT 783 does not
mean any individual who is "disappointed of a benefit
which he might have received if some other order had
been made" but a person who has suffered a legal
grievance so as to constitute wrongful deprivation of an
enforceable legal right.
24. The jurisprudence regarding the locus standi of
the petitioners in seeking a writ of Certiorari is well
settled. It was held by the English Court of Appeal in the
case of R. v. Paddington Valuation Officer, ex. p., Peachey
Properties Corporation (1966) 1 QB 380, at 401, that
Courts "would not listen of course to a mere busybody
who was interfering in things which did not concern him".
In R. v. Thames Magistrates Courts, ex. P., Greenbaum,
46
(1957) 55 LGR 129, the Court of Appeal had held that
Courts retained the discretion to refuse any such
application if the conduct was such as to disentitle the
petitioner to relief, despite the petitioner having
established any of the recognised grounds for quashing.
25. Pertinently, it was held by the High Court of
Australia in the case of Permanent Trustee Co. of New
South Wales v. Campbelltown Corpn., (1960) 105 CLR
401, that Courts would hardly ever exercise its discretion
in favour of an applicant who had himself instituted the
proceedings or benefitted from the order impugned in the
petition.
26. In addition to the negation of the locus of the
petitioners herein by the order of the Division Bench
dated 26.07.2023, the Hon'ble Apex Court has held in the
case of Bacha F. Guzdar, Bombay v. Commissioner of
Income Tax, Bombay (1955) 1 SCR 876, that the rights of
the shareholders in the company does not amount to
more than a right to participate in the profits of the
company and that it does not stretch to having any share
in the property of the company. The Court further held
that a company is a juristic person and is distinct from
the shareholders. Therefore, it is a settled law that a
shareholder does not possess a right to over the assets of
the company as a whole.
27. The Hon'ble Supreme Court as far back as in the
case of State of Orissa v. Ram Chandra Dev (1964) 5 SCR
811 has held that before a writ or an appropriate order
can be issued under Article 226 of the Constitution, it
must be established that the party has a right and the
said right is "illegally invaded or threatened. The
existence of a right is thus the foundation of a petition
under Article 226."
28. Furthermore, it has been held in the case of
Jasbhai Motibhai Desai v. Roshan Kumar (1976) 1 SCC
671 by the Hon'ble Supreme Court that where a person
has not sustained an injury to any legally protected
interest and has not been subjected any legal wrong or
has suffered wrongfully any legal grievance, such person
47
is not a 'person aggrieved' to invoke the extraordinary
jurisdiction of a writ Court. It further observed that
however, in exceptional cases where an act or omission
of an authority prejudicially affected a stranger or a
person who was not a party to the proceedings before the
authority, but had a substantial or genuine interest in the
subject matter of the proceedings, Courts may allow
applications under Article 226 to avoid miscarriage of
justice.
29. It was further observed by the Hon'ble Apex
Court in the case of Ghulam Quadir v. Special Tribunal,
(2002) 1 SCC 33, that rights under Article 226 of the
India Constitution can be enforced only by an aggrieved
person except in the case of where writ prayed for is
habeas corpus and quo warranto.
30. Furthermore, the Apex Court has opined in the
case of the Ayaayubkhan Noorkhan Pathna v. State of
Maharashtra & Ors. (2013) 4 SCC 465 that existence of
the legal right sought to be enforced is a condition
precedent for invoking the writ jurisdiction of the courts.
It further upheld the ratio enunciated in the case of Ravi
Yashwant Bhoir v. District Collector, Raigad & Ors. (2012)
4 SCC 407, that "under the garb of being a necessary
party, a person cannot be permitted to make a case as
that of general public interest. A person having remote
interest cannot be permitted to become a party in the lis,
as the person who wants to become a party in a case, has
to establish that he has a proprietary right which has
been or is threatened to be violated, for the reason that a
legal injury creates a remedial right in the injured
person."
