Dlf Ltd And Ors vs State Of Haryana And Ors

CWP No. 4212 of 2013. ::-1-::

IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH.

CWP No. 4212 of 2013. [O&M] Date of decision: February 18, 2015.

[1]. CWP No. 4212 of 2013.

DLF Limited & Ors. Petitioners

Versus

State of Haryana & Ors. Respondents

***

[2]. CWP No. 10509 of 2013.

Ansal Properties & Infrastructure Limited Petitioner

Versus

State of Haryana & Ors. Respondents

***

CORAM: HON'BLE MR. JUSTICE SURYA KANT HON'BLE MRS. JUSTICE LISA GILL

***

Present:- Shri Ashok Aggarwal and Shri Chetan Mittal, Senior Advocates with Mr. Rajeev Anand, Advocate, for DLF Limited.

Mr. M.L.Sarin, Senior Advocate with Messers Adarsh Jain and Nitin Sarin, Advocates for Ansal Properties.

Dr. Ashwani Kumar, Senior Advocate with Mr. S.S.Pattar, Sr. DAG, Haryana and Ms. Sangeeta Bharti & Ms. Stuti Tandon Advocates, for the respondents.

Mr. D.V.Sharma, Sr. Advocate with Ms. Akshita Chauhan, Advocate, for HUDA.

****

1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest?

***

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-2-::

SURYA KANT, J.

DLF Limited and its associate Companies [for short 'DLF']

and Ansal Properties and Infrastructure Limited [for short 'Ansal']

through their respective writ petitions have laid challenge to the

constitutionality of Haryana Development and Regulation of Urban

Areas [Amendment and Validation] Act, 2012 [Haryana Act No. 4 of

2012]. Ansal has further sought a direction for the refund of `983.74

lacs along with interest @18% per annum from 21st July, 2000 besides

seeking quashing of the demand notice-cum-letter dated 05th March,

2013. DLF also seeks a writ of prohibition to restrain the respondents

from claiming or recovering Internal Community Building Charges as

well as a direction for the adjustment and refund of the amount

deposited towards ICB charges along with interest @18% per annum.

[2]. The genesis of the reliefs sought by the petitioners lies in

an inter-parties judgment of the Hon'ble Supreme Court between the

Ansal and State of Haryana and its authorities which is reported as

Ansal Properties and Investment Limited Versus State of Haryana

& Ors., 2009[3] SCC, 553.

[3]. Before adverting to the core questions arising for

determination, it may be mentioned that the 'DLF' and the 'Ansal' are

engaged in the business of planned urbanization/ colonization by

developing their respective land[s] into residential, commercial or

institutional areas etc.

[4]. Both the petitioners are Public Limited Companies duly

registered under the Companies Act, 1956 and are carrying on their

business of planned urbanization and colonization as per the Licences DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-3-::

granted to them under the provisions of Haryana Development and

Regulation of Urban Areas Act, 1975 [for short '1975 Act'] and the

Rules framed there-under, known as the Haryana Development and

Regulation of Urban Areas Rules, 1976 [for short '1976 Rules']. The

petitioner - Companies are required to enter into an 'Agreement' with

the State of Haryana through its Prescribed Authority to obtain the

licence for the execution of the 'Development Works' as defined under

the 1975 Act. The formats of 'Licences' and 'Agreement[s]' are also

prescribed under the Rules.

[5]. The petitioners' case is that as per the provisions of the

1975 Act and the relevant Rules read with Clause 1[e] of the

Agreement, the Director, Town and Country Planning, Haryana [for

short 'the Director'] though could ask them to pay only the

proportionate development charges for 'External' or 'Internal'

Development Works, yet the said Authority, in a totally illegal manner

and without any authority of law, started levying Internal Community

Building Charges [for short 'ICB charges'] for the construction of

community buildings, like Hospitals, Schools, Police Posts, Parks,

Community Centres etc. under the head of 'External Development

Charges' [for short 'EDC'].

[6]. The petitioners in this regard refer to the offending Memo

dated 11th January, 1988 of the Director sent in supersession of the

earlier Memos, intimating the petitioners and also the other private

colonizers about the Government's decision of charging `3.72 lac per

gross acre as EDC in respect of the 'plotted colonies' which included

the ICB charges @ `61,000 per gross acre. The Memo further DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-4-::

stipulated that no recovery of ICB charges be made from the plot-

holders though the petitioners were given credit for the Community

Buildings constructed by them at the earmarked sites.

[7]. It may be clarified at the outset that the ICB charges were

sought to be levied on the petitioners or the other Licence-holders only

in respect of those 'Community Building sites' which they had failed to

construct or get the same constructed and were taken-over/transferred

to the State Government and thereafter constructed by the State

Government or its agency at their expenses.

[8]. The petitioners are said to have protested against the levy

of ICB charges @ `61,000 per gross acre but they were coerced into

depositing the same as a pre-condition for the renewal and/or grant of

new licences. Ansal was informed vide Memo dated 4th May, 1994 of

its liability to deposit `275.55 lacs along with interest @18%+3%

towards external development works for getting its licences, up to the

year 1993-94, renewed.

[9]. Ansal challenged the demand for ICB charges before this

Court in CWP No. 6565 of 1994 which was dismissed on 29th July,

1999. The Ansal's Civil Appeal No. 8186 of 2001 was however

allowed by the Hon'ble Supreme Court vide judgment dated 23rd

January, 2009 [2009 [3] SCC, 553], [in short : Ansal's case] laying

down that the demand of ICB charges @ `61,000 per gross acre

raised by the respondents was totally illegal, unjustified and

unreasonable. The Director was asked to adjust the amount already

deposited towards the dues of Ansal.

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-5-::

[10]. The afore-stated final conclusion was founded upon a

minute consideration of the Legislative Policy of the 1975 Act, the

1976 Rules framed there-under and the terms and conditions of

Agreement or Licence executed between the parties. It would thus be

apt at this stage to briefly discuss those provisions which were

considered in Ansal's case while setting aside the demand raised

towards ICB charges.

The Haryana Development and Regulation of Urban Areas Act, 1975:-

[11]. The 1975 Act has been enacted to regulate the use of land

so as to prevent ill-planned and haphazard urbanization in or around

the towns in the State of Haryana. Its Section 2 defines various

expressions, words and phrases used in the Act and as per its clause

[e] 'development works' means the 'internal' and 'external'

development works. According to Clause [g] 'external development

works' include sewerage, drainage, roads and electrical works which

may have to be executed in the periphery or outside of a colony for the

joint benefit of two or more colonies. Clause [i] explains 'internal

development works' to mean [a] metalling of roads and paving of

footpaths; [b] turfing and plantation of trees in open spaces; [c] street

lighting; [d] adequate and wholesome water-supply; [e] sewers and

drains both for storm and sullage water and necessary provision for

their treatment and disposal; and [f] any other work that the Director

may think necessary in the interest of proper development of a colony.

[12]. Section 3 of the Act mandates that any owner of a land

who desires to convert it into a colony, unless exempted under Section

9, must apply and obtain Licence from the Director on payment of the DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-6-::

prescribed fee. If the Director is satisfied with regard to the existence

of the requisites contemplated under sub-Section [2], he would grant

the licence under sub-Section [3] in the prescribed form after the

applicant has furnished Bank Guarantee equivalent to 25% of the

estimated cost of the development works and has further undertaken

to comply with the conditions contained in that provision including that

[i] such applicant shall enter into an agreement in the prescribed form;

[ii] pay the proportionate development charges; [iii] maintain and

upkeep all roads, open spaces, public parks and public health services

etc. for a period of five years from the date of completion certificate;

[iv] construct at his own cost, or get schools/hospitals/community

centres and other community buildings constructed by any other

institution or individual at its costs, on the lands set apart for this

purpose and [v] permit the Director or any other authorised officer to

inspect the execution of the layout and the development works in the

Colony and to carry out all directions issued by such authorities.

Section 3[3][b] empowers the Director to refuse to grant licence, by

means of speaking order and after an opportunity of being heard. The

licence so granted is valid for a period of two years though renewable

from time to time on payment of prescribed fee.

[13]. Section 5 of the Act creates an obligation on the colonizer

to bear the cost of development works for which the colonizer is

required to deposit 50% of the amount realized by him from the plot-

holders in a separate account to be maintained in a scheduled bank.

This amount can be utilised by the colonizer only for "meeting the cost

of internal development works in the colony". Once such works have DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-7-::

been completed to the satisfaction of the Director, the colonizer is at

liberty to withdraw the balance amount. The balance 50% of amount is

deemed to have been retained by the colonizer, inter-alia, to meet the

cost of land and external development works. Section 8 empowers the

Director to cancel the licence if the colonizer contravenes any

provisions of the licence or the Act or Rules. Section 9 empowers the

Director to grant exemption from obtaining licence in certain situations

including where 20% of the plots were carved out and sold or agreed

to be sold prior to 16th November, 1961. Section 10 of the Act enables

levy of penalties and prescribes other penal consequences as well for

any violation of the provisions of the Act. Various other provisions

contained in the Act do not need any reference here they being

irrelevant in the context of the nature of controversy in hand.

[14]. As regard to the 1976 Rules formulated under the Act, it is

pertinent to notice that Rule 4 binds the colonizer to reserve land for

roads, open spaces, schools, public and community buildings and

other common uses in the layout plan of the colony and such area

"shall not be less than 45% of the gross area of the land under the

colony". In the case of an industrial colony, however, the land reserved

for the above stated purposes shall not be less than 35% of the gross

area of the land under the colony. Rule 5 details out the development

works to be executed by the colonizer and the designs and

specifications of such works need to be mentioned in the layout plan of

the Colony. These development works include:-

(a) metaling of roads and paving of footpaths ;

(b) turfing and plantation with trees of open spaces ; DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document

CWP No. 4212 of 2013. ::-8-::

(c)street lighting ;

(d) adequate and wholesome water supply ;

(e) sewers and drains both for storm and sullage water and necessary provision for their treatment and disposal;

and

(f) any other works that the Director may think necessary in the interest of proper development of the colony.

[15]. Rule 11 of the 1976 Rules is the instrument to secure

compliance of the conditions contained in Sections 3, 3-A and 5 of the

1975 Act. As a composite provision, it mandates an applicant who

applies for licence - to [i] furnish bank guarantee to the Director which

is equal to 25% of the estimated cost of the development works and

then to enter into an agreement in Form LC-IV; [ii] undertake to

deposit 50% of the amount realized from the plot-holders in the

manner prescribed under Section 5 of the Act; [iii] undertake to pay

proportionate development charges if the main lines of roads,

drainage, sewerage etc. are to be laid out and constructed by the

Government or a Local Authority; [iv] undertake the maintenance and

upkeep of all roads, open spaces, public parks etc.; [v] undertake to

construct at his own cost or get the schools/hospitals/community

centres and other community buildings constructed by any other

institution or individual at its costs, on the land set apart for this

purpose; [vi] undertake to transfer to the Government at any time, if so

desired by the Government free of cost, the land set apart for such

community buildings; [vii] undertake to permit the Director or any other

authorised officer to inspect the execution of the layout and

development works in the colony etc. etc.

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[16]. Rule 12 of the 1976 Rules provides that once the applicant

fulfills all the conditions laid down in Rule 11 to the satisfaction of the

Director, the latter shall grant licence in Form LC-V, which shall be

valid for a period of two years. The licence can be further renewed in

exercise of the power vested in the Director under Rule 14 of the

Rules.

Ratio-decendie of the Judgment in Ansal's case:

[17]. The above stated provisions of the Statute, Rules read with

terms and conditions contained in the Agreement executed between

Ansal and the respondent-Authorities came up for the consideration in

Ansal's Case for determining as to whether or not Ansal was liable to

pay `61,000 per gross acre towards ICB charges. The Hon'ble

Supreme court set-aside the levy of those charges, laying down that:-

"34. The said findings arrived at by the learned Division Bench of the High Court appears to be in direct conflict and also in contradiction with the provisions of Sections 3(3)(a)(iv) of the Act and also all the terms and conditions provided in sub-clause (b) of clause (1) of the Licence Agreement. There is no mention at all of any requirement for the licensee to provide for or to make payment for the cost of construction of internal community buildings when the land is transferred to the Government free of cost. No such statutory basis could be shown either in the statute or in the licence agreement.

38. When the provisions of Section 3(3)(a)(iv) are analysed, it would be apparent that the word used in the said provision is "land" and it has been specifically mentioned therein that if the colonizer does not construct DINESH GUPTA the community buildings and facilities on its own or through 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-10-::

its agency or organization or individual, then the said licensee would be required to transfer the said land set apart for the aforesaid purpose free of cost to the Government.

39. The Government's claim is therefore restricted to lands which the developer has failed to develop as community centres. In other words only that land which the developer has not been able to develop as community services facilities would stand transferred to the Government free of cost and the said land could be utilized by the Government for the aforesaid purpose either by itself or through its agency. If the legislature had intended that the licensee is required to transfer the land and also to construct the buildings on it or to make payment for such construction, the legislature would have made specific provisions laying down such conditions explicitly and in clear words in which event the provisions would have been worded in altogether different words and terms. It is well settled principle in law that the court cannot read anything into a statutory provision which is plain and unambiguous. The language employed in a statute is determinative factor of legislative intent. If the language of the enactment is clear and unambiguous, it would not be proper for the courts to add any words thereto and evolve some legislative intent, not found in the statue.

46. It is needless to say that if the provision would have been the same at the relevant time, in that event the situation would have been different but no such provision either in the Act or in the Rules or in any policy framed by the Government could be brought to our attention. Therefore, what we were required to consider was only the explicit provision of Section 3(3)(a)(iv) of the Act and the rules framed thereunder, DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-11-::

which are extracted herein before in terms of which we find no obligation on the part of the appellant to pay for the construction of internal community buildings which was being demanded by the appellant as external development charges. Charges for construction of internal community buildings can never be equated with the external development charges, so the demand itself was illegal.

47. Since the respondent No. 2 sought to justify the demand made on the ground that such demand is justified as internal community building, we have no other option but to hold that such demand could not have been made even as internal community buildings for no such power and jurisdiction was vested in the Government to make such a demand for the simple reason that there was neither any statutory support nor any policy decision in support of the same. Even in the Licence Agreement, nothing was contemplated to the effect that in addition to the liability to transfer the land set apart for the said buildings to the Government free of cost, on the contingency mentioned in the statue and relied in the Licence Agreement, the licensee is also required to pay for the construction of said buildings". [Emphasis applied by us]

[18]. The demand towards ICB charges was thus annulled after

interpreting Section 3[3][a][iv] of the Act and the Rules framed there-

under to the effect that there was no obligation on the part of Ansal or

a Colonizer to pay for the construction of Internal Community Buildings

on having failed to raise construction over the earmarked site[s] which

have been transferred to the Government, free of costs. It was clarified

that the ICB charges can not be equated with EDC, for the obvious

reason that the Legislature has not included the schools/hospitals/ DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-12-::

police posts/community centres and other community buildings either

within the expressions 'external development works' or 'internal

development works'. These Community buildings find mention only in

Section 3[3][a][iv] which inter-alia provides that such community

buildings shall be [i] constructed by the licensee at his own costs; [ii]

he can get the same constructed by any other institution or individual

at the latter's costs; or [iii] failing which and if so desired by the

government, shall transfer the land of such earmarked site[s] to the

Government, free of costs. It was, thus, ruled that in such a

contingency; [iv] the colonizer was obligated to transfer the 'land' set

apart for hospitals/schools/ community centres and community

buildings to the Government free of costs, and [iv] that the expression

'Land' does not include the cost of construction of such community

building sites.

Haryana Development and Regulation of Urban Areas [Amendment and Validation] Act, 2012:-

[19]. Ansal and various other builders who had been paying the

ICB charges since the year 1987 sought their refund [DLF alone

claimed a refund of `584.6 Crores] and having regard to the financial

implications statedly running into thousands of crores of rupees, the

State Legislature enacted the Haryana Development and Regulation of

Urban Areas [Amendment and Validation] Act, 2012 [Haryana Act No.

