KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD

(A Government of Karnataka Undertaking)

# 49,4th & Sth Floors, 'East Wing', Khanija Bhavan, Race Course Road, Bengaluru - 560 001
Phone : 080-22265383 Fax : 080-22267901
Website : www.kiadb.in email : ceoemkiadb@gmail.com

No. KIADB IHQ / CEO&EM/ PSt6 12023-24 Date: 10.0 | .2024

To:
The Commissioner,
Bangalore Development Authority,
T. Chowdaiah Road,
Kumara Park West,
Bengaluru - 560 O2O.
Sir,
Sub: Granting permission for formation/development of
industrial layouts and construction of buildings
within the Local Planning Area (Bangalore
Metropolitan Area) of Bangalore City by Karnataka
Industrial Area Development Boardwithout taking
permission from Bangalore Development Authority-
reg.
Ref: 1. Your letter dated 22.12.2023 in No. BE.A.PRA/NA
YO SA/ GVT l2OsO 12023-24.
2. cO dated 07.11.2015 No. NA A EE 118 MSU
2015 issued by the Government of Karnataka.
3. GO dated 02.02.2016 No. NA A EE 29 MSU 2016
issued by the Government of Karnataka.
{. Circular dated 26.O2.2016 issued by Department
of Industries and Commerce, Government of
Karnataka.
****
1. With reference to the above subject and references, I would
like to submit that the Karnataka Industrial Areas Development Act,
1966(hereinafter referred to KIAD Act for short) was enacted for the
purpose of making special provisions for securing establishment of
industrial areas in the State of Karnataka and to permit the
establishment and orderly development of industries within the
industrial areas. Keeping in mind the said object, KIAD Act, 1966,
c€une to be enacted and The Karnataka Industrial Areas Development
Board Regulations, 1969 (hereinafter referred to as Regulations 1969)
came to be framed.
2. As can be seen from the Regulation 16 of Regulations 1969
speaks about Building Regulations and Annexure to the same also
relates to the sarne. Regulation 16 of Regulations 1969 reads as
under:
" 16. Building Regulations.- The building
regulations which the allottee will have to comply
with are given in Annexure-I, appended to these
regulations."

The Rules and Regulation also speaks about calling for

application for allotment as well as the manner of disposal of sites
apart from procedure for execution of Lease Deed and Sale Deeds of
the land allotted to various industries.

3. It can also be seen that once the Notification under Section

3(i) of the KIAD Act 1966 is issued, the area in question is declared as
industrial area coming within the ambit of the Karnataka Industrial
Area Development Board and all developmental activities within the
said area is taken by the said Board.

4. Further,as can be seen from 1966 Act, the general powers

of the Board are to provide amenities in the industrial areas, make
available building on lease or sale to industries to construct building,
allot sites and approve and sanction plansas provided under
Regulation 16 of Regulations 1969.

5. It is to be noted that in terms of the order dated

07 .r 1 .2015, it was ordered that the Bruhat Bengaluru
MahanagaraPalike(BBMP) shall be the Finat Authority in connection
with according permission and building plan sanction. [n essence, the
planning authority, as contemplated under section 2(7)(a)(1) for the
prescribed area, was declared to be the Bruhat Bengaluru
MahanagaraPalike. A copy of the order dated :O7.LL.2O15 is produced
as Annexure-A.

6. The said order was again withdrawn/modified in terms of

an order under Section 2(7)(a)(ii) dated 02.02.2016. It is to be noted
that in terms of powers under sub clause (ii) of clause (a) of clause (7)
of Section 7 of the Karnataka Town and Country Planning Act, 1961,
the State Government, as it deems fit/expedient, can for any other
local planning area constitute a separate Planning Authority. A Copy
of the order dated O2.O2.2016 is produced as Annexure - B.

