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 Civil Appeal No 8073 of 2022 Page 2 of 33 Appeal No 175 of 2017 titled “ Karnataka State Electronics Development Corporation Ltd. 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 & conditions of allotment and payment of price of land in full as may be finally determined by the appellant. The Civil Appeal No 8073 of 2022 Page 5 of 33 said value was duly adopted based upon the guidance value determined by the Government. 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.
3.2 Crores per acre was applicable for residential purposes, but this being used for commercial purpose, the rate would be higher by 40 per cent and, therefore, the loss would be additional Rs. Before the High Court, the respondent also filed a communication which took place between the appellant and the audit department, wherein the appellant sent a response to the audit objection justifying that the prevailing rate was Rs. The submissions advanced by learned counsel for the appellant are summarized as hereunder: a) The Division Bench committed an error in dismissing the appeal primarily on the ground of delay of 459 days, which was not satisfactorily explained. It was further stipulated in clear terms that at the time of final execution of sale cum lease deed, the prevailing rate would be charged as would be finalised in due course of time depending upon other attending charges which may be liable to be paid by the appellant. d) The Single Judge and the Division Bench failed to appreciate that all other entities, list of which was provided, had been charged at the final rate determined as per the 141 Board resolution. It is a non-profit Civil Appeal No 8073 of 2022 Page 12 of 33 organisation, established for the growth and promotion of Information Technology and Electronics sector in the State of Karnataka.
The respondent has already paid an additional amount of Civil Appeal No 8073 of 2022 Page 13 of 33 Rs.3,75,000/- towards land development cost for which a separate demand had been raised as such no further demand could be raised on the basis of revision of prices. e) It was only when the respondent repeatedly requested the appellant to execute the final lease cum sale deed and was compelled to issue a legal notice that an additional demand of Rs.83 Lakhs was raised vide communication dated 25.07.2012. Civil Appeal No 8073 of 2022 Page 16 of 33 f) Benefit of the Limitation Act was not admissible to the appellant in as much as the entire exercise and the time spent in filing reviews and appeals repeatedly was in itself an abuse of process of law.
Before proceeding to analyze the arguments advanced by the learned counsel for the parties, at the outset, it would be relevant to refer to the terms of the allotment letter, terms of the agreement Civil Appeal No 8073 of 2022 Page 17 of 33 between the parties as also the resolutions passed from time to time. b) Paragraph 1 of the said allotment letter provided that the lease shall be converted into a sale subject to fulfilment of all terms and conditions of allotment and payment of price of land in full as finally fixed, subject to adjustment of amount already paid towards premium and rent. At the end of 10 years or completion of the project for which land is allotted whichever is early, the lease shall be converted into a sale subject to fulfillment of all the terms and conditions of allotment and payment of price of land in full as finally fixed subject to adjustment of amounts paid by you towards premium and rents. g) Paragraph 6 of the said agreement states that the parties have agreed to the price of land being tentatively fixed at Rs.25 Lakhs. Civil Appeal No 8073 of 2022 Page 21 of 33 ii) The lessee shall not change the name/product (as mentioned in the application) without the previous written consent of the lessor or any officer authorized by the lessor and such consent shall be granted by the lessor subject to the condition that the lessee has to pay prevailing rate of the plot.” i) The next relevant clause is clause 13(b) which provides that the lessor (appellant) would fix the price as soon as it is convenient and the same would be communicated to the lessee so that the sale could be affected. As soon as it may be convenient the LESSOR shall fix the price of the demised premises in the allotment letter and at which it will be sold to the LESSEE and communicate it to the LESSEE and the decision of the LESSOR in this regard will be final and binding on the LESSEE. At the end of ten years or completion of the project for which land is allotted whichever is early, the lease shall be converted into a sale subject to fulfillment of all the terms and conditions of allotment and payment of price of land in full as finally fixed subject to adjustment of amounts paid by you towards premium and rents. The Government Audit Party, while auditing the records of the appellant, raised an objection at Audit Enquiry No.27 vide communication dated 06.11.2008 that the appellant was suffering a loss of at least Rs.78.25 lakhs in as much as the change in activity from IT related sector to hospitality sector would amount to a fresh transaction and, therefore, the rate prevailing at the time of seeking change in activity should have been applied treating it to be a fresh transfer. It is true that initially the appellant tried to justify the demand of change in activity of Rs.5 lakhs calculated at the rate being Rs.1 Crore per acre but later on it realized that the audit objection was correct and, therefore, the appellant was entitled to demand the revised final rate as determined by the 141 Board meeting. The Board further noted about the huge demand for land by the industries to set up IT Parks and IT related activities in Electronics City, and fixation of guidance value by the Government in Electronics City at Rs.800/- per sq. The Directors suggested to adopt the guidance value of Rs.3.2 Crores per acre fixed by the Government, which will enable the Corporation to maximize its returns, Civil Appeal No 8073 of 2022 Page 26 of 33 hence, to fix, the price of Rs.3.2 Crores per acre. The 141 Board Meeting has taken place prior to the respondent applying for change of use and issuing of the demand notice for conversion, there could be no justification for not adhering to the decision taken in the 141 Board Meeting.
The audit objection is based upon correct appreciation of the decisions taken in the Board Meeting, in particular, 141 Board Meeting as also based upon the terms and conditions laid down in the Letter of Allotment and the Lease Agreement. Once the respondent is bound by the terms and conditions, the final rate determined by the Board in its 141 meeting, being the prevailing rate of the Collector, would be binding on the respondent. The case of Vinod Kapoor (supra) related to filing of a second S.L.P. The case of Sandhya Educational Society (supra) also has no application as it related to maintainability of the S.L.P.
Further reliance has been placed upon the judgment in the case of Prakash Dal Mill (supra) This argument has no legs to stand prior to the request for execution of the sale deed, the final rate had already been determined in the 141 Board Meeting and, therefore, the respondent would be bound to and abide by the same. In the present Civil Appeal
