Haryana State Industrial Dev.Corp vs Shakuntla & Ors

Haryana State Industrial Dev. Corp. . .. Appellant(s)

Versus

Shakuntla and Ors. ... Respondent(s)

With

CIVIL APPEAL NO.7021 OF 2009 [Arising out of SLP ) No. 7187 of 2007]

Haryana State Industrial Dev. Corp. ... Appellant(s)

Versus

Raj Bala and Ors. ... Respondent(s)

With

CIVIL APPEAL NO.7022 OF 2009 [Arising out of SLP ) No. 20142 of 2007]

Shakuntla and Ors. .. Appellant(s)

Versus

State of Haryana & Ors. ... Respondent(s)

1 With

CIVIL APPEAL NO.7052 OF 2009 [Arising out of SLP ) No. 2390 of 2008]

State of Haryana and Ors. ... Appellant(s)

versus

Shakuntla and Ors. .. Respondent(s)

With

CIVIL APPEAL NO. 7023 OF 2009 (Arising out of SLP ) No. 9841 of 2008]

State of Haryana and Ors. ... Appellant(s)

versus

Smt. Raj Bala and Anr.. .. Respondent(s)

JUDGMENT

TARUN CHATTERJEE, J.

1. Delay condoned.

2. Leave granted.

2

3. These appeals by special leave have arisen from a judgment dated

14th of December, 2006 of a Division Bench of the High Court of

Punjab and Haryana at Chandigarh passed in CWP No. 2479/2006

whereby the High Court had set aside the Notifications dated 11th of

November, 2002 and 12th of November, 2003 issued under Sections 4

and 6 of the Land Acquisition Act, 1894, (in short `the Act')

respectively so far as the acquired lands of the claimant-respondents

are concerned, subject to certain conditions to be fulfilled by them.

4. The facts in appeal arising out of S.L.P. No. 7099/2007 are sufficient

to decide the questions of law that have arisen in these appeals. In

that view of the matter, let us narrate the facts involved in

SLP)No.7099 of 2007 in a nutshell and the decision of which will also

govern the other Special Leave Petitions [Appeals].

5. On 15th of November, 2002, a notification under Section 4 of the Act

was issued by the State Government of Haryana for the purpose of

acquisition of lands situated in Village Khandsa, Tehsil and District

Gurgaon for the purpose of development of a corporate complex for

industrial, institutional, commercial and recreational purposes. The

respondent no.1, being one of the owners of the notified acquired

lands, filed objections under Section 5 of the Act, for exclusion of their

lands. The Haryana Government, later on, that is on 12 th of

3 November, 2003 issued a Notification under Section 6 of the Act, in

respect of the aforementioned lands declaring that the lands notified

were needed by the Government for a public purpose.

6. On 16th of July, 2005, the High Court of Punjab and Haryana at

Chandigarh disposed of the petitions filed by respondent no.1 and

others, directing that the grievances of the land owners be considered

by a High Powered Committee, constituted to look into whether the

lands of the owners concerned could be released from acquisition.

The High Powered Committee submitted its consolidated report

containing its observations and recommendations to the State

Government on 10th of November, 2005. The Committee

recommended the acquisition of the lands of respondent no.1 on the

basis of the parameters of evaluation formulated for the same

purpose. On the basis of the same parameters, some other lands

were released, land belonging to M/s Orient Crafts being one such

plot. The recommendations of the Committee were to be applicable to

all such cases pending before the High Court and they would not be

disturbed till further orders of the Government. Aggrieved by the

recommendations of the High Powered Committee, respondent no.1

filed a writ petition before the High Court of Punjab and Haryana

contending that the said report was liable to be quashed as the policy

4 of pick and choose was adopted in the matter of releasing lands and

that the acquisition of lands was discriminatory. The High Court

concluded that the case of respondent no.1 was on a better footing

than that of M/s Orient Crafts since a perusal of the site plan shows

that the land of M/s Orient Crafts which is similarly placed with the

land of the respondent no.1, does not contain any structure unlike

that of the land of the respondent no.1 containing a pucca structure.

Moreover, no nullah flows through the land of M/s Orient Crafts as

averred by the appellant Corporation. As such, the land of M/s Orient

Crafts was held to be wrongly released from acquisition amounting to

discrimination against respondent no.1. Accordingly, the High Court

ordered the release of the land belonging to respondent no.1 on the

following grounds:

i. That they will maintain the green belt as desired by the

Department which is essentially required to lay the

infrastructure.

ii. That they would pay the proportionate internal and

external charges to the Haryana State Industrial

Development Corporation (in short the `HSIDC') as and

when it is required by the authorities.

