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Phatu Rochiram Mulchandani v. Karnataka Industrial Areas Development Board

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 3803 of 2014)Decided 12 Mar 2014
Civil Appeal No. 3803 of 2014
Justice S.S. Nijjar · Justice A.K. Sikri

Background

A company received industrial plots on a lease-cum-sale basis but failed to establish its factory and later went into liquidation. The development board cancelled the leases and obtained the company court's permission to recover possession, which a promoter and guarantor challenged in an effort to preserve the land for possible revival.

Decision Breakdown

The Court dismissed the appeals and upheld the cancellation and permission to resume possession. The company's non-compliance prevented it from becoming owner merely because it had made payments under the agreements. Sending a cancellation notice did not itself require prior leave of the company court, although taking possession after winding up did, and the board had obtained that permission. A vague revival proposal without a proper rehabilitation scheme did not defeat the board's rights; the promoter's challenge was considered on its merits rather than rejected simply for lack of standing.

Lesson Learnt

A conditional industrial allotment is not unconditional ownership; liquidation does not erase lease breaches, but recovery of possession must still follow the required court process.

Official source (sci.gov.in)View Judgment (PDF)

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