4 of 2012] which received the assent of the Governor of Haryana on

21st March, 2012. It would indeed be relevant here to briefly mention

the 'Statement of Objects and Reasons' of the Amendment and

Validation Act, 2012 which have been pointedly referred to by both the

parties. It is recited therein that EDC for residential plotted colony @ DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-13-::

`3.72 lacs per acre including the amount of `61,000 per gross acre

towards construction of Community Buildings, were conveyed by the

Department in the year 1987. Thereafter, the ICB charges were

increased @10% per annum and the same is levied/recovered from all

the licensees as a part of EDC. The policy decision for levying the ICB

charges was to ensure expeditious construction of the earmarked sites

by the Government agency so as to provide basic infrastructure to

licensed colonies to encourage habitation in an area like Gurgaon.

After a reference to the decision in Ansal's case, it is stated that DLF

has also sought refund of ICB charges amounting to `584.6 Crores

and has filed a writ petition in the High Court for that purpose. There is

a pointed reference to the fact that "the matter would involve huge

financial implications running into thousands of crores in case other

licensees also stake their claim for such refund".

[20]. The Statement of Objects and Reasons reiterates the

desirability to validate the 1987 policy decision regarding demand of

ICB charges and also to legitimize all actions taken in this regard

earlier through agreement[s]. It is further declared that a transparent

mechanism needs to be adopted for taking-over and construction of

the community sites in case the colonizer is not able to do so in a

reasonable period of time. Hence Section 3[3][a][iv] of the Act is to be

amended and some new provisions like Section 10-A and 23-A also

need to be inserted.

[21]. As regard to the salient features of the 2012 Act, its

Section 2 amends sub-Section [3] of Section 3 of the Principal Act

[1975] by substituting Clause [iv] and by inserting a new sub-clause DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-14-::

[iv-a] after the sub-clause [iv]. Similarly, Sections 3 and 4 of the

Amendment and Validation Act have inserted two new provisions

comprising Sections 10-A and 23-A respectively.

[22]. Section 5 of the 2012 Act contains the validation clause

added as sub-Sections [1] and [2] to the newly inserted section 23-A.

[23]. Let us at this stage compare and consider the amended or

newly inserted provisions vis-a-vis those contained in the Principal Act

of 1975, in the following tabulated form:-

Principal Act, 1975 Amendment And Validation Act, 2012 "2[e] "development works" means internal and external development works;

[g] "external development works" include sewerage, drainage, roads and electrical works which may have to be executed in the periphery of, or outside, a colony for the joint benefit of two or more colonies;

[i] "internal development works" mean - [i] No change metalling of roads and paving of footpaths; [ii] turfing and plantation with trees of open spaces; [iii] street lighting; [iv] adequate and wholesome water-supply; [v] sewers and drains both for storm and sullage water and necessary provision for their treatment and disposal; and [vi] any other work that the Director may think necessary in the interest of proper development of a colony".

3.Application for licence. 3.Application for licence.

(1) .........

(1).......... (2).......... (2).......... (3) After the enquiry under sub-section (2), the (3) After the enquiry under sub-section (2), the Director by an order in writing, shall - (a) grant, Director by an order in writing, shall - a licence in the prescribed form, after the (a) grant, a licence in the prescribed form, after applicant has furnished to the Director a bank the applicant has furnished to the Director a guarantee equal to twenty five per centum of the bank guarantee equal to twenty five per centum estimated cost of development works as certified of the estimated cost of development works as by the Director and has undertaken-- (i) to enter certified by the Director and has undertaken-- into an agreement in the prescribed form for (i) to enter into an agreement in the prescribed carrying out and completion of development form for carrying out and completion of works in accordance with the licence granted: development works in accordance with the (ii)........................ licence granted: (ii)........................ (iii)........................... (iii)...........................

(iv) to construct at his own cost, or get (iv) to construct at his own cost, or get constructed by an other institution or individual at constructed by any other institution or DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-15-::

its cost, schools, hospitals, community centres individual at its cost, schools, hospitals, and other community buildings on the lands set community centres and other community apart for this purpose, or to transfer to the buildings on the lands set apart for this Government at any time, if so desired by the purpose, in a period as may be specified, and Government, free of cost the land set apart for failing which the land shall vest with the schools, hospitals, community centres and Government after such specified period, free community buildings, in which case the of cost, in which case the Government shall Government shall be at liberty to transfer such be at liberty to transfer such land to any land to any person or institutions as it may deem person or institution including a local fit; authority, for the said purposes, on such terms and conditions, as it may deem fit:

xx xx xx Provided that in case of licenses issued prior to the notification of the Haryana Development and Amendment of section 3 of Haryana Act 8 of 1975 Regulation of Urban Areas (Amendment and Validation) Act, 2012, the licensee, the purchaser or the person claiming through him shall construct the school, hospital, community centres and other community buildings on the land set apart for this purpose, within a period of four xx xx xx years, extendable by the Director by another period of two years, for reasons to be recorded in writing, from the notification of the Haryana Development and Regulation of Urban Area (Amendment and Validation) Act, 2012:

Provided further that at the end of the period as specified under the proviso, if the xx xx xx site is not utilised for the purpose, it was meant for, the land shall vest with the Government and in which case, the Government shall be at liberty to transfer such land to any person or institution including a local authority, for the said purposes, on such terms and conditions, as it may deem fit:

Provided further that a show cause xx xx xx notice and an opportunity of hearing shall be issued before vesting the land in the Government.

(iv-a) to pay proportionate cost of construction of such percentage of sites of such school, hospital, community centre and other community buildings and at such rates as specified by the Director.

10-A. Recovery of dues.-- All dues payable under the Act, which have not been deposited within the time specified, shall be recovered as arrears of land revenue"

23A. Power to issue directions-

The Director, with the approval of the Government, may, from time to time and/or xx xx xx under the directions issued under section 9A by the Government, shall, issue directions as are necessary or expedient for carrying out DINESH GUPTA the purposes of this Act".

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5(1) Notwithstanding any judgment, decree or order of any court or tribunal or other authority to the contrary, any action taken with regard to the recovery of proportionate cost of construction of such schools, xx xx xx hospitals, community centres and other community buildings, either through the issuance of executive instructions or through condition prescribed in the Bilateral Agreement executed at the time of grant of licence or through any undertaking obtained from the coloniser, or any action taken or things done or purporting to have been taken or done, before the commencement of the xx xx xx Haryana Development and Regulation of Urban Areas (Amendment and Validation) Act, 2012, shall be deemed to be as valid and effective as if such action was taken or done in accordance with the provisions of the Haryana Development and Regulation of Urban Areas (Amendment and Validation) Act, 2012 and any executive instructions or any Bilateral Agreement or any undertaking obtained in this regard and all such xx xx xx recoveries made, shall be deemed to be as valid and effective as if such Bilateral agreement were executed, or executive instructions were issued or undertakings were obtained or recoveries were made in accordance with the provisions as amended and validated in accordance with the xx xx xx provisions contained in the Haryana Development and Regulation of Urban Areas (Amendment and Validation) Act, 2012, and shall not be called in question in any court or tribunal or other authority.

Provided that the amount already deposited against the cost of construction of the community buildings shall be spent on the construction of such community xx xx xx buildings or related infrastructure within a period of five years hereafter, unless any further extension is allowed under exceptional circumstances by the Government after recording reasons thereof, and accordingly,--

(i) all acts, proceedings or things done or action taken by the Government or by any xx xx xx other official of the Government or by any authority, in connection with the recovery of cost of construction of such schools, hospitals, community centres and other community buildings by the Director either through issuance of executive instructions or through condition prescribed in bilateral agreement or through any undertaking obtained from coloniser, for all purposes be deemed to be and to have always been done xx xx xx or taken in accordance with law;

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CWP No. 4212 of 2013. ::-17-::

(ii) no suit or other proceedings shall be maintained or continued in any court or before any authority for the refund of any such amount already deposited or for nullification of Bilateral agreement already made, executive instructions already issued and undertaking obtained; and xx xx xx (iii) no court or authority shall enforce a decree or order directing the refund of any such recovery of cost of construction of such schools, hospitals, community centres and other community buildings so charged or for nullification of bilateral agreement executed or any executive instructions issued or any undertaking obtained in this regard.

(2) Notwithstanding any judgment, order or xx xx xx decree of any court or tribunal or other authority to the contrary, if a licensee who deposited the cost of construction, full or part, on the demand of Government and later took the refund under a judgment, order or decree passed by court or tribunal or any other authority, the Government may, after the notification of the Haryana Development and Regulation of Urban Areas (Amendment xx xx xx and Validation) Act, 2012, order the recovery of the amount of construction of which the refund has been taken by the licensee under such judgment, order or decree, after giving a show cause notice and an opportunity of being heard".

[24]. The significant changes or insertions brought in by the

2012 Act thus include [i] an explicit clause empowering the State

Government to specify the period within which the Community

Buildings need to be constructed by the colonizer, failing which the

land shall vest with the State Government; [ii] the licensee or its agent

is permitted to construct the Community Buildings on the land set apart

for this purpose within a period of four years, extendable by the

Director for another period of two years; [iii] the benefit of the extended

period to complete construction of community buildings is admissible

to the pre-April, 2012 licence-holders also; [iv] if the site is not utilised

for the community buildings, the land shall vest with the Government

and the latter shall be at liberty to transfer it to any person or institution DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-18-::

including a Local Authority for the said purpose; [v] the licensee is

liable to pay the proportionate cost of construction of such percentage

of sites of such community buildings at such rates as may be specified

by the Director and this provision has been added retrospectively since

30th January, 1975.

[25]. The newly implanted provisions include the power to

recover dues as arrears of land revenue [Section 10-A] and powers

conferred upon the Director to issue directions as are necessary or

expedient for carrying out the purpose of this Act with the approval of

the Government [Sec.23A].

[26]. The provision of validation i.e., Section 23A[1] and [2]

[Section 5 of the 2012 Act] opens with a non-obstante clause and it

says that notwithstanding any judgment, decree or order of any Court

or Tribunal or other authority to the contrary, any action taken for

recovery of proportionate cost of construction of schools/ hospitals,

community centres and other community buildings either through

executive instructions or otherwise, including an agreement executed

at the time of grant of licence or through an undertaking obtained from

the colonizer, before the 2012 Act came into force, shall be deemed to

be valid and effective as if such action was taken in accordance with

the provisions of the 2012 Act. The executive instructions, bi-lateral

agreement or undertaking obtained in this regard and all such

recoveries made, shall be deemed to be valid and effective as if these

instruments were executed or obtained in accordance with the

provisions of the 2012 Act.

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[27]. The proviso to sub-Section [1] further declares that the

amount already deposited against the cost of construction of the

Community Buildings shall be spent only on the construction of such

buildings or the related infrastructure within a period of five years

unless any further extension is allowed by the Government after

recording reasons. The validation clause prohibits the maintainability

of any suit or other proceedings or their continuation in any Court or

before any Authority for the refund of the amount already deposited or

for nullification of bilateral agreement etc. and that no Court or

authority shall enforce a decree or order directing any refund of cost of

construction of schools/community centres/ hospital or any community

building, already recovered from a colonizer.

[28]. Sub-Section [2] below the newly added Section 23-A is

loaded with yet another non-obstante clause and according to this

provision notwithstanding any judgment, order or decree of any Court

or Tribunal to the contrary, if a licensee who deposited the cost of

construction, full or part, on the demand of the Government and later

took the refund under the judgment or order passed by the Court or

Tribunal, the State Government after enforcement of the 2012 Act,

was competent to recover the said amount of which the refund has

been taken by the licensee.

[29]. After the Amendment and Validation Act, 2012 came into

force w.e.f. 3rd April, 2012 and its Section 23-A[2] enabled the State

Government to recover the amount of ICB charges which were

refunded to a colonizer under the directions of the Court's judgment,

order or decree, Ansal was slapped with a notice dated 05th March, DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-20-::

2013 [P-32] whereby the order of refund and adjustment of ICB

charges amounting to `983.74 lacs towards outstanding dues of EDC

charges pertaining to its one of the licence of 2005, was withdrawn

and Ansal has been asked to deposit the outstanding dues to the tune

of `1995.65 lacs within 15 days along with penal interest. Though

Ansal vide its reply dated 20th March, 2013 [P-33] controverted its

liability and took various pleas including that of the unconstitutionality

of 2012 Act, but finding no reconsideration or withdrawal of the

subject-notice that the instant writ petition has been filed.

[30]. The principal issue[s] raised in these cases therefore count

on the validity of the Amendment and Validation Act, 2012.

Petitioners' case as per pleadings:-

[31]. The issue under consideration indeed is an elementary

question of law, therefore, an elaborate reference to the pleadings can

be conveniently avoided. The petitioners have broadly averred that [i]

the Validation Act does not fulfill the constitutional mandate as it does

not remove the defect which the Court had found in the previous law

nor the provision legalising an earlier executive decision could be

introduced retrospectively; [ii] the Validation Act is wholly arbitrary and

beyond the legislative competence; [iii] the Validation Act has been

enacted to invalidate the judicial pronouncement and is a crude

attempt to over-rule the judgment of the highest court of the land in

Ansal's case; [iv] the inter-se parties judgment of the Hon'ble

Supreme Court being final, there can not be a legislative fiat to deny

reaping of its fruits; [v] the Validation Act suffers from the vice of

arbitrariness as it permits to spend the amount of ICB charges on DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-21-::

"related infrastructure"; [vi] sub-clause [iv-a] could not be introduced

retrospectively w.e.f. 30th January, 1975 to cast obligation on a

colonizer to pay ICB charges from the year 1975 more so when the

contingency of handing-over the site free of cost is yet to arise; [vii] the

Haryana Act No. 4 of 2012 deserves to be struck down as it is

completely vague and is silent on the refund of ICB charges in a case

where the community buildings have already been constructed by the

colonizer; [viii] the 2012 Act is violative of Part-III of the Constitution as

it divests an owner of the property on account of its mis-utilisation by a

third party; [ix] the expression "proportionate cost" contained in the

newly added provision is totally vague and arbitrary; [x] the provisions

of 2012 Act would lead to absurdity, besides the same being

repugnant to the legislative policy of the principal Act of 1975 and [xi]

the levy of ICB charges is against the public policy etc.

The stand taken by respondents in the written statement:-

[32]. Respondents have in their written statement [Ansal's case]

explained that the petitioner was granted 18 licences for the

development of Palam Vihar Residential Colony between 1982 to 1987

and 13 licences for the development of another colony known as

Sushant Lok between 1985 to 1987. The total area of both the

colonies measured to 461.54 and 412.7 acres, respectively. That

despite there being an express clause in the agreement executed by

the colonizer that it shall construct or get the schools/hospitals/

community centres and other community buildings constructed, failing

which the land shall stand transferred free of cost to the State

Government, it was observed that such Community Buildings were not

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being constructed for a long time. The State Government, therefore,

directed all the colonizers including the petitioner and its associate

Companies to transfer the land set apart for construction of community

sites. Accordingly, a mechanism had to be put in place to recover from

the licensees proportionate cost of construction of such buildings.

Since HUDA was entrusted with the execution of external development

works, the said Authority along with the Finance, Town and Country

Planning Departments etc., determined the EDC rates as

communicated to the petitioner and other builders vide Memo dated

21st/23rd December, 1987. The EDC @ `3.72 lacs per gross acre

including the costs of ICB charges worked out to be at `61,000 per

gross acre. The Government's decision to take over all the community

sites and to get the same constructed from a government agency had

to be taken on account of failure of the colonizers to develop the

community buildings. The State Government, therefore, took a

decision on 23rd May, 1988 to take over the community sites from the

colonizers which was formally conveyed to all the colonizers vide letter

dated 16th August, 1988. It is claimed that in respect of the two

residential colonies, referred to above, Ansal was required to construct

60 Community sites but none of these sites had been constructed till

May, 1988 when the decision to take-over the community sites was

taken. It is maintained that there are 11 community sites which are still

to be constructed by the petitioner.

[33]. A some-what similar stand has been taken against the DLF

as well.

