Karnataka High Court
M/S S L V Saw Mills And Wood Industries vs Karnataka Industrial Areas … on 30 June, 2025
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 30TH DAY OF JUNE, 2025
BEFORE
THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ
WRIT PETITION NO. 25081 OF 2016 (GM-KIADB)
BETWEEN
M/S SLV SAW MILLS AND WOOD INDUSTRIES
# 325/1, MYSORE ROAD,
BANGALORE - 560039
REP BY ITS PROPRIETOR MR N VINAY GUPTA
...PETITIONER
(BY SRI. PRAMOD NAIR SR. ADVOCATE FOR
SMT. VEENA J. KAMATH., ADVOCATE)
AND
1. KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD
REPRESENTED BY ITS CEO AND EXECUTIVE MEMBER
# 49, 4TH & 5TH FLOORS 'EAST WING'
KHANIJA BHAVAN, RACE COURSE ROAD,
BENGALURU - 560001
Digitally signed
by SHWETHA
RAGHAVENDRA 2. KARNATAKA UDYOG MITRA
Location: HIGH REPRESENTED BY MANAGING DIRECTOR
COURT OF
KARNATAKA 3RD FLOOR, KAHNIJA BHAVAN (SOUTH WING)
NO 49, RACE COURSE ROAD
BANGALORE - 560001
3. MAGTEL POWER SYSTEMS PRIVATE LIMITED
'LATHA ESTATE' SY NO 52/2 I MAIN ROAD,
PAVAMANA NAGAR, J P NAGAR 8TH PHASE,
BENGALURU - 560076
4. M/S. PARVATHI ENTERPRISES
PICHAKUNTARAPALYA,
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SHANUMANGALA POST,
BIDADI HOBLI,
RAMANAGRAM TALUK & DISTRICT
5. M/S. RAJRAJESHWARI ENGINEERING WORKS
HOUSE NO.194,
SHYANUMANGALA VILLAGE
RAMANAGARM DISTRICT
.... RESPONDENTS
(BY SRI. P.V. CHANDRA SHEKAR., ADVOCATE FOR R1;
SRI. KIRAN V RON., ADVOCATE FOR R2;
SRI. UDAY HOLLA., SR. ADVOCATE FOR
SRI. VINEETH REDDY., ADVOCATE FOR R3;
SRI. T.P. VIVEKANANDA., ADVOCATE FOR R4;
SRI. ANJANEYA A.B., ADVOCATE FOR R5)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE
CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI OR
ANY OTHER WRIT QUASHING THE IMPUGNED CANCELLATION LETTERS
BEARING NO. IADB/HO/ALLOT/AS/18578/4595/15-16 DATED 6TH JULY 2015
(ANNEXURE-N) AND NO. IADB/HO/ALLOT/AS/18578/12776/15-16 DATED
11TH DECEMBER 2015 (ANNEXURE-V) AND ETC.
THIS WRIT PETITION COMING ON FOR ORDERS AND HAVING BEEN
RESERVED FOR ORDERS ON 24.03.2025, THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR JUSTICE SURAJ GOVINDARAJ
CAV ORDER
1. The Petitioner is before this Court seeking for the
following reliefs:
i. A writ of certiorari or any other writ quashing
the impugned cancellation letters bearing no.
IADB/HO/ALLOT/AS/18578/4595/15-16 dated
6th July 2015 (Annexure-N) and No.
IADB/HO/ALLOT/AS/18578/12776/15-16 dated
11th December 2015 (Annexure-V)
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ii. Direction to the R1 to restore the allotment of 6
acres as per letter bearing No.
IADB/HO/ALLOT/AS-2/18578/1114/09-10 dated
14th December 2009 (Annexure-C) on the terms
and conditions as mentioned in the said
Allotment Letter.
iii. As a consequence of the above, declare that any
lease cum sale agreement that is entered into
by the 3rd Respondent with the 1st Respondent
as void ab initio.
iv. Grant such other further reliefs that may be
prayed for during the course of the oral
arguments with the kind leave of this Hon'ble
Court, on obtaining the documents from the 1st
and 2nd Respondent under the Right to
Information Act.
2. The Petitioner claims to be a proprietary concern
established for manufacturing and dealing with
wooden furniture and allied wood products in the
year 1908, with the fourth generation continuing the
business. The Petitioner wanted to expand its
business using the latest technology. The Karnataka
Udyog Mitra (hereinafter for brevity referred to as
'KUM') had held a global investors' meet where the
Petitioner submitted its project report to establish an
industry for manufacturing wooden furniture on six
acres of land in Bidadi Industrial Area, which came to
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be approved by the Single Window Agency on
12.11.2009.
3. The Land Audit Committee took note of the land
utilisation details of the Petitioner and submitted it to
the KUM and agreed to consider the allotment of six
acres in Plot Nos.34, 35 and 36 of Bidadi's IInd
Phase Industrial Area and directed the Petitioner to
make payment of the balance amount of
Rs.3,74,40,000/-.
4. The Petitioner thereafter arranged finances to make
payment. Accordingly, on 08.03.2010, the Canara
Bank had sanctioned a loan of Rs. 8,07,00,000/- for
the cost of land and construction of the building, as
also purchase of machinery.
5. The Petitioner, on inspection of the land, found that
the area was yet to be developed, there were certain
problems unsolved and as a result withheld the
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payment of the balance amount. The Respondent-
KIADB, vide its letter dated 27.09.2010, on its own
without any request made by the Petitioner, granted
extension of time for payment of the balance amount
with interest at the rate of 12.75% from 14.06.2010.
6. The Petitioner on 23.10.2010 wrote to the KIADB
about the lack of development in the allotted land,
reiterating that the funds were available and would
be so paid once the development was completed by
the KIADB. Instead of replying to the allegations
made by the Petitioner, the KIADB, vide its letter
dated 23.10.2010, granted an extension of 10 days'
time to make payment of the balance amount. The
bank also wrote to the KIADB on 29.11.2010, stating
that the balance amount was ready to be paid, and
called upon the Respondent No.1 to arrange for a site
visit to complete some formalities.
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7. The Petitioner and Chief Manager of Canara Bank are
stated to have visited the plots on 05.04.2011, when
the plots could not be located. Further, they also
found that agricultural activities were being carried
out in many of the lands and as such, these were
brought to the notice of KIADB and KUM vide its
letter dated 05.04.2011. The Petitioner contended
that the Petitioner had invested in the project, as
well as the plant and machinery, had called upon
KIADB and KUM to give a status report on the
allotted plot vide its letter dated 05.04.2011.
8. The KIADB vide its letter dated 06.07.2011, again
granted an extension of time up to 16.08.2011 to
make payment of the monies, but had withdrawn the
request/demand for interest. The Petitioner vide its
letter dated 25.09.2012, brought to the notice of the
KIADB and KUM that there were agricultural activities
being carried out and requested the KIADB to make
available the said land. On 19.03.2013, the KIADB
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acknowledged that there were certain issues related
to the allotted lands, but did not make any
commitment on when those issues would be sorted
out.
9. The Petitioner thereafter submitted various
representations to the KIADB, seeking a status
report on the said lands. No such status report was
furnished. However, on 06.07.2015, the KIADB
cancelled the allotment in favour of the Petitioner on
the ground that the Petitioner had failed to make
payment of the balance amount within the stipulated
time period. In reply, the Petitioner on 10.07.2015
wrote to the KIADB and KUM that the cancellation
was uncalled for; the amounts were already
sanctioned by the Bank and were available with the
Bank to be processed for payment immediately. It is
only on account of the development works not being
done by the KIADB that the matter could not be
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resolved. The Petitioner again, on 17.07.2015, wrote
to the KIADB about the aforesaid issues.
10. No action having been taken, it is alleged that the
Petitioner was shocked to learn that the KIADB had
allotted two acres of land from the said plots to
Respondent No.3-Magtel Power Systems Private
Limited (hereinafter referred to as 'Magtel') vide
allotment letter dated 16.07.2015. The Petitioner
approached the Chief Secretary, Government of
Karnataka, vide letter dated 28.07.2015. The Chief
Secretary made a note on the letter stating that the
cancellation by Respondent No.1- KIADB was sudden
and it needs to be verified, and further directed that
there should be no allotment to any other company
in the plots allotted to the Petitioner until the matter
was resolved.
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11. The KIADB breached the direction of the Chief
Secretary and gave the luxury of choice to Magtel to
choose from in Plot Nos. 34, 35 and 36 as to where
the said 2 acres is to be allotted. Subsequently, the
KIADB, vide its letter dated 03.08.2015, withdrew
the cancellation dated 06.07.2015. However, reduced
the allotment from 6 acres to 3.75 acres for a sum of
Rs.01,98,90,000/- with the terms and conditions of
the allotment letter dated 14.12.2009 being
unaltered.
12. On 11.12.2015, the KIADB cancelled the allotment
letter dated 03.08.2015 on the ground that the
Petitioner was not interested in implementing the
project. Thereafter, the Petitioner made several
representations for the restoration of the allotment of
6 acres of land to the Petitioner. The KIADB, vide its
letter dated 22.03.2016, demanded the return of the
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original allotment dated 14.12.2009 so as to refund
the amounts paid by the Petitioner.
13. Being suspicious about the conduct of the KIADB, the
Petitioner filed an application under the Right to
Information Act to inspect the files relating to the
aforesaid Plot Nos.34, 35 and 36. A Partial inspection
was made available, and on such inspection, it was
found that there were certain disputes ongoing on
the plots allotted to the Petitioner by the land losers,
alleging that no compensation was paid by the
KIADB.
14. The records indicated that there are no developments
in the plots allotted to the Petitioner. No roads or
drains were constructed. The land losers prevented
the Petitioner from entering their allotted plots and
stopped the KIADB from undertaking any
development work. It is only in the month of January
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2015 that the land losers' dispute was resolved, and
that the land losers were compensatorily allotted the
possession of Plot Nos. 34, 35 and 36 of the said
project.
15. MAGTEL-Respondent No.3 was allotted Plot Nos.23 at
the Bidadi Industrial Area. As the KIADB did not have
the land to give possession to MAGTEL, an
alternative plot was allotted to MAGTEL, in the plot
allotted to the Petitioner on 16.07.2015, the
possession certificate was issued on 28.08.2015, and
a lease-cum-sale agreement was executed on
21.09.2015. It is in that background that the
Petitioner is before this Court seeking for the
aforesaid reliefs.
16. Sri. Pramod Nair, learned Senior Counsel appearing
for the Petitioner, would submit that:
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16.1. The land allotted to the Petitioner in Plot
Nos.34, 35 and 36 was never developed. The
Bank that had sanctioned the loan did not make
payment of the amounts already sanctioned to
the KIADB on account of the development work
not having happened. The Bank had
categorically indicated that it would make
payment of the cost of the land to the Board
upon completion of the development work and
necessary documentation. The KIADB not
having done the needful, the Bank did not
make payment of the monies.
16.2. The KIADB has never addressed these issues
raised by the Petitioner or the Bank, but has
only extended time for payment. There is an
acknowledgement on the part of the KIADB on
19.03.2013 that there are issues to be resolved
as regards the lands allotted to the Petitioner.
Despite the Chief Secretary having directed that
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no allotment is to be made, the KIADB has
gone ahead with allotment of portions of the
property previously allotted to the Petitioner.
Having done so, an allotment letter dated 03-
08-2015 was issued reducing the allotted area
of the Petitioner to 3.75 acres.
16.3. There is a reciprocal obligation on the part of
the KIADB to provide infrastructure facilities. It
is only after the infrastructure facilities are
developed that the Respondent No.1 could allot
plots. In the present case, an allotment has
been made without the KIADB developing the
industrial estate.
16.4. In one another proceedings in WP
No.50659/2012 filed by M/s.Ambience
Infrastructure, this Court has accepted that
there is no development which has happened.
The said Ambience Infrastructure having
contended so in their petition. There is no
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obligation on the part of the Petitioner to make
payment of the balance amount until KIADB
has complied with its obligation in terms of
Section 51 of the Contract Act, 1872.
16.5. He relies upon the decision of the Hon'ble Apex
Court in the case of Nathulal vs.
Phoolchand1, more particularly para no. 12
thereof, which is reproduced hereunder for easy
reference:
12. In considering whether a person is willing to perform
his part of the contract the sequence in which the
obligations under a contract are to be performed must be
taken into account. The argument raised by Mr Shroff that
Nathulal was bound to perform the two conditions only
after the amount of Rs 21,000 was paid is plainly contrary
to the terms of the agreement. By virtue of Section 4 of
the Transfer of Property Act the chapters and sections of
the Transfer of Property Act which relate to contracts are to
be taken as part of the Indian Contract Act, 1872. If,
therefore, under the terms of the contract the obligations
of the parties have to the performed in a certain sequence,
one of the parties to the contract cannot require
compliance with the obligations by the other party without
in the first instance performing his own part of the contract
which in the sequence of obligations is performable by him
earlier.
1
(1969) 3 SCC 120
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16.6. By relying on Nathulal's case, he submits that
the obligations of the parties have to be
performed in a certain sequence. One of the
parties to the contract cannot require
compliance with the obligation of the other
party without, in the first instance, performing
their own part of the contract. Thus, the KIADB
could not have insisted that the Petitioner make
payment of the balance amount without the
layout having been developed by the KIADB.
16.7. He relies upon the decision of this Court in the
case of M/s. Kapsi Power Products vs. Chief
Executive Officer, KIADB2, more particularly
paras nos. 10 and 13, thereof which are
reproduced hereunder for easy reference:
10. At the time of final hearing, it was represented by the
learned counsel for the petitioner that the construction of
the building is complete and that the plant is yet to be
commissioned. It is well nigh impossible for any
industrialist to take up any development work in an
2
WP 16982/2017
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industrial plot, without the basic infrastructure, such as,
electricity and water. It is difficult for an individual to
procure a dedicated electrical line or a water line for its
industrial plot. The respondent No.1 which is endowed with
statutory duty, to promote industrial growth, and thereby
generate employment, cannot disown its responsibility in
providing the basic infrastructure. It is bound to supervise
at every stage, the progress of the industrial unit and
attempt to remedy any issue that retards the
implementation of industrial unit. It would be of no benefit
to an industrialist, to keep an industrial plot idle, as he
would get title to the property only after the project is
commissioned. This is therefore, a classic case of
Governmental apathy, putting to risk the interest of an
individual and retarding industrial growth.
13. Consequently, this writ petition is allowed the
impugned order bearing No.KIADB/HO/ALLOT/17936/
19302/2016-17 dated 17.03.2017 passed by the
respondent No.1 to the extent of demanding a sum of
Rs.1,51,37,002/- from the petitioner is quashed. The
petitioner is granted one year time from today to
commission the unit and start commercial production. The
respondent No.1 to 3 are directed to provide all necessary
assistance to the petitioner for implementation of the
project, failing which, the concerned officer shall personally
be held liable for any delay in implementation of the
project. If the unit is not commissioned within one year,
the respondents are at liberty to take such measures as
are available in law.
16.8. By relying on Kapsi Power Products' case, he
submits that there is a statutory duty on the
part of the KIADB to promote industrial growth
and generate employment. The Court in that
case found that there was apathy on the part of
the Government, putting at risk the interest of
an individual regarding industrial growth, and
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as such quashed the order of the KIADB
demanding certain amounts from the allottee
therein and directed the KIADB to provide all
necessary assistance for implementation of the
project. He submits that the interest of the
Petitioner and the investment made by the
Petitioner have also been put at risk in the
present matter, and therefore, directions have
to be issued to the KIADB to cooperate with the
Petitioner in the implementation of its project.
