The Karnataka High Court has issued notice on a petition seeking action over alleged violations involving nearly 10 acres of land earmarked for an IT park in Bengaluru East, bringing the conditions governing industrial land allotment and leasehold financing under judicial scrutiny.
Justice R Devdas issued the order on October 9 on a petition filed by Royal Fragrances Private Limited. The company has sought a direction to the Karnataka Industrial Areas Development Board (KIADB) to consider initiating resumption proceedings against land in Devarabeesanahalli and Kariyammana Agrahara villages.
The property measures approximately 9 acres and 34½ guntas. According to the petition, the Karnataka government acquired the land for a proposed software or IT park, and Royal Fragrances paid Rs 1.34 crore to the KIADB under an agreement dated October 18, 2001.
The current dispute concerns transactions involving the present lessee, Sai Srushti Infrastructure Innovation Projects India Private Limited, and its predecessor, RR Platina Infra. Royal Fragrances has asked the authorities and the court to examine whether certain commercial and financial arrangements complied with the conditions attached to the allotment and the subsequent lease-cum-sale agreement.
The petition refers to an agreement involving Micro Labs Limited for proposed built-up space on the property. It also refers to financing arrangements involving OCM India Opportunities XB Alternate Investment Fund, managed by Oaktree Capital Management, and security interests over leasehold rights. The petition states that an agreement to sell proposed built-up space was executed before the formal allotment of the land and questions whether the transaction met applicable approval requirements.
Royal Fragrances has also cited a debenture trust deed dated April 18, 2022, and a deed of hypothecation dated May 2, 2022. The company contends that the lease-cum-sale agreement requires prior written consent from the KIADB for a mortgage and limits such financing to construction on the project land. It has questioned whether the arrangements complied with those conditions.
The petition refers to debenture issuances totalling Rs 625 crore by three group entities and identifies the Oaktree-managed fund as a debenture holder. It does not specify the fund’s individual holding or investment amount. The allegations are directed principally against the present lessee and its predecessor. The court order does not record any finding of wrongdoing against Micro Labs or the Oaktree-managed fund.
Royal Fragrances has stated that it submitted a representation to the KIADB on April 17, 2026, seeking action over the alleged violations, but that the authority had not acted on its request. The company has asked the High Court to direct the board to consider the representation and take an appropriate decision under Section 34B of the Karnataka Industrial Areas Development Act, 1966.
The court directed notice to the remaining respondents after recording the appearance of counsel for the first two respondents. It permitted objections to be filed to the impleading applications and directed that the matter be listed after two weeks. The October 9 order concerns notice and further listing; the allegations remain to be examined and the court has not adjudicated the merits of the dispute.