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[34]. The respondents have further maintained that in view of

the specific clause contained in the agreement[s] executed by the

colonizers admitting their obligation to construct the community

building sites, the respondents earnestly believed that as per the

existing provisions of 1975 Act, the colonizer was required to

construct it at its own cost or get the community buildings constructed

and if it failed to do so, the Government could direct the colonizer to

transfer the land free of cost and thereafter the Government would

construct such sites or get the same constructed at the cost of

colonizer. The respondents, thus, always believed that when the

colonizer failed to construct such buildings in a reasonable time, the

Government was well within its right to direct them to transfer the land

set apart for construction of community buildings and also to pay

proportionate cost of construction of such buildings.

[35]. The written statement further explains that since the

Hon'ble Supreme Court in Ansal's case has interpreted the provisions

of 1975 Act and the Rules framed thereunder contrary to what the

respondents used to believe, that the defect or lacunae in the

provisions has been effectively removed and cured by the Legislature

by amending the existing provisions, prospectively or retrospectively

and also by inserting some new provisions in the Act.

[36]. Before we proceed further and delve upon the rival claims,

one contentious issue on facts is also worth noticeable at this stage.

Since the respondents have in their written statement taken the stand

that petitioners failed to construct community buildings in a long span

of over five years till the State Government decided on 23rd May, 1988 DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-24-::

to take-over the community sites and that some of the such sites are

yet to be constructed, the petitioners have countered those allegations

along with furnishing the details of community sites, which, according

to them, have since been constructed or got constructed by them and

are complete in all respects as also the vacant sites which were

transferred to the State Government but are still lying un-constructed.

The State Government's administrative decision, sought to be

legalised through the impugned Legislation and which imposes an

obligation on the Colonizer to contribute the cost of construction

against 25% of over-all ICB sites, is also alleged to be totally illogical,

irrational and a rule of thumb as it discloses no criteria, facts or figures

for determining that percentage. The respondents too have filed

additional affidavits to controvert the petitioners' claim. We propose to

deal with this aspect in the later part of this order.

[37]. We have heard Shri M.L.Sarin, Senior Counsel for Ansal,

Sarv Shri Ashok Aggarwal and Chetan Mittal, Senior Counsel for DLF

and Dr. Ashwani Kumar, Senior Counsel on behalf of the State of

Haryana at a considerable length. The relevant record and the brief

synopsis handed-over by the parties besides catena of decisions cited

at the bar, have also been perused.

Contentions on behalf of the Petitioners:-

[38]. Learned Senior Counsel for the petitioners vehemently

argued that:-

[i] the principles laid down by various pronouncements

of the Hon'ble Supreme Court to test a Validation

DINESH GUPTA Law may be broadly categorised in three parts, i.e., 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-25-::

[a] the Validating Statutes shall remove the defect

which the Court had found in the previous law. The

resultant effect is that if the said amendment was in

existence on the given date when the judgment was

pronounced, then the Court would not have

pronounced the judgment in the manner it has

opined; [b] the Legislature is competent to amend the

provisions of the Act from a particular date in the

past; [c] the amendment does not violate Part-III or

other provisions of the Constitution;

[ii] as regard to principle at [a] above, the Apex Court in

Ansal's case found Section 3[3][a][iv] to be very

clear and explicit in using the word 'Land' from which

the intention of the Legislature to transfer the land

alone was writ large and, thus, there was no statutory

basis to compel a licensee for making payment of

cost of construction of ICBs. The afore-said defect

has not been cured by the Legislature because the

obligation even now on the licensee is to transfer the

'land free of cost';

[iii] the Haryana State Legislature though is competent to

legislate on the subject, however, creating a fresh

charge from a retrospective date is beyond its

legislative competence. When there was no

obligation in the past, the State can not impose a

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fresh charge retrospectively by further taking away

the right to refund;

[iv] similarly, the impugned legislation fails to qualify the

third test as well. The administrative decision of 1987

is sought to be declared valid under the garb of

validation whereas the proviso added to Section

3[3][a][iv] still enables the Licensee to develop the

community sites within 4+2 years. The validation

provision is per-se arbitrary and unreasonable as it

has taken away all the rights of refund irrespective of

the fact as to whether the sites have been

constructed or not.

[v] the judgment rendered by the Hon'ble Supreme

Court in Ansal's case is inter-parties and has

attained finality. The Legislature has enacted the

2012 Amendment Act with the singular aim to over-

rule the Supreme Court judgment which is

impermissible. The doctrine of separation of powers

within our Constitutional frame-work does not vest

the Legislature with any Judicial Power, hence the

attempt made by Haryana Legislature to set at

naught the Apex Court Judgment is totally

unconstitutional;

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[vi] the Legislature can fill-up the lacunae or cure the

defect in a Statute where the matter is still pending

adjudication either before the High Courts or the

Hon'ble Supreme Court but where the matter has

attained finality, there vests no legislative power to

take away the effect of or reverse such judgment.

[vii] the Ansal's case gives a categoric finding on facts,

which have not been disputed by the respondents,

namely, that the charges though shown as part of

EDC are basically the cost of construction for internal

community buildings. Such a specific finding of fact

being one of the foundation of the judgment, will

constitute res-judicata and can not be removed or

set-aside by creating a deeming fiction in law;

[viii] the decisions of the Hon'ble Supreme Court where

the Legislations rendering the court-decisions in-

effective were upheld, are totally distinguishable and

can not be employed in the instant case as in all such

judgments the matters were still pending

consideration before High Courts or the Supreme

Court and had not attained finality;

[ix] the Haryana Act No. 4 of 2012 is completely arbitrary

and thus violative of Article 14 of the Constitution as

it makes the petitioners liable to pay for raising

construction on the land which already stands

DINESH GUPTA 2015.02.20 13:39 transferred to the respondents;

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[x] the Amendment and Validation Act, 2012 is in conflict

with and runs opposite to the legislative policy of the

parent Act, which, as per its Objects and Reasons

deals only with the 'user' of the land, whereas the

Amending Act seeks to bestow the power of dealing

with the "ownership of the land", contrary to the

dictum in M/s DLF Qutab Enclave Educational

Charitable Trust Vs. State of Haryana, [2003] 5

SCC, 622;

[xi] the impugned Act can not operate retrospectively, for

even in respect of the licences issued prior to the

date of its notification, the coloniser or its subsequent

purchaser etc. can construct the community building

sites on the land set apart for that purpose within a

period of four years, extendable by the Director by

another two years from the date the amended Act

has come into force. Then how can one of its clause

create obligation towards ICB charges in the past,

i.e., retrospectively w.e.f. 30th January, 1975?;

[xii] the ICB charges can not in any case be levied at this

stage in view of the amended provisions where-under

the coloniser or the person through him, is entitled to

avail a period of four years extendable to six years,

for the construction of community buildings. The

period of 4+2 years is to reckon from the date the

2012 Act has been notified;

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[xiii] since the Hon'ble Supreme Court in Ansal's case

has not struck down any provision or part of the 1975

Act, there could arise no occasion for the State

Legislature to validate any thing;

[xiv] Ansal's case categorically holds that not only a

statutory provision was wanting to levy ICB charges,

there was no policy decision as well. However, the

Validation Law has been enacted on an erroneous

premise that there existed a policy decision by the

State Government which is now being validated. The

claim now made by the State Government regarding

existence of such policy decision, has no factual

basis and is only an after-thought;

[xv] the existence of power to legislate does not ipso-

facto mean that such power has been legitimately

exercised. The Legislature possesses the power to

amend the existing Law or to enact a new Law so as

to cure the defect or remove a lacuna but can not

simply nullify and over-ride the Court-judgment

without removing the basis for rendering such

judgment. The Amendment and Validation Act fails to

qualify this test and is not in 'furtherance of' the

judgment rendered by the Apex Court in Ansal's

case rather it intends 'to negate' that judicial verdict;

[xvi] the power to legislate retrospectively can be

DINESH GUPTA 2015.02.20 13:39 exercised only for the removal of substratum of a I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-30-::

Court judgment and not to declare it as 'not binding'

on the parties, the distinction between legislative and

judicial functions is well defined within the frame-work

of Indian Constitution. The Legislature while

exercising its sovereign powers can not impose itself

as a Court superior to Supreme Court;

[xvii] the 1975 Act being a Regulatory Act prescribed the

penalty to the extent of confiscation of ownership

right of the land set apart for community buildings in

case of failure of the coloniser to construct himself or

get the same constructed. However, the impugned

amendment has enhanced the penalty

retrospectively as in the event of the above

mentioned failure, the licensee is compelled not only

to give the land free of costs but also bear the cost of

construction as well;

[xviii] the impugned amendment has retrospectively altered

the statutory contract executed between the parties,

which is impermissible in law. The licence agreement

does not give any power to the State to charge for

cost of construction of ICBs and it being a binding

contract between the parties, can not be unilaterally

altered contrary to the principle of novation of a

contract in terms of Section 62 of the Contract Act;

[xix] the so-called executive policy decision sought to be

DINESH GUPTA 2015.02.20 13:39 validated was inconsequential in law as the bilateral I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-31-::

agreement between the parties can undergo no

changes on the basis of such like unilateral

administrative action;

[xx] no demand can be raised against the petitioners

towards ICB charges as the event of liability, if any,

has not arisen. In view of the proviso now added to

Section 3[3][a][iv], the licences granted before April,

2012 are also entitled to avail the extended period of

4+2 years for the construction of the left out ICB

sites;

[xxi] the demand for ICB charges @ `61,000/- per gross

acre is otherwise totally illogical and arbitrary as [a] it

includes 100% community buildings in the area

concerned whereas the stand of the respondents is

that only 25% of the buildings are to be transferred to

the State for which they are charging the cost of

construction; [b] the charge of `61,000/- includes cost

of the land which the Colonizer is giving free of cost;

[c] the petitioners are entitled to the credit of the sites

already constructed as per the details furnished by

them, in view of the instructions dated 21st

December, 1987 [R-2] and [d] the petitioners still

have a right to construct the remaining sites within

the extended period as per the amended provision

especially when all such sites are still in their

possession;

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[xxii] the State's plea that unbearable hardship shall be

caused if it was required to refund thousands of

crores of rupees to various licensees, is wholly

irrelevant and alien to the context under

consideration, for inconvenience cannot be

considered as a decisive factor while interpreting the

Statute. The maxim "Dura Lex Sed Lex" (i.e. The law

is hard but it is the law) must be followed and even if

it is a case of conflict between law and equity, the law

must prevail;

[xxiii] since the language of the Statute is plain and clear

this Court should apply the literal rule of interpretation

without the aid of considerations like equity, public

interest or the intention of the Legislature, so that the

relevant words, phrases and expressions can be

construed as these are understood in the ordinary

parlance.

Case-Law relied on behalf of the petitioners:-

[39]. The decisions cited on behalf of the petitioners to support

their leading contentions summarized at [i] to [viii] in Para 38 may also

be briefly noticed:-

[40]. The Cauvery Water Disputes Tribunal's case, [1993]

[Supp.] 1 SCC, 96, considered the question was whether the

Ordinance promulgated by the Governor of Karnataka on 25th July,

1991 was unconstitutional and was issued to over-ride the interim

order dated July 25, 1991, passed by Cauvery Water Disputes DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-33-::

Tribunal in favour of State of Tamil Nadu in an inter-State Water

Dispute? Clause 4 of the Ordinance contained an 'over-riding effect of

the Ordinance' and declared that its provision shall have effect

notwithstanding anything contained in any order, report or decision of

any Court or Tribunal, whether made before or after the

commencement of the Ordinance, save and except a final decision

under Section 5 read with Section 6 of the Inter-State Water Disputes

Act, 1956. It was held that the Legislature can change the basis on

which a decision is given by the Court and thus change the law in

general but it can not "set aside an individual decision inter-

parties and affect their rights and liabilities alone. Such an act on

the part of the Legislature amounts to exercising the judicial

power of the State and to functioning as an appellate court or

tribunal".

[41]. S.R.Bhagwat & Ors. Vs. State of Mysore, [1995] 6 SCC,

16, had a chequered history of several rounds of litigation of inter-se

seniority dispute of civil servants of States of Hyderabad and Bombay

who were allotted to the new State of Mysore under Section 115 of the

State Re-organisation Act, 1956. The Mysore High Court settled the

seniority dispute and after at-least two rounds, the appeals questioning

its correctness were finally dismissed by the Hon'ble Supreme Court

on 22nd December, 1972. The decision was given partial effect and writ

petitioners were granted deemed dates of promotions. However,

before granting the consequential monetary benefits, the State of

Mysore issued an Ordinance which culminated into enactment of

Karnataka State Civil Services [Regulation of Promotion, Pay and DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-34-::

Pension] Act, 1973. Section 11[2] of the Act had an 'over-riding effect'

and according to it the rights of a civil servant were to be determined in

accordance with that Act, notwithstanding anything contained in any

judgment, decree or order or any Court "directing promotion or

consideration for promotion of civil servants and payment of salaries

and allowances consequent upon such promotion....". The provision

further empowered the State Government to review the cases of

promotion etc. granted under the Court orders. The Hon'ble Supreme

Court concluded that sub-Section [2] of Section 11 is an attempt by the

State Legislature "to get out of the binding effect of the decision by

resorting to its legislative power. The judgments, decrees and orders

of any court or the competent authority which had become final against

the State were sought to be done away with by enacting the impugned

provisions of sub-Section [2] of Section 11. Such an attempt can not

be said to be a permissible legislative exercise. Section 11[2],

therefore, must be held to be an attempt on the part of the State

Legislature to legislative over-rule binding decisions of competent

Courts against the State....".

[42]. In State of Tamil Nadu & Ors. Vs. K.Shyam Sunder &

Ors. AIR 2011 SC, 3470, the validity of various provisions of Tamil

Nadu Uniform System of School Education Act, 2010 which was

enacted to provide the State Common Board of School Education was

questioned before the High Court of Madras, who vide the judgment

dated 30th April, 2010 struck-down Sections 11, 12, and 14 being

unconstitutional. The Hon'ble Supreme Court on 10th September, 2010

upheld that judgment. The State Legislature then brought an DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-35-::

amendment in its Section 3 and substituted it with a new provision with

regard to the common syllabus. As the new academic session had

commenced on 1st June, 2011 and the Amendment Act came into

force on 07th June, 2011, a large number of writ petitions were filed in

the High Court challenging that amendment. The High Court struck

down Section 3 of the Amendment Act, 2011 after holding that the only

purpose to bring the Amendment Act was to nullify the effect of the

final judgments. Dismissing the State's appeals, the Hon'ble Supreme

Court held that passing the Act, 2011 simply tantamounts to

subversive of law.

[43]. In State of Haryana & Ors. Vs. Karnal Co-op Farmers'

Society Limited & Ors., [1993] 2 SCC, 363, an amendment in the

Punjab Village Common Lands [Regulation] Act, 1961 as applicable in

the State of Haryana, inserting Sections 13-A and 13-B in the Principal

Act, was put to test. Section 13-A enabled the Assistant Collector 1st

Grade to set-aside civil Court decrees obtained by persons against

Panchayats in respect of land or other immovable property which were

held to be not a part of the shamlat-deh. This Court struck-down

Section 13-A on the ground that the A.C.1st Grade was conferred un-

canalised powers to sit over the judgments and decrees of the Civil

Courts and, thus, it ultra-vires the Constitution. The Hon'ble Supreme

Court dismissed the State's appeals laying down that "under our

Constitution no legislature has the power to abrogate Civil Courts'

decrees or orders or judicial adjudications by merely declaring under a

law made by it that such decrees or orders or adjudications are no

longer valid or binding on the parties, for such power of declaration DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-36-::

would be a judicial function which can not be encroached upon by a

legislature.....".

