Karnataka HC orders status quo in Bengaluru land dispute involving KIADB, Canara Bank

BENGALURU: The Karnataka High Court has directed the parties involved to maintain status quo over a disputed parcel of land and restrained the creation of third-party rights until the next hearing in a case involving competing claims over property which the Karnataka Industrial Areas Development Board (KIADB) maintains was acquired for its purposes.

The proceedings have also brought before the court questions raised in a writ petition over a mortgage transaction involving Canara Bank, under which title deeds relating to the property were allegedly deposited to secure credit facilities aggregating Rs 85 lakh.

The bank’s subsequent handling of the transaction has also been questioned in the writ petition. Royal Fragrances Pvt Ltd complained to Canara Bank and other authorities on May 11, 2026. According to the petition, Canara Bank acknowledged the complaint on May 13 but, in a communication dated June 1, said it was unable to identify the loan or trace the mortgage details. The petitioner has placed these communications before the court and questioned the bank’s handling of its complaint.

Justice M I Arun passed the interim order on August 29 while hearing the petition filed by Royal Fragrances Pvt Ltd. The dispute concerns 18 guntas of land at Devarabisanahalli village, Varthur Hobli, Bengaluru East Taluk.

According to the petition, the chronology of events relating to the property is central to the dispute. The final acquisition notification in respect of the land was issued on February 23, 2004 under the provisions of the Karnataka Industrial Areas Development Board Act.

Royal Fragrances has contended that, following the acquisition proceedings, the land vested absolutely in the State and that, under Section 28(5) of the KIADB Act, such vesting was free from encumbrances. The petition states that more than eight years later, on October 22, 2012, title deeds relating to the same 18-gunta parcel were deposited with Canara Bank’s Marathahalli branch to secure credit facilities aggregating Rs 85 lakh.

The petitioner has questioned the mortgage transaction on the ground that the land had, according to its case, already vested in the State following the acquisition proceedings.

KIADB, in its statement of objections filed before the High Court on August 28, has maintained that the land was acquired for the purposes of the Board, including for the development of an IT/Software Park.

Royal Fragrances has sought, among other reliefs, disclosure of documents relating to the bank’s title verification and appraisal process in connection with the credit facilities. The petition refers to documents including the legal search report, title certificate and encumbrance records allegedly considered during the transaction.

The petitioner has also questioned a registered Deed of Discharge executed on June 18, 2022, following the discharge of the loan liability, under which the title documents were allegedly returned to the original landowner’s legal heirs.

During the hearing, Royal Fragrances submitted that despite the acquisition proceedings, respondent Nos. 5 to 8 were allegedly continuing to deal with the property and create or attempt to create third-party rights over it.

Counsel appearing for respondent Nos. 5 to 8 disputed the petitioner’s version regarding the legal status of the land. It was submitted that although the property had initially been notified for acquisition, it was subsequently de-notified pursuant to judicial decisions which, according to the respondents, had attained finality.

The respondents maintained that they were the lawful owners of the property and were entitled to deal with it in accordance with law. On the other hand, KIADB has maintained in its statement of objections that the land was acquired for its purposes.

Taking note of the competing positions regarding the status of the property, the High Court said the matter required consideration. The court observed that, in view of the submissions made, including the stand taken by KIADB regarding the acquisition of the land, the interests of justice would be served by preserving the existing position pending further hearing.

Accordingly, the High Court directed the parties to maintain status quo in respect of the property and restrained them from creating any third-party rights until the next date of hearing. The matter has been listed for further hearing on September 19. (ANI)