Embassy Developments Limited disclosed that its subsidiary, EEBP, received an order from the Karnataka Industrial Areas Development Board (KIADB) dated March 16, 2026, directing the surrender of approximately 78 acres of land in Kadugodi Industrial Area, Bengaluru. The order cites alleged breaches of the Lease-cum-Sale Agreement (LCSA), primarily related to sub-lease arrangements made without prior KIADB approval. EEBP denies the allegations and plans to challenge the Order in the High Court of Karnataka.
KIADB Order Directs Land Surrender
Embassy Developments Limited has announced that its subsidiary, Embassy East Business Park Limited (“EEBP”), received an official order from the Karnataka Industrial Areas Development Board (“KIADB”) on March 17, 2026. The order, dated March 16, 2026, pertains to the land admeasuring approximately 78 acres located in the Kadugodi Industrial Area, Bengaluru Urban District.
EEBP holds leasehold rights over this Land pursuant to a Lease Cum Sale Agreement (“LCSA”) executed on June 7, 2007, valid until June 6, 2029. The KIADB order directs EEBP to surrender possession of the Land within 30 days from the date of the Order.
Alleged Breaches Cited
The KIADB order was passed under Section 34B of the Karnataka Industrial Areas Development Act, 1966, citing alleged breaches of the LCSA terms. The primary allegations relate to the execution of memorandum of understandings/agreements/agreement-to-sell arrangements with third-party sub-lessees or potential buyers concerning portions of the Land without obtaining prior approval from KIADB.
Grounds for Challenging the Order
EEBP firmly refutes the allegations and, based on legal counsel advice, believes the Order can be successfully challenged on several grounds:
- Sub-Lease Compliance: The sub-lease arrangements were executed only after obtaining a No Objection Letter (NOC) from KIADB, which complies with the LCSA terms.
- Agreements Not Constituting Sale: Arrangements referred to as Agreement-to-Sell (“ATS”) do not, by themselves, create or transfer interest in the property. These documents, which involved no transfer of possession, were conditional upon KIADB executing a formal sale deed in EEBP’s favor and should not be construed as a conveyance or “sale.”
- Violation of Natural Justice: EEBP contends that it had previously communicated relevant facts to KIADB, including consent and the legal distinction between an ATS and a concluded sale, but the Order failed to reference or engage with this prior communication.
Next Steps Planned
The Company, along with EEBP, is currently evaluating the implications of the Order. The intended course of action is to avail appropriate legal remedies, including approaching the Hon’ble High Court of Karnataka for suitable relief.
Source: BSE