31. In conclusion, where the locus of the petitioners
herein (who are the disputed shareholders of Allottee)
before the proceedings of the KIADB against the Allottee
in respect of the violations of the Lease Agreement dated
07.06.2007 was negated by virtue of the order dated
26.07.2023 passed by the Division Bench of this Court,
the petitioners herein do not have the locus standi to lay
a challenge to an order passed in pursuance of the order
dated 26.07.2023, under the garb of espousing public
48
interest by calling attention to State inaction qua unjust
enrichment. Furthermore, it is well settled that interested
persons are not entitled to file public interest litigations.
32. A bare perusal of the order impugned herein,
which grants an extension of a period of two years from
the date of obtaining of plan sanction to implement the
Project development over the scheduled property, reveals
that it enures to benefit of the petitioners herein,
provided they succeed in the pending litigations. It may
thus, be reasonably inferred that the instant petitions
have been preferred by the disputed shareholders of the
Allottee entity solely to gain unfair advantage, settle
personal scores and coerce the Allottee to arrive at a
settlement in respect of their dispute, which is currently
pending consideration before the Trial Court below.
Therefore, the petitioners cannot contend to have
suffered any legal injury and be allowed to seek a writ in
the nature of Certiorari to quash the order impugned
herein.
Accordingly, the petitions stand dismissed on the sole
ground of lack of locus standi."
(Emphasis supplied)
The coordinate Bench holds that a bare perusal at the impugned
order therein granting two years from the date of obtaining plan
sanction to implement the project over the schedule property
reveals that it enures to the petitioners herein, provided they
succeed in the pending litigation. Therefore, the coordinate Bench
holds that the instant petitions were filed by the disputed share
holders of the allottee entity solely to gain unfair advantage, settle
49
personal scores and coerce the allottee to arrive at a settlement in
respect of their dispute, which is currently pending consideration
before the trial Court. Thus, the coordinate Bench holds that the
petitioners cannot contend that they have suffered any legal injury,
which would allow them to seek a writ in the nature of certiorari to
quash the impugned order therein. The coordinate Bench considers
the entire spectrum of law qua the locus.
12. Writ Appeals are preferred in Writ Appeal Nos.1772 of
2024 c/w 1797 of 2024. In the writ appeals the grounds urged are
identical to what is now projected in the case at hand. The Division
Bench has passed an interim order in the said writ appeals. It reads
as follows:
"ORAL ORDER
(PER: HON'BLE THE CHIEF JUSTICE
MR. JUSTICE N. V. ANJARIA)
The Court had an occasion to pass the order on
20.01.2025 observing that having regard to the nature of the
disputes involved in these appeals and the subject matter
thereof, the parties may take instructions as to whether they
would opt for undergoing the mediation process to resolve the
disputes.
2. Statement of learned Senior Advocate Mr. C.K.
Nandakumar for the appellant was recorded that the appellant
was willing to opt for mediation. As learned Senior Advocate Mr.
K.G. Raghavan for respondent No.2 wanted to take instructions,
the two writ appeals were ordered to be posted today.
3. Today, it was stated by learned Senior Advocate for
respondent No.2 that respondent No.2 is also agreeable to go
for mediation for the purpose of resolution of the disputes.
Learned Senior Advocate for respondent No.2 however
submitted that the disputes which are referable and arise from
the proceedings of Original Suit No.234 of 2022 pending before
the Commercial suit should be made subject matter of
Mediation. Learned Senior Advocate for the appellant has no
objection who stated that the mediation may be confined to the
disputes involved in Original Suit No.234 of 2022.
4. In the second place, both the sides jointly submitted
that they may be permitted to request Hon'ble Mr. Justice
R.V.Raveendran, Former Judge, Supreme Court of India to act
as a private mediator on behalf of the parties. It will be
permissible for both the sides to extend a request to Hon'ble Mr.
Justice R.V.Raveendran in an appropriate manner, to act as a
mediator.