[44]. In B.Krishna Bhat Vs. State of Karnataka & Anr. [2001]

4 SCC, 227, the issue raised before the High Court was: whether the

Bangalore Development Authority [BDA] could levy any tax, cess or

fee on the owners of the land/buildings situated outside the limits of

Bangalore City Corporation. The High Court answered the question in

favour of the owners of lands and buildings and held that "there was

no inherent power to assess, impose and recover taxes, cess and fees

other than the betterment tax as the power to levy and recover taxes,

cess and fees has to be expressly conferred on BDA" and that "there

was no material on record to hold that BDA had been rendering any

service to the persons concerned corresponding to the taxes, cess and

fees recoverable because such tax was service related". The State

Legislature amended the Principal Act and inserted Sections 28-A, 28-

B and 28-C whereby BDA was statutorily entrusted with the obligation

of providing certain civic amenities and in lieu thereof, it was

empowered to levy and collect property tax. Further, Section 7 of the

Amending Act validated all the collection made by the BDA which was

earlier declared as without authority of law by the High Court. It was

held by the Hon'ble Supreme Court that the amended provisions to the

extent of levying property tax or its recovery were neither beyond the

scope of legislative power nor unguided or arbitrary. The Validation

Act, however, was struck down laying down that since the High Court

had set aside and ordered the refund of recovered amount after giving

a finding of fact that no services were rendered by the BDA in lieu of DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-37-::

the tax levied, the lack of services rendered at the relevant point of

time was an invalidity which could not have been removed by the

Legislature to justify the levy of tax by way of an Amending Act and

that finding of fact could neither be ignored nor over-ruled.

[45]. D.Cawasji Company, Mysore & Anr. Vs. State of

Mysore & Ors., 1984 [Supp.] SCC, 490 was a case where Sales Tax

was computed on the sale price of Arrac together with excise duty and

cesses payable thereon. The inclusion of 'excise duty' and 'cesses' in

the 'sale price' for the purpose of levy of Sales Tax, having been

challenged, the High Court of Mysore held that the Excise Duty which

was paid not by the seller but by the purchaser could not become a

part of the price at which goods are sold by that seller, hence no Sales

Tax could be collected on Excise Duty which was not a part of its

selling price. The State preferred an appeal before the Supreme Court

but withdrew it subsequently. Since various contractors who had

meanwhile paid the disputed Sales Tax amounts sought their refund,

the State Government passed Ordinance No. 3 of 1969, followed by

the Act of Legislature, Section 3 whereof declared that notwithstanding

any thing contained in any judgment, decree or order of any Court, the

Sales Tax on country-liquor other than Toddy levied or collected or

purported to have been levied or collected shall, for all purposes, "be

deemed to be and to have always been validly levied or collected in

accordance with law, as if this Act had been in force at all material

times when such tax was levied or collected and ......". The aforesaid

provision was struck-down by the Hon'ble Supreme Court holding that

the amendment was passed, as was set out clearly in the Statement of DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-38-::

Objects also, to over-ride the judgment of the High Court and to enable

the State to hold on to the amount collected as Sales Tax on Excise

Duty, Health Cess and Education Cess on Arrac or special liquor. It

was further held that the State instead of remedying the defect or

removing the lacuna has by the impugned amendment sought to raise

the rate of tax with retrospective effect to avoid the liability of refund.

[46]. In The Municipal Corporation of the City of Amhedabad

& Anr. Vs. The New Shrock Spg. and Wvg. Company Limited and

Ors., [1970] 2 SCC, 280, the land and building owned by various

Textile Companies in the city of Ahmedabad were assessed to

property tax but the buildings were assessed on the basis of floor area.

The owners unsuccessfully challenged the criteria of assessment

before the High Court and even when their appeals were pending

before the Hon'ble Supreme Court, the assessment for subsequent

years also continued. When the Corporation took coercive steps to

recover the due amount of taxes, writ petitions under Article 32 were

also filed. Finally, the Hon'ble Supreme Court vide judgment dated 21st

February, 1967, struck down the rules, though permitted the

Corporation to value the land and buildings on flat rate method. Since

the judgment entailed refund of tax already recovered, State of Gujarat

brought Amendment Act of 1968 inserting Section 152-A for the

validation of the tax amount already assessed or recovered. The

provision was held to be unconstitutional on the premise that the

Corporation could retain the amount collected as property tax only if

there was an assessment according to law and that the impugned

provision authorises the Corporation to assess or re-assess the DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-39-::

premises as per the amended criteria even if the previous

assessments stood set-aside by the Courts. Sub-Section [3] of Section

152-A was held to be an attempt to make a direct inroad into the

judicial powers of the State. It was ruled that no Legislature in this

Country has power to ask the instrumentalities of the State to disobey

or disregard the decisions given by Courts.

[47]. In Satchidananda Mishra Vs. State of Orissa & Ors.,

[2004] 8 SCC, 599, 49 posts of Junior Teachers were filled in total

disregard to the provisions of the 1979 Statutory Rules. Since the

State Public Service Commission refused to approve the same, the

State Government enacted the Orissa Medical Education Service

[Appointment of Junior Teachers Validation] Act, 1993 by which all the

appointees were deemed to have been validly and regularly appointed

in the service from the date of their original appointments. The

Validating Act was held to be unconstitutional by all the judicial forums

observing that there was an illegality which struck at the root of the

appointments and therefore it was beyond the scope of the legislature

to validate the appointments which were violative of Articles 14 and 16

of the Constitution.

[48]. In Delhi Cloth and General Mills Company Limited &

Anr. Vs. State of Rajasthan & Ors., [1996] 2 SCC, 449, State of

Rajasthan issued a notification under the Rajasthan Town

Municipalities Act, 1951 proposing to extend the limits of Kota

Municipality to include village Rajpura but no final notification was

issued. In the case of village Ummedganj, it was included within the

limits of Kota Municipality but such inclusion did not precede any DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-40-::

notification inviting objections. Subsequently Ummedganj was also

excluded from the limits of Kota Municipality. As the petitioner's

Industry was located in the area falling in these villages, Octroi was

collected from it. The Petitioner, thus, firstly filed a civil suit to restrain

the Kota Municipality from levying or collecting Octroi and followed by

another for the refund of about eleven lac rupees which were allegedly

paid towards Octroi. The State Government then issued an Ordinance,

followed by the Validating Act of 1975 and as per its Section 3, villages

of Rajpura and Ummedganj were deemed always to have continued to

exist and shall thereafter continue to exist within the limits of

Municipality at Kota for all intent and purposes and the liability to pay

taxes was also deemed under that provision. Sections 4 to 7 of the

Principal Act prescribing the mandatory procedure required to be

followed for inclusion of Villages within the municipal limits, however,

remained un-amended. The Validation Act was held to be illegal and

unconstitutional as it did not cure any defect and merely created a

deeming fiction that the subject-villages fall within Kota Municipality

even when the mandatory provisions of Sections 4 to 7 had not been

followed for inclusion of those villages.

[49]. In AP Dairy Development Corporation Federation Vs.

B. Narasimha Reddy & Ors. [2011] 9 SCC, 286, Ordinance 2 of 2006

promulgated by State of Andhra Pradesh excluding Milk Diary

Cooperative Societies from the purview of AP Mutually Aided

Cooperative Societies Act, 1995 with a deeming fiction that such

societies shall be deemed to have been registered under the AP

Cooperative Societies Act, 1964 retrospectively from the date of DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-41-::

registration of such Societies under the 1995 Act, was struck down

being violative of Articles 19[1][c] and 14 of the Constitution on the

ground that the State can not force a society to get itself registered

under the Statute for which the Society had not applied and that too

without giving any option to such societies.

[50]. In Madan Mohan Pathak & Anr. Vs. Union of India &

Ors., [1978] 2 SCC, 50, the petitioner-employees were held entitled

to annual cash bonus under the settlement arrived at with the LIC. By

virtue of the Life Insurance Corporation [Modification of Settlement]

Act, 1976, that judgment of Calcutta High Court was sought to be

rendered in-effective. The Hon'ble Supreme Court held that the High

Court judgment was not a mere declaratory judgment holding impost

or tax to be invalid so that a validation statute could remove the defect

pointed out by the judgment amending the law with retrospective

effect. It was a judgment giving effect to the right of the petitioners and

the only remedy available against it was by way of appeal or review

but so long as the judgment stands, it can not be disregarded or

ignored and it must be obeyed by the LIC.

[51]. In State of Tamil Nadu Vs. State of Kerala & Anr., AIR

2014 SC, 2407 [known as Mullaperiyar Dam case], the Hon'ble

Supreme Court vide judgment dated 27th February, 2006 decided the

dispute between States of Tamil Nadu and Kerala, by permitting the

water level in the Mullaperiyar Dam to be raised from 136 to 142 feet

with a further direction that after the strengthening work was complete

to the satisfaction of the CWC, independent experts would examine

the safety angle before the water level is permitted to be raised up to DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-42-::

152 feet. In less than three weeks of the afore-stated decision, the

Kerala State Legislature amended Kerala Irrigation and Water

Conservation Act, 2003 by the Kerala Irrigation and Water

Conservation [Amendment] Act, 2006 and as per the Second

Schedule appended to the Amendment Act, the height of Full

Reservoir Level of the Dam was fixed at 136 feet. On a challenge laid

by the State of Tamil Nadu to the constitutionality of Kerala

Amendment Act, 2006, the Constitution Bench summed up the

separation of powers doctrine under the Indian Constitution and struck

down the 2006 Amendment Act on arriving at the conclusions, inter-

alia, that :-

".........it is abundantly clear that on the one hand there is a finding of fact determined by this Court on hearing the parties on the basis of the evidence/materials placed on record in the judgment of this Court in Mullaperiyar Environmental Protection Forum1 and on the other in 2006 (Amendment) Act, the Kerala legislature has declared the dam being an endangered one and fixed the water level in the dam at 136 ft. If the judgment of this Court in Mullaperiyar Environmental Protection Forum 1 and the 2006 (Amendment) Act are placed side by side insofar as safety of the Mullaperiyar dam for raising the water level from 136 ft. to 142 ft. is concerned, it is obvious that the judgment of this Court and the law enacted by Kerala State legislature cannot stand together and they are irreconcilable and inconsistent. The impugned law is a classic case of nullification of a judgment simpliciter, as in the judgment of this Court the question of safety of dam was determined on the basis of materials placed before it and not on the interpretation of any existing law and there was no occasion for the legislature to amend the law by DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-43-::

altering the basis on which the judgment was founded. When the impugned law is not a validation law, there is no question of the legislature removing the defect, as the Court has not found any vice in the existing law and declared such law to be bad". [Emphasis applied]

[52]. The decision in Amarendra Kumar Mohapatra & Ors. vs.

State of Orissa & Ors., (2014) 4 SCC 583, has been referred to

highlight the tests prescribed for a Validating Act, namely, whether (i)

the vice of invalidity that rendered the Act, Rule, proceedings or action

invalid has been cured by the Validating legislation; (ii) the Legislature

was competent to validate the Act, action, proceedings or rule

declared invalid in the previous judgments and (iii) such validation is

consistent with the rights guaranteed by Part-III of the Constitution? It

is only when the answer to all these three questions is in affirmative

that the Validation Act can be held to be effective.

[53]. In all fairness, three more often-cited decisions in (i) Shri

Prithvi Cotton Mills Ltd. & Anr. vs. Broach Barough Municipality &

Ors., (1969) 2 SCC 283; (ii) Indian Aluminium Co. & Ors. vs. State

of Kerala & Ors., (1996) 7 SCC 637; and (iii) Bakhtawar Trust &

Ors. vs. MD Narayan & Ors., (2003) 5 SCC 298 have been relied

upon by both the parties. We propose to refer to these decisions while

summarizing the case-law cited on behalf of the respondents so as to

avoid multiplicity.

[54]. Equally profitable is to cite the latest decision of the

Hon'ble Supreme Court dated 04th February, 2015 in S.T.Sadiq Vs.

State of Kerala & Ors., 2015[2] SCALE, 69], [rendered after this

order was reserved] wherein the question of constitutional validity of DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-44-::

the Kerala Cashew Factories Acquisition [Amendment] Act of 16th

August, 1995, was raised. Having found that Section 6 of the Act is

aimed only at directly up-setting a final judgment of the Supreme Court

and the non-obstante clause of that provision intended to wipe out the

final judgment, the Hon'ble Supreme Court has ruled that the Kerala

Legislature wished to interfere with two judgments of the Supreme

Court making no distinction between factories that were managed by

the Cashew Development Corporation and CAPEX. The offending

Statute was consequently struck-down.

[55]. For an impetus to the contention that liability to pay ICB

charges could not be levied retrospectively, the petitioners relied upon

Star India [P] Limited Vs. Commissioner of Central Excise,

Mumbai and Goa, [2005] 7 SCC, 203 which lays down that normally

liability with retrospective effect can be extended only by way of

clarification and not by way of amendment to Statute with retrospective

effect.

[56]. Delhi Development Authority, N.D. & Anr. Vs. Joint

Action Committee, Allottee of SFS Flats & Ors. [2008] 2 SCC, 672

has been pressed into aid to urge that the 1987 administrative policy

which is sought to be validated through the impugned amendment was

a unilateral novation of contract which is impermissible in law unless

the parties are ad idem to the new terms and conditions. A Division

Bench judgment of this Court in M/s Janta Land Promoters Ltd. vs.

State of Punjab & Ors., 2011(1) ICC 17, has also been cited for the

same purpose.

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-45-::

[57]. For the contention that the licence or agreements

issued/executed between the petitioners and the Director are statutory

contracts where terms and conditions cannot be varied through

unilateral administrative decisions taken by the respondents, reliance

was placed on Bharat Sanchar Nigam Ltd. & Anr. vs. BPL Mobile

Cellular Ltd. & Ors. (2008) 13 SCC 597.

[58]. Similarly, the contention that inconvenience or hardship

cannot be a decisive factor while interpreting a Statute and that the law

has to be followed even if it is hard and that equity can only

supplement law and can not supplant it, was sought to be

strengthened citing the decisions in (i) Mysore State Electricity

Board vs. Bangalore Woolen, Cotton & Silk Mills Ltd. & Ors.,

[1963] Supp. [2] SCR, 127; (ii) Martin Burn Ltd. vs. Corporation of

Calcutta, [1966] 1 SCR, 543; (iii) Raghunath Rai Bareja & Anr. vs.

Punjab National Bank & Ors. (2007) 2 SCC 230; (iv) Vijay Narayan

Thatte & Ors. vs. State of Maharashtra & Ors., (2009) 9 SCC 92; (v)

CMD/Chairman BSNL & Ors. vs. Mishri Lal & Ors. (2011) 14 SCC

739; (vi) Popat Bahiru Govardhane & Ors. vs. Special Land

Acquisition Officer & Anr., (2013) 10 SCC 765.

[59]. As regard to the plea that where the language of the

Statute is plain and clear, the literal rule of interpretation need to be

applied without referring to any other considerations, the petitioners

relied upon Rohitash Kumar & Ors. vs. Om Parkash Sharma &

Ors., (2013) 11 SCC 451.

Contentions on behalf of Respondents:-

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-46-::

[60]. In contrariety, Dr. Ashwani Kumar, learned Senior Counsel

for the State of Haryana maintained that the Haryana Act No. 4 of

2012 surely is constitutional and totally impregnable as it conforms to

all the well-defined legal tests for the validity of a piece of Legislation.

