ELECTRO ANIL LIMITED Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THE petitioner has prayed for a declaration that S. 34 B of the Karnataka Industrial Area Development (Amendment) Act, 2000 as invalid and in violation of Art. 19 and 21 of the constitution; that the termination of lease as per annexure S bearing No. IADB 3716 11118 2001-02 dated 2. 1. 2002 issued by the 3rd respondent is illegal; to declare the order of allotment dated 4. 3. 2002 issued by the 4th respondent at annexure Y as illegal and also to issue consequential direction to the respondents to restore the possession of the property to the petitioner by accepting the difference amount along with interest amounting to Rs. 6,52,696/- and for such other orders.

(2.) PETITIONER is said to be registered as a private limited company on 27. 4. 1982 for the purpose of manufacture of electronic battery powered two wheelers. Later the petitioner is said to have converted into a public limited company recognised by the respondents as per annexure A. One Prabhakar who is a director is also empowered to represent the company as per annexure B. On the application made, a plot was sought to be allotted on 25. 6. 1982 by the 3rd respondent at Veerasandra industrial Area, Attibele Hobli, Anekal Taluk. Consequently, the 3rd respondent put the petitioner in possession of plot Nos. 31b and 31c as per annexure D which measured 12002 sq. mtrs and on 19. 11. 1982, a lease cum sale agreement was also said to be executed. At that time, petitioner is said to have paid an initial deposit of Rs. 30,013/- Later, the petitioner was sanctioned loan by the Karnataka State Financial Corporation to the tune of rs. 20,87,000/- for establishing a small scale industry. According to him, he has utilised the said amount for the purpose of purchase of machineries. He also obtained a loan of Rs. 45 lakhs from the state Bank of Mysore for purchase of machineries and raw materials. However, according to the petitioner, because of the pressure from the financial institutions, he has discharged the loan amount due to State Bank of Mysore as well as to Karnataka state Financial Corporation. According to him, the State government has provided subsidy of Rs. 7. 50 lakhs for setting up an industry in the backward area. At the time of establishing, after putting up the building, he had left sufficient space for runway in order to test drive the vehicles to be manufactured. He has also spent more than 60% amount towards cost of the project excluding the site cost. Petitioner is said to have obtained license from the hebbagodi Panchayat for. construction of factory building on 1. 4. 1987 as per annexure G.

(3.) ACCORDING to the petitioner, he has made efforts to secure several components from outside as the same was not available in the country for the intended manufacture of mopeds. Ignoring that he has invested 60% of the cost of the project, the respondent has issued a letter dated 13. 7. 1992 as to why the lease shall not be determined although there is no violation of the terms of the lease. Though reply was issued to the said notice as per annexure n on 31. 7. 1992, 3rd respondent has issued a notice dated 16. 10. 1992 stating that structure as well as land will be resumed on 20. 11. 1992 for failure to implement the project within the stipulated period ignoring the board's resolution made in the meeting held on 3. 12. 1991. Against which, petitioner filed WP 34041/1992 before this Court wherein this Court disposed of the petition stating that there is a settlement between the parties according to which the petitioner has to pay 75% of the difference between the market price that was prevailing on the date of resumption notice dated 16. 10. 1992 and the market price prevailing on the last date of time extended for completion i. e. , on 21. 3. 1988. Petitioner had also agreed therein that 75% of the difference in rates along with penalty of Rs. 15,000/- would be paid within six months from 8. 9. 1999 or four and half months from the date of intimation and he had also agreed to give an undertaking to the KIADB to commence production activities within one year from the date of payment. On such failure, the 3rd respondent was at liberty to take action in accordance with the terms of the contract. However, in response to the same the petitioner was called upon to pay a sum of Rs. 5,31,469/- by letter dated 25. 8. 2000 and also to file a undertaking to implement the project. According to the petitioner, in pursuance of the said letter, he paid only a sum of Rs. 15,000/- towards penalty and sought for extension of time to pay the difference on the ground that he was facing financial crisis. However, according to the petitioner, instead of considering the request and without hearing him, letter dated 2. 1. 2002 was issued terminating the lease and fixing the date for resumption of the scheduled land. Hence, this petition on various grounds.