5 7. Before us, the learned counsel for the appellants argued, at the first

instance, that since a High Powered Committee having been

appointed to examine the cases of land acquisition had

recommended the acquisition of the lands of the respondents, the

decision of the High Court to quash the particular acquisition was

fallacious. The High Powered Committee had adopted certain guiding

principles for ascertaining the status of the land notified for

acquisition, the first three conditions being;-

I. The land for which CLU (change of land use) has been

obtained and the Industrial unit is under construction/

constructed or running, not to be acquired; but if the CLU

obtained but no construction initiated and duration of

sanction had expired before the issue of notification under

Section-4, shall not be considered as a case of CLU

obtained, keeping in view the provisions of the Punjab

Scheduled Roads and Controlled Areas Restrictions of

Unregulated Development Rules, 1965 (Rule 26 f)

II. The Industrial units constructed without permission, if fit in

the overall planning and do not interfere in the road

network, will be adjusted as these are subject to the

condition that the Town and Country Planning

6 Department has not filed prosecution case in the Court of

Law for the violations, and shall give an undertaking to

the Committee that they will apply to the Director, Town

and Country Planning for compounding the offences and

shall pay all the charges/ fees to the Government as per

policy of the Department of Town and Country Planning

Haryana.

III. To ensure continuity of the Industrial Estate, land under

acquisition, which is essential for integrated planning,

shall not be released.

These guidelines and parameters for evaluation of the merits of

each case were approved by the Government of Haryana and Punjab

and were subsequently notified through the newspaper `The Tribune'

and were also made available in the website of HSIDC.

8. The land belonging to the respondent had houses and shops built

prior to the notification issued under Section 4 of the Act. However

this does not amount to fulfilment of the conditions necessary for

release of the land under the criteria laid down in the abovementioned

parameters and as such, this particular land was rightly

recommended for acquisition. On the other hand, the land belonging

to M/s Orient Craft was recommended for release by the High

7 Powered Committee on grounds which were beyond the scope of the

criteria applied under the parameters approved by the Government.

Moreover, as rightly pointed out by the High Court, the observation of

the Committee regarding a seasonal nullah passing through the lands

of M/s Orient Craft are contrary to the actual facts. Consideration of

this observation in releasing the land of M/s Orient Craft betrays an

element of either partiality or insincerity on the part of the Committee.

Though, no construction was raised on the land of M/s Orient Craft,

the State of Haryana sought an affidavit from the General Manager of

M/s Orient Craft before releasing their land. In the affidavit filed by the

Senior General Manager of M/s Orient Craft, it was averred that they

would leave the land as desired by the HSIDC which is essentially

required to lay the infrastructure. Moreover, it was averred that they

would also pay the proportionate external and internal developmental

charges to the HSIDC. Consequent to the submission of this affidavit,

the Director of Industry & Commerce, Haryana, released the land

belonging to M/s Orient Craft. This procedure of release of the land

notified for acquisition clearly does not conform to the guidelines that

were formulated and approved at the first place.

9. It appears that the release of the land of M/s Orient Craft would not

frustrate the whole object of acquisition for expansion of the industrial

8 estate since the undertaking of M/s Orient Craft to release land as

desired by the HSIDC amounts to fulfilment of the lands needed by

the HSIDC in that area. However, the manner in which it was

released and the grounds that were relied on for its release are

fraught with defects that raise doubts regarding the impartiality and

sincerity of the authority. The appellant corporation has sought to

justify the decision of the High Powered Committee to release that

particular land by referring to a judgment of this Court in the case of

Anand Buttons v. State of Haryana and others [(2005) 9 SCC 164]

wherein this court observed:

"...reasoning of the High Court cannot be faulted for the simple reason that the authority, who has to carry out the planned development of the industrial estate, is in the best position to judge as to which land can be exempted from the acquisition without jeopardizing the development scheme. It is not possible for the court to sit in appeal over the exercise of such satisfaction by the authority vested with the task of implementing the development plan."

Thus the validity of the decision of the concerned authority was

upheld on the ground that it has to carry out the planned development of

the industrial estate and so it is in the best position to judge as to which

land can be exempted from acquisition without jeopardising the

development scheme. As such, it was rightly held by this court in Anand

Buttons's Case (supra) that it is not possible for the court to sit in appeal

9 over the exercise of such satisfaction by the authority vested with the

task of implementing the development plan.

10. The task of such authority is no doubt to ensure the smooth execution

of the development plans and since they have a firsthand knowledge

of the ground realities, they are surely at a better position than

anyone else to decide as to which land is to be acquired and which is

to be released. But when there has been a guideline laid down for the

same task and it has been approved and notified, the issue becomes

a matter of policy which the authority has to follow with a reasonable

amount of uniformity. In the given facts of the case, the respondents

have alleged discrimination thereby attracting Article 14 of the

Constitution of India. As held in the case of Union of India v.

