IMPORTANT POINT
Limitation – Delay can be condoned in order to advance justice inter se parties.

JUDGMENT :

VIKRAM NATH, J.

1. This appeal is directed against the judgment and order dated 28.07.2017 passed by the Division Bench of the High Court of Karnataka in Writ Appeal No. 175 of 2017 titled “Karnataka State Electronics Development Corporation Ltd. vs. Kumaon Entertainment and Hospitalities Private Limited” whereby the appeal of the appellant was dismissed, thereby confirming the judgment of the learned Single Judge dated 03.09.2015 and 14.11.2016, allowing the Writ Petition No. 1605 of 2015 of the respondent and dismissing the review petition respectively.

2. The State of Karnataka came up with a policy decision for the purposes of promoting and developing industries related to Electronic and Information Technology within the State. It established Karnataka State Electronic Development Corporation Ltd. ¹ [in short known as “appellant”] as a Non-Profit Organisation for the aforesaid purpose across the State including the Electronic City in Bangalore. Acquisition of land in large amount was made in Bangalore city for setting up an area known as Electronic City.

3. The appellant, vide its 133rd Board Resolution came up with a new selection process for allotment of land in the Electronic City. Vide allotment letter dated 25.01.2006, the appellant allotted plot admeasuring 0.25 acres to the respondent for development of such land to be used in industry relating to Information Technology and Electronic Development Sector (Animation and Multi Media Services). The tentative price fixed of the allotted land was Rs. 1 Crore per acre. The respondent was required to commence the project at the earliest.

4. The allotment was made on lease cum sale basis for a period of ten years. It was further stipulated that upon completion of ten years or on completion of the project, the lease would convert to a sale, subject to fulfilment of all the terms and conditions of allotment and payment of price of land in full as may be finally determined by the appellant. It was also clearly mentioned in the allotment letter that the price of land indicated was only tentative (Rs. 1 Crore per acre). The final price of the allotted land would be communicated later, which would be dependent upon other factors being finalized in the meantime. Possession of the land was given to the respondent on 09.05.2006.

5. A lease cum sale agreement was executed between the appellant and the respondent on 30.10.2006. The terms of the lease cum sale agreement would be dealt in detail at a later stage.

6. The respondent, which was originally a partnership firm, applied for it being converted into a private limited company in 2007. The appellant issued no objection certificate in that regard on 18.05.2007.

7. In the 141st Board meeting of the appellant dated 19.07.2007, the Board resolved that the price for allotment would be as per the guidance value fixed by the Government, which was Rs. 800/- per sq. ft. It would work out to Rs. 3.2 Crores per acre. The said value was duly adopted based upon the guidance value determined by the Government.

8. On 23.07.2007, the respondent applied to the appellant for conversion of nature of use from Information Technology sector to Hospitality sector. As per the terms of allotment and the lease agreement, change in nature of use could be granted, subject to the payment of additional charges at the prevailing rate. On 24.09.2007, communication was issued by the appellant granting permission for the change in the nature of activity, subject to payment of Rs. 20 lacs per acre. The respondent thereafter paid an amount of Rs. 5 lacs as the allotted land was only one quarter of an acre. On 15.10.2007, the respondent also applied for approval of its plan for construction.

9. On 06.11.2008, an audit objection was raised stating that the prevailing rate of plot at the time of change of use was Rs. 3.2 Crores per acre, whereas permission of change of use was granted at a much lower rate. The appellant had, therefore, suffered a loss of Rs. 46.25 lacs