16.9. There is an arbitrary cancellation of the
allotment of the Petitioner by the KIADB and an
illegal allotment made to Respondent No.3.
Initially, the KIADB having informed
Respondent No.3 that there is no land available,
ought not to have allotted the land of the
Petitioner to Respondent No.3. He relies on the
documents produced by filing an application
under the Right to Information Act to contend
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that there is an admission made by the KIADB
of issues relating to the said land which is being
looked into personally by the CEO and
Executive Member, KIADB as per the Principal
Secretary's email dated 09.08.2012. The
Principal Secretary, vide email dated
08.01.2014, has written to Respondent No.3-
MAGTEL that he has spoken to the CEO and
even KIADB and is working on the request.
MAGTEL wrote to the KIADB on 29.04.2015
stating that there are vacant plots in Bidadi
Industrial Area Phase II, like Plot Nos . 34, 35
and 36, and requested the allotment of one of
the plots.
16.10. As on 29.04.2015, when the said email was
written, the allotment of the Petitioner had not
been cancelled. Thus, the question of MAGTEL
contending that there are vacant plots which
could be allotted was completely misconceived.
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Immediately thereafter, the Petitioner's
allotment was cancelled on 06.07.2015, and a
portion of the plot was allotted to Respondent
No.3-MAGTEL, and in this regard, he relies on
the note sheet dated 08.07.2015.
16.11. Petitioner vide his letter dated 10.07.2015 had
objected to the cancellation of the allotment
made to the Petitioner, which was not
considered by the KIADB. There is an obligation
on the part of the KIADB to consider the same
in terms of Clause 9 of the allotment letter
made to the Petitioner, which casts an
obligation on the part of the KIADB to restore
allotment if a request is made within 30 days.
Thus, he submits that the allotment made to
MAGTEL was in undue haste and in
contravention of law and facts.
16.12. His further submission is that KIADB has
arbitrarily and illegally cancelled the Petitioner's
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allotment to unduly favour Respondents No.4
and 5, namely, Parvati Enterprises (hereinafter
referred to as 'Parvati'), and Rajarajeshwari
Engineering Works (hereinafter referred to as
'Rajarajeshwari') respectively. His contention
is that Parvati and Rajarajeshwari claim to be
land losers. In this regard, he refers to the note
sheet dated 19.08.2013, submitted by Sri.
Puttavirayya, the owner of Sy. No. 95 of Shunya
Mangala Village, had taken compensation for
the lands of 5 acres 10 guntas out of 7 acres 10
guntas acquired, the land owner and his son
were troubling the entrepreneurs of Plot
Nos.33, 37B, 37A, 36A, 36, 34 and 35.
16.13. The allottee of Plot No.33 had approached the
Court. It was on that basis that it was decided
by the Board in its 308th meeting held on
25.07.2011 to consider the request of the
landlords for allotment on priority basis and if
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the land is not available, as and when vacant
land is available by way of cancellation,
resumption or surrendering, the same to be
allotted on priority basis to the land losers.
Thus, he submits that the KIADB has sought to
favour the land losers by allotting the land on
account of their having created problems for
the allottees by cancelling the allotment made
to the Petitioner on 06.07.2015.
16.14. This allotment made to Respondents No.4 and
5, is even prior to the cancellation of the
Petitioner's allotment, since the same has been
made on 23.01.2015, where the cancellation
occurred on 06.07.2015. The allotment made to
Respondent No.5 on 27.05.2015 was also made
prior to the cancellation of the allotment of the
Petitioner on 06.07.2015. He, therefore,
submits that the writ petition is required to be
allowed.
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17. Sri. P.V. Chandrasekhar, learned counsel appearing
for the KIADB, would submit that;
17.1. The writ petition is liable to be rejected on
account of delay and laches. The cancellation
order was passed on 06.07.2015, and the Writ
Petition was filed on 25.04.2016, nearly a year
after the cancellation. MAGTEL has been
allotted the plot on 16.07.2015, possession
handed over on 28.08.2015 and lease-cum-sale
agreement executed on 21.09.2015; third-party
rights have been created, and the Petitioner
cannot agitate his rights thereafter.
17.2. He submits that the Petitioner has only paid
20% of the cost of the land from the year 2010,
the balance 80%, amounting to Rs.
03,74,40,000/ was not paid, despite several
extensions of time being granted by the KIADB.
The allotment having been cancelled on
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06.07.2015, the Petitioner had requested some
more time to pay the amount and requested
that the cancellation order be recalled.
Considering the said request, the Petitioner was
issued a fresh allotment for 3.75 acres at a cost
of Rs.01,98,90,000/- and an extension of 15
days' time was granted to make payment of the
balance amount together with interest at
12.75%. This amount was also not remitted by
the Petitioner and hence, the second allotment
made was also cancelled on 11.12.2015.
17.3. Thus, he submits that whether the loan was
sanctioned or not is immaterial so long as the
Petitioner did not make payment of the
amounts. It is for the Petitioner to take up the
same with the banker, and not hold the KIADB
responsible for it.
17.4. Insofar as the allegation that no amenities are
provided, he submits that the same is a false
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statement. All the amenities have been
provided, the area has been developed, and
roads have been laid. The respondent No.3-
MAGTEL, on allotment, has put up construction,
which indicates that the roads are available.
The Petitioner's contention regarding the non-
development of the industrial area is a self-
serving statement that is not based on any
logical basis.
17.5. The Petitioner has not availed of the many
opportunities provided by KIADB in extending
the time to make payment of the monies. One
M/s.Ambience Refrigeration Private Limited,
which had been allotted Plot No. 33, took
possession on 17.11.2011, and a lease-cum-
sale agreement was executed on 12.01.2012, in
furtherance of which a plan sanction was
obtained and the construction of the factory
was completed.
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17.6. His further contention is that another
neighbouring allottee M/s.Manyata Impex
Private Limited, which had been allotted Plot
No.37-B, has also put up construction of the
factory. The neighbours having put up
construction, the claim of the Petitioner that
there is no access to the property, or that the
area is not developed, is completely
misconceived. His contention is that KIADB has
complied with all the terms and conditions. It is
the Petitioner who has not complied with its
obligations; the payments due by the Petitioner
have not been made. Even though the extent
was reduced, the payments towards the
reduced extent were also not made. The
Petitioner, having accepted the modified
allotment letter, cannot now seek
implementation and or enforcement of the
earlier allotment.
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17.7. He submits that the plots in question are carved
out of land bearing Sy.Nos.95 and 213 of
Shunyamangala Village, Bidadi Hobli,
Ramnagara Taluk. Final notification having been
issued on 19.11.2007 under subsection (4) of
Section 28 of the KIADB Act, the land stood
vested with the State Government free of all
encumbrances. The said lands were handed
over by the Special Land Acquisition Officer
(hereinafter for brevity referred to as "SLAO")
to KIADB on 12.01.2009, and thereafter, it is
the KIADB who is in possession of the property.
Insofar as land in Sy.No.95 is concerned, the
landowner Sri. Eeramadaiah has been paid
compensation for 6 acres 30 guntas of land.
The land in Sy.No.213 is owned by Sri.Ramaiah,
Sri.Ramaswamy, Sri.Kenchaiah and
Sri.Doddaputtaiah who have also been paid
compensation, which are detailed as under:
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3. It is submitted that, the land owner of
Sy.No.95 of Shanumangala Sri. Eeramadaih has
been paid compensation for 06 Acres 30 Guntas,
as follows:
i) On 21.02.2011 a sum of Rs. 2,10,00,000 (Two
Crores Ten Lakhs Only) for an extent of 5 Acres
10 Guntas.
ii) On 21.06.2011 a sum of Rs. 6,10,475 (Rupees
Six Lakhs Ten Thousand Four Hundred and
Seventy Five Only) towards Malkies.
iii) On 10.01.2012 a sum of Rs.39,82,792
(Rupees Thirty Nine Lakhs Eighty Two Thousand
Seven Hundred Ninety Two only)
iv) On 28.09.2013 a sum of Rs.6,00,000/-
(Rupees Six Lakhs Only), of an extent of 01 Acre
20 Guntas and he sought for allotment of balance
extent of land i.e., Plot No. 34-P1.
4. It is submitted that the land owners of Survey
number 213 are Sriyuths Ramaiah, Ramaswamy,
Kenchaiah and Doddupattaiah have paid the
compensation of their respective exents in the
following manner:
i) On 08.04.2010 a sum of Rs.95,75,000/-
(Rupees Ninety Five Lakhs Seventy Five
Thousand Only) to Sri. Ramaiah for lands in
Survey number 145, 147/2 and 213.
ii) On 26.02.2012 a sum of Rs.1,64,433 (Rupees
One Lakh Sixty Four Thousand Four Hundred and
Thirty Three) to Sri. Ramaiah for lands in Survey
numbers 147 and 213 (Towards Malkies).
iii) On 03.01.2012 a sum of Rs.62,374 (Rupees
Sixty Thousand Three Hundred and Seventy Four
Only) to Sri. Ramaswamy for lands in Survey
numbers 145 and 213 (Towards Malkies).
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iv) On 27.08.2012 a sum of Rs.33,110 (Rupees
Thirty Thousand One Hundred and Ten) to Sri.
Ramaswamy for lands in Survey number 145 and
213.
v) On 14.09.2010 a sum of Rs.1,14,059 (Rupees
One Lakh Fourteen Thousand and Fifty Nine) to
Sri. Ramaswamy for lands in Sy.No.145 and 213.
vi) On 08.04.2010 a sum of Rs.95,75,000
(Rupees Ninety Five Lakhs Seventy Five
Thousand) to Sri. Kenchaiah for lands in Survey
numbers 145, 147/2 and 213.
vii) On 21.12.2010 a sum of Rs.62,961 (Rupees
Sixty Two Thousand Nine Hundred and Sixty One)
to Sri. Kenchaiah for lands in Survey Numbers
147/2 and 213.
viii) On 29.12.2010 a sum of Rs. 1,07,821
(Rupees One Lakh Seven Thousand Eight
Hundred Twenty One) to Sri. Kenchaiah for lands
in Survey numbers 145, 147/2 and 213.
ix) On 25.06.2010 a sum of Rs.1,91,50,000
(Rupees One Crore Ninety One Lakhs Fifty
Thousand) to Sriyuths Doddaputtaiah (Rs.
63,83,344), Kencharamaiah (Rs. 63,83,343) and
Ramaswamy (Rs. 63,83,333) for lands in Survey
numbers 145, 147/2 and 213.
17.8. It is after the completion and formation of the
industrial plots that an allotment letter was
issued by the KIADB to the Petitioner. He again
reiterates that the entire payment has not been
made. The other neighbouring plot owners have
put up construction and are operating the
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industries. It is only the Petitioner who has not
done so. The Petitioner cannot claim any
benefit in relation thereto.
17.9. The Petition not making out any grounds is
required to be dismissed.
18. Sri. Udaya Holla, learned senior counsel appearing
for MAGTEL submits that:
18.1. The petition is required to be dismissed on
account of delay and laches.
18.2. The Petitioner had suppressed the fact that the
original allotment of 6 acres was modified on
31.07.2013 to 3.75 acres. This suppression
goes to the root of the matter inasmuch as
having accepted the modification and reduction,
the Petitioner has chosen to agitate his rights
over the entire land, which is not permissible.
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18.3. In this regard, he relies upon the decision of the
Hon'ble Apex Court in the case of ABCD v.
Union of India3, more particularly para no. 17
thereof, which is reproduced hereunder for easy
reference:
17. In K.D. Sharma v. SAIL [K.D. Sharma v. SAIL,
(2008) 12 SCC 481] it was observed: (SCC p. 493,
para 39)
"39. If the primary object as highlighted in
Kensington Income Tax Commrs. [R. v. General
Commissioners for Purposes of Income Tax Acts For
District of Kensington, ex p Princess Edmond De
Polignac, (1917) 1 KB 486 : 86 LJKB 257 : 116 LT
136 (CA)] is kept in mind, an applicant who does not
come with candid facts and "clean breast" cannot hold
a writ of the court with "soiled hands". Suppression or
concealment of material facts is not an advocacy. It is
a jugglery, manipulation, manoeuvring or
misrepresentation, which has no place in equitable
and prerogative jurisdiction. If the applicant does not
disclose all the material facts fairly and truly but
states them in a distorted manner and misleads the
court, the court has inherent power in order to
protect itself and to prevent an abuse of its process to
discharge the rule nisi and refuse to proceed further
with the examination of the case on merits. If the
court does not reject the petition on that ground, the
court would be failing in its duty. In fact, such an
applicant requires to be dealt with for contempt of
court for abusing the process of the court."
18.4. By relying on ABCD v. Union of India, he
submits that a person who approaches the
3
(2020) 2 SCC 52
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Court must disclose all material facts, even if
they are against him. He cannot pick and
choose the facts he likes to disclose. Having
suppressed the above relevant fact, the petition
is required to be dismissed.
18.5. He relies on the decision of the Hon'ble Apex
Court in the case of K.D. Sharma v. Steel
4
Authority of India Limited and others ,
more particularly para nos. 38 and 39 thereof
which are reproduced hereunder for easy
reference:
38. The above principles have been accepted in our legal
system also. As per settled law, the party who invokes the
extraordinary jurisdiction of this Court under Article 32 or of
a High Court under Article 226 of the Constitution is
supposed to be truthful, frank and open. He must disclose
all material facts without any reservation even if they are
against him. He cannot be allowed to play "hide and seek"
or to "pick and choose" the facts he likes to disclose and to
suppress (keep back) or not to disclose (conceal) other
facts. The very basis of the writ jurisdiction rests in
disclosure of true and complete (correct) facts. If material
facts are suppressed or distorted, the very functioning of
writ courts and exercise would become impossible. The
petitioner must disclose all the facts having a bearing on the
relief sought without any qualification. This is because "the
court knows law but not facts".
4
(2008) 12 SCC 481
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39. If the primary object as highlighted in Kensington
Income Tax Commrs. [(1917) 1 KB 486 : 86 LJKB 257 : 116
LT 136 (CA)] is kept in mind, an applicant who does not
come with candid facts and "clean breast" cannot hold a writ
of the court with "soiled hands". Suppression or
concealment of material facts is not an advocacy. It is a
jugglery, manipulation, manoeuvring or misrepresentation,
which has no place in equitable and prerogative jurisdiction.
If the applicant does not disclose all the material facts fairly
and truly but states them in a distorted manner and
misleads the court, the court has inherent power in order to
protect itself and to prevent an abuse of its process to
discharge the rule nisi and refuse to proceed further with
the examination of the case on merits. If the court does not
reject the petition on that ground, the court would be failing
in its duty. In fact, such an applicant requires to be dealt
with for contempt of court for abusing the process of the
court.
18.6. By relying on K.D. Sharma's case , he again
contends that a person approaching the Court
must disclose all material facts.
18.7. He submits that the Petitioner has been
approbating and reprobating inasmuch as it is
contended that the area has not been
developed. On the other hand, the Petitioner is
willing to take the allotment by challenging the
allotment made in favour of Respondent No.3.
If the stand of the Petitioner is that the area
has not been developed, the question of the
Petitioner accepting the allotment would not
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arise. Otherwise, the fact that the Petitioner is
willing to take the allotment after the same has
been made in favour of Respondent No.3, by
not having paid the due amounts for more than
5 years, indicates the mala fides on part of the
Petitioner on account of the continuous
approbating and reprobating on the allotment.
