Karnataka High Court sets aside KIADB order in Rs 1,125 crore Lam Research land matter

BENGALURU: The Karnataka High Court has set aside a Karnataka Industrial Areas Development Board (KIADB) order that had directed the resumption of more than 78 acres of land allotted to Embassy East Business Park Ltd in Bengaluru’s Kadugodi Industrial Area.

The High Court passed the order after the company filed an affidavit clarifying its agreements with Lam Research India Pvt Ltd. The HC said the concerns raised by KIADB had been sufficiently explained by the company. The dispute relates to around 78 acres of land originally allotted by KIADB to Embassy East Business Park Ltd (earlier known as Concord India Pvt Ltd) for the development of IT and ITES infrastructure.

According to court records, KIADB had allowed the company to sublease 25 acres of the land to Lam Research India Pvt Ltd for construction and project-related purposes. However, KIADB later alleged that the company had also entered into an Agreement to Sell (ATS) for the same land, while KIADB claimed that the company did not yet have alienable title over the property.

The KIADB order referred to company records and documents showing that both a sublease agreement and an agreement to sell were executed on March 20, 2025, in relation to 25 acres of land. The Karnataka Industrial Areas Development Board (KIADB) stated that the total value mentioned in the agreement was ₹1,125 crore.

KIADB took the view that the lease-cum-sale agreement only allowed subleasing with prior approval and did not permit sale agreements or similar arrangements involving transfer rights over the land. On this basis, the Board ordered the resumption of the land.

The KIADB also referred to earlier agreements involving Nuziveedu Seeds Ltd and Mandava Holdings Pvt Ltd, alleging that agreements had been entered into for portions of the land without KIADB’s prior permission. The proceedings also mentioned an inspection report stating that construction activity had not started on parts of the land as of November 2025.

Before the High Court, Embassy East Business Park filed an affidavit saying that the agreement with Lam Research was conditional and that no sale deed would be executed unless KIADB first transferred title to the company under the original lease-cum-sale arrangement.

The company also told the High Court that the agreement did not create any collateral rights affecting KIADB’s rights over the land. It further stated that proposed sublease arrangements involving entities linked to NSL and Mandava Holdings would not go ahead without KIADB approval.

After considering these statements, the High Court quashed the resumption order but gave KIADB liberty to take fresh action in accordance with the law in future if required. The high court also clarified that it had not expressed any opinion on the merits of disputes pending between the parties in other cases.

The dispute may also raise broader legal and regulatory questions relating to transactions involving leasehold industrial land allotted by public authorities. Legal observers note that issues such as the nature of rights created under an Agreement to Sell, registration requirements, stamp duty implications, and treatment of commercial consideration may arise in such arrangements, depending on the structure of the transaction and applicable law. However, the Karnataka High Court order does not record any findings on these issues, and no adverse finding has been made by any court or regulatory authority so far. (ANI)