International Trading Co. [(2003) 5 SCC 437], Article 14 applies to

matters of government policy and such policy or action would be

unconstitutional if it fails to satisfy the test of reasonableness. This

Court observed :

"...It is law that Article 14 of the Constitution applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional. While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give impression that it was so done arbitrarily on by any

10 ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basic requirement of Article 14 is fairness in action by the state, and non- arbitrariness in essence and substance is the heart beat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for discernible reasons, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness. Where a particular mode is prescribed for doing an act and there is no impediment in adopting the procedure, the deviation to act in different manner which does not disclose any discernible principle which is reasonable itself shall be labelled as arbitrary. Every State action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary."

The discretion to change a policy in exercise of the executive

power, which appears to be the case in the present matter, must be

exercised fairly and should not give the impression that it was so done

arbitrarily or by any ulterior criteria. It has been observed by this court,

as noted herein above, that a question whether the impugned action is

arbitrary or not, is to be ultimately answered on the facts and

circumstances of the given case. It was rightly held that where a

particular mode is prescribed for doing an act and there is no

11 impediment in adopting the procedure, the deviation to act in a different

manner which does not disclose any discernible principle which is

reasonable itself shall be labelled as arbitrary.

11.Thus in the given facts of the case, the action of the Committee in

releasing the lands of M/s Orient Craft would not be arbitrary in so far

as it has deviated from the procedure laid down in the form of

guidelines approved for the same purpose, provided a principle

discerned from the deviation is within the bounds of the

reasonableness test. From a perusal of the facts of the case, it is

clear that the release of the land of M/s Orient Craft may be said to be

based on the logic that as the undertaking of M/s Orient Craft to

release their land as desired by the department had fulfilled the lands

needed by the HSIDC, so the deviation in releasing the same has a

justifiable reason. So, we may safely say that such deviation from the

procedural guidelines is not unjustified in the present situation. This

leads us to the question as to why such a reasonable principle was

not applied in the case of the lands of the respondent, though the

same were contiguous and adjoining the lands of M/s Orient Craft and

thereby releasing the land of the respondent also.

12.As the deviation from the guidelines in releasing the land of M/s

Orient Craft has been found to be not wrongful, there is no question of

12 committing two wrongs by applying the same yardstick to release the

lands of the respondents. As such, we do not find anything wrong in

the decision of the High Court to release the lands of the respondents

from acquisition.

13.Thus, let us now consider the question raised by the respondents

regarding the validity of the conditions laid down by the High Court for

release of their lands. As noted herein earlier, the High Court had laid

down the following conditions for the release from acquisition of the

lands of the respondents :-

i. That they will maintain the green belt as desired by the

Department which is essentially required to lay the

infrastructure.

ii. That they would pay the proportionate internal and

external charges to the HSIDC as and when it is

required by the authorities.

It is obvious that these conditions laid down are very similar to the

undertaking of M/s Orient Craft which was filed in the form of an affidavit

as mentioned earlier. At the risk of repetition, we would like to mention

the two conditions mentioned in the undertaking of M/s Orient Craft viz.:-

13 i. That they would leave the land as desired by the

department which is essentially required to lay the

infrastructure.

ii. That they would also pay the proportionate external and

internal development charges to the HSIDC as and

when assessed and demanded.

Thus, the intention of the High Court is clearly to bring parity in the

status of the lands of the respondents vis-a-vis that of M/s Orient Craft.

This is justifiable since the same principle has been applied that is

discernible from the act of release from acquisition of the land of M/s

Orient Craft, as has already been observed.

14. However, the respondents have argued against the validity of the

condition to maintain a green belt on their land up to 50 meters on

two grounds. First, they relied on a judgment of this Court in the case

of Raju S. Jethmalani v. State of Maharastra [(2005) 11 SCC 222]

wherein it was held that the burden to make available green area

cannot be put on the citizens. Secondly, it was argued that the

condition of maintaining 50 meters green belt is not supported by any

law in force, and also that even under Section 3 of the Punjab

Scheduled Roads & Controlled Areas (Restriction of Unregulated

14 Development) Act, 1963, there is no condition of maintaining green

belt.

15. Before taking up the first point, we would like to clarify one thing

about the second point. It is true that Section 3 of the Punjab

Scheduled Roads & Controlled Areas (Restriction of Unregulated

Development) Act, 1963 does not explicitly require the maintenance

of 50 meters green belt. However, one must take into consideration

the fact that the Corporation had been appointed as a nodal agency

by the State Government for rapid industrialisation of the State and so

it had to carry out the planned development of the industrial estates.