In this regard, he relies upon the judgment of
the Hon'ble Apex Court in the case of Cauvery
Coffee Traders, Mangalore vs. Hornor
Resources (International) Co. Ltd.,5 more
particularly para nos. 34 and 35 thereof, which
are reproduced hereunder for easy reference:
34. A party cannot be permitted to "blow hot and
cold", "fast and loose" or "approbate and reprobate".
Where one knowingly accepts the benefits of a
contract or conveyance or an order, is estopped to
deny the validity or binding effect on him of such
contract or conveyance or order. This rule is applied
to do equity, however, it must not be applied in a
manner as to violate the principles of right and good
conscience. (Vide Nagubai Ammal v. B. Shama Rao
[AIR 1956 SC 593] , CIT v. V.MR.P. Firm Muar [AIR
1965 SC 1216] , Maharashtra SRTC v. Balwant
Regular Motor Service [AIR 1969 SC 329] , P.R.
Deshpande v. Maruti Balaram Haibatti [(1998) 6 SCC
5
(2011) 10 SCC 420
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507 : AIR 1998 SC 2979] , Babu Ram v. Indra Pal
Singh [(1998) 6 SCC 358 : AIR 1998 SC 3021] ,
NTPC Ltd. v. Reshmi Constructions, Builders &
Contractors [(2004) 2 SCC 663 : AIR 2004 SC 1330]
, Ramesh Chandra Sankla v. Vikram Cement [(2008)
14 SCC 58 : (2009) 1 SCC (L&S) 706 : AIR 2009 SC
713] and Pradeep Oil Corpn. v. MCD [(2011) 5 SCC
270 : (2011) 2 SCC (Civ) 712] .)
35. Thus, it is evident that the doctrine of election is
based on the rule of estoppel--the principle that one
cannot approbate and reprobate inheres in it. The
doctrine of estoppel by election is one of the species
of estoppels in pais (or equitable estoppel), which is
a rule in equity. By that law, a person may be
precluded by his actions or conduct or silence when
it is his duty to speak, from asserting a right which
he otherwise would have had.
18.8. By relying on Cauvery Coffee Trader's case,
he submits that one cannot approbate and
reprobate in a manner similar to blowing hot
and cold, when one, with all knowledge and
judgement, consents to a contract, he then
cannot deny the binding nature of the
instrument upon him. This rule applies insofar
as equitable estoppel is concerned. The
Petitioner, having changed his stance multiple
times and delayed on payments on multiple
occasions, invariably warrants the rule of
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equitable estoppel to be applied and thus,
cannot assert a claim of an existing right to
avail allotment.
18.9. He relies upon the judgment of the Hon'ble
Apex Court in the case of Rajasthan State
Industrial Development & Investment
Corporation and another v. Diamond &
Gem Development Corporation Limited and
another, 6 more particularly, para nos. 15 and
16 thereof, which are reproduced hereunder for
easy reference:
15. A party cannot be permitted to "blow hot-blow
cold", "fast and loose" or "approbate and reprobate".
Where one knowingly accepts the benefits of a
contract, or conveyance, or of an order, he is
estopped from denying the validity of, or the binding
effect of such contract, or conveyance, or order upon
himself. This rule is applied to ensure equity,
however, it must not be applied in such a manner so
as to violate the principles of what is right and of
good conscience. [Vide Nagubai Ammal v. B. Shama
Rao [AIR 1956 SC 593] , CIT v. V. MR. P. Firm Muar
[AIR 1965 SC 1216] , Ramesh Chandra Sankla v.
Vikram Cement [(2008) 14 SCC 58 : (2009) 1 SCC
(L&S) 706 : AIR 2009 SC 713] , Pradeep Oil Corpn. v.
MCD [(2011) 5 SCC 270 : (2011) 2 SCC (Civ) 712 :
AIR 2011 SC 1869] , Cauvery Coffee Traders v.
Hornor Resources (International) Co. Ltd. [(2011) 10
SCC 420 : (2012) 3 SCC (Civ) 685] and V.
6
(2013) 5 SCC 470
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Chandrasekaran v. Administrative Officer [(2012) 12
SCC 133 : (2013) 2 SCC (Civ) 136 : JT (2012) 9 SC
260] .]
16. Thus, it is evident that the doctrine of election is
based on the rule of estoppel--the principle that one
cannot approbate and reprobate is inherent in it. The
doctrine of estoppel by election is one among the
species of estoppels in pais (or equitable estoppel),
which is a rule of equity. By this law, a person may be
precluded, by way of his actions, or conduct, or
silence when it is his duty to speak, from asserting a
right which he would have otherwise had.
18.10. Diamond & Gem's case too relies upon the
same observation made in Cauvery Coffee
Traders' case, clearly establishing the stand
and view of the Hon'ble Apex Court as regards
the application of the doctrine of equitable
estoppel.
18.11. He relies upon the judgment of the Hon'ble
Apex Court in the case of State of Uttar
Pradesh vs. Karunesh Kumar and others7,
more particularly para no. 22 thereof, which is
reproduced hereunder for easy reference:
22. In the case at hand, the un-selected candidates
want to press into service a part of the 1978 Rules
7
2022 SCC Online SC 1706
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while accepting the 2015 Rules. Such a selective
adoption is not permissible under law, as no party
can be allowed to approbate or reprobate, as held by
this Court in Union of India v. N. Murugesan, (2022)
2 SCC 25:
"Approbate and reprobate
26. These phrases are borrowed from the Scots law.
They would only mean that no party can be allowed
to accept and reject the same thing, and thus one
cannot blow hot and cold. The principle behind the
doctrine of election is inbuilt in the concept of
approbate and reprobate. Once again, it is a principle
of equity coming under the contours of common law.
Therefore, he who knows that if he objects to an
instrument, he will not get the benefit he wants
cannot be allowed to do so while enjoying the fruits.
One cannot take advantage of one part while
rejecting the rest. A person cannot be allowed to
have the benefit of an instrument while questioning
the same. Such a party either has to affirm or
disaffirm the transaction. This principle has to be
applied with more vigour as a common law principle,
if such a party actually enjoys the one part fully and
on near completion of the said enjoyment, thereafter
questions the other part. An element of fair play is
inbuilt in this principle. It is also a species of
estoppel dealing with the conduct of a party. We
have already dealt with the provisions of the
Contract Act concerning the conduct of a party, and
his presumption of knowledge while confirming an
offer through his acceptance unconditionally.
xxxxxxxxx
27.2. State of Punjab v. Dhanjit Singh Sandhu
[(2014) 15 SCC 144] : (SCC pp. 153-54, paras 22-
23 & 25-26)
"22. The doctrine of "approbate and reprobate" is
only a species of estoppel, it implies only to the
conduct of parties. As in the case of estoppel it
cannot operate against the provisions of a statute.
(Vide CIT v. MR. P. Firm Muar [AIR 1965 SC 1216].)
23. It is settled proposition of law that once an order
has been passed, it is complied with, accepted by the
other party and derived the benefit out of it, he
cannot challenge it on any ground. (Vide
Maharashtra SRTC v. Balwant Regular Motor Service
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[AIR 1969 SC 329].) In R.N. Gosain v. Yashpal Dhir
[(1992) 4 SCC 683] this Court has observed as
under : (R.N. Gosain case [(1992) 4 SCC 683], SCC
pp. 687-88, para 10)
'10. Law does not permit a person to both approbate
and reprobate. This principle is based on the doctrine
of election which postulates that no party can accept
and reject the same instrument and that 'a person
cannot say at one time that a transaction is valid and
thereby obtain some advantage, to which he could
only be entitled on the footing that it is valid, and
then turn round and say it is void for the purpose of
securing some other advantage'.'
xxxxxxxxx
25. The Supreme Court in Rajasthan State Industrial
Development & Investment Corpn. v. Diamond &
Gem Development Corpn. Ltd. [(2013) 5 SCC 470 :
(2013) 3 SCC (Civ) 153], made an observation that
a party cannot be permitted to "blow hot and cold",
"fast and loose" or "approbate and reprobate".
Where one knowingly accepts the benefits of a
contract or conveyance or an order, is estopped to
deny the validity or binding effect on him of such
contract or conveyance or order. This rule is applied
to do equity, however, it must not be applied in a
manner as to violate the principles of right and good
conscience.
26. It is evident that the doctrine of election is based
on the rule of estoppel, the principle that one cannot
approbate and reprobate is inherent in it. The
doctrine of estoppel by election is one among the
species of estoppel in pais (or equitable estoppel),
which is a rule of equity. By this law, a person may
be precluded, by way of his actions, or conduct, or
silence when he has to speak, from asserting a right
which he would have otherwise had."
18.12. By relying on Karunesh Kumar's case his
submission is that it is settled law that a person
at one time cannot claim something to be vaild
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and then turn around alleging that it is void to
obtain some other advantage, and the doctrine
of equitable principle ought to be applied in the
same rigour of common law. The Petitioner first
claiming non-development as a reason to not
make payment of balance consideration,
thereafter delay the same over a period of time
and subsequently stake claim on the basis of an
alleged subsisting right to allotment only upon
the the property having been allotted to
Respondent No. 3 herein is thus a clear case of
approbation and reprobation and hence is
estopped by equity.
18.13. He again reiterates that the cancellation was
made on 06.07.2015, which came to be
modified on 31.07.2015, the petition has been
filed in April 2016, seeking to challenge the
cancellation made on 06.07.2015 by
suppressing the modification dated 31.07.2015.
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He submitted that in the meanwhile, third-party
rights have been created, equities have been
established in favour of the allottees. This delay
and latches goes to the root of the matter and
as such is fatal to the claim of the Petitioner.
18.14. He relies on the judgment of the Hon'ble Apex
Court in the case of Ramana Dayaram Shetty
vs. International Airport Authority of
India8, more Particularly para no. 35 thereof
which is reproduced hereunder for easy
reference:
35. Now, on this view we should have ordinarily set
aside the decision of Respondent 1 accepting the
tender of Respondents 4 and the contract resulting
from such acceptance but in view of the peculiar
facts and circumstances of the present case, we do
not think it would be a sound exercise of discretion
on our part to upset that decision and void the
contract. It does appear from the affidavit filed by
the parties that the appellant has no real interest in
the result of the litigation, but has been put up by
A.S. Irani for depriving Respondents 4 of the benefit
of the contract secured by them. We find that a
number of proceedings have been instituted for this
purpose from time to time by A.S. Irani either
personally or by instigating others to take such
proceedings. The first salvo in the battle against
Respondents 4 was fired by K.S. Irani, proprietor of
Cafe Excelsior, who filed a suit challenging the
8
(1979) 3 SCC 489
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decision of Respondent 1 to accept the tender of
Respondents 4 but in this suit he failed to obtain an
interim injunction and his appeal was dismissed by
the High Court on October 19, 1977. It is significant
that when the tenders were opened in the office of
the Airport Director, Cafe Excelsior was represented
by A.S. Irani, which shows that either Cafe Excelsior
was a nominee of A.S. Irani or in any event K.S.
Irani, proprietor of Cafe Excelsior, was closely
connected with A.S. Irani. Moreover, it is interesting
to note that though the tender of Respondents 4 was
accepted as far back as April 19, 1977, K.S. Irani did
not adopt any proceedings immediately but filed the
suit only after A.S. Irani was informed by the Airport
Director on August 22, 1977 that a final order has
been received from the Ministry requiring A.S. Irani
to immediately close down his restaurant and snack
bars. It is also a circumstance not without
significance that A.S. Irani did not immediately take
any proceeding for challenging the acceptance of the
tender of Respondents 4, but filed a suit in his own
name only after the appeal of K.S. Irani was
dismissed by the High Court on October 19, 1977.
These circumstances clearly indicate that the suit
was filed by K.S. Irani at the instance of A.S. Irani or
in any event in concert with him and when the suit of
K.S. Irani failed to achieve the desired result, A.S.
Irani stepped into the arena and filed his own suit.
This suit was for a mandatory injunction seeking
removal of the two snack bars which had in the
meantime been put up by Respondents 4 pursuant to
the acceptance of their tender by Respondent 1. But
in this proceeding also A.S. Irani failed to obtain an
ad interim injunction. It was only after the failure to
obtain interim relief in these two proceedings, one by
K.S. Irani and the other by A.S. Irani, that the
appellant filed the present writ petition in the High
Court of Bombay challenging the decision of
Respondent 1 to accept the tender of Respondents 4.
Now, it appears from the record that the appellant
was at the material time conducting a restaurant
called Royal Restaurant and Store which was owned
in partnership by three persons, namely, J.K. Irani,
K.M. Irani and G.S. Irani. G.S. Irani is the brother of
A.S. Irani and he was managing and looking after
the restaurant of A.S. Irani at the airport. It would,
therefore, be a fair inference to make that the
appellant was well connected with A.S. Irani and
from the manner in which proceedings with a view to
thwarting the attempt of Respondents 4 to obtain the
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benefit of their contract, have been adopted one
after the other in different names, it does appear
that the appellant has filed the writ petition at the
instance of A.S. Irani with a view to helping him to
obtain the contract for the restaurant and the snack
bars. It is difficult to understand why the appellant
should have waited until November 8, 1977 to file
the writ petition when the tender of Respondents 4
was accepted as far back as April 19, 1977. The
explanation given by the appellant is that he was not
aware of the acceptance of the tender of
Respondents 4 but that is a rather naive explanation
which cannot be easily accepted. It is not possible to
believe that the appellant who was so well connected
with A.S. Irani and G.S. Irani did not know that A.S.
Irani had failed to obtain the contract for running the
restaurant and the snack bars and that this contract
had been awarded to Respondents 4 as a result of
which A.S. Irani was being pressed to close down his
restaurant and snack bars. We have grave doubts
whether this writ petition was commenced by the
appellant bona fide with a view to protecting his own
interest. Moreover, the writ petition was filed by the
appellant more than five months after the
acceptance of the tender of Respondents 4 and
during this period, Respondents 4 incurred
considerable expenditure aggregating to about Rs
1,25,000 in making arrangements for putting up the
restaurant and the snack bars and in fact set up the
snack bars and started running the same. It would
now be most inequitous to set aside the contracts of
Respondents 4 at the instance of the appellant. The
position would have been different if the appellant
had filed the writ petition immediately after the
acceptance of the tender of Respondents 4 but the
appellant allowed a period of over five months to
elapse during which Respondents 4 altered their
position. We are, therefore, of the view that this is
not a fit case in which we should interfere and grant
relief to the appellant in the exercise of our
discretion under Article 226 of the Constitution.
18.15. By relying on Ramana Dayaram Shetty's
case he submits that where no real interest
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shown by the contracting party in litigating on a
issue but however prefers such litigation only at
the detriment of another beneficiary would
raise grave doubts as to whether the petitioner
is bonafide with a view to protect his interests
or not, and hence is not fit to be interfered with
under the Article 226 jurisdiction. The petitioner
herein having suppressed the modification in
the allotment vide order dated 31.07.2015 and
then after a delay of nine months chooses to
agitate his rights against the cancellation dated
06.07.2015, all of this while an allotment was
made to Magtel, clearly draws a map of the
Petitioner having slept over his rights, not
displaying any interest in furtherance thereof
and knocked the doors of this Court only upon
the allotment to a third-party. Hence, this Court
ought not intercede into this matter under
Article 226.
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18.16. He relies on the judgment of this Court in the
case of Ashok Kumar Mishra v. Collector9,
more particularly para no. 7 thereof, which is
reproduced hereunder for easy reference:
7. It is well settled that the power of the High Court
under Article 226 of the Constitution to issue an
appropriate writ is discretionary and if the High Court
finds that there is no satisfactory explanation for the
inordinate delay, it may reject the petition if it finds
that the issue of writ will lead to public
inconvenience and interference with rights of others.
