HANUMAN SILKS Vs. KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD

JUDGEMENT

(1.) Karnataka Industrial Areas Development Board, the first respondent herein, is a statutory body established under the Karnataka Industrial Areas Development Act, 1966 ('the Act' for short). It has established and developed an industrial layout in Chickaballapur known as Chickaballapur Industrial Area.

(2.) The Board allotted Plot No. 1A and 1B in the said layout each measuring 4122 Sq.M. to the two petitioners. The Board issued confirmatory letters of allotment to the petitioners 4/6-2-1993 and 12-1-1993 respectively. The Board delivered possession of the said plots to, the petitioners on 6-2-1993 and 24-6-1993. The Board entered into lease-cum-sale agreements with the petitioners on 18-8-1993 and 19-8-1993. By clause 2(p)(1) of the said agreements, the petitioners covenanted with the Board to complete the civil construction work and erection of the factory within 12 months, and to commence production within 24 months, from the date of confirmatory letter of allotment. Clause 4 of the said agreements provides that, if the allottee/ lessee committed breach of any of the lessee's covenants, the Board (lessor) may re-enter upon the leased premises.

(3.) As the petitioners did not commence the civil construction work at all and consequently did not complete the construction nor commence production before 6-2-1995 and 12-1-1995 respectively, the Board issued notices dated 16-2-1995 and 15-2-1995 to the petitioners calling upon them to show cause why action for resumption should not be taken under clause 4 of the agreement. The petitioners gave their replies dated 4-4-1995 and 30-3-1995 stating that for want of water supply and for want of financial assistances, it was not possible for them to take up the construction and sought extension by one year, to complete the construction and commence production. Thereafter, by letters dated 22/23-6-1995 (Annexure-s 'F' and 'E' respectively in the two petitions),. the Board informed the petitioners that the petitioners had failed to implement the project before the stipulated date and the reasons given for noncompliance were not convincing and therefore, their request for extension of time was rejected; and the Board further notified the petitioners that in exercise of its powers under clause 4 of the agreements, the plots allotted to them will be resumed on 25-7-1995 at 11.00 a.m. and on such resumption, forfeiture clauses 4 and 11 will become operative. Petitioners again sought extension of time by their letters dated 5-7-1995.