The needs of industrialisation and economic development are so

dynamic that it is not possible to limit these needs by certain

legislative provision. These needs will change according to the

growing economic demands. In the present case in hand, the need

for rapid industrialization of the State was recognised by the State

Government and accordingly notifications were issued by it under

Sections 4 and 6 of the Act, which was clearly done according to the

applicable rules and procedures. Moreover, there is no law in force

that categorically limits the area to which a green belt may be

extended, and this means that it is a need based decision on the part

of the authority though it has to be within reasonable bounds. So the

15 mere fact that Section 3 of the Punjab Scheduled Roads & Controlled

Areas (Restriction of Unregulated Development) Act, 1963 does not

explicitly require the maintenance of 50 meters green belt, cannot be

allowed to frustrate the attempt to meet the ever increasing economic

needs of rapid industrialisation. In this regard, we may once again

look back to the judgment in Anand Button's case (supra) and

conclude that since the nodal agency is in the best position to decide

how much is needed for the maintenance of 50 meters green belt,

there is nothing wrong in requiring the same in the given case.

16. As far as the judgment in the case of Raju S. Jethmalani (supra) is

concerned, we need to see whether the facts in that case are similar

to the facts in the present case. In Raju S. Jethmalani, this court held

that no burden can be placed on private citizens to provide suitable

area in the locality for using the same as garden or park. This Court

observed :

"...We fail to understand how can the burden be placed on the appellants that they should provide suitable area in the present locality for using the same as garden or park. Rather, the burden should have been placed on the Municipal Corporation or the State Government instead of putting it on the appellants that they must provide some space for garden and park. This direction, in our opinion, appears to be wholly misconceived and we set aside the impugned order of the Division Bench..."

16 In view of the above, therefore, the burden should have been

placed on the Municipal Corporation or the State Government and not

on the individuals. This appears to render the judgment of the High

Court in the present case fallacious as far as the conditions imposing

maintenance of a green belt on the respondents is concerned. However

in the present case, the purpose is very different from that in Raju S.

Jethmalani's case and also the applicable Acts are different. So the

need is to check whether the two situations are in pari materia or not.

We have to take into account the observations of this Court in Raju S.

Jethmalani's case (supra) that a development plan can be prepared of a

land comprising of a private person but that plan cannot be implemented

till the land belonging to the private person is acquired by the Planning

Authority. Accordingly in Raju S. Jethmalani's case (supra), the decision

of the High Court to impose burden on private individuals to provide

suitable area for park was found to be faulty because of the fact that the

Municipal Corporation had failed to acquire the land for the said purpose

even though it was planned so initially. It is beyond any doubt that in the

present case, the HSIDC is ready to acquire the land of the private

persons i.e. the respondents, and so we fail to relate the situation in

Raju S. Jethmalani with that of the present case. Moreover, we cannot

17 frustrate the overall purpose of the Act by relying on a judgment that

relates to a matter under the Maharashtra Regional and Town Planning

Act, 1966. Thus, we need not be bound by the decision in Raju S.

Jethmalani's case (supra) as far as the burdening of a private person to

provide land for public utility is concerned. However, so far as the

question of maintaining a green belt imposed by the High Court in the

impugned order is concerned, we are not in a position to agree with such

directions of the High Court.

17.Leaving the land for the HSIDC to develop a green belt is different

from that of requiring the private person to maintain the green belt

since that will be an unnecessary burden on that person. Since we

have sought to rely on the averment made by M/s Orient Craft in

order to bring parity between the status of the lands of the

respondents and M/s Orient Craft, we believe that the same criteria

should be applied in releasing these lands from acquisition. The most

important issue is that the process of development and

industrialisation as planned and approved by the legislature should

not meet a dead end because of a small stretch of land. As such, the

land of the respondents shall be released from acquisition as was the

case with M/s Orient Craft, but the same shall be done on same

grounds as was applied for the land of M/s Orient Craft. Accordingly,

18 affirming the judgment of the High Court, we only modify the

conditions for fulfilment on the part of the respondents so that their

land is released from acquisition. These are:-

i. They will release the land which is needed by the HSIDC for

maintaining the green belt, undisturbed and such land shall

be not more than the 50 meters prescribed for the Green Belt.

ii. They will pay the proportionate external and internal charges

to the HSIDC as and when it is required by the authorities.

18.Apart from the modifications that we have made in the conditions

imposed by the High Court in the impugned judgment as mentioned

above, we do not find any merit in these appeals.

19.For the reasons aforesaid, the appeals are disposed of with the

aforesaid modification of the impugned judgment of the High Court.

There will be no order as to the costs.

..........................J [Tarun Chatterjee]

New Delhi; ..........................J.

19 October 22, 2009. [V.S.Sirpurkar]

20