This rule applies also to a case in which the validity
of an election to a local authority is challenged. The
question whether in a given case the delay involved
is such that it disentitles a person to relief under
Article 226 is a matter within the discretion of the
High Court which as in all matters of discretion has
to exercise it judiciously and reasonably having
regard to the surrounding circumstances.
18.17. By relying on Ashok Kumar Mishra's case he
submits that the power of High Courts to issue
a writ under Article 226 is discretionary and
based on the consideration of delay and
equties. The Petitioner having approached the
Court with unreasonable delay and no equities
in favour, he persuades this Court to dismiss
this petition.
9
(1980) 1 SCC 180
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18.18. He relies on the judgment of this Court in the
case of M/s Hanuman Silks & Anr. Vs.
Karnataka Industrial Areas Development
Board and Others10, more particularly para
nos. 14.5 and 15 thereof which are reproduced
hereunder for easy reference:
14.5. When the said principles are applied, it is clear
that questions as to whether the termination of lease
is valid or not is not a matter that can be allowed to
be agitated in a writ proceeding. Similarly questions
relating to performance and breach of contract, and
consequences of non-performance and breach are
also not matters that can be adjudicated under
Article 226.
15. The facts disclose that possession of the two
plots was taken on 25.7.1995 after giving notices on
16.2.1995 and 22/23.6.1995. In the notice dated
16.2.1995, the petitioners' attention was expressly
drawn to the provisions of the agreement and the
consequences of non-fulfilment of its obligations.
Again by notice dated 22.6.1995, petitioners were
notified that their leases were terminated and their
plots would be resumed on 25.7.1995. The fact that
on 25.7.1995 the Board took back possession of the
plots is not disputed. Though the petitioners gave
letters requesting for extension of time on 5.7.1995
and met the Executive Member of the Board in
August 1995, they apparently did not pursue the
matter thereafter. They, however, claim to have sent
a letter dated 13.9.1995 stating that they were
making arrangements for necessary finance for
speedy construction and implementation of the
Project and that they were making arrangements for
water from a nearby borewell; and that they were
agreeable to pay the difference in cost of the plots at
the current rates prevailing and requesting the Board
10
ILR 1996 KAR 3384
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to inform the amount to be paid as difference in rate.
Though the letter also refers to the meeting held on
9.8.1995, there is no reference to any assurance
said to have been made by the Executive Member of
the Board that on payment of the difference in cost,
the plot will be given back to the petitioners. The
Writ Petitions were filed only on 2.1.1996 and
20.1.1996. The Board allotted the plots to fourth
respondent on 31.10.1995, delivered possession on
10.11.1995 and executed a Lease-cum-sale
Agreement with fourth respondent on 16.11.1995. In
the circumstances, petitioners cannot now contend
that they were expecting a further communication
from the Board and, therefore, did not take any
action. The inaction from 25.7.1995 to the date of
filing of the Writ Petitions is fatal to the cases of the
petitioners because, in the meanwhile, the Board
having taken possession, whether rightly or wrongly,
has made a fresh allotment, delivered possession
and entered into a lease-cum-sale agreement with
the fourth respondent. It should also be noticed that
fourth respondent is not a new applicant, but an
earlier allottee of another plot who lost its plot for no
fault of its, on account of the litigation between the
Board and the previous owners of the land. Any
interference now will upset the rights of a third
party, namely the fourth Respondent.
18.19. By relying on Hanuman Silk's case he submits
that any dispute as regards performance,
breach or non-performance of a contract cannot
be adjudicated under Article 226. If upon non-
performance, there are any third-party rights
created, any interference by the Courts would
upset the rights of such third-parties and in this
regard would upset the bonafide rights of
Magtel.
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18.20. His submission is that the Petitioner is estopped
by conduct to contend to the contrary. Having
accepted the modification dated 31.07.2015,
the Petitioner thereafter cannot challenge the
allotment made in favour of Respondent No.3.
In this regard, he relies upon the judgment of
the Hon'ble Apex Court in the case of Baini
Prasad v. Durga Devi11, more particularly
para no. 16 thereof, which is reproduced
hereunder for easy reference:
16. In the light of the concurrent findings on the
questions of ownership and encroachment, as noted
above, it can only be held that it was after
encroaching upon the land in question and ignoring
the absence of any title that he made structures
thereon at his own risk. Once it is so found, the
original appellant cannot be treated as a "transferee"
within the meaning of the TP Act and for the purpose
of Section 51 of the TP Act. Therefore, we have no
hesitation to hold that the appellants are not entitled
to rely on the provision under Section 51 of the TP
Act to seek for restoration of the modification made
by the first appellate court with respect to demolition
and possession. The appellants, rightly, did not take
up the plea of adverse possession and in the
circumstances, being not a transferee for the
purpose of Section 51 of the TP Act, he cannot
legally require the respondent either to pay the value
of improvements and take back the land or to sell
out the land to him at the market value of the
11
2023 SCC Online SC 101
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property, irrespective of the value of the
improvements.
18.21. By relying on Baini Prasad's case he submits
that the Petitioner not having impugned the
modification dated 31.07.2015, has in effect
accepted it and therefore cannot now claim to
be a holder of rights as regards the original
allotment.
18.22. He relies upon the judgment of the Hon'ble
Apex Court in the case of B.L. Sreedhar v.
K.M. Munireddy12 more particularly Para 30
thereof, which is reproduced hereunder for easy
reference:
30. If a man either by words or by conduct has
intimated that he consents to an act which has been
done and that he will not offer any opposition to it,
although it could not have been lawfully done without
his consent, and he thereby induces others to do that
which they otherwise might have abstained from, he
cannot question the legality of the act he had
sanctioned to the prejudice of those who have so given
faith to his words or to the fair inference to be drawn
from his conduct.
12
(2003) 2 SCC 355
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18.23. By relying on B.L. Sreedhar's case his
submission is that the Petitioner cannot now
question the legality of the cancellation dated
06.07.2015, subsequent modification dated
31.07.2015, after having in essence consented
to it by abstaining to offer any opposition to the
same. Hence, the Petitioner is barred from
impugning an act which he has so sanctioned
by way of conduct.
18.24. His further submission is that on account of the
modification of the allotment, vide order dated
31.07.2015 restricting the allotment to 3.75
acres and a demand having been raised for a
sum of Rs.1,98,90,000/, the very allotment in
favour of the Petitioner has been novated. A
new contract having come into being, the
Petitioner cannot agitate his rights under the
old contract and or allotment.
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18.25. In this regard, he relies on the judgment of the
Hon'ble Apex Court in the case of H.R.
13
Basavaraj v. Canara Bank more
particularly para nos. 18 and 19 thereof, which
are reproduced hereunder for easy reference:
18. Now let us examine Section 62 of the Act which
reads as follows:
"62. Effect of novation, rescission and alteration of
contract.--If the parties to a contract agree to
substitute a new contract for it, or to rescind or alter
it, the original contract need not be performed."
This section gives statutory form to the common law
principle of novation. The basic principle behind the
concept of novation is the substitution of a contract
by a new one only through the consent of both the
parties to the same. Such consent may be expressed
as in written agreements or implied through their
actions or conduct. It was defined thus by the House
of Lords in Scarf v. Jardine [(1882) 7 AC 345 :
(1881-85) All ER Rep 651 (HL)] : (AC p. 351)
"... that there being a contract in existence, some
new contract is substituted for it, either between the
same parties (for that might be) or between different
parties; the consideration mutually being the
discharge of the old contract."
19. It might be useful at this juncture to turn to the
decision of this Court in Lata Construction v. Dr.
Rameshchandra Ramniklal Shah [(2000) 1 SCC 586]
whereby this Court held that if the rights under the
old contract were kept alive even after the second
agreement and rights under the first agreement had
not been rescinded, then there was no substitution
of contracts and, hence, no novation.
13
(2010) 12 SCC 458
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18.26. By relying on H.R. Basavaraj's case, he
submits that while there being a contract in
existence, parallely a new contract is
substituted for it, between the same or
different parties, then such substitution shall be
considered as novation, which subsequently
leads to the discharge of the older contract. In
the present case, the Petitioner having
consented to the modified order of allotment,
the older allotment dated 14.12.2009 shall be
considered to be mutually discharged and thus
cannot claim any rights therefrom.
18.27. He relies upon the judgment of the Hon'ble
Apex Court in the case of Lata Construction
v. Rameshchandra Ramniklal Shah (Dr)14
more particularly Para Nos.9 and 10 thereof,
which are reproduced hereunder for easy
reference:
14
2000 (1) SCC 586
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9. We may, at this stage, refer to the provisions of
Section 62 of the Indian Contract Act which provides
as under:
"62. If the parties to a contract agree to substitute a
new contract for it, or to rescind or alter it, the
original contract need not be performed."
This provision contains the principle of "novation" of
contract.
10. One of the essential requirements of "novation",
as contemplated by Section 62, is that there should
be complete substitution of a new contract in place
of the old. It is in that situation that the original
contract need not be performed. Substitution of a
new contract in place of the old contract which would
have the effect of rescinding or completely altering
the terms of the original contract, has to be by
agreement between the parties. A substituted
contract should rescind or alter or extinguish the
previous contract. But if the terms of the two
contracts are inconsistent and they cannot stand
together, the subsequent contract cannot be said to
be in substitution of the earlier contract.
18.28. By relying on Lata Constructions' case his
submission is that the pre-requisities to
adjudge novation of a contract as per section
62 of the Indian Contract Act, 1872 would be,
the complete substitution of the new contract in
place of the old, ineffect completely altering the
terms of the original contract. The modification
order dated 31.07.2015, completely having
altered the terms from the original contract
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thus stands novated and the Petitioner cannot
claim the subsistence of any rights from the
older/original contract.
18.29. He relies upon the judgment of the Hon'ble
Apex Court in the case of Kanchan Udyog Ltd.
v. United Spirits Ltd.,15 more particularly para
nos. 20 to 24 thereof, which are reproduced
hereunder for easy reference:
20. Clause 5 of the bottler's agreement provided for
supply of concentrates by the respondent, or from
such suppliers as shall be nominated by it. Twelve
out of fourteen bottlers had agreed at the Bangalore
convention on 15-10-1987 to the new arrangement
for supply of concentrates through M/s VEC. The
appellant also commenced placement of orders
directly and received concentrates from M/s VEC
since 22-4-1988 and continued to do so even after
its letter dated 11-1-1989, by placing orders on 8-3-
1989 till it finally discontinued after closure of the
plant in May 1989. It is not the case of the appellant,
based on evidence, that M/s VEC failed to supply
concentrates, or that it did not meet standards, or
was insufficient to meet its marketing obligations,
much less that any other of the twelve bottlers had
complained in this regard. The bottling of McDowell's
Sparkling Soda was an entirely different issue and
could have been continued by the appellant
notwithstanding the controversy regarding the
concentrates. The plea of the respondents for
novation of the contract referring to Sections 8 and
62 of the Act, sub silentio finds support from the
observations in McDermott International Inc.
[McDermott International Inc. v. Burn Standard Co.
15
(2017) 8 SCC 237
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Ltd., (2006) 11 SCC 181] as follows : (SCC p. 237,
para 151)
"151. Clause 5 of the contract categorically states
that MII was to procure the material which was to be
reimbursed by BSCL. The extra amount incurred by
MII for procuring materials having extra thickness,
therefore, was not payable. To the aforementioned
extent, there has been a novation of contract. MII
had never asserted, despite forwarding of the
contention of ONGC, that it would not comply
therewith. It, thus, accepted in sub silentio."
21. The novation of a contract could take place sub
silentio was also noticed in BSNL v. BPL Mobile
Cellular Ltd. [BSNL v. BPL Mobile Cellular Ltd.,
(2008) 13 SCC 597] as follows : (SCC p. 620, para
45)
"45. ... They might have also been held bound if they
accepted the new rates or the periods either
expressly or sub silentio."
22. The learned Single Judge framed an issue also
with regard to waiver, estoppel and acquiescence,
then answered it in the negative in a singular line,
without any discussion. Waiver and acquiescence
may be express or implied. Much will again depend
on the nature of the contract, and the facts of each
case. Waiver involves voluntary relinquishment of a
known legal right, evincing awareness of the
existence of the right and to waive the same. The
principle is to be found in Section 63 of the Act. If a
party entitled to a benefit under a contract, is denied
the same, resulting in violation of a legal right, and
does not protest, foregoing its legal right, and
accepts compliance in another form and manner,
issues will arise with regard to waiver or
acquiescence by conduct. In the facts of the present
case, the conduct of the appellant in placing orders
and receiving supply of concentrates directly from
M/s VEC, for a period of nearly one year, and
continuing to do so even after it wrote to the
respondent in this regard, without recourse to any
legal remedies for denial of its legal right to receive
concentrates from the respondent, undoubtedly
amounts to waiver by conduct and acquiescence by
it to the new arrangement. The plea that it was done
under compulsion, and not voluntarily, is devoid of
any material, substance and evidence. It is
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unacceptable and merits no consideration.
Alternatively, if it was an assignment under Clause 5
of the agreement, there had been no termination of
the contract by the respondent.
23. Waiver by conduct was considered in P. Dasa
Muni Reddy v. P. Appa Rao [P. Dasa Muni Reddy v.
P. Appa Rao, (1974) 2 SCC 725] , observing as
follows : (SCC p. 729, para 13)
"13. Abandonment of right is much more than mere
waiver, acquiescence or laches. ... Waiver is an
intentional relinquishment of a known right or
advantage, benefit, claim or privilege which except
for such waiver the party would have enjoyed.
Waiver can also be a voluntary surrender of a right.
The doctrine of waiver has been applied in cases
where landlords claimed forfeiture of lease or
tenancy because of breach of some condition in the
contract of tenancy. The doctrine which the courts of
law will recognise is a rule of judicial policy that a
person will not be allowed to take inconsistent
position to gain advantage through the aid of courts.
Waiver sometimes partakes of the nature of an
election. Waiver is consensual in nature. It implies a
meeting of the minds. It is a matter of mutual
intention. The doctrine does not depend on
misrepresentation. Waiver actually requires two
parties, one party waiving and another receiving the
benefit of waiver. There can be waiver so intended
by one party and so understood by the other. The
essential element of waiver is that there must be a
voluntary and intentional relinquishment of a right.
The voluntary choice is the essence of waiver. There
should exist an opportunity for choice between the
relinquishment and an enforcement of the right in
question."
24. Waiver could also be deduced from
acquiescence, was considered in Waman Shriniwas
Kini v. Ratilal Bhagwandas & Co. [Waman Shriniwas
Kini v. Ratilal Bhagwandas & Co., 1959 Supp (2) SCR
217 : AIR 1959 SC 689] observing as follows : (AIR
p. 694, para 13)
"13. ... Waiver is the abandonment of a right which
normally everybody is at liberty to waive. A waiver is
nothing unless it amounts to a release. It signifies
nothing more than an intention not to insist upon the
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right. It may be deduced from acquiescence or may
be implied."
18.30. By relying on Kanchan Udyog Ltd's case his
submission is that novation of a contract may
take place sub silentio. Any waiver or
acquisence may be express or implied to the
effect that if a party entitled to a benefit under
a contract, if such benefit is denied and the
party does not protest foregoing their legal
rights to the same, it may be considered as
waiver or acquiescence by conduct. Waiver is
consensual in nature, implies meeting of minds
and is a matter of mutual intention either
expressly or by conduct. The Petitioner has thus
waived his rights by accepting the order of
modification.
18.31. By relying on all of the above, learned senior
counsel for the MAGTEL submits that the above
petition is to be dismissed.
