Case Note & Summary
The petitioner, M/s Durga Fabrication Works, represented by its proprietor Sri Prakash Ramu Rathod, was allotted an industrial shed in Plot No.10D of Non-IT SEZ Industrial Area, Pajeera Village, Bantwal Taluk, Dakshina Kannada District, by the Karnataka Industrial Area Development Board (KIADB) vide allotment letter dated 20.05.2016 for establishing a fabrication unit. Subsequently, the petitioner sought permission to establish lodging and boarding facilities on the same plot for the benefit of workers. The Chief Executive Officer-cum-Executive Member of KIADB, by order dated 17.07.2019 (Annexure-P) and covering letter dated 19.07.2019 (Annexure-P1), rejected the request without assigning any reasons and without affording any opportunity of hearing to the petitioner. Aggrieved, the petitioner filed a writ petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka. The petitioner contended that the impugned orders were arbitrary, violative of principles of natural justice, and passed without application of mind. The respondents argued that the rejection was based on policy and that the petitioner had no right to use the industrial plot for non-industrial purposes. The High Court, after hearing both sides, held that the impugned orders were in gross violation of natural justice as no notice or opportunity of hearing was given to the petitioner before passing the adverse order. The court quashed the orders and directed the respondents to consider the petitioner's request afresh on merits after affording a reasonable opportunity of hearing. The court did not express any opinion on the merits of the case and left it open to the respondents to pass appropriate orders in accordance with law.
Headnote
A) Administrative Law - Natural Justice - Right to be Heard - Refusal of permission without hearing - KIADB rejected petitioner's request for lodging and boarding facilities in industrial plot without any notice or opportunity of hearing - Held that the order is in gross violation of principles of natural justice and liable to be quashed (Paras 3-5). B) Industrial Law - Karnataka Industrial Area Development Board Act, 1966 - Allotment of Industrial Shed - Ancillary Use - Petitioner allotted plot for fabrication unit sought permission for lodging and boarding for workers - KIADB rejected citing policy - Held that the Board must consider the request on merits after hearing the petitioner, as the rejection was arbitrary and without application of mind (Paras 4-6).
Issue of Consideration
Whether the Karnataka Industrial Area Development Board (KIADB) can refuse permission for establishing lodging and boarding facilities in an industrial plot without affording an opportunity of hearing to the allottee, and whether such refusal is arbitrary and violative of principles of natural justice.
Final Decision
The High Court quashed the impugned order dated 17.07.2019 (Annexure-P) and the covering letter dated 19.07.2019 (Annexure-P1). The court directed the respondents to consider the petitioner's request afresh on merits after affording a reasonable opportunity of hearing to the petitioner. The court clarified that it had not expressed any opinion on the merits of the case and left it open to the respondents to pass appropriate orders in accordance with law.
Law Points
- Natural justice
- Right to be heard
- Arbitrary exercise of power
- Industrial development
- Ancillary use of industrial land