He very fervently urged that:-

[i] the power of Legislation to amend or enact the law

retrospectively in order to cure the defect or lacunae

in that law has been unambiguously recognised by

the Apex Court in a catena of decisions;

[ii] no one can have a vested right in a defective

legislation and no benefit can be allowed to enure

only because the Legislature, due to over-sight, left a

lacuna in the legislation or the Courts have construed

such legislation in a manner other than what the

Legislature perceived it;

[iii] the law can be moulded to meet the exigencies of

Constitution as while the law must be stable, it can not

stand still. It is a well recognised principle that the

intention of the Legislature is beyond judicial review

and that curative statutes are intended to affect past

transactions and, thus, are inherently retrospective in

their operation;

[iv] there can be no set formula for the language to be

used in drafting the Amendment and Validation Act,

nor do the language, expressions or phrases so used, DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-47-::

be the sole test for determining the legality or

sustainability of such Statute. The State Legislature in

exercise of its sovereign functions has effectively

cured and removed the lacuna and defect in the

original Act through the Haryana Act No. 4 of 2012;

[v] there can be no transfer malice in the field of

legislation;

[vi] the Statement of Objects and Reasons of the

impugned Act clearly spells out that the necessity to

enact the Validation Act, 2012 arose after the decision

of the Hon'ble Supreme Court in Ansal's case which

pointed out that there ought to be expressly stated

power in law to recover the cost of construction of

ICBs;

[vii] the respondents have always understood the original

law to contain that power but in the light of the

decision of the Hon'ble Supreme Court, the

Legislature has chosen to explicitly add the said

power retrospectively and, thus, the Validation Act

truly is in furtherance of the decision in Ansal's case

and not in negation thereof;

[viii] but for an express provision in the Statute to support

ICB charges, the decision of the Hon'ble Supreme

Court would have been altogether different. It is that

very lacuna only which the Legislature has remedied DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-48-::

through the Validation Act. Ansal's case also

recognizes the power of Legislature to levy and

recover ICB charges through a clearly stated

legislative intent. The respondents considered the

said Legislative intent to be implicit in the original Act

but the same has now been lucidly incorporated. To

say it differently, substantive issue decided in Ansal's

case was lack of statutory power to collect ICB

charges, which has now been distinctly added;

[ix] the allegation that there is no rationality behind the

decision to recover the costs of construction against

25% of the over-all ICB sites or that such a percentile

was per-se arbitrary, was well expounded in the

affidavit dated 12th May, 1995 filed by the then

Commissioner, Town and Country Planning, Haryana

in this Court in CWP No. 6565 of 1994, i.e., Ansal's

case and which was duly noticed by this Court in its

judgment dated 29th July, 1999. That administrative

decision has been appropriately embedded through

the Amendment Act;

[x] the petitioners' plea that a Regulatory Statute like

1975 Act can not empower the State to levy any

impost or tax retrospectively is totally misdirected as it

is now well recognised part of the constitutional

jurisprudence that a Statute containing regulatory

measures, which is essentially a function of the State, DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-49-::

can include the power to levy a charge or fee as per

its regulating functions for the services rendered or

otherwise. The licence fee may be either regulatory or

compensatory. The licence fee can be regulatory

when the activity for which the licence is given,

requires to be regulated or controlled. The fee which

is charged for regulation of such activity would be

validly classified as a fee and not a tax, even without

the element of quid-pro-quo;

[xi] the additional affidavit dated 7th August, 2014 filed by

the respondents suitably allays the petitioners'

apprehension as it clarifies that no cost has been

recovered with respect to the sites which have already

been constructed by the petitioner- colonizers;

[xii] the petitioners deserve to be non-suited on equitable

considerations also as they have been profiteering to

the tune of thousands of crores of rupees under the

licences granted on the basis of their own undertaking

and understanding of the liability towards ICB charges

for which there has been an express clause in the

Bilateral agreements executed between the parties

since the year 1989.

Case Law relied on behalf of the State of Haryana:

[61]. The Constitution Bench judgment in Shri Prithvi Cotton

Mills Ltd. (supra) is the lead-case cited by both the sides. There the

Hon'ble Supreme Court struck-down Rule 350-A of the Rules made DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-50-::

under the Bombay Municipal Boroughs Act, 1925 which laid the rate

for assessing open lands for the purpose of property tax being ultra-

vires the Act itself [Patel Govardhan Das Hargovind Das Vs. Municipal

Commissioner, Ahmedabad (1964) 2 SCR 608]. The Legislature of Gujarat

then passed the Gujarat Imposition of Taxes by Municipalities

(Validation) Act, 1963 and on being challenged, the Hon'ble Supreme

Court upheld that Validation Act laying down that when a Legislature

sets out to validate a tax declared by a Court to be illegally collected

under an ineffective or invalid law, the cause for ineffectiveness or

invalidity must be removed before validation can be said to take place

effectively. Further, the Legislature must possess the power to impose

tax and it is not sufficient to declare merely that the decision of the

Court shall not bind for that tantamounts to reversing the decision in

exercise of judicial power which the Legislature does not possess or

exercise. It was further held that Validation of a tax declared illegal by

the Court can be done only if the grounds of illegality or invalidity are

capable of being removed and are in fact removed and the tax thus

made legal by re-enacting retrospectively a valid and legal taxing

provision and then by fiction "making the tax already collected to stand

under the re-enacted law". The Constitution Bench also ruled that

"Sometimes the legislature gives it own meaning and

interpretation of the law under which the tax was collected and by

legislative fiat makes the new meaning binding on courts. The

legislature may follow any one method or all of them and while it

does so it may neutralise the effect of the earlier decision of the

court which becomes ineffective after the change of the lawMM".

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document

CWP No. 4212 of 2013. ::-51-::

[62]. In Hari Singh & Ors. vs. The Military Estate Officer &

Anr., (1972) 2 SCC 239, originally the Constitutionality of the Public

Premises (Eviction of Un-authorised Occupants) Act, 1958 was

challenged on the ground that its Section 5(1) violated Article 14 of the

Constitution as it conferred unguided discretion on the authorities to

invoke either of the two alternative remedies for eviction of persons in

unauthorised possession, namely, [i] suit for eviction in a court of law;

or [ii] the recourse under the 1958 Act itself. While the appeals were

still pending, the Public Premises (Eviction of Unauthorised

Occupants) Act, 1971 came to be enacted on August 23, 1971

retrospectively w.e.f. September 16, 1958 [except its Sections 11, 19 &

20]. The appellants challenged the validity of 1971 Act but that was

repelled by the Constitution Bench on the grounds that [i] the

Legislature was competent to enact the 1971 Act and it has the power

to pass laws with retrospective operation; and [ii] the challenge to the

constitutionality of the original Act was laid on the ground that there

were two procedures and the choice of either was left to the unguided

discretion of the Estate Officer and that the 1971 Act has removed the

basis of arbitrariness as it does not leave any such discretion with the

Estate Officer, for under the 1971 Act there is only one procedure.

[63]. In I.N.Saksena Vs. State of Madhya Pradesh [1976] 4

SCC, 750, the petitioner - a Judicial Officer was retired from service

after he attained the age of 55 years. He challenged his retirement on

the ground that Fundamental Rule 56 as it stood after the amendment

dated 29th November, 1963 did not authorise to retire after the

attainment of 55 years of age. The Hon'ble Supreme Court accepted DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-52-::

his plea vide judgment dated 30th January, 1967. As he had

meanwhile attained the age of 58 years, it was held that he could not

be absorbed back in service but will be entitled to such benefits as

may accrue to him by virtue of the success of writ petition. When the

appeal was heard by the Hon'ble Supreme Court, it could not be

pointed out that Madhya Pradesh [Age of Compulsory Retirement]

Rules, 1965 had already been made under Article 309 of the

Constitution with retrospective effect from March 1, 1963 and under

these Rules, a Government servant could be retired on attaining the

age of 55 years on three months notice. It was to meet with this

situation that the State Government promulgated an Ordinance

followed by Act No. 5 of 1967 validating the retirement of certain

government servants including the petitioner, notwithstanding the

judgment of the Hon'ble Supreme Court in his favour. The 1967 Act

empowered the State not to pay the dues of the petitioner from the

date of his retirement, i.e., December 3, 1963 onwards. The petitioner

challenged the validity of the 1967 Act, particularly its Sections 2 and

5, raising four contentions including "that the Act has been passed to

over-rule the decision of the Supreme Court which the Legislature has

no power to do". The Apex Court negatived all the contentions by

applying the twin test laid down by the Constitution Bench in Hari

Singh's case [supra].

[64]. The Constitution Bench in M/s Ujagar Prints & Ors. Vs.

Union of India & Ors., [1989] 3 SCC, 488 upheld the validity of

Central Excises and Salt Additional Duties Excise [Amendment] Act,

1980 which treated the process of bleaching, dyeing, printing, sizing DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-53-::

etc. as that of a 'manufacturer'. The amendment was necessitated by

the judgment of Gujarat High Court which had declared the levy illegal

on the premise that such processing did not bring into being a new and

commercially different article with a distinctive character and use. It

was further held that a competent legislature can always validate a

law, provided the infirmities and vitiating factors noticed in the

declaratory judgment are removed or cured. Such a validating law can

also be made retrospective. If in the light of such validating and

curative exercise made by the Legislature, the earlier judgment

becomes irrelevant and unenforceable, that can not be called an

impermissible legislative over-ruling of the judicial decision. The Apex

Court also held that no individual can acquire a vested right from a

defect in a statute and seek a wind-fall from the Legislature's mistakes.

[65]. Vijay Mills Company Limited & Ors. Vs. State of

Gujarat & Ors., [1993] 1 SCC, 345 explains the different modes of

validating the provisions of an Act retrospectively, depending upon the

intention of the Legislature in that behalf. It upheld the Bombay Land

Revenue [Gujarat Amendment and Validation] Act, 1981 whereby the

rule making provision of the Principal Act was amended to empower

the Government to make Rules retrospectively and deeming the

amended provision to have been always in existence so as to validate

the Rules framed prior to coming into force the amended provision

itself.

[66]. P.Kannadasan & Ors. Vs. State of TN & Ors. [1996] 5

SCC, 670, is a case where Section 115 of the Tamil Nadu Panchayats

Act, 1958 levied local cess on every rupee of land revenue payable to DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-54-::

the Government in respect of any land. The High Court upheld the

validity of the levy saying that it was within the legislative competence

of the State Legislature it being a tax on land. On appeal before the

Hon'ble Supreme Court, the matter was finally heard by a Seven-

Judge Bench in India Cement Limited Vs. State of Tamil Nadu [1990] 1 SCC,

12 which declared the said levy to be out-side the legislative

competence of the State Legislature. Following that decision, the

Hon'ble Supreme Court also set aside identical levies by the States of

Orissa, Bihar and Madhya Pradesh in Orissa Cement Limited Vs. State of

Orissa [1991] Supp.[1] SCC, 430. Taking note of the fact that these

decisions had a serious impact on the revenue of several States,

Parliament came forward and promulgated an Ordinance on 15th

February, 1992 which was replaced by the Cess and Other Taxes On

Minerals [Validation] Act, 1992. Section 2 of the Act contained the

validation of State laws and actions taken thereunder relating to

cesses or other taxes on minerals and that notwithstanding any

judgment, decree or order of any Court, such cesses or taxes shall be

deemed to have been validly levied and recovered and also that no

suit or proceedings for the refund of the cesses or taxes realized under

the State laws shall be maintainable. The validated State laws were

included in The Schedule. The Hon'ble Supreme Court upheld the

Central Act reiterating the settled principle that since imposition of

taxes or cess under State laws was held beyond the legislative

competence of the State Legislature and not beyond the competence

of Parliament, retrospective validation of an invalid taxing was a

permissible legislative recourse.

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document

CWP No. 4212 of 2013. ::-55-::

[67]. In Indian Aluminium Co. & Ors. Vs. State of Kerala &

Ors. [1996] 7 SCC 637, the High Court of Kerala declared the action

of Government of Kerala in imposing surcharge on supply of electricity

energy to be ultra-vires the Kerala Essential Articles Control Act, 1986

with a further direction to refund the amount collected thereunder.

Soon after the Supreme Court upheld that judgment on 13th April,

1989, the State issued the Kerala Electricity Surcharge [Levy and

Collection] Ordinance, 1989 which later on was replaced by the Act

No. 22 of 1989. The challenge to its Section 11 laid on various

grounds like lack of legislative competence or as an attempt to

interfere with or encroach upon the power of judicial review entrusted

to the Courts, was turned down after referring to the fulsome of case

law.

[68]. State of TN Vs. M/s Arooran Sugars Limited, [1997] 1

SCC, 326 also reiterates that the Legislature may remove the defect

pointed out by the Court, which it may do by amending the definition or

other provisions retrospectively and such a recourse does not amount

to encroachment by the Legislature over the power of Judiciary. The

Five Judge Bench ruled that "a Court's directive must always bind

unless the conditions on which it is based are so fundamentally altered

that under altered circumstances such decisions could not have been

given". Madan Mohan Pathak's case [supra] was distinguished as

there was no non-obstante clause in that case to take away the effect

of the judgment of the High Court.

[69]. People's Union for Civil Liberties and Ors. Vs. Union of

India & Anr., [2003] 4 SCC, 399, considered the question of validity of DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-56-::

the Representation of the People [Amendment] Ordinance, 2002 to

find out whether it was consistent with the directions issued in Union of

India Vs. Assn. for Democratic Reforms & Anr. [2002] 5 SCC, 294. It was held,

in no uncertain terms, that the Legislature can not over-ride decision of

Court by empowering instrumentalities of the State to disobey the

same though it can change the basis of the decision or remove the

defect pointed out by the Court so as to render the decision in-effective

and that the Legislature has no power to review the decision of the

Supreme Court and set it at naught.

[70]. In Bakhtawar Trust & Ors. Vs. M.D.Narayan & Ors.,

[2003] 5 SCC, 298, the Karnataka Town and Country Planning Act,

1961 and the Regulations framed there-under prescribed 55 feet as

the maximum height of a new construction for the city of Bangalore.

The Builder constructed an eight storeyed building with a height of

more than 55'. Pursuant to a writ petition filed by the owner of

adjoining property, the High Court declared such construction illegal.

The Builder's appeal was also dismissed. Thereafter, the

Commissioner passed an order directing the builder to demolish 6th, 7th

and 8th floors of the building and while the contempt proceedings were

also initiated for non-compliance of the order of the High Court, the

Karnataka Legislature rescued the builder and passed the Bangalore

City Planning Area Zonal Regulations [Amendment and Validation]

Act, 1996 whereby the maximum height limit for a new building stood

increased to above 165 feet with retrospective effect. In the second

round of litigation, the Hon'ble Supreme Court allowed the appeal and

declared the Amendment Act as constitutionally valid, for it satisfied DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-57-::

the twin test of competence and curing the defect or lacuna pointed

out by the Court in the Original Act.

[71]. Dharam Dutt & Ors. Vs. Union of India & Ors. [2004] 1

SCC, 712 reiterates that the doctrine of colourable legislation does not

involve any question of bona-fide or mala-fide and the only question

that needs to be answered is whether the Legislature is competent to

enact a particular law. If the Legislature is competent to pass such law,

the motives which impelled it to act become wholly irrelevant. But if it

lacks competence, then the question of motive, in any case, does not

arise.

[72]. In ITW Signode India Limited Vs. Collector of Central

Excise, [2004] 3 SCC, 48 amendment in Section 11-A of Central

Excise Act, 1944 was upheld as a valid piece of legislation, for it was

brought in to cure the defect pointed out in the case of CCE Vs. Cotspan

Limited [1999] 7 SCC, 633.

[73]. In State of Himachal Pradesh Vs. Narain Singh, [2009]

13 SCC, 165, the respondent - landowner[s] filed writ petitions in the

High Court wherein the State Government was directed to complete

the ongoing Land Revenue Settlement operations in accordance with

the Punjab Settlement Manual. Some other directions were also

issued. The State filed Special Leave Petition in which leave was

granted and judgment of the High Court was stayed. During the

pendency of Civil Appeal, the State Legislature enacted Himachal

Pradesh Land Revenue [Amendment and Validation] Act, 1996 with

retrospective effect. The constitutionality of 1996 Act was assailed by

the respondent-landowner[s] primarily on the ground that it was a DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-58-::

piece of colourable legislation brought in to nullify the High Court

judgment dated 13th January, 1994 and that the Amendment Act was

in conflict with the Principal Act. The Hon'ble Supreme Court reversed

the view of High Court and upheld the Amendment Act laying down

that the power of the sovereign Legislature to legislate within its field,

both prospectively and retrospectively, are unquestionable and where

the competent Legislature removes the substratum or the foundation

of a judgment retrospectively, it does not transgress any other

constitutional limitation.

[74]. A.Manjula Bhashini & Ors. Vs. The Managing Director,

AP Women's Cooperative Finance Corporation Limited & Anr.,

[2009] 8 SCC, 431 too elucidates the same principles as in that case

also Andhra Pradesh [Regulation of Appointments to Public Services

and Rationalisation of Staff Pattern and Pay Structure] Act, 1994 was

amended retrospectively from the year 1994 imposing restrictions on

the regularisation of services of daily wage employees, who were

otherwise entitled to such regularisation in terms of the directions

issued by the Tribunal/Courts in their favour.

[75]. Learned Senior Counsel heavily banked upon the decision

in Secunderabad Hyderabad Hotel Owners' Association & Ors. Vs.