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19. Sri. T.P. Vivekananda, learned counsel appearing for
Respondent No.4 would submit that:
19.1. The family of the partners of Respondent No.4
lost an extent of 7 acres 10 guntas in Survey
No.95 of Sunyamangala village out of which
compensation was paid only to an extent of 6
acres 30 guntas, and in respect of the
remaining extent of 20 guntas, compensation
was not paid. Hence, a request was made to
the KIADB for allotment of 20 guntas on an
incentive basis, on 20.01.2011. This came to be
considered by the Board in its meeting dated
25.07.2011, when the Board resolved that if
any industrial plot is available, the same may
be allotted on a preferential basis to the land
loser. The landowners made several
representations for allotment of the land. When
they were asked to deposit a sum of Rs.3/-
lakhs towards development cost, which was
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deposited on 08.05.2014. Thereafter, the
matter was taken up for consideration by the
Plot Assignment Committee in the meeting held
on 23.1.2015.
19.2. The committee taking into account the
resolution dated 25.07.2011, recommended
allotment of 19.77 guntas in Plot No.34P1 of
Bidadi II Phase Sector-2 on 23.01.2015.
Thereafter, the proceeding relating to allotment
of site was not taken up.
19.3. It is contended that though the Petitioner was
allotted Plot Nos.34, 35 and 36 in the year
2009, till the year 2015, the Petitioner did not
make payment of any amounts nor did carry
out any development and it is in that
background that the cancellation was effected,
which cancellation was subsequently modified.
The Petitioner not having complied with the
conditions stipulated cannot claim any equity.
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Respondent No.4 being the land loser, the
interest of the land loser is to be protected and
the allotment made in favour of respondent
No.4 not to be disturbed.
20. Sri. Anjaneya A.B., learned counsel appearing for
Respondent No.5-Rajarajeshwari submits that;
20.1. The land in Sy.No.54/8, measuring 2 acres 6
guntas in Shunyamangala village, Bidadi Hobli,
Ramnagara, belonged to one Sri. D.K. Kyatapa,
who is the father of the partners of
Rajarajeshwari. The said land having been
acquired and the entire compensation not
having been paid, the partners submitted an
application to KIADB for allotment of 10 guntas
of land to establish a General Engineering
Industry on 09.11.2010, 27.03.2011 and
02.08.2013. An initial deposit of Rs.3 lakhs was
also made on 10.01.2011.
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20.2. A further amount was demanded to that effect
on 26.03.2015 of Rs.01,09,000/- which
payment was made by Respondent No.5 and in
pursuance thereof the allotment was made to
Respondent No.5 measuring 10 Guntas. The
partners of Respondent No.5 being land losers,
it is contended that Respondent No.5 having
established the unit, their interests too ought to
be protected.
21. Sri. Pramod Nair, learned Senior Counsel in reply
would submit that;
21.1. There is no automatic termination and or
cancellation if the price is not paid. In this
regard, he relies upon the decision of this Court
in the case of M/s.Imperial Constrafin Pvt.
Ltd., vs. Chief Executive Officer and
Executive Member, KIADB and ors.,16 more
16
W.A.No.533/2021
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particularly paranos. 3, 7 and 8 thereof, which
are reproduced hereunder for easy reference:
"3. Opposing the writ petition, Shri. Vijaya
Kumar A.
Patil for KIADB submitted that:
• land was allotted on September 06, 2017 as
per Annexure-H. Petitioner was required to
deposit 30% of
the tentative premium within 30 days, from the
date of allotment and the petitioner has
remitted the same. As per Clause 3(a)(ii), the
balance premium amount of Rs.8,57,50,000/-
was required to be paid within 90 days from the
date of the allotment;
• as per Clause 4(a) of the allotment letter,
upon failure to pay the amount as aforesaid,
the allotment stands cancelled automatically.
Petitioner has not paid the said amount and
therefore, the allotments have been cancelled.
7. Shri. Vijaykumar is right in his submission
that failure to make payment as required in
clause 3(a)(ii) before the time stipulated
therein entails automatic cancellation. This
happens by default on the part of the
petitioner, which occurred on December 5,
2017. However, cancellation of allotment has
been communicated in July 2019. Thus, it is
clear that petitioner has defaulted in making
the payment.
8. Since allotment has stood automatically
cancelled, the contention with regard to the
signature by the CEO and the issuance of notice
under Section 34B of the Act are irrelevant.
Approval of projects by High Level Clearance
Committee is accorded to entrepreneurs to
provide facilities under one roof. By petitioner's
default,
some other prospective entrepreneur has lost
his chance to set-up an Industry. Such defaults
will have cascading effect not only on the
entrepreneurs but also on the Industrial
development in the State."
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21.2. He relies upon the decision of this Court in the
case of Chantilly Group vs. State of
Karantaka & ors.,17 more particularly, internal
page nos. 25 and 26 thereof, which are
reproduced hereunder for easy reference:
"The allotment of the land is on twenty years lease basis.
The tentative price of the land per acre was fixed at
Rs.30,00,000/- (Rupees Thirty Lakh only). A perusal of
terms and conditions No.4(a), (b), and 6(a) depicts that
40% of the land cost shall be paid within thirty days from
the date of issue of the allotment letter; a sum of
Rs.1,63,44,000/- (Rupees One Crore Sixty-Three Lakh
Forty-Four Thousand only) being the balance 60% tentative
cost of land shall be paid within 180 days from the date of
issue of the allotment letter. Condition No.6(a) refers to the
automatic expiry of the offer of allotment and forfeiture of
the earnest money deposit and 25% of the amount paid
towards the cost of the land.
It is not in dispute that the meeting was held on the 7th day
of December 2010 regarding providing infrastructural
facilities. It is interesting to note that due to the delay in
providing infrastructural facilities, it was decided to extend
the time for the payment of the balance cost of the land
without any interest. The Board indeed extended the
timeline for the payment of the balance amount. It has
given the go-by to the terms and conditions. Under these
circumstances, the action of the Board is not justified
The main justification for the legal enforcement of the right
by the petitioner is that the Board was under an obligation
to provide the infrastructure facilities but it failed to keep up
the obligation even after the extension of time. In my
considered view, the petitioner is right in its justification.
There is nothing on record to show that the Board informed
the petitioner about the completion of the infrastructure
facilities. On the other hand, it went on demanding the
payment of the balance amount with interest. And on one
fine day, it informed the petitioner that it has canceled the
17
W.P.No.65245/2016
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allotment of land in plots No.2 Part & 3 with immediate
effect. The Board also informed the petitioner to go over to
their office for a refund of the eligible amount as per the
rules.
If the foregoing analysis of the relevant law is correct, it can
be safely summarized by stating that the Board has not
kept the promise; it has given the go-by to the terms and
conditions and agreed to extend the timeline for the
payment. Hence, the contention that the petitioner has
violated the terms and conditions is satisfactorily hopeless. I
may venture to say that the Board has utterly failed to keep
up its promise. Hence, the cancellation is bad. Furthermore,
the Board in the allotment letter, has agreed to refund the
eligible amount to the petitioner."
21.3. By relying on the Chantilly Group's case, he
submits that if the KIADB had not completed
the development works and made available the
infrastructure facility, the question of KIADB
claiming the/any amounts due would not arise.
21.4. He relies on another decision of this Court in
the case of Vismay Realtors Pvt. Ltd., vs.
State of Karnataka18, more particularly para
no. 10 thereof, which is reproduced hereunder
for easy reference:
10. On careful examination of said letter, it may be
inferred and evident that the respondent-Board has
not taken possession of the land till March, 2017 and
18
WP No54245/2017
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therefore, I find force in the submission made by the
learned Senior counsel appearing for the petitioner
that there is no delay nor fault on the part of the
petitioner in respect of effectuating the terms and
conditions of the allotment letter. It also emonstrates
that, unless the possession of the land in question is
not handed over to the petitioner, it would be
difficult for the petitioner, to comply with the
statutory requirements and to complete the project.
Therefore, I am of the opinion that the queries raised
by the petitioner in the Annexures referred to above
relating to pending infrastructure work, supply of
potable water, sale of units to employees in the
KIADB Industrial Area and non-availability of
guidelines etc., ought to have been considered by
the respondent-KIADB before issuing the cancellation
letter produced at Annexure-P to the writ petition. It
is clear from the letters addressed by the
respondent-KIADB that the acquisition of the land
itself was not completed and same is not even
available for development till March, 2017 and
therefore, the cancellation of the allotment made in
favour of the petitioner is arbitrary and contrary to
Article 14 of the constitution of India as such,
requires to be re-considered by the respondent-
KIADB. Though, Sri P.V. Chandrashekar, learned
Counsel appearing for the respondent-KIADB,
contended that interference of this Court, under
Article 226 of Constitution of India, is limited and
cannot interfere with regard to contractual matters,
however, this Court cannot close its eyes if the
statutory authorities act arbitrarily and in derogance
of settled principles in law. Being an instrumentality
of the State, under Article 12 of the Constitution of
India, the respondent-KIADB has to conform to the
spirit of Article 14 of Constitution of India. In this
regard, it is relevant to cite dictum laid down by the
Hon'ble Apex Court in the case of M.P. Power
Management Company (supra), paragraph 53 and
60.
"53. We may notice that as to what constitutes
arbitrariness fell for consideration by this court in a
case which involved cancellation of the examination
held as part of a recruitment process, in East Coast
Railway v. Mahadev Appa Roa. We notice the
following passages which are apposite for this case.
"19. Black's Law Dictionary describes the term
"arbitrary" in the following words:
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"Arbitrary. --1. Depending on individual discretion;
specif., determined by a judge rather than by fixed
rules, procedures, or law. 2. (Of a judicial decision)
founded on prejudice or preference rather than on
reason or fact. This type of decision is often termed
arbitrary and capricious."
20. To the same effect is the meaning given to the
expression "arbitrary" by Corpus Juris Secundum
which explains the term in the following words:
"Arbitrary.--Based alone upon one's will, and not
upon any course of reasoning and exercise of
judgment; bound by no law; capricious; exercised
according to one's own will or caprice and therefore
conveying a notion of a tendency to abuse
possession of power; fixed or done capriciously or at
pleasure, without adequate determining principle,
non-rational, or not done or acting according to
reason or judgment; not based upon actuality but
beyond a reasonable extent; not founded in the
nature of things; not governed by any fixed rules or
standard; also, in a somewhat different sense,
absolute in power, despotic, or tyrannical; harsh and
unforbearing. When applied to acts, 'arbitrary' has
been held to connote a disregard of evidence or of
the proper weight thereof; to express an idea
opposed to administrative, executive, judicial, or
legislative discretion; and to imply at least an
element of bad faith, and has been compared with
'willful'."
xxxxxxxxx
23. Arbitrariness in the making of an order by an
authority can manifest itself in different forms. Non-
application of mind by the authority making the
order is only one of them. Every order passed by a
public authority must disclose due and proper
application of mind by the person making the order.
This may be evident from the order itself or the
record contemporaneously maintained. Application of
mind is best demonstrated by disclosure of mind by
the authority making the order. And disclosure is
best done by recording the reasons that led the
authority to pass the order in question. Absence of
reasons either in the order passed by the authority
or in the record contemporaneously maintained is
clearly suggestive of the order being arbitrary hence
legally unsustainable."
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54 to 59 XXX XXX XXX
60. We may cull out our conclusions in regard to the
points, which we have framed:
i. It is, undoubtedly, true that the writ jurisdiction is
a public law remedy. A matter, which lies entirely
within a private realm of affairs of public body, may
not lend itself for being dealt with under the writ
jurisdiction of the Court.
ii. The principle laid down in Bareilly Development
Authority (supra) that in the case of a non-statutory
contract the rights are governed only by the terms of
the contract and the decisions, which are purported
to be followed, including Radhakrishna Agarwal
(supra), may not continue to hold good, in the light
of what has been laid down in ABL (supra) and as
followed in the recent judgment in Sudhir Kumar
Singh (supra).
iii. The mere fact that relief is sought under a
contract which is not statutory, will not entitle the
respondent-State in a case by itself to ward-off
scrutiny of its action or inaction under the contract, if
the complaining party is able to establish that the
action/inaction is, per se,arbitrary.
iv. An action will lie, undoubtedly, when the State
purports to award any largesse and, undoubtedly,
this relates to the stage prior to the contract being
entered into [See R.D. Shetty (supra)]. This scrutiny,
no doubt, would be undertaken within the nature of
the judicial review, which has been declared in the
decision in Tata Cellular v. Union of India.
v. After the contract is entered into, there can be a
variety of circumstances, which may provide a cause
of action to a party to the contract with the State, to
seek relief by filing a Writ Petition.
vi. Without intending to be exhaustive, it may
include the relief of seeking payment of amounts due
to the aggrieved party from the State. The State
can, indeed, be called upon to honour its obligations
of making payment, unless it be that there is a
serious and genuine dispute raised relating to the
liability of the State to make the payment. Such
dispute, ordinarily, would include the contention that
the aggrieved party has not fulfilled its obligations
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and the Court finds that such a contention by the
State is not a mere ruse or a pretence.
vii. The existence of an alternate remedy, is,
undoubtedly, a matter to be borne in mind in
declining relief in a Writ Petition in a contractual
matter. Again, the question as to whether the Writ
Petitioner must be told off the gates, would depend
upon the nature of the claim and relief sought by the
petitioner, the questions, which would have to be
decided, and, most importantly, whether there are
disputed questions of fact, resolution of which is
necessary, as an indispensable prelude to the grant
of the relief sought. Undoubtedly, while there is no
prohibition, in the Writ Court even deciding disputed
questions of fact, particularly when the dispute
surrounds demystifying of documents only, the Court
may relegate the party to the remedy by way of a
civil suit.
viii. The existence of a provision for arbitration,
which is a forum intended to quicken the pace of
dispute resolution, is viewed as a near bar to the
entertainment of a Writ Petition (See in this regard,
the view of this Court even in ABL (supra) explaining
how it distinguished the decision of this Court in
State of U.P. v. Bridge & Roof Co., by its
observations in paragraph-14 in ABL (supra)].
ix. The need to deal with disputed questions of fact,
cannot be made a smokescreen to guillotine a
genuine claim raised in a Writ Petition, when actually
the resolution of a disputed question of fact is
unnecessary to grant relief to a writ applicant.
x. The reach of Article 14 enables a Writ Court to
deal with arbitrary State action even after a contract
is entered into by the State. A wide variety of
circumstances can generate causes of action for
invoking Article 14. The Court's approach in dealing
with the same, would be guided by, undoubtedly, the
overwhelming need to obviate arbitrary State action,
in cases where the Writ remedy provides an effective
and fair means of preventing miscarriage of justice
arising from palpably unreasonable action by the
State.
xi. Termination of contract can again arise in a wide
variety of situations. If for instance, a contract is
terminated, by a person, who is demonstrated,
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without any need for any argument, to be the
person, who is completely unauthorised to cancel the
contract, there may not be any necessity to drive the
party to the unnecessary ordeal of a prolix and
avoidable round of litigation. The intervention by the
High Court, in such a case, where there is no dispute
to be resolved, would also be conducive in public
interest, apart from ensuring the Fundamental Right
of the petitioner under Article 14 of the Constitution
of India. When it comes to a challenge to the
termination of a contract by the State, which is a
non-statutory body, which is acting in purported
exercise of the powers/rights under such a contract,
it would be over simplifying a complex issue to lay
down any inflexible Rule in favour of the Court
turning away the petitioner to alternate Fora.
