KIADB cannot resume an industrial plot without serving the mandatory notice under Section 34-B(2).

The petitioners were allotted industrial plots in Kolhar Industrial Area in 2010 and entered into registered lease-cum-sale agreements. KIADB later issued notices under Section 34-B(1) and (3) of the Karnataka Industrial Areas Development Act, 1966, and passed resumption orders dated 12 October 2022 because the petitioners had not commenced industrial activity within the stipulated period.

The petitioners challenged the resumption orders and sought consideration of their request for an extension.

1. Whether KIADB could order resumption of the plots without serving the petitioners a notice under Section 34-B(2) of the Act, allowing them the statutory opportunity to remedy the breach.

2. Whether the petitioners’ request for additional time to complete their projects and commence industrial activity should be considered by KIADB.

Section 34-B of the Karnataka Industrial Areas Development Act, 1966 governs resumption of allotted premises for breach of allotment conditions.

As applied by the Court, Section 34-B(2) requires KIADB, where the allottee has failed to remedy the breach within the stipulated time, to serve a notice calling on the allottee to show cause within 30 days why possession should not be resumed; the statutory process also provides an opportunity to remedy the breach before resumption.

The Court found that, although KIADB had issued notices under Sections 34-B(1) and 34-B(3), it had not served the distinct notice required by Section 34-B(2) before ordering resumption.

The petitioners therefore had not received the statutory opportunity to remedy the breach, making the resumption orders procedurally defective. The Court left the merits of the petitioners’ request for additional time to KIADB to consider in accordance with law.

It reserved liberty for the petitioners to submit representations seeking time to complete their projects and commence industrial activity, and directed KIADB to consider any such representations and pass appropriate orders in accordance with law. No order was made as to costs.