7. The State Government has declared the Karnataka

Industrial Area Development Board as the Planning Authority in
connection with the "Industrial Area" as declared under section 3(i) of
the Karnataka Industrial Area Development Act, 1966. The same is
forthcoming from the reasons assigned in the order dated 02.02.2016
whereunder a modification was effected to the order dated 07.Ll.2015
by deleting the industrial area under the KIADB and the KSSIDC. The
relevant portion of the said order is reproduced as below:-

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8. The aforementioned reasoning in the said order is that the

Board, in consultation with the Town Planning Authority and in
accordance with the relevant Regulations, has been formulating
Building Regulations after obtaining permissions from the
Government. Further, the Engineers of the Board and Technical Staff
are capable of implementing the Building Bye-lawsand also the Board
has appointed an officer of the rank of Joint Director of the Town
Planning Department.

9. In view of the sarne the planning authority in connection with

the industrial area is the KIADB and the Authority to accord building
permission and plan sanction is also the KIADB.

10. In furtherance, the Commissioner for Industries and

Commerce has clarified vide circular dated 26.02.2016 that KIADB /
KSSIDC has the powers to issue permission/license for construction
of building in industrial areas falling within the jurisdiction of the
Bruhat Bengaluru MahanagaraPalike.

1 1. Right from the inception of the KIAD Act and regulations, it

is the Board which has been granting permission and building plans,
and reliance on the Apex Court judgement in Civil Appeal
No.9684 l2oll dated 27.LL.2018 has no relevance in view of the fact
that the issue in the said judgment pertains to levy of betterment tax
under Section 18 of The Karnataka Town and Country Planning Act
and did not have anything to deal with the plan sanction.

12. The issue in connection with the change of land use as

contemplated in the communication on the subject dated 22.12.2023
of the Bangalore Development Authority has been a subject matter of
various judicial pronouncements.

The same are as under:

1. H. G. Sheela V/s State of Karnataka & Others (2OO6) 3 Kant

W 24 at para 16

5
 "...IrL uiewof the law laid down bg the Apex
Court in the cases referred to supra, the
Notification under section 3(1) of the Act bg
including the lands in question and declaring the
sqme as "indttstrial area" and Acquisition of the
land in question bg the State Gouernment in
fauour of the companA which are ectrmarked for
residential/park in the CDP for industriot
establishment ls contrary to the object and
purpose fo, which the land qre eqrmarked.
Therefore, the Boqrd has no authoritg or power
to declare tLrc area q.s "industial area" without
change of land use in the CDP bg following the
mandqtory procedure bg the planning Authoritg
and State Gouernment as prouided under the
use sholl be done under Section 14-A of the
Karnatakq Town q.nd Country Planning Act bg
the Plonning Authoritg constituted under Section
4-C of the soid Act. The Board cannot usurp the
soid pouer to declare anA qrea as "industrial
areq.". In the Decision of the Apex court in
BiharilalJaishwalVs Commissioner of income-
tax at pqrq.graph 19 upon which leqrned senior
counsel on behalf of same of the Petitioners has
rightlg relied it is held as under:

"One arm of law cannot be utilised to defeat the

other arm of law. Doing so would be opposed to
public policy and bing fiLe low ridicule...

A copy of the judgement is produced as Annexure -C

13. The said order having been taken in Appeal, before the
Division Bench, by the Board in Special Land Acquisition OfIicer.
KIADB & Another V/s State of Karnataka ILR 2OO7 I(AR 4891. it
was held in para 20 as under:

"...Therefore, keeping these aspects in uiew and

noticing the power auqilable to the Gouernment
and the decision which is required to be taken
bg tlp Gouernment to declare an area as
industrial area for the deuelopment of industry,
in our uiew, the decision making process of the

