KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD versus NANDI COLD STORAGE PVT. LTD.

Citation: [2007] 8 S.C.R. 270 · Decided: 11-07-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Case Partly allowed

Judgment (excerpt)

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KARNA T AKA INDUSTRIAL AREAS DEVELOPMENT BOARD 
v. 
NANDI COLD STORAGE PVT. LTD. 
JULY I I, 2007 
B 
[DR. ARfJIT PASA YAT, P.K. BALASUBRAMANY AN AND D.K. JAIN. JJ.] 
Consumer Protection Act. 1986: 
Deficiency in service-Compensation-Plot allotted by Industrial Areas 
C Development Board to complainant for opening a cold storage-loan 
sanctioned-Later. loan cancelled as complainant could not go ahead with 
the project due to litigation initiated by owners of lands-Claim for 
compensation filed against Board-National Consumer Disputes Redressa/ 
Commission holding that there was deficiency in service and complainant 
D u·as entitled to compensation of rupees three lakhs-On appeal. Supreme 
Court issued notice limited to quantum of compensation onlv-Held: About 
deficiency in service, correct approach has been adopted-However. 
considering peculiar circumstances, compensation fixed to rupees one lakh. 
The respondent-<:ompany filed a complaint before the National Consumer 
E Disputes Redressal Commission, against the appellant-Industrial Areas 
Development Board complaining deficiency of service, as on the plot allotted 
to it b~· the Board, construction activities for opening the proposed cold storage 
could not be carried out because of the litigation initiated by the owners with 
regard to acquisition of the said plot and, ultimately, the loan obtained by the 
complainant was cancelled. The National Commission held that there was 
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deficiency in sen·ice and the complainant was entitled to a compensation of 
rupees three lakhs. On the appeal filed by the Board, the notice issued was 
limited to the quantum of compensation only. 
Allowing the appeal in part, the Court 
HELD: In the notice it was indicated that the same was limited to the 
question of compensation. About the deficiency in sen·ice the correct approach 
has been adopted. Considering the peculiar circumstances of the case, the 
compensation is fixed to rupees one lakh. I Para 10 and 1 I) f 273-D-EJ 
270 
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KAR.'\ATAKA l:'<Ul'STRJAL AREASDE\'E BOARD I'. M'>DICOLD STORAGE P\'T LTD [PASAYAT. J] 27) 
CIVIL APPELLATE JURISDICTION 
I.A. No. I 
IN 
Civil Appeal No. 5542 of2004 
From the Final Judgment & Order dated 28.04.2004 of the National 
Consumer Disputes Redressal Commission at New Delhi in Original Petition 
No. 42of1999. 
Kiran Suri and S.J. Amith for the Appellant. 
S. Nanda Kumar, Sathish Kumar. K. Mayil Samy and V.N. Raghupathy 
for the Respondent. 
The Judgment of the Court was delivered by 
DR. ARIJIT PASA Y AT, J. I. Challenge in this appeal is to the order 
passed by the National Consumer Disputes Redressal Commission at New 
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Delhi (in short the "National Commission'). Respondent had filed a complaint 
against the appellant before the National Commission. 
2. Background facts in a nutshell are as follows: 
3. In the complaint responde~t inter alia stated as follows: 
The complainant company. desirous of opening a cold storage unit in 
the State of Kamataka. applied for allotment of land to the appellant in 
August 1991. After meeting all the formalities required from time to time by F 
the appellant, a plot bearing No.2 of Chickballapur Industrial Area, measuring 
2.5 acre of land, was allotted for setting up a cold storage. Possession 
c·ertificate was issued on 26/30.8.93. The complainant also in the meantime 
obtained a loan of Rs.67 lakh from the Karnataka State Financial Corporation 
(in short 'KFC'). For the first time in August 1994, a letter was written by 
appellant to the complainant that "the company could not go ahead with G 
construction activity on the plot allotted as the erstwhile land owner of plot 
No.2 covered in Sy.No.29 and 30 of Jadalathimmanahally Village has obtained 
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stay order from the High Court ofKamataka in W.P.No.70/88 challenging the 
acquisition proceedings. The Board initiated action for vacating the stay 
order granted by the High Court of Karnataka. However, the company could H 
272 
SUPREME COURT REPORTS 
[2007] 8 S.C.R. 
A not go ahead with implementation in view of the stay order granted by the 
High Court. The complainant sought for pennission to go ahead with 
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implementation after the litigation in respect of the above land is disposed of 
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by the High Court. The Board should also grant extension of time to the 
company for implementation of the project after disposal of the litigation. 
4. Original land holder took back possession forcibly in vi

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