The court clarified that a party cannot be treated as abandoning a project due to delays in acquiring land by the authority responsible, highlighting the entitlement to a refund under specific circumstances.

1. The present intra - Court appeal is filed under S.4 of the Karnataka High Court Act , 1961 (Hereinafter referred to as the ' Act of 1961'), by the appellant No.1 / Karnataka Industrial Area Development Authority, challenging the order dated 15.09.2021, passed in W.P No.146875/2020, by the learned single Judge, whereunder the learned single Judge has allowed the writ petition filed by respondent No.1 / petitioner.

2. The parties will be referred to as per their ranking before the Tribunal, for the sake of convenience.

3. The factual matrix in brief leading to the present appeal are that the petitioner intended to setup a sugar factory at Devlapurhatti village, Raibhag taluk, Belagavi district and pursuant to the request made by the petitioner, the Government of Karnataka (Hereinafter referred to as the 'GOK'), vide order dated 29.04.2010, granted in principle approval to the project proposal of the petitioner company to setup a 2500 TCD Sugar plant with 12 MW Cogen at Devlapurhatti village of Raibag taluk in Belagavi district. The G.O.K undertook to acquire an extent of 158 acres of land situated in Devlapurhatti village and allotted the same to petitioner through Karnataka Industrial Areas Development Board (Hereinafter referred to as the 'KIADB').

4. The petitioner also obtained an Industrial Entrepreneur Memorandum (Hereinafter referred to as the 'IEM') as required under the Sugarcane (control) (Amendment) O.2006 and also furnished a performance bank guarantee of Rs.1 crore to the Chief Director (Sugars), New Delhi on 23.07.2010, in pursuance of which, the Union Secretary, passed an order dated 15.12.2010, taking the proposed sugar factory of petitioner on record as a new sugar factory.

5. On 02.05.2012, the petitioner entered into an agreement with the KIADB for the purpose of making available land an extent of 158.06 acres situated across several survey numbers in Devlapurhatti village, Raibhag Taluk, Belagavi district, for the purpose of setting up of the said sugar factory. As per the terms and conditions of the said agreement, the petitioner deposited a sum of Rs.1,39,06,200/- on 20.04.2012 being 40% of the tentative amount quoted and intimated the same to the KIADB vide letter dated 23.04.2012. As per the terms and conditions of the agreement, the KIADB was required to take necessary steps to acquire the said land and thereafter, transfer its right, title and interest and possession in favour of petitioner and issue allotment letter.

6. The IEM dated 06.07.2010 was valid only for a period of two years and petitioner sought for extension of the same. Vide order dated 23.07.2012, the IEM was extended by a period of six months and vide order dated 15.01.2013, it was further extended up to 05.07.2013. The petitioner was informed that in the event the petitioner does not take effective steps by 05.07.2013 and commence commercial production on or before 05.07.2015, the performance guarantee furnished by the petitioner would stand forfeited.

7. Since the KIADB did not take requisite steps to acquire the land and handover possession, the petitioner submitted a representation dated 03.09.2014, to the Chief Director (Sugar), New Delhi, requesting for exclusion of time taken for completing the acquisition of land, while computing the time limit for implementation of the IEM. The petitioner also issued a letter dated 29.01.2015 to the KIADB requesting them to expedite the process of land acquisition. On 04.02.2015, the Directorate of Sugar, issued a show cause notice to the petitioner as to why action should not be taken against the petitioner for non - implementing the IEM, to which, the petitioner sent a detailed reply on 06.04.2015.

8. The Special Land Acquisiti