Ordinarily, the cases of termination of contract by
the State, acting within its contractual domain, may
not lend itself for appropriate redress by the Writ
Court. This is, undoubtedly, so if the Court is duty-
bound to arrive at findings, which involve untying
knots, which are presented by disputed questions of
facts. Undoubtedly, in view of ABL Limited (supra), if
resolving the dispute, in a case of repudiation of a
contract, involves only appreciating the true scope of
documentary material in the light of pleadings, the
Court may still grant relief to an applicant. We must
enter a caveat. The Courts are today reeling under
the weight of a docket explosion, which is truly
alarming. If a case involves a large body of
documents and the Court is called upon to enter
upon findings of facts and involves merely the
construction of the document, it may not be an
unsound discretion to relegate the party to the
alternate remedy. This is not to deprive the Court of
its constitutional power as laid down in ABL (supra).
It all depends upon the facts of each case as to
whether, having regard to the scope of the dispute
to be resolved, whether the Court will still entertain
the petition.
xii. In a case the State is a party to the contract and
a breach of a contract is alleged against the State, a
civil action in the appropriate Forum is, undoubtedly,
maintainable. But this is not the end of the matter.
Having regard to the position of the State and its
duty to act fairly and to eschew arbitrariness in all its
actions, resort to the constitutional remedy on the
cause of action, that the action is arbitrary, is
permissible (See in this regard Kumari Shrilekha
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Vidyarthi v. State of U.P.). However, it must be
made clear that every case involving breach of
contract by the State, cannot be dressed up and
disguised as a case of arbitrary State action. While
the concept of an arbitrary action or inaction cannot
be cribbed or confined to any immutable mantra,
and must be laid bare, with reference to the facts of
each case, it cannot be a mere allegation of breach
of contract that would suffice. What must be
involved n the case must be action/inaction, which
must be palpably unreasonable or absolutely
irrational and bereft of any principle. An action,
which is completely malafide, can hardly be
described as a fair action and may, depending on the
facts, amount to arbitrary action. The question must
be posed and answered by the Court and all we
intend to lay down is that there is a discretion
available to the Court to grant relief in appropriate
cases.
xiii. A lodestar, which may illumine the path of the
Court, would be the dimension of public interest
subserved by the Court interfering in the matter,
rather than relegating the matter to the alternate
Forum.
xiv. Another relevant criteria is, if the Court has
entertained the matter, then, while it is not tabooed
that the Court should not relegate the party at a
later stage, ordinarily, it would be a germane
consideration, which may persuade the Court to
complete what it had started, provided it is otherwise
a sound exercise of jurisdiction to decide the matter
on merits in the Writ Petition itself.
xv. Violation of natural justice has been recognised
as a ground signifying the presence of a public law
element and can found a cause of action premised
on breach of Article 14. [See Sudhir Kumar Singh
(supra)].
21.5. By relying on Vismayi Realtor's case, he
submits that the allotment of a plot cannot be
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cancelled without infrastructure works being
completed.
21.6. He relies on another decision of this Court in
the case of M/s.Ondot Corporate Services
Pvt. Ltd., vs. KIADB19, more particularly
paranos. 3, 4, 5, 6, 7 and 9 thereof, which are
reproduced hereunder for easy reference:
3. He submits that although there is nothing on the
part of the petitioner, the petitioner is prepared to
take back the plots by paying the prevailing market
value of the plot. He brings to my notice the enabling
Clause No.9 in the allotment letter, dated
04.03.2008 (Annexure-B) which reads as follows:
"9. The cancelled allotments or the resumed plots
shall be restored, only at the rates prevailing at the
time of considering such requests provided the
request in writing for such restoration is received
within one month from the date of cancellation of
allotment or resumption. Any requests received after
expiry of 30 days from the date of
cancellation/resumption of land will be rejected."
4. He submits that just within six days of receiving
the impugned cancellation communication, the
petitioner has submitted the representation on
28.12.2015.
5. Sri B.B.Patil, learned counsel for the respondent
No.1 submits that the petitioner has been dodging
the payment of balance cost of the land. He submits
that if the balance cost of the land is not paid within
90 days from the date of issuance of the allotment
letter, the allotment stands cancelled by the
19
WP No.17509/2016
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operation of the clause contained in the allotment
letter.
6. The submissions of the learned counsel have
received my thoughtful consideration. I am not
persuaded to accept the argument urged on behalf of
the first respondent that the allotment stands
cancelled by the operation of the Clause in the
allotment letter. Perhaps that is the reason why the
respondent No.1 has passed the order cancelling the
allotment.
7. The petitioner has been complaining of the
pending works like levelling, boundary demarcation,
cleaning of debris, etc. to the first respondent.
Further as lately as on 01.04.2012, the first
respondent Deputy Development Officer writes to the
Special Land Acquisition Officer that the survey work
is not yet completed.
9. I therefore quash the impugned letter and direct
the respondent No.1 to consider the petitioner's
representation, dated 28.12.2015 for restoration of
the industrial plot at prevailing rate in keeping with
Clause 9 of the allotment letter, which is extracted
hereinabove. The respondent No.1 shall pass the
order on the petitioner's said representation taking
into account the precedents in similar cases and the
norms and guidelines in force as expeditiously as
possible and in any case within one month from the
date of the issuance of the certified copy of today's
order.
21.7. By relying on Ondot's case, he again submits
that without the infrastructure being provided,
the KIADB cannot rely upon the clause for
automatic cancellation.
21.8. As regards the suppression of the aacceptance
of a lesser extent of land, he submits that the
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same is completely misconceived. Though the
letter dated 03.08.2015 was not enclosed, an
averment has been made in paragraph 24 of
the petition that with a mala fide intention,
Respondent No.1 issued an allotment letter
dated 03.08.2015 for an amount of
Rs.1,98,90,000/-. Thus, there is no suppression
as such made by the Petitioner as alleged by
the Respondents.
21.9. He relies upon the decision of the Hon'ble Apex
Court in Krishna Rai v. Banaras Hindu
University and ors.,20, more particularly
paranos. 24 and 32 thereof, which are
reproduced hereunder for easy reference:
24. The case laws relied upon by the Division Bench
would have no application in the facts of the present
case as none of the judgments relied upon by the
Division Bench laid down that principle of estoppel
would be above law. It is settled principle that
principle of estoppel cannot override the law. The
manual duly approved by the Executive Council will
prevail over any such principle of estoppel or
acquiescence.
20
2022 (8) SCC 713
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32. Further in Tata Chemicals Ltd. v. Commr. of
Customs [Tata Chemicals Ltd. v. Commr. of
Customs, (2015) 11 SCC 628] , it has been laid
down that there can be no estoppel against law. If
the law requires something to be done in a particular
manner, then it must be done in that manner, and if
it is not done in that manner, then it would have no
existence in the eye of the law. Para 18 of the said
judgment is reproduced below : (SCC p. 636)
"18. The Tribunal's judgment [Commr. of Customs v.
Tata Chemicals Ltd., 2004 SCC OnLine Cestat 270]
has proceeded on the basis that even though the
samples were drawn contrary to law, the appellants
would be estopped because their representative was
present when the samples were drawn and they did
not object immediately. This is a completely perverse
finding both on fact and law. On fact, it has been
more than amply proved that no representative of
the appellant was, in fact, present at the time the
Customs Inspector took the samples. Shri K.M. Jani
who was allegedly present not only stated that he
did not represent the clearing agent of the appellants
in that he was not their employee but also stated
that he was not present when the samples were
taken. In fact, therefore, there was no
representative of the appellants when the samples
were taken. In law equally the Tribunal ought to
have realised that there can be no estoppel against
law. If the law requires that something be done in a
particular manner, it must be done in that manner,
and if not done in that manner has no existence in
the eye of the law at all. The Customs Authorities are
not absolved from following the law depending upon
the acts of a particular assessee. Something that is
illegal cannot convert itself into something legal by
the act of a third person."
21.10. By relying on Krishna Rai's case, he submits
that there cannot be an estoppel effected
against law. The KIADB being required to make
available the infrastructure facilities, and not
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having done so, the plea of estoppel cannot be
taken against the Petitioner.
21.11. He relies on the judgment of the Hon'ble Apex
Court in the case of Sikkim Subba Associates
vs. State of Sikkim21, more particularly
Clasitum (h) page 646 to Clasitum (e) at page
647 thereof, which are reproduced hereunder
for easy reference:
Waiver involves a conscious, voluntary and
intentional relinquishment or abandonment of a
known, existing legal right, advantage, benefit, claim
or privilege, which except for such a waiver, the
party would have enjoyed. The agreement between
the parties in this case is such that its fulfilment
depends upon the mutual performance of reciprocal
promises constituting the consideration for one
another and the reciprocity envisaged and engrafted
is such that one party who fails to perform his own
reciprocal promise cannot assert a claim for
performance of the other party and go to the extent
of claiming even damages for non-performance by
the other party. He who seeks equity must do equity
and when the condonation or acceptance of belated
performance was conditional upon the future good
conduct and adherence to the promises of the
defaulter, the so-called waiver cannot be considered
to be forever and complete in itself so as to deprive
the State, in this case, of its power to legitimately
repudiate and refuse to perform its part on the
admitted fact that the default of the appellants
continued till even the passing of the award in this
case. So far as the defaults and consequent
entitlement or right of the State to have had the
21
(2001) 5 SCC 629
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lotteries either foreclosed or stopped further, the
State in order to safeguard its own stakes and
reputation has continued the operation of lotteries
even undergoing the miseries arising out of the
persistent defaults of the appellants. The same
cannot be availed of by the appellants or used as a
ground by the arbitrator to claim any immunity
permanently for being pardoned, condoned and
waived of their subsequent recurring and persistent
defaults so as to deny or denude forever the power
of the State as the other party to the contract to put
an end to the agreement and thereby relieve
themselves of the misfortunes they were made to
suffer due to such defaults. Once the appellants
failed to deposit the prize money in advance within
the stipulated time, the time being of the essence
since the prizes announced after the draw have to be
paid from out of only the prize money deposited, the
State was well within its rights to repudiate not only
due to continuing wrongs or defaults but taking into
account the past conduct and violations also despite
the fact that those draws have been completed by
declaration or disbursement of prize amounts by the
State from out of its own funds. The conclusion to
the contrary that the State has committed breach of
the contract is nothing but sheer perversity and
contradiction in terms.
21.12. By relying on the Sikkim Subha Associates
case, he submits that when an agreement
between parties contemplates mutual
performance of reciprocal promises constituting
the consideration for one another, if a party
fails to perform their own reciprocal promise,
they cannot claim the performance by the other
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party. On that basis, he submits that the
KIADB, not having discharged its obligation of
developing the land properly, cannot claim
payments by the Petitioner. The extension of
time granted from time to time by the KIADB
indicates that the KIADB was not ready to allot
the said property.
21.13. He relies upon the judgment of the Hon'ble
Apex Court in the case of R.S. Maddanappa v.
Chandramma22, more particularly para no. 9
thereof, which is reproduced hereunder for easy
reference:
9. Mr Venkatarangaiengar, however, wanted us to
hold that the law of estoppel by representation is not
confined to the provisions of Section 115 of the
Evidence Act, that apart from the provisions of this
section there is what is called "equitable estoppel"
evolved by the English Judges and that the present
case would come within such "equitable estoppel". In
some decisions of the High Courts reference has
been made to "equitable estoppel" but we doubt
whether the court while determining whether the
conduct of a particular party amounts to an estoppel,
could travel beyond the provisions of Section 115 of
the Evidence Act. As was pointed out by Garth, C.J.
in Ganges Manufacturing Co. v. Saurjmull [ILR 5 Cal
669] the provisions of Section 115 of the Evidence
22
AIR 1965 SC 1812
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Act are in one sense a rule of evidence and are
founded upon the well known doctrine laid down in
Pickard v. Sears [1832 A & E 469] in which the rule
was stated thus:
“Where one by his word of conduct wilfully causes
another to believe for the existence of a certain state
of thing and induced him to act on that belief so as
to alter his own previous position, the former is
concluded from averring against the latter a different
state of things as existing at the first time.”
The object of estoppel is to prevent fraud and secure
justice between the parties by promotion of honesty
and good faith. Therefore, where one person makes
a misrepresentation to the other about a fact he
would not be shut out by the rule of estoppel, if that
other person knew the true state of facts and must
consequently not have been misled by the
misrepresentation.
21.14. By relying on Madanappa’s case, he submits
that the object of estoppel is to prevent fraud
and secure justice. In the present case, fraud
has been committed by the KIADB.
21.15. He relies on the judgment of the Hon’ble Apex
Court in the case of Mukund Swarup Mishra
v. Union of India23, more particularly para no.
4 thereof, which is reproduced hereunder for
easy reference:
23
(2007) 2 SCC 536
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4. During the pendency of the matters before the
Committee, this Court continued interim order
granted earlier. Pursuant to the directions of this
Court, the Committee commenced its proceedings by
examining the relevant records relating to allotment.
Notices were issued, replies were sought in the form
of affidavits, letters or other
applications/representations. The Committee also
afforded an opportunity of making oral submissions
to the allottees. Oral hearing was also afforded to
other applicants on the panel whose applications
were rejected or who were not granted allotment. In
several cases, allottees or other applicants were
represented by their counsel to whom opportunity of
hearing was extended. Hearings were held at Delhi
and at other places mentioned in the report. The
Committee, thereafter, considered the relevant
materials keeping in view the salient features of the
guidelines laid down by the Government of India and
submitted its detailed report.
21.16. By relying on Mukund Swaroop‘s case, he
submits that any expenses incurred by
Respondents Nos.3 to 5 on the basis of
fraudulent allotment will not enure to their
benefit, and as such, there cannot be a
promissory or equitable estoppel pleaded
against the Petitioner. His submission is also
that the defense of MAGTEL is completely
misconceived. Respondent No.3 was allotted
the plot immediately after cancellation, made in
favour of the Petitioner. Any expenses incurred
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by Respondent No.3 is at the sole risk of
Respondent No.3. This Court in its order dated
13.01.2017 on a request made by Respondent
No.3 to develop the property has categorically
stated that it is open to Respondent No.3 to
develop the industrial plot at its own risk and
subject to the outcome of the writ petition.
MAGTEL having taken the risk of development
cannot now contend that because of the
development which has occurred, the
cancellation cannot be made. It is a risk which
has been voluntarily taken by MAGTEL.
21.17. He relies on the case of Zenit Mataplast (P)
Ltd. v. State of Maharashtra24, more
particularly para nos. 29, 39 and 40 thereof,
which are reproduced hereunder for easy
reference:
29. In a case like this, when the applicant
approaches the court complaining against the24
(2009) 10 SCC 388
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statutory authority alleging arbitrariness, bias or
favouritism, the court, being custodian of law, must
examine the averments made in the application to
form a tentative opinion as to whether there is any
substance in those allegations. Such a course is also
required to be followed while deciding the application
for interim relief.
39. Anything done in undue haste can also be
termed as arbitrary and cannot be condoned in law
(vide M.P. Hasta Shilpa Vikas Nigam Ltd. v.
Devendra Kumar Jain [(1995) 1 SCC 638 : 1995 SCC
(L&S) 364 : (1995) 29 ATC 159] and Bahadursinh
Lakhubhai Gohil v. Jagdishbhai M. Kamalia [(2004) 2
SCC 65 : AIR 2004 SC 1159] ).
40. If the instant case is considered, in the light of
the above settled legal propositions and admittedly
the whole case of the appellant is based on violation
of Article 14 of the Constitution as according to the
appellant it has been a case of violation of equality
clause enshrined in Article 14, the facts mentioned
hereinabove clearly establish that the Corporation
and the Government proceeded in haste while
considering the application of Respondent 4 which
tantamounts to arbitrariness, thus violative of the
mandate of Article 14 of the Constitution.