5. In view of the above, the subject matter as mentioned
above is referred to the mediation. Since the disputes primarily
are between the appellant and respondent No.2, the said two
parties shall engage themselves in mediation.
6. Learned advocates for the parties through their learned
Senior Advocates have further agreed that since they are
undertaking the process of mediation for resolving the dispute
as above, Original Suit No.234 of 2022 shall not proceed further
and that both the sides shall not take any precipitative action in
relation to the subject matter during the pendency of the
mediation. It is so directed in view to provide equitable and
congenial platform for the mediation process.
7. In addition to the above, the observations made in the
order dated 20.01.2025 inter alia that respondent No.2 shall
abide by all the conditions of the lease-cum-sale agreement
including Condition No.11(b) shall also operate.
Both the appeals are adjourned. They shall be listed next
upon a note filed by either of the parties before the Registry."
Mediation to resolve the dispute was directed by the Division Bench.
The mediation is said to have failed. The 2nd respondent then
applied before the Board seeking sub-letting of the property allotted
to it to the 3rd respondent. The Board permits and after the
permission sub-lease is entered into between the 3rd
respondent/Lam Research (India) Private Limited and the 2nd
respondent. The petitioners now challenge the same before this
Court.
13. If two circumstances were in favour of the petitioners, it
would have been altogether different. The judgment rendered by
this bench holding that the petitioners had locus is diluted by the
Division Bench. It is modified on a submission made by the Board
that it is willing to conduct an enquiry and two years extension is
granted to implement the project. The petitioners again challenged
the said communication before the coordinate Bench. The
coordinate Bench has clearly held that the petitioners have no locus
to challenge the private transaction between the Board and the 2nd
respondent. The said judgment is neither stayed nor reversed as on
today, albeit, the Division Bench has directed mediation for
settlement of dispute between the parties. Nonetheless, the
judgment rendered by the coordinate Bench, which is subsequent
to what was rendered by this bench would be binding upon this
Bench.
14. In the light of the entire spectrum of law considered by
the coordinate Bench qua locus, repeating those judgments in the
cases at hand would only bulk the subject order. The judgments
relied thereon are again pressed into service in the case at hand.
Therefore, all would depend upon the Division Bench's order
challenging the order of the coordinate Bench in the aforesaid writ
appeals. If the petitions are entertained notwithstanding the
judgment of the coordinate Bench, it would run foul of the settled
principle of judicial discipline that coordinate bench judgments are
binding on subsequent benches of equal or lesser strength. The
Apex Court in DR. SHAH FAESAL v. UNION OF INDIA1 -
elucidates the law on this issue as follows:
".... .... ....
23. This brings us to the question, as to whether a
ruling of a coordinate Bench binds subsequent coordinate
Benches. It is now a settled principle of law that the
decision rendered by a coordinate Bench is binding on the
subsequent Benches of equal or lesser strength. The
aforesaid view is reinforced in the National Insurance Co.
Ltd. v. Pranay Sethi [National Insurance Co. Ltd. v. Pranay
Sethi, (2017) 16 SCC 680 : (2018) 3 SCC (Civ) 248 : (2018) 2
SCC (Cri) 205] wherein this Court held that : (SCC pp. 713-14,
para 59)
"59.1. The two-Judge Bench in Santosh
Devi [Santosh Devi v. National Insurance Co. Ltd.,
(2012) 6 SCC 421 : (2012) 3 SCC (Civ) 726 : (2012) 3
SCC (Cri) 160 : (2012) 2 SCC (L&S) 167] should have
been well advised to refer the matter to a larger Bench
as it was taking a different view than what has been
stated in Sarla Verma [Sarla Verma v. DTC, (2009) 6
SCC 121 : (2009) 2 SCC (Civ) 770 : (2009) 2 SCC (Cri)
1002] , a judgment by a coordinate Bench. It is because
a coordinate Bench of the same strength cannot take a
contrary view than what has been held by another
coordinate Bench."