Hyderabad Municipal Corporation, Hyderabad & Anr. [1999] 2

SCC, 274, to justify levy of Licence-fee/other statutory charges under a

Regulatory Statute like the 1975 Act, according to which the licence

fee may be either regulatory or compensatory. When a fee is charged

for rendering specific services, the element of quid-pro-quo between

the service rendered and the fee charged ought to be reasonably DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-59-::

established. Albeit, the licence fee can be regulatory also when the

activities for which a licence is given are required to be regulated or

controlled. The fee charged for regulation of such activity would be

validly classifiable as a fee and not a tax although no service is

rendered.

[76]. Similarly, Calcutta Municipal Corporation & Ors. Vs.

Shrey Mercantile [P] Ltd. & Ors., [2005] 4 SCC, 245, draws

distinction between 'tax' and 'fee' and explains that imposition of fees

for the primary purpose of regulation and control can be classified as

'fee' but if revenue is the primary purpose and regulation is merely

incidental, then the imposition is a 'tax'. It holds that "the power to

regulate, control and prohibit within the main object of giving some

special benefit to a specific class or group of persons is in the exercise

of police power and the charge levied on that class to defray the costs

of providing benefit to such a class is a 'fee'".

[77]. Likewise, M/s Kishan Lal Lakhmi Chand & Ors. Vs.

State of Haryana & Ors., [1993] Supp. 4 SCC, 461, explains the

difference between a tax and a fee, inter-alia, pointing out that the

power of any Legislature to levy a fee is conditioned by the fact that it

must be by and large a quid-pro-quo for the services rendered, for

which the only requirement is that of a reasonable relationship

between the levy of the fee and the services rendered.

[78]. A.P.Paper Mills Limited Vs. Government of A.P. & Anr.

[2000] 8 SCC, 167 also reiterates that the licence fee is regulatory in

nature and the element of quid-pro-quo is not applicable to such fee

though there needs to be a reasonable co-relation between the levy of DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-60-::

licence fee and the purpose for which the Act or the Rules have been

enacted.

Settled Principles emerging out of the cited case-law:-

[79]. The legal issues that emerge well settled as per the cited

case-law may be conjointly summed up as follows:-

[i] The validity of a Validating Law depends upon the

twin-test as to whether the Legislature possesses the

competence over the subject-matter and whether

while making the amendment or validation law, it has

removed the defect or cured the lacuna which the

Courts had found in the existing law;

[ii] If the Legislature is empowered to legislate over the

subject matter, it can enact such a valid law even

retrospectively so as to bind even the past

transactions;

[iii] The Legislature while making a law with retrospective

effect can not sit over the Court's judgment or usurp

the judicial power, for no such power has been vested

in it under the Constitution but it can remove the basis

which led to the Court's decision;

[iv] The doctrine of separation of powers within the

Constitutional Scheme, vests the power of Judicial

review in Courts only;

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-61-::

[v] Where the court has granted relief or benefits on

interpretation of the existing law, the Legislature can

nullify the same by enacting the law with retrospective

effect save as the law so enacted does not

contravene Chapter III or other provisions of the

Constitution;

[vi] Where the competent Legislature enacts a valid law in

the manner explained above, the judgment of the

Court is not over-ruled or reversed; the judgment is

only in-effectuated as its consequences are

neutralised after the change of law;

[vii] The decision of a Court would always bind the

parties unless the conditions on which it is based are

so fundamentally altered by the competent Legislature

that the decision could not have been given in the

altered circumstances;

[viii] Once the Legislature enacts a valid law, prospectively

or retrospectively, it can not be declared ultra-vires on

the ground that it would take away the benefits which

would have been available as a result of applicability

or interpretation given to the existing law by a superior

court;

[ix] Even a competent Legislature can not directly over-

rule a judicial decision and the Validation Act can not

simply declare a judgment, order or direction of the DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-62-::

Court as not binding unless the very premise on which

the Court delivered the judgment or declared an

action invalid, is completely removed and cured in

such a manner that the Court, in the light of the

changed law, can not reiterate its earlier view;

[x] When the competent Legislature makes a law

retrospectively to neutralise a judicial decision, its

validity can not be challenged by attributing mala-fides

to the Legislature as the concept of 'transferred

malice' is unknown in the field of legislation and the

challenge can sustain only on the dual test of the

legislative competence and whether in making the

validation it has removed the defect which the Courts

had found in the existing law;

[xi] Where the Court has rendered its decision solely on a

question of fact which has become final and binding,

such findings on facts rendered in the previous

proceedings shall operate res-judicata and there can

not be a deemed substitution or reversal of such fact-

finding by the Legislature through a law enacted

retrospectively;

[xii] Where an inter-parties final judgment has been

implemented and the beneficiary has reaped its fruits,

the Legislature can not by way of a declaratory-law

authorize the Executive to disobey that judgment by

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-63-::

withdrawing the benefits given under the compliance

of that judgment.

[xiii] The 'tax' and 'fee' are two different connotations. The

'Fee' can be regulatory as well as compensatory. In

the case of a 'licence fee' levied under Regulatory

Statute, the principle of quid-pro-quo is not attracted

though the fee so levied ought to be relatable to the

legislative object of the Act or the Rules framed there-

under.

The questions arising for determination:-

[80]. From the exposition of legal issues by learned Senior

Counsel for the parties, their pleadings and the case-law cited by

them, the following questions need to be determined in these cases:-

[i] Whether there was any lacuna or defect found by the

Hon'ble Supreme Court in the Principal Act of 1975

while deciding Ansal's case?

[ii] If so, whether the State Legislature is competent to

cure such lacuna and remove the defect in the

Principal Act, 1975 retrospectively?

[iii] If question No.[ii] is answered in affirmative, whether

the Haryana Act No. 4 of 2012 has removed such

defect or cured the lacuna in the principal Act?

[iv] Whether sub-Section [2] of Section 23-A which is

part of the Validation clause to the extent it empowers DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-64-::

the State Government "to order the recovery of the

amount of construction of which the refund has been

taken by the licensee under the judgment, order or

decree" of the Court, ultra-vires Part-III of the

Constitution?

[v] Whether the Haryana Act No. 4 of 2012 has been

enacted to over-rule and nullify the judgment in

Ansal's case and is a piece of colourable

Legislation?

[vi] Whether the impugned legislation is violative of

Article 14 or other constitutional provisions?

[vii] Whether the Amendment and Validation Act, 2012 is

in conflict with the legislative object of the principal

Act of 1975?

[viii] What is the effect of the first proviso added to Section

3[3][a][iv] of the 1975 Act vide Haryana Act No. 4 of

2012?

[ix] Whether the 1975 Act being a Regulatory Statute can

empower levy of licence fee and other statutory

charges like cost of construction of ICB sites

retrospectively?

[x] Whether the demand of `61,000/- per gross acre

towards cost of construction of ICBs raised against

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-65-::

the petitioners is arbitrary and far in excess of the

actual cost of construction of 25% of such buildings?

[xi] Whether the impugned legislation amounts to

unilateral alteration or amendment of the statutory

contract executed between the parties?

[xii] Whether Ansal is entitled to refund of [ICB charges]

`983.74 lacs along with interest in compliance with

the inter-parties judgment of the Hon'ble Supreme

Court which has attained finality?

Question No.[i] : Whether there was any lacuna or defect found by the Hon'ble Supreme Court in the Principal Act of 1975 while deciding Ansal's case? :-

[81]. Section 3[3][a] of the 1975 Act as it existed before its

amendment in 2012 vividly provided that the applicant seeking licence

shall have to give an undertaking [i] for carrying on and completion of

the development works in accordance with the licence granted; [ii] the

development works means 'internal' and 'external' both and [iii] the

expression 'External Development Works' and 'Internal Development

Works' as defined in Section 2[g] and [i] of the Act do not include

amenities like schools/hospitals/post offices/police posts/ community

centres or other community buildings. Nonetheless, a colonizer is

obligated to provide these community buildings to the residents of the

colony he develops by virtue of Clause [iv] of Section 3[3][a] of the un-

amended Act. An identical obligation was created on the colonizer

under Rule 11[e] of the 1976 Rules also. There was yet another

express clause to the same effect in the bilateral agreement executed

between the parties.

DINESH GUPTA On a cumulative reading notwithstanding the 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-66-::

effect of these provisions but having regard to the fact that the

Legislature had used a specific phrase the 'land' only, Hon'ble

Supreme Court in Ansal's case held that Section 3[3][a][iv] does not

create any obligation on the colonizer to pay for the cost of

construction of community buildings in a case where the 'land' set

apart for such community buildings is transferred to the State

Government free of cost. It was, thus, ruled that "if the Legislature

has intended that the licensee is required to transfer the land and

also to construct the building on it or to make payment for such

construction, the Legislature would have made specific

provisions laying down such conditions explicitly and in clear

words in which event the provision would have been worded in

altogether different words and terms".

[82]. Ansal's judgment rejected the plea that "subsequently

respondent No. 2 has made it a policy of including expressly the value

of the community buildings in the internal development works........"

and held that "if the provision would have been the same at the

relevant time, in that event the situation would have been

different but no such provision either in the Act or in the Rules or

in any policy framed by the Government could be brought to our

attention". It was further ruled that "there was no obligation on the part

of the appellant to pay for the construction of ICB which was being

demanded by the Government as EDC" and that "such demand

could not have been made even as internal community buildings

for no such power and jurisdiction was vested in the Government

to make such a demand for the simple reason that there was DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-67-::

neither any statutory support nor any policy decision in support

of the same".

[83]. The demand raised against Ansal towards ICB charges

was undoubtedly annulled for want of explicit provision in the Statute,

Rules or policy and the consequential lack of jurisdiction to levy and

recover such charges. The Apex Court, therefore, held that if the

Legislature had intended that a licensee is required to not only transfer

the land but also to bear the expenses for construction of community

building sites, then the Legislature would have made a specific

provision to that effect.

[84]. It was surely a case of lacuna and defect in Sections 2 or

3[3][a][iv] of the Principal Act, 1975 which led the Hon'ble Supreme

Court to set aside the demand raised for ICB charges. To say it

differently, if the Legislature had used the expression like 'land along

with proportionate cost of construction' in the later part of sub-clause

[iv] of Section 3[3] or had it included the amenities like school, hospital

etc. in the definition of 'external' or 'internal' development works under

Section 2[g][i] of the Act, the verdict would have been totally otherwise.

The first question thus stands answered accordingly.

Question No.[ii] : If so, whether the State Legislature is competent to cure such lacuna and remove the defect in the Principal Act, 1975 retrospectively? :-

[85]. The competence of the State Legislature to enact the

Original Act of 1975 or the Amendment and Validation Act, 2012,

within the constitutional frame-work, has not been doubted by the

petitioners. Otherwise also, the Principal Act squarely falls within the

ambit of Article 246[3] read with the field of Legislation referable to DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-68-::

Entries 18 and 66 of the List-II - State List of the Constitution. The

State Legislature, therefore, is indubitably competent to carry out the

amendment[s], subject to the well known limitations like conformity

with Part-III and other provisions of the Constitution.

[86]. It is well settled principle of law that where a tax, fee or any

other charge is declared by a Court to be illegally collected under an

in-effective or invalid law, the Legislature is well within its right to

validate such tax, fee or charge by removing the cause of that

ineffectiveness or invalidity. Of course, the Legislature must possess

the power to levy such tax, fee or charges for if it does not possess

such power, its action would continue to remain ineffective or illegal

notwithstanding the futile exercise of validation. It is equally well

settled that when the Legislature sets out to validate the action

declared to be illegal by the Court, the parties shall remain tied up by

that decision of the Court unless the conditions on which such

judgment is based are so radically modified that the Court could not

give such decision in the altered circumstances. The validation of a

tax, fee or charge which has been declared illegal by the Court, thus,

can be done only if the grounds of illegality or invalidity are capable of

being removed and are in fact removed by the Legislature.

[87]. The Legislature has varied means and measures to

undertake the above stated exercise including either conferment of

jurisdiction where jurisdiction had not been properly envisaged before

or by re-enacting retrospectively a valid law and then by fiction the tax,

fee or charge already collected are saved under the re-enacted law.

Similarly, the Legislature may clarify the true and correct meaning and DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-69-::

interpretation of the law under which the tax was collected and then by

legislative fiat it can make the new meaning binding upon the Courts.

[88]. The above illustrated legislative exercise does not amount

to usurping of Judicial powers. The dictionary meaning of the word

"Usurp" is to 'take control of or take place of'. There is no usurpation of

Judicial Powers so long as the Legislature by its act does not take

control of Judicial Powers in its hands and is just exercising its powers

conferred upon it exclusively by the Constitution. Parliament or State

Legislature are vested with the exclusive power of legislation and

make the laws prospectively as well as retrospectively. Retrospective

application of law is an act of the Sovereign Legislature. In Consumer

Education and Research Society Vs. UOI and Ors. [2009] 9 SCC,

648, it is held that Power of Parliament to enact a law under Article

102[1][a] includes the power to enact such law retrospectively.

[89]. Surely, the Legislature can not directly over-rule a judicial

decision except that it can retrospectively remove the substratum or

foundation of a judgment to make that decision ineffective. Such an

exercise is a valid legislative recourse save that it does not transgress

any other constitutional limitations. Even in those cases where the

Apex Court struck down the enactments, it has been reiterated that

the Legislature can change the basis on which a decision is given by

the Court and, thus, change the law in general, which will affect a class

of persons and events at large. But while doing so, the Legislature can

not set aside an individual decision inter-parties and affect their rights

and liabilities alone as such an act on the part of the legislature

amounts to encroachment in the judicial sphere and usurpation of the DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-70-::

powers of an Appellate Court or Tribunal. There is, thus, an inbuilt

embargo against the Legislature from usurping the judicial functions

and then over-ruling the court decision or making a direction that the

decision is not binding.

[90]. The long journey of case-law starting from Shri Prithvi

Cotton Mills to S.T.Sadiq's cases, after a minute analysis of the

doctrine of 'separation of power' in Indian perspective, unequivocally

have illuminated these synopsized principles.

[91]. From the above resume of discussion, we hold that there is

no constitutional inhibition against the State Legislature from curing the

lacuna or removing the defect in the Principal Act of 1975 with

retrospective effect, i.e., from the date such defect or lacuna had

occurred.

Question No.[iii] : If question No.[ii] is answered in affirmative, whether the Haryana Act No. 4 of 2012 has removed such defect or cured the lacuna in the principal Act? :-

[92]. To find out whether the Amendment and Validation Act,

2012 has removed the above noticed defect and lacuna in the Original

Act of 1975, it appears useful to divide the provisions of Haryana Act

No. 4 of 2012 as set out in Para 23 of this order into two parts, i.e., [i]

Amendment and Clarificatory Clause[s] and [ii] Validation Clause.

Amendment and Clarificatory Clause[s]:-

[93]. The first part of Clause [iv] of Section 3[3] of the Original

Act has been kept intact except that unlike the un-amended provision

where-under the licensee is required to 'transfer' the land to the State

Government free of costs, if so desired, now there is a shift in the DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-71-::

policy and if the licensee-colonizer fails to construct or get the

community buildings constructed within the stipulated period, the

earmarked land 'vests' in the State without any formal transfer.

Similarly, under the un-amended Act, the licensee had no further

explicit liability [on reaching the third stage] except transferring the

'land' set apart for community buildings to the State Government free

of costs. The newly inserted provision [Clause (iv-a)] which has been

brought on the statute-book retrospectively w.e.f. 30th January, 1975,

now puts licensee under an obligation "to pay proportionate cost of

construction of such percentage of sites of such schools,

hospitals, community centres and other community buildings and

at such rates as specified by the Director". The Legislature has,

thus, now crystalised its intentment, which it always intended, that if

the licensee fails to construct or get the community building sites

constructed within the stipulated period, such licensee shall have to

pay the proportionate cost of construction of those community

buildings besides the fact that the land set apart for those buildings

would also vest in the State Government by statutory operation.

[94]. In the wake of these amendments or clarificatory additions,

it is inescapable that the Principal Act of 1975 after its 2012

amendment lucidly obliges a colonizer to pay the cost of construction

of community buildings in addition to the land set apart for that

purpose, if such coloniser fails to construct or get those buildings

constructed within the prescribed period. The Haryana Act No. 4 of

2012 indeed has effectively cured and removed those defects or

lacunae which the Apex Court detected in the Original Act in Ansal's DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-72-::

case. Since the void was created at the time of inception of the

Original Act on 30th January, 1975 that the Legislature has filled it up

from that very date.