6
Gouernment should indicate that such an erea
alone ls the suitoble areq. for deuelopment of
that particular industry euen though such
declaration is for locating a single industry. Such
application of mind is euen more important in a
mqtter of this nature wherein tlrc propertg is
within the zonal regulation and gouerned bg the
prouisions contained in the Town and Country
Planning Act. The first attempt of the
Gouernment should be to balance the
requirements of both enactment so as to prouide
a harmonious construction of both the
enq"ctments. When the decision making process
indicates that this is not possible ond the said
area is required to be declared as qn industriol
areq. considering that the deuelopment of such
industry is possible onlg in that qrea and in
such a situation if there is conflict in the
prouisions contqined in such enactment, no
doubt, the proulslons of the KIADB Act would
preuail in uiew of prouisions contained in Section
47 of the Act, but this should be clearlg euident
on record and not in an arbitrary mqnner merelg
because the power ls quailqble to the
Gouernment. It ls in fact qt this stage, the
prouisions contained in Section 14-A of the KT &
CP Act also should be kept in uiew and giuen
effect to, so as to consider whether the change of
lond use ls ineuitable and as to whether the
said area requires to be deueloped as an
industrial qrea in the absence of other
alternatiue. On the contrary, if a declqrqtion is
made under Section 3(1) of the Act qnd
thereafier if it is corusidered thot change of land
use ls to be made, the mere compliance of
Section 14-A of the KT & CP Act would onlg
become an emptg formalitg and as such it mag
not be appropriqte to hold that afier acquiring,
euen the Gouernment has to follow Section 14-A
for change of land use. Therefore, in our uiew
the change of land use ls an aspect which
requires consideration but should precede the
q.ction of declaring the aree as a"n industiol
area. As noticed aboue, the uery decision
making process before issuing a notification

7
 under Section 3(1) of the KIADB Act should
indicate application of mind to these aspects of
the matter relating to the change of land use of
the soid areq being declared a.s industriql area
as against the earlier zonal regulations moreso
when the area is within the planning area of the
Deuelopment Authority. Onlg on such
consideration being indicated, a notification
issued bg the Gouernment could be sustained. In
the facts and circttmstances of the present case,
there fs no suctrconsideration. Indicated, and as
such, we are of tlrc uiew that the leqrned Single
Judge u)as justified in quashing the said
notificatiorl..."

Acopy of the Judgement is produced as Annexure - D

14. In view of the above discussion and the orders of the

Hon'ble High Court, it can be safely said that the planning authority
for the industrial areas is the KIADB and there is no requirement of
change of land use in connection with the formation of an industrial
area. The natural corollary would be that the planning authority in
connection with the said industrial area is the KIADB. The said
judicial pronouncement also highlights the overriding effect of Section
47 of KIAD Act.

15.As per your communication dated 22.12.2023, you have

asked the KIADB to take permission for change in land use as
contemplated under Section l4A, 15 and L7 of The Karnataka Town
and Country Planning Act, 1961, and also to take permission under
Section 14 and 15 of the sarne Act, before commencement/
development of the project by all industrial units.

16. The above said issues have all been dealt by the Division
Bench of the Honble High court of Karnataka
in Special Land
Acquisition officer V/s State of Karnataka. Therefore, the

B
representation made by you is totally contrar5r to the judgment of the
Honble High Court.

17. In order to reiterate what the Division Bench of the

Honble High Court has said"if a declaration is made under Section 3(i)
of the Act and thereafi,er if it is considered that change of land use is to
be made, the mere compliance of Section 14-A of the KT & CP Act
would only become an emptg formalitg and as such it mag not be
appropriqte to hold that afi,er acquiring, euen th.e Gouerrtment has to
foltow Section 14-A for change of land ttseo. Therefore, once the
notification is already issued and implemented under Section 3,
further requirement of change of land use does not arise.

18. The State Government has also enacted The Karnataka

Industries (Facilitation) Act, 2OO2 (hereinafter referred to as
Facilitation Act, 2OO2) in order to provide for the promotion of
Industrial Development and Facilitation of new investments and also
to simplify the regulatory framework by reducing procedural
requirements and rationalising documents and to provide for an
investor friendly environment in the State of Karnataka. As can be
seen from the representation, it is in the teeth of the Facilitation Act,
2OO2 in as much as the Secretar5l to
Government, Urban
Development Department being one of the members of the Committee
having approved the project, once again requires the approval from
the BDA would be contrary to the object of the Act and amounts to
detriment to the Ease of Doing Business Policy.