21.18. By relying on Zenit Mataplast‘s case, he
submits that the State and its instrumentalities
are required to be fair, legitimate and act
without any affection and all the actions taken
by the State and its authorities ought not to be
arbitrary. In the present matter, the rights of
the Petitioner are sought to be trampled upon
by the KIADB in preference to the rights of
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Respondent Nos.3 to 5, which could not be so
done.
21.19. Further submissions were made as regards
certain settlement discussions between the
Petitioner and Respondents Nos.3 to 5. I am of
the considered opinion that these submissions
cannot be considered by this Court. Any
settlement discussion among the parties has to
remain between the parties and the same
cannot be made subject matter of an argument
before this Court if such settlement talks were
to fail. No party can use any discussion during
settlement talks for its own benefit if the
settlement talks were to fail. All discussions
during settlement talks are confidential and
remain confidential.
21.20. Hence, the reliance placed on the judgment of
the Hon’ble Apex Court in the case of
Dr.Poornima Advani and another vs.
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Government of NCT and another25 in this
regard to contend that the demand made by
Respondents No.3 to 5 was contrary to law,
cannot be looked into.
22. Shri P. V. Chandrashekhar, learned counsel appearing
for the KIADB on account of the citations referred to
in reply, submits that:
22.1. The Petitioner is only a speculative allotee and
not a genuine entrepreneur. A paltry amount
having been deposited in the year 2009, no
further payment was made except to contend
that the banks had sanctioned the loan. If at all
the bank had sanctioned the loan, it was for the
Petitioner/bank to have made payment of the
due amounts. The same not having been done,
the Petitioner cannot claim any equity on the
basis of the sanctioned loan.
25
2025 SCC Online SC 419
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22.2. He relies upon the decision of a Coordinate
Bench of this Court in M/s.Imperial
Constrafin Pvt. Ltd., vs. Chief Executive
Officer and Executive Member, KIADB &
ors26, and by placing reliance on Clause 3A-2 of
the lease agreement, he submits that if the
payment was not made within time, the same
would entail automatic cancellation of the
allotment. He submits that the said judgment
having been taken up on appeal in
W.A.No.533/2021, the Division Bench of this
Court has dismissed the appeal and in this
regard, he places reliance on para nos. 7 and 8
thereof, which are reproduced hereunder for
easy reference:
7. On perusal of 4(a) of the allotment letter, it is
quite evident that on failure to pay the balance
premium amount, the offer of allotment stands
automatically cancelled and under clause 4(b), the
plot would automatically stand restored with the 2nd
respondent- Board. The above said two clauses
would clearly indicate that in the event of breach,
the allotment stands automatically cancelled.
26
W.P. No. 33257/2019
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Therefore, the contention of the appellant that he
was not notified before communicating the
cancellation cannot be acceded to.
8. We have also examined the statement of
objections filed by respondents 1 and 2. The
appellant was required to pay the balance tentative
premium on 5.12.2017. The 2nd respondent even
after expiry of period kept on communicating to the
4th respondent-Bank to deposit the balance premium
of Rs.8,84,51,712/- along with interest at the rate of
12%. The first communication was sent on
28.4.2017. The 2nd communication was sent on
2.3.2018. If 4th respondent-Bank was insisting for
NOC from the 2nd respondent-Board for release of
the amount, then it was incumbent on the part of the
appellant to negotiate and convince his banker to
release the amount. The appellant cannot expect an
authority to issue NOC before receiving the balance
premium. Therefore, we are of the view that no fault
can be found with respondents 1 and 2. The learned
Single Judge has dealt with the matter and has
rightly dismissed the writ petition. This Court has
taken note of the fact that the authorities were quite
lenient and had extended time even after expiry of
the statutory period prescribed under clause 3(a)(ii)
of the allotment letter. The appellant was not able to
deposit the balance premium amount even in 2018
which is evident from the two communications dated
28.4.2017 and 2.3.2018. Further, this Court has also
taken note of the fact that respondents 1 and 2 have
allotted the site to a 3rd party after cancellation of
allotment in favour of the appellant.
22.3. He refers to the standard conditions attached to
the allotment letter, more particularly Clause 3
of the allotment letter, which is reproduced
hereunder for easy reference:
“3. The tentative price of the land and lease
rents shall be paid as follows:
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3(a) A sum of Rs.63,63,000/- being the balance
of 20% of the land cost shall be paid with 30
days from the date of issue of this letter on or
before 13.01.2010.
3(b) a sum of Rs.3,74,40,000/- being the
balance tentative cost of land shall be paid with
180 days from the date of issue of this letter
i.e., on or before 13.06.2010.
3(c) in the event of your furnishing bank
guarantee or letter of commitment form
KSFC/KSIIDC/Financial Institutions agreeing to
pay the cost of land indicated at 3(b) directly to
the Board, the allotment will be confirmed and
documentation will be permitted subject to
payment of interest @ 12.75% per annum on
amount dur from the date of handing over
possession of land to the date of payment which
should be made within 180 days from the date
of execution of agreement.
3(d) you should pay lease rent of Rs.1000/- per
acre/per annum or part thereof or at such other
rates as may be fixed by the Board from time to
time together with Maintenance charges of
Rs.2,500/- per acre per annum.
3(e) interest at 12.75% per annum shall be
levied in case the lease rents are not paid within
one month from the date on which the lease
rents fall due every year.”
22.4. He submits that in terms of Clause 3B, an
amount of Rs.03,74,40,000/- was to be paid
within 180 days, that is on or before
13.06.2010. The date having been fixed, there
is no reciprocal promise being involved, the
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payment was required to be made by the
Petitioner by 13.06.2010. He submits that the
reference to Clause 3C is misconceived
inasmuch as if a loan has been sanctioned, the
allotment would be confirmed and
documentation would be completed subject to
payment of interest at 12.75% per annum,
which payment is to be made within 180 days
from the date of execution of the agreement
would not imply that the Petitioner can take its
own sweet time to make payment of the
amounts.
22.5. The Petitioner, despite having been called upon
to make payment of the monies and come
forward to execute a lease-cum-sale
agreement, not having come forward to do so,
cannot take advantage of his own wrongdoings
by contending that the lease-cum-sale
agreement having not been executed, there is
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no obligation to make payment of the monies.
He submits that the reliance on interpretation
placed by the Petitioner on the said clause is
completely misconceived. This fact, taken into
consideration, with the delay caused by the
Petitioner of nearly six years, the Petitioner is
not entitled for any discretionary relief to be
granted to the Petitioner.
22.6. Sri. P.V. Chandrasekhar, learned counsel relying
on M/s.Ambience Refrigeration Pvt. Ltd.’s
case submits that what was in question in that
matter was only with regard to a road to the
property of Ambience. Even according to the
Petitioner, the said plot allotted to Ambience is
situated opposite to the plot of the Petitioner.
The said writ petition was filed in the year
2012, three years thereafter also, the Petitioner
did not make payment of the monies. He
submits that Ambience has established its unit
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and, as such, reliance placed on the judgment
in Ambience Refrigeration’s case is
completely misconceived.
23. Sri.Udaya Holla, learned senior counsel, in reply,
submits that the allotment made in favour of
Respondent No.3 is proper and correct. Therefore,
the investment made being proper and correct,
equities would lie with Respondent No.3. On that
basis, he submits that the writ petition as filed is
required to be dismissed and the allotment made in
favour of Respondents No.3 to 5 be confirmed.
24. Heard Sri. Pramod Nair, learned Senior Counsel
appearing for the Petitioner, Sri. P.V. Chandrasekhar,
learned counsel appearing for Respondent No.1-
KIADB, Smt. Sukruta R, learned counsel appearing
for Respondent No.2, Sri. Udaya Holla, learned senior
counsel appearing for Respondent No.3-MAGTEL and
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Sri. T.P. Vivekananda, learned counsel appearing for
Respondent No.4, Sri. Anjaneya A.B., learned counsel
appearing for Respondent No.5-
Rajarajeshwari.Perused papers.
25. The points that would arise for the consideration of
this Court are:
1. Whether the Petitioner placing reliance on
sub-Clause 3(c) of the letter of allotment
can contend that the bank having
sanctioned the loan, there is no
requirement to make payment of the said
amount until the lease-cum-sale
agreement is executed?
2. Whether the Petitioner has established
that there are no infrastructure facilities
which have been provided to the plot by
the KIADB?
3. Whether mere mentioning of the
modification of the allotment in Para 24 of
the Writ Petition without any relief being
sought for in relation thereto, would
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entitle the Petitioner to the relief sought
for?
4. Whether not seeking any relief as regards
the modification, which is in the form of
novation of the agreement, would entitle
the Petitioner for any relief?
5. Is the cancellation effected by KIADB
proper?
6. What order?
26. I answer the above points as under:-
27. Answer to Points No.1: Whether the Petitioner
placing reliance on sub-clause 3(c) of the letter
of allotment can contend that the bank having
sanctioned the loan, there is no requirement to
make payment of the said amount until the
lease-cum-sale agreement is executed?
27.1. Relying on Clause 3(c) of the allotment letter,
learned counsel for the Petitioner submits that
if a bank guarantee or a letter of commitment
from KSFC / KSIIDC / financial institutions
agreeing to pay the cost of land indicated in
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Cluase 3(b) directly to the Board, the allotment
would be confirmed and documentation will be
permitted subject to payment of interest at the
rate of 12.75% per annum on amount due from
the date of handing over possession of the land
till the date of payment which should be made
within 180 days from the date of execution of
the agreement. His submission is that the
requirement to make payment of balance
tentative cost in terms of Clause 3(b) would not
be required to be done, if there is a letter of
commitment received from a financial
institution. In this case, the Petitioner having
furnished such a letter of commitment from its
bankers, the bankers having sanctioned the
loan in favour of the Petitioner, the entire
balance consideration as demanded by the
KIADB was not required to be paid.
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27.2. Clause 3 has been extracted hereinabove. In
terms of Clause 3(a), a sum of Rs.63,63,000/-.
being 20% of the land cost, was required to be
paid, which has been paid. In terms of Clause
3(b), the balance of a sum of Rs.3,74,40,000/-
is to be paid within 180 days from the date of
issuance of the allotment letter that is on or
before 13-6-2010. Clause 3(c) is an exception
to Clause 3(b) which provides for where the
allottee of the land were to provide a bank
guarantee or a letter of commitment from
KSFC, KSIIDC or a financial institution, then the
payment would be deferred with an obligation
on part of the allottee to pay interest at the
rate of 12.75% per annum from the date of
handing over of the possession to the execution
of the agreement, the amount to be paid within
180 days from such execution.
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27.3. Since possession has not been handed over, the
question of payment of interest would also not
arise. Thus though Sri.P.V.Chandrasekhar,
learned counsel for the KIADB and Sri.Udaya
Holla, learned Senior counsel for Respondent
No.3 have sought to strenuously contend that
there is a default on part of the Petitioner in
making payment of the due amounts, I am
unable to accept their submission for the
aforesaid reason. Clause 3(c), as indicated
above, being an exception to Clause 3(b), the
payment was not required to be made by 13-6-
2010, since the bank had sanctioned the loan
and at innumerable times informed KIADB that
it would release the amounts on possession
being handed over after the development works
are completed, and a lease-cum-sale
agreement being executed, since the lease-
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cum-sale agreement would be a security for the
bank to advance the monies.
27.4. Hence, I answer Point No.1 by holding that the
contention of the Petitioner by relying on Clause
3(c) of the letter of allotment that the payment
is deferred till handing over the possession is
proper and correct.
28. Answer to Point No.2: Whether the Petitioner
has established that there are no infrastructure
facilities which have been provided to the plot
by the KIADB?
28.1. The submission of Sri.Pramod Nair, learned
Senior counsel appearing for the Petitioner is
that the development works had not been
carried out and it is in that background that the
Petitioner was unable to start its project. The
bank was not willing to make payment of the
due amounts until a lease-cum-sale agreement
was executed in favour of the Petitioner and the
Petitioner was in a position to implement the
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project and it is on that background that he has
submitted that without the infrastructure
facilities being made available, the Petitioner
could not take possession of the land. His
submission is also that the allotment letter
contemplates reciprocal promises, the order of
performance of the reciprocal promises by
relying on Nathulal’s case is firstly for the
KIADB to make available the infrastructure
facilities and thereafter for the Petitioner to
commence, implementation of the project by
making payment of the due amounts. What
would have to be seen now is whether the
Petitioner has been able to establish that
infrastructure facilities were not available.
28.2. Though the same, to some extent, hinges upon
appreciation of facts more particularly disputed
facts, despite it being suggested to the learned
counsel for the Petitioner that he could
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approach the Civil Court, he has insisted for the
matter to be taken up by contending that this
Court could decide the matter on the basis of
material available on record.
28.3. The only basis on which such a contention has
been taken is that when the Petitioner, along
with the bankers, visited the property, they
were unable to locate the same. There is no
proper access to the property, and there were
certain agricultural activities being carried on in
the plots allotted to the Petitioner. All these
aspects would have to be considered in the
context of the timeline of the matter.
28.4. Sri. P.V. Chandrashekar, learned counsel for the
KIADB, has categorically contended that the
KIADB was ready to hand over possession of
the property. It is the Petitioner who did not
take over the possession and make payment of
the due amounts. The allotment letter having
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been issued on 14.12.2009, except the
payment of 20% of the amount which was
made in the year 2010, no further payments
have been made by the Petitioner. The
Petitioner continued to keep quiet until an
allotment was proposed to be made of the plot
to Respondent No.3-MAGTEL. Until then, the
Petitioner chose not to make payment of the
due amounts. The Petitioner raised this issue of
allotment to MAGTEL only in the year 2014.
Until then, no such contention had been raised.
28.5. What is of importance for this Court to consider
is that MAGTEL was willing to take on lease the
property in question or a portion of the
property in question and set up its industry
when the Petitioner clearly wasn’t willing to do
so.
28.6. Much has been sought to be made out as
regards the claim made by Ambience
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Infrastructure by referring to the proceedings
filed by it in W.P.No.50659/2012 to contend
that Ambience Infrastructure, being situated
opposite the plot of the Petitioner, Ambience
Infrastructure had also contended that no
infrastructures were available.
28.7. A perusal of the documents relating to
Ambience Infrastructure would establish that
the issue, in that matter, was as regards access
to the property of Ambience Infrastructure,
which issue was raised by them in the year
2012. Subsequently, it is a matter of fact and
record that Ambience Infrastructure has set up
as a unit which is functional. The issues which
have been raised by the Petitioner were post-
2014. Thus, in 2014, the Petitioner cannot, in
my considered opinion, rely on the contention
of Ambience Infrastructure raised in 2011,
when Ambience Infrastructure, which was in
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possession, subsequently established its
industry on the said property. The fact that
Ambience Infrastructure established its industry
is evidenced by the photographs, which have
been produced, regarding which there is no
dispute.
28.8. Hence, the contention of the Petitioner on the
basis of the aforesaid writ petition filed by
Ambience Infrastructure will not enure to the
benefit of the Petitioner inasmuch as post the
writ petition, Ambience has established this
project.
28.9. Due to the Petitioner’s failure to implement the
project, the allotment made in favour of the
Petitioner was cancelled on 6-7-2015. A portion
of the plot was allotted to MAGTEL on 16-7-
2015, possession was handed over by KIADB
and received by MAGTEL on 28-08-2015. A
lease-cum-sale agreement was executed on 21-
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09-2015. MAGTEL, during this time, did not
raise any contention that the infrastructure
facilities had not been provided or that
development activities had not been completed.