Validation Clause:-

[95]. The second part is Section 5 of 2012 Act vide which sub-

Sections [1] and [2] have been added under Section 23-A. This

provision opens up with a 'non-obstante' clause and declares that even

if there is a judgment, decree or order of any court or Tribunal, the

action taken with regard to recovery of cost of construction of

community buildings like schools/hospitals etc., either through

executive instructions or through condition prescribed in the bilateral

agreement, shall be deemed to be valid and effective as if such action

was taken or done in accordance with the provisions of the

Amendment and Validation Act, 2012. Sub-Section [2] further provides

that even if ICB charges have been refunded to a licensee in

compliance to the judgment, order or decree of a Court, the State

Government was competent to recover such amount after the 2012

Act has come into force.

[96]. The petitioners have very forcefully contended that the

above stated provision, particularly sub-Section [2], does not satisfy

the twin-test that [i] the existing provision is defective and which the

Legislature intends to cure and [ii] the defect is removed in general

and not in particular to over-rule a court judgment.

[97]. It is relevant in the context of legitimacy of Sub-Section [1]

to refer to the administrative decision taken in the year 1987 asking the

existing and prospective licensees to include the cost of ICB charges DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-73-::

@ `61,000 per gross acre in the EDC determined at that time @

`3.72 lacs per gross acre. The said administrative policy was duly

communicated to all the license-holders and the Director eventually

enforced it uniformly. There is also a reference to that administrative

policy in the Statement of Objects and Reasons of Haryana Act No. 4

of 2012. The afore-stated policy nevertheless could not defend the

State action of imposing ICB charges firstly for want of proper

legislative back-up and secondly it could not apply to the licences

issued during the years 1982 to 1987, namely, much before its birth.

Where an executive action has been invalidated or rendered

ineffective by the judgment of a court, the Legislature is well within its

right to revalidate it by altering or removing the very basis of invalidity

on which the Court gave its judgment. The Legislature may do so with

retrospective effect also for the re-validation of the past action already

taken under the executive policy.

[98]. The validation clause consisting Sub-Section [1] added

below Section 23-A is otherwise in tune with clause [iv-a] inserted in

Section 3[3][a] w.e.f. 30th January, 1975, for if the Legislature has now

validly levied ICB charges retrospectively from that date, then the

recovery of proportionate cost of construction of those community

buildings which the State or its agency have completed before the

2012 Act came into force, is totally lawful. For that matter, the decision

in Ansal's case squarely supports the respondents as it unequivocally

holds that but for an explicit provision in Section 3[3][a] for the

imposition of ICB charges, the situation would have been altogether

different. Now that the Legislature has cured that defect, the recovery DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-74-::

already affected through executive action, has got the colour of

legitimacy and is deemed to have been recovered under the express

legislative policy.

[99]. Sub-Sections (1) of Section 23-A [added through Section 5

of the Amendment Act] is a sequel to the retrospective insertion of

Clause [iv-a] in Section 3[3][a][iv] of the principal Act. Since the

Legislature has wiped out the legal deformity from the date it had crept

in and due to which the respondents suffered the judgment in Ansal's

case, the validation clause so far as sub-Section [1] of Section 23-A

which protects the past State action taken on an erroneous

understanding or interpretation of the un-amended provision, deserves

to sustain and we hold accordingly.

Question No. [iv] : Whether sub-Section [2] of Section 23-A which is part of the Validation clause to the extent it empowers the State Government "to order the recovery of the amount of construction of which the refund has been taken by the licensee under the judgment, order or decree" of the Court, ultra-vires Part-III of the Constitution?:-

[100]. Now, adverting to Sub-Section [2] of the Validation

clause added below Section 23-A [through Section 5 of the 2012 Act],

it enables the State Government to recover even that amount of ICB

charges which the State as a judgment-debtor had refunded to a

licensee in compliance with or in execution of the judgment of a Court.

The provision obviously empowers the Executive to re-open those

matters also where - [a] inter-se parties judgment has attained finality;

[b] the judgment debtor either has no remedy of appeal or did not avail

such remedy; [c] the judgment has already been executed and the

decree-holder has reaped its fruits; and [d] the Executing Court too

has become functus-officio in the sense that nothing remains pending DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-75-::

on its board. The litmus-test to be passed for the sustenance of a

provision like sub-Section [2] would therefore be:- [i] is it a case of

removal of lacuna or curing the defect in general or [ii] is it an abortive

attempt by Legislature to review a final judgment and bring the parties

to status-quo ante? And [iii] whether the veiled object behind sub-

Section [2] is to defy the judgment in Ansal's case though in a

circuitous manner?

[101]. At-least two of the cited decisions have closely dealt with

the fact-situation similar to the case in hand and may help in view

formation. In I.N.Saksena's case [supra] relied upon by the State, the

judgment inter-se parties was delivered by the Supreme Court on 30th

June, 1967. Immediate thereafter and before granting the

consequential monetary benefits, the new Legislation was brought into

force. Upholding the amended law, Para No. 20 of the judgment

clarifies that the earlier judgment was not a 'money decree, raising a

judgment debt'. It was held to be a declaratory decree declaring the

order of compulsory retirement invalid. The further declaration

regarding entitlement to consequential benefits was held to be

'incidental or ancillary to the main reliefTT. to fall or stand with the

same'. It was, thus, held that "the decree did not create an indefeasible

right of property in favour of the appellant".

[102]. In S.R.Bhagwat's case [supra] relied upon by the

petitioners the inter-se seniority dispute and consequential claim for

deemed dates of promotions was settled by the Mysore High Court.

The judgment attained finality and was partly implemented except that

the consequential monetary benefits were yet to be released. At that DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-76-::

juncture the State of Mysore firstly issued an Ordinance and then

enacted the Act where-under the actual financial benefits directed to

be made available to the petitioners pursuant to the orders of the High

Court were sought to be taken away. The solitary object to legislate

the Act was to deny the consequential benefits to the petitioners

flowing from the judgment. The Hon'ble Supreme Court declared the

Act unconstitutional laying down that a binding judicial pronouncement

between the parties can not be made in-effective with the aid of any

legislative power by enacting a provision which in substance over-rules

such judgment and "is not in the realm of a legislative enactment which

displaces the basis or foundation of the judgment and uniformly

applies to a class of persons concerned with the entire subject

sought to be covered by such an enactment having retrospective

effect".

[103]. None of the parties have cited the third decision rendered

in Virender Singh Hooda & Ors. Vs. State of Haryana & Anr.(II)

[2004] 12 SCC, 588. That was a case where the Supreme Court vide

its previous judgments in [i] Virender Singh Hooda & Ors. Vs. State of

Haryana & Anr.(i) [999] 3 SCC, 696 and [ii] Sandeep Singh Vs. State of Haryana

& Ors. [2002] 10 SCC, 549 granted the benefit of executive instructions

dated 22nd March, 1957 and 26th May, 1972 for appointment in the

State Civil Services beyond the advertised posts, i.e., against future

vacancies. Both the judgments were implemented and the petitioners

were given appointment as noticed by the Hon'ble Supreme Court in

Paras 8 and 9 of the judgment. Meanwhile, the State of Haryana

enacted the Haryana Civil Service [Executive Branch] and Allied DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-77-::

Services and Other Services, Common/Combined Examination Act,

2002 whereby the subject-instructions were repealed/withdrawn with

retrospective effect. The proviso to Section 4[3] of 2002 Act further

stipulated that "TT.if a candidate has been appointed or offered

appointment over and above advertised posts for any reason, the

service of such candidate shall be dispensed with. However, he shall

be entitled to be appointed to the service/posts, if any, for which his

name was originally recommended by the CommissionC.". The

Hon'ble Supreme Court upheld the 2002 Act reiterating the principles

already discussed except the afore-mentioned proviso which was

struck down as it sought to reopen those decisions of the Court which

had attained finality and had since been implemented so as to

withdraw the benefits already granted in deference to the Court

directions. The Hon'ble Supreme Court, thus, held as follows:-

"68. Despite the aforesaid conclusion, the Act [proviso to Section 4(3)] to the extent it takes away the appointments already made, some of the petitioners had been appointed much before enforcement of the Act (ten in number as noticed hereinbefore) in implementation of this Court's decision, would be unreasonable, harsh, arbitrary and violative of Article 14 of the Constitution. The law does not permit the legislature to take back what has been granted in implementation of the court's decision.

Such a course is impermissible".

[104]. The operative part of the judgment in Ansal's case

deciphers the option given to the respondents either to refund the ICB

charges recovered from Ansal and/or to adjust the same against other

dues. It may be the transfer of entries only but this is a conceded fact

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-78-::

that the amount of `983.74 lacs paid by Ansal towards ICB charges

was adjusted against its dues of EDC in respect of a licence of 2005.

In this manner, the judgment in Ansal's case stood complied with and

nothing remained recoverable from the respondents in execution

thereof. It is equally undeniable that the transfer of entries was made

in compliance with the judgment in Ansal's case well before the

Haryana Act No. 4 of 2012 was passed. If that is so, is it not a case

where the Legislature has by virtue of sub-Section [2] of Section 23-A

conferred the Executive with sweeping powers like withdrawal of the

benefits given to a decree-holder in execution of the judgment or order

of the Court?

[105]. The judgment in I.N.Saksena's case [supra], in our

considered view, is distinguishable and does not resolve the riddle for

the reasons that:-

[i] the provisions of the new Legislation challenged therein

merely prevented [a] maintainability or continuation of a

suit or proceedings for the recovery of any amount

including payment towards salary of a government servant

who had been compulsorily retired; and [b] the Court was

prevented from enforcing or executing a decree or order

directing such payment;

[ii] the previous judgment of the Court dated 30th January,

1967 was a declaratory decree only which did not create

an indefeasible right of property;

[iii] the Court's judgment was yet to be implemented. DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-79-::

[106]. [i] Para 9 of the judgment in S.R.Bhagwat's case on the

other hand, does notice that the High Court judgment had

been implemented and the petitioners had been granted

deemed dates of promotions. Only consequential monetary

benefits were awaiting release;

[ii] by virtue of sub-Section [2] of Section 11 of the offending

Act in S.R.Bhagwat's case, the judgments, decrees and

orders of any court which had become final against the

State were sought to be done away;

[iii] the benefits which had already been granted to the

petitioners in deference to the court judgment were, thus,

sought to be withdrawn on the strength of the impugned

provision.

[iv] Similarly, in Virender Singh Hooda's case also, the

offending proviso to Section 4[3] of 2002 Act was couched

in the same tone and tenor and was worded in the same

manner as has been employed in sub-Section [2] of

Section 23-A of the Validation Clause of 2012 Act;

[v] the previous judgments in Virender Singh Hooda's case

had attained finality and stood implemented.

[107]. The archival account of facts and the legal principles re-

stated in S.R.Bhagwat or Virender Singh Hooda's cases, coupled

with the fine distinction drawn in S.T.Sadiq's case that the Legislative

function consists in 'making' law and not in 'declaring' what the law

shall be, brings a close parity between these three binding decisions DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-80-::

on one hand and the Ansal's case on the other, to infer that the

offending provisions in all these cases were enacted only with a view

to take away the benefits granted under a judgment which has attained

finality inter-se parties. In the Ansal's case the State of Haryana was a

party, and the judgment had been implemented well before the 2012

Act came into force. The elevated principle that the Legislature can not

take back what has been granted in implementation of the Court's

decision, thus, applies with equal force in the case in hand as well.

[108]. Sub-Section [2] of Section 23-A, i.e., the Validation Clause

which has gone far-beyond the well-defined limits of respective areas

of operation under the Separation of Powers doctrine appears to have

been enacted with the object to wriggle out of the consequences that

have fallen upon the respondents as a result of the judgment in

Ansal's case and such a recourse being impermissible within the

Constitutional frame-work, the afore-stated provision can not sustain

and is hereby struck-down being totally unconstitutional.

Question No.[v] : Whether the Haryana Act No. 4 of 2012 has been enacted to over-rule and nullify the judgment in Ansal's case and is a piece of colourable Legislation?:-

[109]. It is well settled that the question of bona-fides or mala-

fides on the part of the Legislature are alien to the doctrine of

'colourable legislation' which operates within a limited radious only to

go into the question of competence of the Legislature to enact a law. If

the Legislature is competent to enact such law, the motives which

prompted it to legislate are wholly irrelevant. Conversely, if the

Legislature does not possess the power to enact a law, the question of

motive does not arise at all. No malice, thus, can be attributed to the DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-81-::

State Legislature for enacting the impugned law for which it admittedly

possesses the powers within our constitutional frame-work.

[110]. Similarly, the petitioners' reliance on the Statement of

Objects and Reasons of 2012 Act where there is a reference to the

decision of Hon'ble Supreme Court in Ansal's case, to buttress their

contention re: colourable exercise of legislative power with a hidden

motive to over-rule the cited decision, appears to be misconceived. We

say so for the reasons that firstly, mere citation of that decision can not

be construed that the sole objective of the Legislature was to over-

come that inter-parties judgment. Secondly, Ansal's case has been

referred to point out that there was no statutory basis requiring the

licensee to make payment for the cost of construction of ICBs. Thirdly,

there is a continuous mentioning of the decided, pending or expected

spurt of new court cases so as to apprise the Legislature of the

likelihood of estimated burden of thousands of crores of rupees on the

State ex-chequer. It will be, thus, too far-fetched to accept from the

contents of the Statement of Objects and Reasons that the new

enactment was legislated with a singular object to over-rule the

judgment in Ansal's case or that what is present as an 'appearance'

does not correspond with the 'reality'. It can not be over-looked that

the Statement of Objects and Reasons of a Statute though is helpful to

interpret its provisions but the same does not constitute as a provision

of the Statute.

Question No. [vi] : Whether the impugned legislation is violative of Article 14 or other constitutional provisions?:-

[111]. It was vehemently urged that the Haryana Act No. 4 of

2012 is wholly arbitrary and does not stand on the touch-stone of DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-82-::

Article 14 of the Constitution as it makes the petitioners liable to pay

for the construction over the land which they set apart and have

transferred to the Government free of cost. We do not find any

substance in this plea. The legislative intentment of 1975 Act is to

prevent ill-planned and haphazard constructions in and around the

towns in the State of Haryana. The Act perceives regulated

development, for which the license-holder is obligated to create the

requisite infrastructure comprising 'External' and 'Internal'

Development Works. Similarly, its Section 3[3][a][iv] from the very

inception envisages that a colonizer has to provide basic amenities like

schools, hospitals, post-office, police posts, recreational parks etc. to

the residents of the colony. The statutory obligation to provide the

amenities is neither arbitrary nor illegal for all such like basic

conditions are integral to a meaningful and dignified way of life as is

understood within the salutary and expansive scope of Article 21 of the

Constitution.

[112]. The Colonizer, even before he applies for the licence, is

fully aware of his obligations re: 'external' and 'internal' development

works or other specified 'amenities'. It goes without saying that the

cost component of such development works or amenities is

appropriately passed on to the residents while determining the

allotment or sale-prices. It is farcical to say that the burden of ICB

charges falls upon the licensee alone. It is the net end consumer,

namely, the buyer of the plot or property, who pays for these

amenities. Seen from this angle and putting it differently, the Haryana

Act No. 4 of 2012 merely binds the licensee by way of an explicit DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-83-::

provision to pay towards the cost of community buildings and account

for the amount which he has already received or would recover from

the buyers. The amended Act has brought in place the mechanism

where-under the colonizer shall spend or pass-on the cost of amenities

which is presumed to have been recovered or would be recovered

from the buyers. Therefore, it is difficult to attribute any arbitrariness,

least to say that the amended Statute violates Article 14 of the

Constitution.