19. To get a better understanding of the said statute and

alsoto ascertain the purpose and intent of the said statute, the
judgment of the Hon'ble Supreme Court in Chairman and MD. BPL

9
Ltd.. V/s P. Gururaia& Others (2OO3l 8 SCC 567 has to be read in
its perspective. It is to be noted that the said judgement was rendered
before the enactment of the said Act, wherein a special committee was
constituted to consider the project of BPL Ltd., as a special case and
the same was called in question all the way up to the Hon'ble Apex
Court. A copy of the Judgement is produced as Annexure - E. The
operating portion as under:-
"...The High-Leuel Committee was chaired bg the Minister
who in terms of the Rules of Exea,ttiue Business framed under
Article 166 was entitled to represent the State. Once q.
consultation takes place bg muhtol discttssions qnd q consensus
is qrriued at betuteen different authoities performing different
functions under the stafiites, th.e purpose for uthich consultation
was to be made would stqnd satisfied..."

20. It is to be noted that a plain reading of the object clause

provides that the legislation was enacted to simplify the process and
related permissions and sanctions to be taken when a project of large
magnitude is to be undertaken. In connection with the sarne,
committees are constituted under the relevant sections, i.€., 4 & 7 to
approve the said proposals/projects. Projects currently are to be
approved by two different committees exceeding investments of more
than 500 crores and 15 crores. These committees consist of members
from all departments of the State.

21. It is to be noted that the Addl. Chief Secretary/Principal

Secretary to the Urban Development Department is a member of both
the Committees constituted under the Facilitation Act, 2OO2. The said
being an undisputed fact that the concerned department is party to
the decision of according approval to the industry and also the
decision is binding on the said department.

10
 22. It is of further relevance to note that section 5 of the
Karnataka Industries (Facilitation) Act, 2002 reads as under:

"...Pou)ers of the Committee- The Committee

shall be the final authoritg in granting approuals
for the project placed before it. The approaals
glaen bu the Commlttee shall be blndlno on
all theconcerned departments or
authorltles and such depantments or
authorltles. shall lssue the requlred
clearances utithln the stlpulated timeand
subject to compliances bg the entrepreneur
undertaking of the proulslons of the applicable
Central or Stqte Acts and the rules made there
under..."

23. The Hon'ble Apex Court in MSPL Ltd.. V/s State of

Karnataka 2O22 SCC Online SC 138O has affirmed the said
position, i.e., the binding effect of the decision of the Committees as
constituted under the Facilitation Act. A copy of the Judgement is
produced as Annexure - F. The operating portion as under:-

"...1t is submitted that the uery pufpose of o

SHLCC and
Single Window Clearance Committee would be defeated if the
approual granted bg such committee is reuiewed again and again
bg other depaftments. The approach of th.e High Court will not
onlg render the krt of the 2002 Act otiose and unworkable, but
will defeat the uery purpose of the 2OO2 Act a"s set out in ttrc
Statement of Object and Req.sons..."

Position of Law before 2O18:

24. The Karnataka Industrial Areas Development Board
(hereinafter referred to as the Board) is a statutory body established
under the Karnataka Industrial Area Development Act, 1966
(hereinafter referred to as the KIAD Act, 1966l, with an object of
promoting the establishment and orderly development of industries in
industrial areas. [n terms of section 3(i) of the KIAD Act, 1966, the

11
State Government declares lands as industrial lands and in terms of
section 2B(l) to 28(8) the said lands are acquired and handed over to
the Board by the State Government for setting up industrial estates
and industrial areas. On the Government handing over the
possession of the acquired lands to the Board, under section 13 & 14
of the KIAD Act, 1966, the Board undertakes development of
Industrial Areas for the prospective entrepreneurs.