The allotment having been made on 16.7.2015,
lease-cum-sale agreement was executed on
21.9.2015 with possession being handed over
in between on 28.8.2015. Neither at the time of
allotment, nor at the time of receiving
possession, nor at the execution of the lease-
cum-sale agreement, MAGTEL raised any issue
as regards the project not being completed, or
the infrastructure facility not being available.
28.10. The grievance of the Petitioner is that MAGTEL,
in pursuance of such lease-cum-sale
agreement, was putting up construction, which
would again establish that MAGTEL was in
possession as also in a position to put up
construction, and more importantly, that the
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allotted land was such that construction could
be put up. Subsequent to the filing of the writ
petition, the construction has continued, of
course, on the condition that no equity would
be claimed by MAGTEL. Be that as it may, from
the time of allotment, MAGTEL has taken
possession, implemented the project, and the
Industry is working on a portion of the land
allotted to the Petitioner.
28.11. Even insofar as Ambience is concerned, reliance
therefore placed by Sri.Pramod Nair, learned
counsel for the Petitioner on Chantilly’s
Group’s case, Vismay Realtor’s case,
Ondot’s case, Krishna Rai’s case, will not
enure to the benefit of the Petitioner inasmuch
as those cases were ones where it was
categorically established that the infrastructure
facilities were not available. In the present
case, taking into consideration that Ambience
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had established a project, so also did MAGTEL
establish a project, would negate the
contention of the Petitioner that infrastructure
facilities are not available.
28.12. Looked at it from another perspective, it is only
after the allotment made in favour of the
Petitioner was cancelled, an allotment was
made in favour of MAGTEL that the Petitioner
has come forward to receive possession of the
property and contending that it is ready to
implement the project. In my considered
opinion, such a stand taken by the Petitioner is
a classic case of approbating and reprobating.
The Petitioner from the year 2010 did not take
possession of the property and or make
payment of the due amounts to the KIADB and
or implement its project on the ground that the
infrastructure was not available. Suddenly, as
soon as an allotment was made in favour of
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MAGTEL, the Petitioner changed his stand and
sought to contend that it was ready to
implement its project; however, the Petitioner
was prevented from doing so.
28.13. The Petitioner who has come before this Court
seeking for discretionary relief has to come with
clean hands. In the present case, the Petitioner
has not only suppressed facts but has also
sought to take up contentions contrary to the
documents on record. As held by the Hon’ble
Apex Court in Cauvery Coffee Traders’,
Karunesh Kumar‘s case, etc., the Petitioner,
has approbated and reprobated, has not
established that the infrastructure facilities
were not available.
28.14. Hence, I answer Point No.2 by holding that the
Petitioner has not established that there is no
infrastructure facilities which have been
provided to the plot by the KIADB. To the
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contrary, the KIADB, on the basis of the
projects already implemented, has categorically
established that the infrastructure facilities
were indeed provided in the industrial plot.
29. Answer to Point No.3: Whether mere
mentioning of the modification of the allotment
in Para 24 of the Writ Petition without any
relief being sought for in relation thereto,
would entitle the Petitioner to the relief sought
for?
29.1. Sri Udaya Holla, learned Senior Counsel has
sought to contend that the Petitioner has not
approached this Court with clean hands. There
is suppression made on part of the Petitioner. In
that regard, he has relied on ABCD’s case,
K.D.Sharma’s case, Ramana Dayaram
Shetty’s case, Ashok Kumar Mishra‘s case.
Firstly, his submission is that the Petitioner has
suppressed the fact of modification of the
allotment made on 31.7.2015. Secondly, that
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the said modification not having been
challenged by the Petitioner, there is
acquiescence on the part of the Petitioner and
as such, the relief sought for cannot be
granted.
29.2. The submission of Sri.Pramod Nair, learned
counsel for the Petitioner, states that the
Petitioner has mentioned this modification in
Paragraph 24 of the petition, and as such, there
is no suppression of the said fact in the
petition. The said Paragraph 24 is reproduced
hereunder for easy reference:
“24. When the 1st Respondent issued the
2nd letter of allotment vide letter dated 3rd
August 2015, the Petitioner, knowing well
that through malafide intentions it might
cancel the allotted plots, informed to the
1st Respondent that it would pay the
amount of Rs.1,98,90,000/- to be paid
under the 2nd allotment letter and
expressly it informed the 1st Respondent
that it wanted the entire extent of 6 acres
allotted in Plots No.34, 35 and 36 and not
just 3.75 acres. The Petitioner also
furnished a letter from bank that the bank
was willing to pay the amount. However,
the 1st Respondent arbitrarily cancelled the
second allotment letter on 22nd December
2015, on the ground that the Petitioner
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was not interested in implementing the
project. This cancellation is arbitrary and
malafide because: firstly, the 1st
Respodnent knew about the credentials of
the Petitioner and was made known that
the Petitioner had sufficient funds to pay
the money indicated in the allotment letter,
secondly, the 1st Respondent knew that the
reason for not paying the Rs.1,98,90,000
was because the 1st Respondent had not
answered why the 6 acres was not allotted
but only 3.75 acres thirdly, the 1st
Respondent knew very well that the
Petitoner had already invested in huge
resources to implement the project on Plots
34, 35 and 36 and thus, it was wrong to
allege that the Petitioner was not keen in
implementing the project.”
29.3. A perusal of Paragraph 24 indicates that even
according to the Petitioner, a second letter of
allotment was issued. The Petitioner had
informed respondent No.1-KIADB, that it was
ready to make payment of an amount of
Rs.1,98,90,000/- as claimed therein. But it
wanted the entire extent of 6 acres and not
3.75 acres allotted under the second allotment.
29.4. Though this statement has been made in Para
24 of the writ petition, the said document has
not been produced, nor is the second allotment
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letter challenged by the Petitioner. Except for
the stray statement made in Para 24 of the Writ
Petition, there is nowhere else that this
cancellation and allotment has been referred to
by the Petitioner.
29.5. It is clear that the second allotment letter
having been received by the Petitioner, the
Petitioner has not challenged the same. This is
in my considered opinion would amount to
acquiescence on part of the Petitioner and the
contract would stand novated on the basis of
such an allotment letter issued by the KIADB.
Even the obligations under the second
allotment letter have not been complied with by
the Petitioner inasmuch as the aforesaid sum of
Rs.1,98,90,000/- has not been paid by the
Petitioner.
29.6. In this regard, it is sought to be contended by
Sri Pramod Nair, learned counsel for the
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Petitioner, that there cannot be an estoppel
against law. But what is being contended by
Sri.Udaya Holla, learned Senior counsel is
equitable estoppel inasmuch as the cancellation
and modification of the allotment, not having
been challenged by the Petitioner, is deemed to
have been accepted by the Petitioner. The
estoppel relied upon by the KIADB and MAGTEL
is an equitable estoppel and not an estoppel
against law. Mere mentioning of the
modification made without seeking relief in
relation thereto, in my considered opinion,
would disentitle the Petitioner from any relief.
29.7. Hence, I answer Point No.3 by holding that
mere mentioning of the modification of the
allotment in Para 24 of the petition without any
relief being sought for in relation thereto would
not entitle the Petitioner to the reliefs which
have been sought for in the present petition.
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30. Answer to Point No.4: Whether not seeking any
relief as regards the modification, which is in
the form of novation of the agreement, would
entitle the Petitioner for any relief?
30.1. Much of the answer to this point has been dealt
with in answer to Point No.3 above. The
submission of Sri Pramod Nair, learned senior
counsel, is that there is no novation of the
agreement which has occurred inasmuch as the
termination is unilateral. The modification of the
allotment is unilateral; the Petitioner has not
accepted any such unilateral change made in
the allotment, and therefore, there being no
novation mutually agreed between the parties,
the Petitioner would be entitled to the benefits
of the agreement/allotment made in favour of
the Petitioner.
30.2. The submission of Sri.P.V.Chandrasekhar,
learned counsel appearing for KIADB is that the
novation made in the allotment has been
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accepted by the Petitioner. The allotment in
favour of the Petitioner was cancelled on
6.7.2015, and it is thereafter that the second
allotment letter for a reduced extent of 3.75
acres was issued. Even the terms of the second
allotment letter were not complied with by the
Petitioner, resulting in the second allotment
letter also being cancelled on 11.12.2015.
30.3. The submission of Sri.Udaya Holla, learned
Senior counsel is that the second allotment
made after the cancellation of the earlier
allotment is a novation of the contract and this
modification and reduction of the extent of land
has been accepted by the Petitioner inasmuch
as the second allotment letter has not been
challenged by the Petitioner in the present writ
petition.
30.4. It is a matter of fact and record that this
modification has not been challenged by the
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Petitioner. As held in my answer to Point No.3
above, no relief has been sought for in relation
to such modification by way of the second
allotment letter. No relief in respect thereto can
be granted by this Court. What is required to be
considered in answer to Point No.4 is that while
reducing the allotment of the extent of land to
the Petitioner, the reduced extent of land has
been allotted to Respondent No.3-MAGTEL.
Though the allotment in favour of MAGTEL has
been challenged, the reduction in favour of the
Petitioner has not been categorically challenged
except to contend that the Petitioner is entitled
for the entire property allotted to it.
30.5. The cancellation of the first allotment in favour
of the Petitioner had been made on 6.7.2015,
modification occurred on 31.7.2015, the Writ
Petition being filed in April 2016, thus, for
nearly a year, there is no challenge made in
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respect thereto by the Petitioner. Thus, it is
apparent that the Petitioner is contesting this
litigation, firstly to get a benefit that it is not
entitled to, and secondly to cause detriment to
MAGTEL, who has put up construction of its
factory and has commenced work. As held in
Ramana Dayaram Shetty’s case, such a
conduct raises grave doubts as to whether the
Petitioner is bona fide and the Petitioner has
slept over its right. As held by the Hon’ble Apex
Court in Ashok Kumar Mishra‘s case, the
reliefs that are to be granted under Article 226
of the Constitution of India are discretionary in
nature and based on the consideration of delay
and equities. If there is an unreasonable delay,
no relief would be granted by this Court. In the
present case, I am of the opinion that there is
such unreasonable delay which has been
caused by the Petitioner. To consider the same
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in more detail would not be permissible before
this Court, inasmuch as all these are disputed
questions of fact which cannot be considered in
a Writ Petition.
30.6. The aspect of novation is established since
there is a complete substitution of the first
allotment letter with the second allotment letter
and satisfies the requirements laid down by the
Hon’ble Apex Court in Lata Construction’s
Case Supra. As held by the Hon’ble Apex Court
in Kanchan Udyog Limited‘s case, it was for
the Petitioner to have approached this Court
immediately after the cancellation of the first
allotment letter. The delay which has been
caused by the Petitioner in approaching the
Court has resulted in novation of the allotment
made in favour of the petition, allotment being
made in favour of MAGTEL, and MAGTEL acting
on it by implementing its industry.
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30.7. As held by the Hon’ble Apex Court in Kanchan
Udyog’s case, the allotment made in favour of
the Petitioner having been cancelled, and
another allotment was made in favour of the
Petitioner by the way of second allotment letter,
the second allotment letter not having been
challenged, that is the modification of the
agreement, not having been challenged, the
Petitioner, in my considered opinion, without
challenging the novation of the agreement,
would not be entitled for any relief.
30.8. Hence, I answer Point No.4 by holding that the
Petitioner not having sought any relief
regarding modification in the form of novation
of the allotment letter would disentitle the
Petitioner from any equitable relief.
31. Answer to Point No.5: Is the cancellation
effected by KIADB proper?
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31.1. It is not in dispute that the allotment was made
on 14.12.2019 and it is only 20% of the total
amount due, which has been paid by the
Petitioner. It is also further not in dispute that
the Petitioner has not taken possession of the
property nor has the Petitioner implemented
any project from at least 2010 till the
cancellation made in the year 2015, i.e., for a
period of five years, the Petitioner has not done
anything on the subject land.
31.2. The justification or excuse given by the
Petitioner is that, Firstly, infrastructure facilities
are not made available by the KIADB. Secondly,
that certain landowners were still carrying on
agricultural activities and thirdly, that until
possession was handed over, after completing
the developmental activities, the bankers or the
Petitioner were not willing to make payment of
the due amounts.
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31.3. In this regard, reference is also made by Sri
Pramod Nair to the document secured under
the Right to Information Act of the records of
the KIADB, wherein KIADB, has itself
categorically admitted that the landowners are
carrying on agriculture activities. The
landowner continues to be in possession of the
property and on that basis it is contended that
the land not being made available to the
Petitioner, the default being on part of the
KIADB, as evidenced in the note sheet, there is
fraud which has been committed by KIADB by
relying on Madanappa’s case and that the
allotment made in favour of MAGTEL and the
landowners is contrary to the applicable law.
These aspects taken into consideration with the
approbation and reprobation made by the
Petitioner who has come forward to implement
the project after the allotment was made in
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favour of Respondent No.3 as also small
portions having been allotted to land losers
Respondents No.4 and 5 would indicate that the
Petitioner was never interested in implementing
the project. From the year 2010 till the year
2015, there is very little communication on part
of the Petitioner.
31.4. It is taking note of the fact that the Petitioner
had not implemented the project, that the
allotment made in favour of the Petitioner was
cancelled, and thereafter, a fresh allotment
letter was issued reducing the extent. Even this
was not complied with by the Petitioner, and the
due amount was not paid, and it is only
thereafter, on cancellation of the allotment
made in favour of the Petitioner, that the
Petitioner is before this Court contending that it
will comply with any orders passed.
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31.5. The land which had been allotted to the Petitioner
was so allotted after acquisition from
agriculturists. This process of acquiring land from
agriculturists, forming a layout and allotting the
same to the applicants like the Petitioner is with
the intention of encouraging industrialisation of
the State in an orderly manner. The manner in
which the Petitioner has acted would clearly and
categorically establish that the Petitioner was not
interested in implementing the project, and it is
only after the allotment was made in favour of
Respondent No.3 that the Petitioner took interest
in the matter, started corresponding, etc. As held
in my answer to Point No.1, the KIADB has made
available the requisite infrastructure. It was
therefore for the Petitioner to have complied with
its obligation of making payment of the due
amounts in terms of reciprocal promises between
the parties, which the Petitioner did not make
payment of. Thus, there is a default on the part
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of the Petitioner on this score also. Though there
are several other decisions which have been
relied upon by the respective counsels in this
regard, on first principles, as also on appreciation
of the facts on record, it is clear that the
Petitioner was delaying the implementation of the
project and for some reason the Petitioner was
also supported by its bankers in this regard.
31.6. While the Petitioner was delaying the
implementation of the project, Respondent No.3
was not only allotted land, but Respondent No.3
implemented its project and was establishing its
industry/factory, it is during the process of
implementation that the Petitioner had
approached this Court. The extent of land allotted
to the Petitioner was reduced, taking into
consideration the allotment made in favour of
Respondent No.3 and Respondents Nos.4 and 5.
31.7. The actions on the part of the Petitioner, as
indicated so far, do not inspire confidence. The
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KIADB, in my considered opinion, has acted
rightly by cancelling the allotment made in favour
of the Petitioner, despite the Petitioner not having
taken things forward and implemented the
project.
31.8. Thus, I answer Point No.5 by holding that the
cancellation effected by the KIADB is proper and
does not require any interference in the hands of
this Court.
32. Answer to Point No.6: What order?
32.1. In view of my answers to Points No.1 to 5 above,
no grounds being made out, the Writ Petition
stands dismissed.
Sd/-
(SURAJ GOVINDARAJ)
JUDGE
PRS
List No.: 1 Sl No.: 61