The court emphasized that while KIADB was empowered to fix the final price, it should be done reasonably and in line with the directions of the Supreme Court in Prakash Dal Mill case. The petitioner was entitled to the absolute sale deed after payment of the final price.

R. DEVDAS, J.

1. The petitioner is a company carrying on business in manufacture and sale of potable liquor and alcohol based chemicals. The petitioner was allotted 140 acres of land in plot Nos.1 to 17 at Shivamogga-Bhadravathi Industrial Area, in the year 1982. The petitioner is before this Court calling in question the demand raised by the respondent Karnataka Industrial Area Development Board (for short ‘the KIADB’) on 14.09.2000 (Annexure-J), calling upon the petitioner to pay Rs.1,28,23,888/- towards difference in the land cost, lease rent, interest, penal interest and maintenance charges, etc and the Letter of termination dated 03.11.2010 (Annexure-Q).

2. The brief facts of the case are as follows: The Government of Karnataka, pursuant to its policy to develop industrially backward areas, announced that it would allot land to qualified entrepreneurs on down payment of 20% cost of land and balance to be collected over a period of 10 years on Lease-cum-Sale basis, for establishing industry in Shivamogga-Bhadravathi Industrial Area. Based on the said policy, on 27.11.1982, respondent-Karnataka Industrial Areas Development Board (for short ‘KIADB’) allotted 140 acres of land in favour of the petitioner herein, at a tentative price of Rs.14,157/- per acre, which works out to Rs.19,81,980/-. On 29.11.1983, a Lease-cum-Sale Agreement was executed in favour of the petitioner, for a period of 11 years, starting from 18.02.1983. The Lease-cum-Sale Agreement was preceded by issuance of Letter of Allotment, Confirmatory Letter of Allotment and Possession Certificate. It is an admitted fact that initially possession was granted to an extent of 85 acres under Possession Certificate dated 10.08.1983 and thereafter the remaining 55 acres were handed over to the petitioner, vide possession certificate dated 15/21.11.1985. The petitioner had paid additional deposit of Rs.3,96,340/- on 08.02.1983 and the balance of the entire sale consideration of Rs.19,81,980/- was paid by the petitioner between 30.07.1985 and 30.08.1985. The petitioner thereafter established a distillery on the land allotted and commenced production in the year 1985-86.

3. Thereafter, the petitioner received a notice form the Karnataka State Pollution Control Board (for short ‘KSPCB’) directing the petitioner to carryout various directions issued by the KSPCB. Since, the petitioner was unable to comply with the directions issued by the KSPCB, it appears that KSPCB issued directions to the concerned authorities to disconnect electricity, water supply and allotment of molasses to the distillery with immediate effect. When the matter stood thus, KIADB called upon the petitioner to pay arrears of rents of Rs.10,40,925/- by issuing a letter dated 29/31.05.1997. Thereafter, vide a letter dated 14.09.2000 (Annexure-J), KIADB informed the petitioner that final rate of the land in question was fixed at the rate of Rs.23.10/- per square meter which works out to 1,30,80,768/- and after giving deduction of Rs.19,81,549/- that was paid by the petitioner, it was called upon to pay Rs.1,28,23,888/-, which includes installments due, interest due, penal interest due and maintenance charges, along with interest. Thereafter, it appears that the petitioner made several representations to the KIADB and to the State Government seeking reconsideration of the demand made by the KIADB. Finally, KIADB terminated the lease by issuing a letter dated 03.11.2010, at annexure-Q. Being aggrieved the petitioner is before this Court assailing the demand notice and termination of lease made by the KIADB.

4. Learned counsel Sri. Abhinav R, appearing for the petitioner, submits that the demand raised by the KIADB is illegal, without force of law and directly in conflict with the judgment of this Court as well as the Hon’ble Supreme Court of India. Learned counsel submits that KIADB could not have raised such a demand which runs counter to the terms enumerated in the Letter of Allotment and Lease-cum-Sal