(emphasis supplied)
24. The impact of non-consideration of an earlier
precedent by a coordinate Bench is succinctly delineated
by Salmond [Salmond on Jurisprudence [P.J. Fitzgerald (Ed.),
12th Edn., 1966], p. 147.] in his book in the following manner:
"... A refusal to follow a precedent, on the other
hand, is an act of coordinate, not of superior,
jurisdiction. Two courts of equal authority have no
power to overrule each other's decisions. Where a
precedent is merely not followed, the result is not that
the later authority is substituted for the earlier, but that
2020 (4) SCC 1
the two stand side by side conflicting with each other.
The legal antinomy thus produced must be solved by the
act of a higher authority, which will in due time decide
between the competing precedents, formally overruling
one of them, and sanctioning the other as good law. In
the meantime the matter remains at large, and the law
uncertain."
(emphasis supplied)
25. In this line, further enquiry requires us to
examine, to what extent does a ruling of coordinate
Bench bind the subsequent Bench. A judgment of this
Court can be distinguished into two parts : ratio
decidendi and the obiter dictum. The ratio is the basic
essence of the judgment, and the same must be
understood in the context of the relevant facts of the
case. The principal difference between the ratio of a case,
and the obiter, has been elucidated by a three-Judge
Bench decision of this Court in Union of
India v. Dhanwanti Devi [Union of India v. Dhanwanti
Devi, (1996) 6 SCC 44] wherein this Court held that :
(SCC pp. 51-52, para 9)
"9. ... It is not everything said by a Judge while
giving judgment that constitutes a precedent. The only
thing in a Judge's decision binding a party is the
principle upon which the case is decided and for this
reason it is important to analyse a decision and isolate
from it the ratio decidendi. ... A decision is only an
authority for what it actually decides. ... The concrete
decision alone is binding between the parties to it, but it
is the abstract ratio decidendi, ascertained on a
consideration of the judgment in relation to the subject-
matter of the decision, which alone has the force of law
and which, when it is clear what it was, is binding. It is
only the principle laid down in the judgment that is
binding law under Article 141 of the Constitution."
(emphasis supplied)
26. The aforesaid principle has been concisely stated by
Lord Halsbury in Quinn v. Leathem [Quinn v. Leathem, 1901 AC
495 (HL)] in the following terms: (AC p. 506)
"... that every judgment must be read as
applicable to the particular facts proved, or assumed to
be proved, since the generality of the expressions which
may be found there are not intended to be expositions
of the whole law, but governed and qualified by the
particular facts of the case in which such expressions are
to be found. The other is that a case is only an authority
for what it actually decides."
(emphasis supplied)
27. Having discussed the aspect of the doctrine of
precedent, we need to consider another ground on which
the reference is sought i.e. the relevance of non-
consideration of the earlier decision of a coordinate
Bench. In the case at hand, one of the main submissions
adopted by those who are seeking reference is that, the
case of Sampat Prakash [Sampat Prakash v. State of J&K,
AIR 1970 SC 1118] did not consider the earlier ruling
in Prem Nath Kaul [Prem Nath Kaul v. State of J&K, AIR
1959 SC 749]."
(Emphasis supplied)
The aforesaid five Judge Bench judgment clearly draws as to when
and how the judgment rendered by the coordinate Bench would be
binding upon the subsequent benches of equal strength or
otherwise. Insofar as the judgments relied on by the learned senior
counsel for the petitioners, all of which need not bear any
consideration in the case at hand, as this Court is bound by what is
decided by the Coordinate Bench.
15. For the aforesaid reasons, on the score that the
petitioners do not have locus to call in question every action
between the 1st respondent/Board and the 2nd respondent/allottee,
for the very reasons rendered by the coordinate Bench, the
petitions are to be rejected.
16. If the petitioners are found wanting in locus, it is settled
principle of law that they cannot be heard on merits. In that light,
the petitions stand rejected.
Consequently, interim order of any kind subsisting, shall
stand dissolved.
Sd/-
(M.NAGAPRASANNA)
JUDGE
bkp
CT:MJ
