KIADB cannot cancel an industrial plot allotment or resume possession without notice under Section 34-B(2).

The petitioner was allotted industrial Plot No. 68/B in 1996 and entered into a registered lease-cum-sale agreement.

After seeking permission to change the proposed business, he received approval in 2018 and a one-year extension of the lease period, from 22 March 2019 to 21 March 2020.

The KIADB later cancelled the allotment, issued a resumption notice, and took possession of the plot, citing the petitioner’s failure to complete construction and commence manufacturing.

The petitioner challenged the cancellation, resumption notice and subsequent possession letter, arguing, among other things, that the action occurred during the COVID-19 period and without the notice required by statute.

He also undertook to commence manufacturing within one year after possession was restored.

Whether the KIADB could cancel the allotment and resume the plot without first issuing the notice required under Section 34-B(2) of the Karnataka Industrial Areas Development Act, 1966.

Whether, in the circumstances—including the COVID-19 period and the petitioner’s undertaking—the impugned cancellation and resumption should be set aside and the request for further time reconsidered.

Section 34-B(2) of the Karnataka Industrial Areas Development Act, 1966 requires the prescribed notice before the KIADB proceeds against an allottee for breach; the Court treated compliance with that procedure as necessary before cancellation and resumption.

The Division Bench’s order in W.P. No. 6435/2020, dated 16 April 2020, stated that during the period when citizens would practically be unable to approach the courts, State authorities and instrumentalities should be slow to take demolition or eviction action.

The Court considered these principles alongside the petitioner’s undertaking to commence manufacturing within one year of restoration of possession.

The KIADB had cancelled the allotment and resumed the plot without issuing the notice required under Section 34-B(2), making the procedure adopted impermissible.

The Court also noted that the cancellation and resumption process occurred during the COVID-19 pandemic, when the Division Bench had urged State authorities to be slow in taking eviction action.

In light of these circumstances and the petitioner’s undertaking, the Court concluded that the KIADB should reconsider the request for additional time rather than allow the impugned action to stand.

It directed respondent Nos. 2 to 4 to consider the petitioner’s request, as set out in his undertaking, and take an appropriate decision within six weeks of receiving the order.

No order as to costs was made.