Question No. [vii] : Whether the Amendment and Validation Act, 2012 is in conflict with the legislative object of the principal Act of 1975?:-

[113]. The petitioners' case is that the original Act of 1975

deals with only the 'user' of land, whereas the Haryana Act No. 4 of

2012 bestows the power to deal with the 'ownership of the land' on

respondents and the later is thus in conflict with the legislative object

of the principal Act. M/s DLF Qutab Enclave Educational Charitable

Trust Vs. State of Haryana & Ors., [2003] 5 SCC, 622 was relied

upon to urge that the 1975 Act was enacted to regulate the user of

land so that the urban areas are not developed in a haphazard manner

and nothing more. The judgment holds that the regulatory provisions

contained in the 1975 Act can not be construed as a total prohibition

on the transfer of land set apart for community buildings like schools,

hospitals etc. The cited decision, in our considered view, does not

advance the above noticed plea. Its Para No. 42 interprets Section

3[3][a][iv] to mean that there is an obligation on the colonizer for the

construction of schools/ hospitals/community centres and other

community buildings at his own cost or get the same constructed by

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-84-::

any other institution etc. and that the power of the Government to take

over the lands is restricted only in a case where the community

services had not been developed. Thus, the State's right to take over

the undeveloped community building sites was well recognised.

Section 3[3][a][iv] was interpreted in Ansal's case to hold that it fell

short of empowering the respondents to recover the proportionate cost

of construction wherever the sites reserved for community buildings

stood transferred to the State Government due to non-construction by

the coloniser or his agent. Since the Haryana Act No. 4 of 2012 has

filled up that lacuna and cured the defect by inserting an explicit

provision for the recovery of the cost of construction of community

building sites from the colonizer if need be, the Amendment Act is

supplementary and complementary to the Principal Act. None of the

provisions of Original Act are at logger-heads with those of the

Amendment Act, necessitating for this Court to avert any head-on

collision.

[114]. That the land shall vest in the State only on the

contingency when the coloniser fails to perform his statutory obligation

is well manifested in the un-amended as well as the amended

provisions. The Haryana Act No. 4 of 2012 merely picks up and ties

the broken threads to reach the same logical end. There is, thus, no

conflict between the intentment or object behind the principal Act of

1975 or those which led to the enactment of Haryana Act No. 4 of

2012.

Question No.[viii] : What is the effect of the first proviso added to Section 3[3][a][iv] of the 1975 Act vide Haryana Act No. 4 of 2012?:-

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-85-::

[115]. For the just appreciation of the Legislative intentment and

the true construction of its provisions, the Haryana Act No. 4 of 2012

may be segregated into four parts. The first part comprises the

amendment and substitution of Clause [iv] of Section 3[3][a]. The

second part is the 'addition' of Clause [iv-a] immediate after Clause

[iv]. The third part is the addition of Section 10-A while the fourth part

consists of Section 23-A along with its sub-Sections [1] and [2] added

by way of Section 5 of the Amendment and Validation Act, 2012. The

Legislature, has without any scope of ambiguity, amended and

substituted Clause [iv] with prospective effect only. It is for this precise

reason that under the first proviso, a Colonizer to whom licence was

granted before the Amendment and Validation Act came into force on

03rd April, 2012, or his agent, are permitted to construct the

schools/hospitals/ community centres and other community buildings

on the land set apart for that purpose, within a period of four years

extendable to another two years by the Director.

[116]. The Legislature has in its wisdom deemed it appropriate to

grant moratorium to all the old licensees to enable them to construct

the un-developed community building sites within a period of 4+2

years countable since 3rd April, 2012, which obviously means that till

the expiry of original or extended period, they are not liable to pay ICB

charges except for the sites which stood transferred to the State and

thereafter have actually been constructed either by the State or its

agency. The petitioners like any other old licensee are also entitled to

the benefit of extended period for constructing the community buildings

on the earmarked sites including those which they have transferred to DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-86-::

the State under the un-amended law. No penal consequences for non-

construction of those community building sites which were subject

matter of the licences granted prior to 03rd April, 2012, though

transferred to the respondents but have still been lying un-constructed,

can be fastened on the petitioners till the expiry of extended period of

4+2 years. The petitioners are held entitled to avail the extended

period to construct those sites and then hand-over the same to the

State Government.

[117]. In other words, the ICB charges in respect of a Community

Building site required to be constructed even under an old licence

granted before 03rd April, 2012 can not be levied on a licensee till the

expiry of 4+2 years the extended period given by the Legislature for

such construction, commencing since 3rd April, 2012.

[118]. On the same analogy, no demand towards ICB charges

can be raised against the petitioners in respect of the community

building sites which are yet to be constructed, for the Legislature has

extended the period for such construction. The demand towards ICB

charges stands restricted only in respect of those sites which the

petitioners had transferred to the State Government and thereafter

have been constructed by the State Government or its agency. The

proportionate cost of construction of these sites is recoverable from

the petitioners as per the newly added explicit provision. The other

consequence which must follow is that the community building sites

transferred by the petitioners to the State Government and which are

still lying un-constructed, shall have to revert back to the petitioners to

enable them to construct or get the same constructed within the DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-87-::

extended period of six years [4+2]. It is only if the petitioners are not

inclined to construct those sites within the permissible period or they

decline to take back such vacant sites for construction purposes within

the stipulated time, that the respondents shall be entitled to raise their

demand for payment of ICB charges qua such sites.

Question No.[ix] : Whether the 1975 Act being a Regulatory Statute can empower levy of licence fee and other statutory charges like cost of construction of ICB sites retrospectively?:-

[119]. The fact that the principal Act is of regulatory character is

neither in dispute nor can it be debated in view of the dictum in DLF

Qutab Enclave's case [supra], wherein the Hon'ble Supreme Court

emphatically categorised it as a Regulatory Act. The basic features of

the Act also speak loudly about it being regulatory in nature. The Act

envisions the modicum of licence which is to be granted on fulfillment

of certain conditions and the monitoring by the statutory Authorities of

the development activities to be carried out there-under. Having held

so, the answer to the question posed here-in-above comes instantly

from the decision in Secundrabad Hyderabad Hotel Owners'

Association case [supra] which draws distinction in the manner of

levy of fee under a Regulatory Statute vis-a-vis a Compensatory Act

and further explains that when the fee is charged for rendering a

specific service, certain element of quid-pro-quo need to be

established, whereas 'licence fee' under a regulatory statute is

charged for regulation of such activities, though no service is rendered.

The decisions in [i] Calcutta Municipal Corporation; [ii] M/s Krishan

Lal Laxmi Chand and [iii] A.P.Paper Mills' cases [supra], also more

or less reiterate that a levy in the nature of fee does not cease to be of

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-88-::

that character merely because there is an element of compulsion nor

is it always necessary that a fee must have direct relation to the actual

service rendered by the Authority to an individual.

[120]. The State Legislature has, owing to the ever-increasing

demand in housing sector, resolved in larger public interest to prevent

not only the haphazard and ill-planned urbanisation but also prescribe

statutory measures to ensure that the private colonizers do not deny

the bare living conditions and requisite amenities to their prospective

buyers. The Legislature has well fore-sighted that the State ex-

chequer alone can not be burdened for creating complete urban

infrastructure, at the cost of several other compelling priorities. The

Statute, thus, postulates compulsory execution of 'external' and

'internal' Development Works by the licensee/coloniser at his cost as

also the construction of community buildings on the earmarked land at

the cost of such licensee. As the Act sets up a regulatory mechanism

for the grant of licence until the Licensed project is executed, the

prescription of 'licence fee' or other statutory 'charges' squarely falls

within the permissible limits elaborated in the above cited decisions.

Question No.[x] : Whether the demand of `61,000/- per gross acre towards cost of construction of ICBs raised against the petitioners is arbitrary and far in excess of the actual cost of construction of 25% of such buildings?:-

[121]. This issue has been hotly debated between the parties and

in that process, the respective facts and figures have also been

seriously disputed. In all fairness, the respondents firstly claimed that

there are several community building sites under different licences

which the petitioners did not construct till May, 1988 when the State

Government took a decision to take over such sites. The petitioners DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-89-::

have filed counter-affidavits, emphasising that they had already

constructed most of the community building sites and/or are in the

process of completion of such constructions. They have also

demonstrated that several vacant sites handed-over to the State

Government are yet to be constructed by its agency - HUDA and

those sites are lying un-attended for decades. We have made a futile

attempt to scan through these affidavits to understand the correctness

of rival claims. It is difficult to appreciate the petitioners for non-

completion of the construction of several community buildings despite

their obligation under the licence[s] or to pat the respondents, who, as

it appears, are equally blame-worthy for having failed to construct

some of the vacant sites taken from the petitioners. Nevertheless, the

blame game can not effectively resolve the controversy. A writ court is

not the ideal forum to hold a roving inquiry. The respondents have not

apparently issued even one reasoned show-cause notice to the

petitioners along with the licence-wise details of the un-constructed

community building sites. Since this question of fact is crucial for

determining the final liability of petitioners towards ICB charges, we do

not approve the casual approach of the Director or other authorities in

sending cryptic and evasive details to the petitioners while alleging

their failure to construct the community buildings. Such sweeping

allegations made by the respondents need not be accepted out-rightly

unless substantiated with exact particulars of the willful inaction.

[122]. As regard to the vigorously raised factual dispute on the

number of total community building sites constructed so far or those

which are yet to be constructed or the sites transferred to the State but DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-90-::

are still lying un-constructed, it is directed that the Director shall issue

a comprehensive notice to the petitioners, giving details of such sites,

licence-wise, to which the petitioners shall be entitled to submit their

reply along with relevant supporting material/documents, where-upon

the said disputes shall be entrusted to the Principal Secretary, Town

and Country Planning Department, Haryana, who shall adjudicate it

after hearing the parties and by way of a speaking order. Till such

exercise is undertaken, no ICB charges shall be levied on the

petitioners in respect of those disputed sites.

Question No.[xi] : Whether the impugned legislation amounts to unilateral alteration or amendment of the statutory contract executed between the parties?:-

[123]. The petitioners' contention that the Licence is a bilateral

agreement and there could be no unilateral novation of its terms and

conditions is de-void of any merit for more than one reason. Firstly, the

licence is a creation of the 1975 Act , thus, constituting a statutory

contract between the parties. The rights and obligations emanating

from such Agreements are regulated by the Statute or the Statutory

Rules framed there-under. Secondly, the Legislature has chosen to

amend or insert new provisions in the Act, mostly with retrospective

effect, hence these amended provisions are deemed to be in existence

from the very inception and are operative by legal fiction since the time

the petitioners applied or were granted the licence[s]. Thirdly, the

terms and conditions of the agreement between the parties are

governed by a special law, therefore, the same must always be

inconformity and subservient thereto. Fourthly, the petitioners have

bound themselves down to pay the ICB charges while executing the

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bilateral agreements. For example., the Agreement dated 16th

January, 1985 [Annexure P-5 in DLF's case] unequivocally says that

"that the owner shall pay the following external development charges

as determined by the Chief Engineer, HUDATTT[1] xx [2] xx, [3] xx,

[4] xx, [5] Community Building @ `26,000/- per gross acreT.". Fifthly,

the judgment in Ansal's case does not hold that a licensee, in no

circumstances, is liable to pay ICB charges, for it set aside the

demand towards ICB charges for want of an explicit provision in

Section 3[3][a][iv] which deficiency has since been made good by the

Legislature.

Question No.[xii] : Whether Ansal is entitled to refund of [ICB charges] `983.74 lacs along with interest in compliance to the inter-parties judgment of the Hon'ble Supreme Court which has attained finality?:-

[124]. In view of our answer to Question No. [iv], whereby sub-

Section [2] of the Validation Clause added to Section 23-A has been

struck down on finding it unconstitutional and an impermissible law,

this question has to be answered in favour of the Ansal for the reason

that the amount of `983.74 lacs earlier recovered from Ansal towards

ICB charges was admittedly adjusted towards EDC dues in respect of

a licence of 2005. However, after the Haryana Act No. 4 of 2012 came

into force, the State of Haryana invoked its powers under Sub-Section

[2] of Section 23-A, i.e., Validation clause and again changed the

entries thereby adjusting the subject amount towards ICB charges,

followed by a fresh demand for payment of EDC along with interest

etc. Since the very source of power for issuing the impugned notice

stands annulled, the consequential action must fall flat. Resultantly,

the amount of `983.74 lacs which was for all intent and purposes DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-92-::

refunded to Ansal in compliance of the judgment of the Hon'ble

Supreme Court in its favour, is liable to be refunded but without any

interest, with a further liberty to adjust it against the pending dues. We

order accordingly.

[125]. In the light of the above discussion and findings, we sum-

up the conclusions as follows:-

[i] The Haryana Development and Regulation of Urban Areas

[Amendment and Validation] Act, 2012 [Haryana Act No. 4

of 2012] is upheld except sub-Section [2] of the Validation

Clause added below Section 23-A and inserted through

Section 5 of the Haryana Act No. 4 of 2012;

[ii] Sub-Section [2] which is a part of the Validation Clause

and has been added to Section 23-A, is hereby struck-

down being unconstitutional as it ultra-vires the permissible

limits of Legislative powers. The writ petitions challenging

the vires of Haryana Act No. 4 of 2012 are accordingly

dismissed, except to the extent above;

[iii] In view of the first proviso added to Section 3[3][a][iv] of the

Haryana Development and Regulation of Urban Areas Act,

1975, which has come into force with immediate effect, the

petitioners and other licence-holders are entitled to the

benefit of extended period of 4+2 years for the construction

of community building sites under the old licences also and

such extended period shall commence w.e.f. 03rd April,

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2012, i.e., when the Haryana Act No. 4 of 2012 was

notified;

[iv] Those community building sites which the petitioners had

transferred to the State Government and which are yet to

be constructed by the State or its agency, shall be re-

transferred to the petitioners within a period of three

months from the date of receipt of a certified copy of this

order, so as to enable them to construct the same or get

such sites constructed, within the extended period as per

conclusion No. [iii] above;

[v] The petitioners, if they fail to raise construction over the

left-out community building sites within the extended

period, shall be liable to pay ICB charges irrespective of

the date of licences, in accordance with Section 3[3][a][vi-

a] of the 1975 Act which has come into force

retrospectively;

[vi] Since the Legislature has validly brought into force sub-

Section [1] of Section 23-A for the validation of ICB

charges already recovered from the petitioners or other

licence-holders, the claim of the petitioners for the refund

of those charges is rejected and their writ petitions qua this

relief are hereby dismissed, subject to conclusion No. [viii]

below;

[vii] The power to levy licence fee or other statutory charges

conferred under the Haryana Development and Regulation DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-94-::

of Urban Areas Act, 1975 which is regulatory in nature, is

hereby upheld;

[viii] In view of our conclusion No. [ii], Civil Writ Petition [No.

10509 of 2013] filed by M/s Ansal Properties and

Infrastructure Limited to the extent it seeks refund or re-

adjustment of the amount of Rs.983.74 lacs in compliance

with the judgment of the Hon'ble Supreme Court in its

favour and reported as [2009] 3 SCC, 553, is allowed and

the respondents are directed to refund or readjust that

amount against other dues of the petitioner without

payment of any further interest, within a period of three

months from the date of receipt of copy of this order;

[ix] The contentious issues with regard to [a] as to how many

community building sites have already been constructed by

the petitioners and handed-over to the State; [b] how many

such vacant sites have been transferred to the State

Government; [c] how many such transferred sites have

been constructed by the State or its agency and [d]

whether the liability towards ICB charges has been

correctly assessed on proportionate basis against 25%

sites, are directed to be placed before the Principal

Secretary, Town and Country Planning Department,

Haryana, who shall accord opportunity to the petitioners as

well as the Director to produce the relevant records and if

need be, shall direct a fact-finding inquiry and then

determine these issues by passing a speaking order within DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document CWP No. 4212 of 2013. ::-95-::

a period of six months from the date of receipt of a certified

copy of this order and till then the demand, if any, raised

against the petitioners even in respect of those community

building sites which were transferred to the State

Government and are said to have been constructed by the

State or its Agency at their expenses, shall be kept in

abeyance.

[126]. Having held so, we hasten to add that the above stated

conclusions shall not be taken as an expression of views in respect of

other statutory liabilities, if any, including EDC and the respondents

shall be at liberty to raise demands in respect thereto and/or to recover

such charges from the petitioners in accordance with law.

[127]. Disposed of in above terms. Dasti.

( SURYA KANT ) JUDGE

February 18, 2015. (LISA GILL) dinesh JUDGE

DINESH GUPTA 2015.02.20 13:39 I attest to the accuracy and authenticity of this document