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Embassy Developments Limited has disclosed that its subsidiary, Embassy East Business Park (EEBP), has been directed by the Karnataka Industrial Areas Development Board (KIADB) to surrender approximately 78 acres of land in the Kadugodi Industrial Area, Bengaluru, within 30 days. The order, issued earlier this month under provisions of the Karnataka Industrial Areas Development Act, 1966, alleges violations of a lease-cum-sale agreement executed in 2007 and valid until 2029. KIADB has cited unauthorised agreements with third parties as the basis for action. The company has denied the allegations, stating that all sub-lease arrangements were undertaken with necessary approvals. It is currently evaluating legal options and plans to challenge the directive before the Karnataka High Court.
Embassy Developments Limited has informed stock exchanges that its subsidiary, Embassy East Business Park (EEBP), has received an order from the Karnataka Industrial Areas Development Board (KIADB) to surrender possession of a 78-acre land parcel in the Kadugodi Industrial Area, Bengaluru, within 30 days, following allegations of breach of lease conditions tied to a long-term agreement executed in 2007. Advertisement
The directive, issued earlier this month under Section 34B of the Karnataka Industrial Areas Development Act, 1966, pertains to land held under a lease-cum-sale agreement that remains valid until 2029. According to the regulatory authority, the subsidiary is alleged to have entered into memoranda of understanding, agreements, and agreement-to-sell arrangements with third parties for portions of the land without obtaining prior approval, which it considers a violation of the contractual terms.
The land parcel, located in a key industrial zone of Bengaluru, represents a significant asset for the developer. The order requires EEBP to hand over possession within a stipulated timeframe, creating immediate operational implications for the project associated with the site.
Embassy Developments has contested the allegations, stating that the arrangements with third parties were carried out after securing no-objection certificates from KIADB and in accordance with the provisions of the lease agreement. The company further clarified that agreements to sell do not constitute a transfer of ownership or possession and were executed subject to compliance with the original terms of the contract.
The subsidiary has also raised concerns regarding procedural aspects of the order, indicating that its prior submissions and clarifications were not adequately considered before the directive was issued. It maintained that the arrangements in question were intended to facilitate timely project development rather than alter ownership structures.
In response to the order, Embassy Developments stated that it is assessing the legal, financial, and operational implications of the directive. The company indicated that it intends to pursue legal remedies, including approaching the Karnataka High Court, to challenge the order and seek relief.
The development introduces uncertainty around the future of the 78-acre parcel, particularly given its location within an established industrial area and its relevance to the company's broader development pipeline in Bengaluru. The outcome of the legal proceedings is expected to determine the status of the land and the continuation of planned or ongoing activities on the site.
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