The allotment rate changes by the Karnataka Industrial Areas Development Board are only applicable prospectively; individuals previously allotted land at higher rates do not have grounds to claim refunds based on subsequent price reductions.

ORDER :

(SURAJ GOVINDARAJ, J.)

1. The Petitioner is before this Court seeking for the following reliefs :

i. To issue a writ of certiorari quashing the impugned order bearing No. 7023 before the CEO and EM, KIADB, Bengaluru dated 18.3.2022 (Annexure-S) passed by the R1;

ii. Consequently direct the R1 to refund the sum of Rs. 100 lakhs (Rs. 50 lakhs per Acre) collected in excess of the actual cost of 2 Acres of land and to pay interest @ 12.5% p.a. on the said sum of Rs. 100 lakhs from 03.05.2016 (date of Lease Deed) until the actual date of payment within a period of 30 days or such other time period as may be determined by this Hon’ble Court.

iii. Award costs of these proceedings; and

iv. Issue any other appropriate writ, order or directions as this Hon'ble Court deems fit under the facts and circumstances of the case, in the interest of justice and equity.

2. The Petitioner claims to be a Company incorporated under the provisions of the Companies Act, 1956 and involved in the business of making cold forged and machined components for automobile and aerospace industries. The Petitioner applied to the 1st respondent - Karnataka Industrial Area Development Board (for brevity, hereinafter referred to as KIADB), for allotment of 2 acres of land in Jakksandra Industrial Area, Malur, Kola District (for brevity, hereinafter referred to as ‘JIA’).

3. KIADB allotted 8,000 square metres of land on 16-04-2016 to the Petitioner in Plots No.47 and 48 of JIA. The Petitioner availed of a loan by way of a term loan and cash credit facility of Rs.620 lakhs/- on the basis of the security provided by the promoter directors and family members from the Bank of India, HSR Layout, Bangalore (hereinafter, for brevity, referred to as ‘BOI’).

4. The total cost of allotment on a 99-years lease was stated to be Rs.276/- lakhs at the rate of Rs.138/- lakhs per acre. The Petitioner set up the industry within seven months of the date of allotment and started its commercial production on 8-11-2016 and, as such, complied with all the conditions imposed by KIADB. In the year 2017, the KIADB pursuant to Order No.CI-105-SPI-2017 of the Government of Karnataka dated 11-7-2017 changed the conditions of allotment, now allotting the land on a lease-cum- sale basis for a period of 10 years for up to 2 acres of land and as such, the KIADB executed a rectification deed on 22-11-2018, reducing the 99- years lease to 10-years lease-cum-sale basis. In furtherance of the policy of the Government to promote the growth of Micro, Small and Medium Enterprises.

5. The Petitioner made a representation on 27-4-2017 to the District Industries Centre, Kolar, (hereinafter referred to as DIC), seeking for refund of excess amount collected by the KIADB since the lease has now been reduced from 99 years to 10 years, which was taken up by the District-level Kaigarika Spandana meeting, under the chairmanship of the Deputy Commissioner, Kolar, on 23-9-2017. The Joint Director, District Industries Centre, Kolar forwarded the said request. The Joint Director and Deputy Commissioner were of the opinion that the said request has to be considered in terms of Special Development Program introduced by the Industries and Commerce Department.

6. The Petitioner claiming that it had set up the industry in the border area of the State of Karnataka at a high capital, and the Petitioner not in a position to achieve break-even claimed that the Petitioner had suffered a loss of Rs.1,19,09,468/- for the financial year 2017- 18 and for the financial year 2018-19, the losses suffered was to the extent of Rs.67,96,622/-. The Petitioner's Managing Director, having provided a loan of Rs.6.3 crores to the Petitioner, had indicated that the Petitioner had suffered huge financial losses. The Petitioner, having learnt that other allotment in the JIA was being made at the rate of Rs.88/- lakhs per acre, had made an application with the KIADB under the Right to Information Act, (hereinafter referred to as ‘RTI’, for brevity),