25. lt is of relevance to note that once the lands are transferred

to the Board, the Board acts under section 13 & 14 of the KIAD Act,
1966. The Board has the powers to alienate, sell, encumber and deal
with the lands in question in furtherance of the KIAD Act & Rules.
The Industrial Area once developed is to be governed and
administered by the Board. It is of further relevance to note that
unlike the Urban Development Authorities Act, whereunder the
designated Development Authority after the completion of the
formation of the layout, hands over the said layout to the Municipal
Authority. Under the KIAD Act, 1966, the Board is not required to do
so. Rather the Board is constituted to effectively govern/administer
the said industrial areas.

26. This is further supported by the decision of the Hon'ble

Supreme Court in Shri. Ramathanu Co-Operative Housing Society
Ltd.. & Another V/s State of Maharashtra and Others AIR 197O
SC 1771 wherein the Pith and Substance of the Maharashtra
Industrial Development Act, 196l (which is parimateria to KIAD Act)
has been held to be not acquisition of lands but formation,
development of industrial areas and industrial development. The
principal functions of the Corporation in regard to the establishment,
growth and development of industries in the State are first to

t2
establish and manage industrial estates at selected places and
secondly to develop industrial areas selected by the State
Government. In consonance with the said principle even the
developed industrial areas abutting or merging into urban
agglomeration are earmarked as concerned Industrial Areas in the
Comprehensive Development Plans. The sarne standsapproved in the
decision of the Hon'ble High Court in M. S. Moses V/s State of
Karnataka ILR 1991 I(AR 77O. Copies of Judgements is produced as
Annexure G & H

Position of law after 27. 1 I .2O 18:

27. It is to be noted that the Hon'ble Supreme Court in
Bangalore International Airport Area Planning Authoritv V/s
Birla Super Bulk Terminal & Others (2O191 12 SCC 572 has held
that the betterment charges to be collectedand also permission to be
accorded by the planning authority, even in case of approval given by
the SHLCC and SLSWCC. However, the said judgement of Hon'ble
Apex Court does not take note of the Object of the Facilitation Act and
sections 4,5, 7 & B of Act and the law laid down in MSPL Ltd., V.
State of Karnataka 2O22 SCC online SC 138O. It also fails to note
that the SecretarJr, Department of Urban Development, is a member
of the SHLCC and SLSWCC and by the virtue of section 5 and 8 of the
Facilitation Act the decisions of the committees are binding on the
respective departments.
A copy of the Judgement is produced as Annexure -J

28, In view of the s€une it can be safely held that planning

authority for all the industrial area is the KIADB and the clearances
given by SHLCC & SLSWCC for all project are binding on all members
of the said committees i.e., the Urban Development Department being

13
a member of the said committee has approved the change in land
use. In essence, it is incumbent upon the concerned departments to
make note of the same and incorporate them under their regime.

Hence, you are requested to withdraw the communication dated

22 . I 2 .2023 in No. aJo ee da;/d oJ-@ ( X/GVT / zoso/ zol3 -24.
Thanking You,
sd/-
Chief Executive Officer
& Executive Member
Copy to:

1. The Additional Chief Secretar5r to Honble Chief Minister,

Government of Karnataka.
2. The Additional chief secretary to Government, Urban
Development, Vidhana Soudha, Bengaluru.
3. The Principal secretary to Government, commerce and
Industries Department, Vikasa Soudha, Bengaluru.
4. Commissioner for Industrial Development & Director of
Industries and commerce, 2nd Floor, South wing, Khanija
Bhavan, Race Course Road, Bengaluru.
5. Personal secretary to chief Secretar5r, Government of
Karnataka, Vidhana Soudha, Bengaluru.
6. Private Secretary to Honble Minister for Large and Medium
Industries and Infrastructure Development, Government of
Karnataka.

W,il,,
Chief Executive Officer
& Executive Member

t4