Rameshwar vs State Of Haryana

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.8788 OF 2015

Rameshwar & Others ……Appellants VERSUS

State of Haryana & Others ..….Respondents

With

CIVIL APPEAL NO.8794 of 2015,

CIVIL APPEAL NO.8791 of 2015 & CIVIL APPEAL NO.8782 of 2015

JUDGMENT

Uday Umesh Lalit, J.

1. These appeals by special leave are directed against the common

Judgment and Order dated 15.12.2014 passed by the High Court of Punjab

and Haryana at Chandigarh dismissing Civil Writ Petition No.23769 of 2011

Signature Not Verified with other connected matters. Appeal arising from Civil Writ Petition Digitally signed by OM PRAKASH SHARMA

No.23769 of 2011 namely Civil Appeal No.8788 of 2015, has been taken as Date: 2018.03.12 13:53:54 IST Reason:

the lead matter and the facts stated therein are dealt with in detail.

2 2. The aforesaid Civil Writ Petition No.23769 of 2011 was filed by 117

landholders for the following principal relief:

“a) Issue writ direction or order, especially in the nature of certiorari quashing the entire action of the respondents who invoked Sections 4 & 6 for the alleged public purpose but ultimately compelled the petitioners to be divested of their valuable and fertile land at throwaway prices under the threat of acquisition to the private persons and consequently after issuing Section 6 and at the stage of final proceedings under Section 9, the acquisition was withdrawn with fraudulent intentions after the land was purchased by the private builders in active connivance with State functionaries and further the entire acquisition proceedings were initiated with mala fide intention, illegally and in violation of the provisions of the Land Acquisition Act. The same is vitiated by fraud and all transactions including the sale deeds etc. are liable to be set aside without invoking the provisions of Part VII of the Act and with a further prayer for an enquiry/investigation through an independent agency in respect of the entire fraud played by the respondents and their officials;….”

3. The relevant facts leading to the filing and disposal of the aforesaid

writ petition were:-

(i) On 27.08.2004 Haryana Government, Industries Department

issued a Notification under Section 4 of the Land Acquisition Act, 1894

(“Act” for short) for acquiring lands admeasuring about 912 Acres from

three villages namely, Manesar, Lakhnoula and Naurangpur, Tehsil and

District Gurgaon for setting up Chaudhari Devi Lal Industrial Township, to

be planned as an Integrated Complex for residential, recreational and other

public purposes. The notification was duly published in newspapers. The 3

landholders including some of the writ petitioners filed their objections

under Section 5A of the Act.

(ii) Soon after the initiation of acquisition, various sale deeds were

executed by the landholders including some of the writ petitioners in favour

of certain builders/private entities. Some such builders/private entities who

had recently purchased the lands also preferred objections under Section 5A

of the Act.

(iii) On 26.02.2005, a report was prepared by Land Acquisition

Collector recommending to the State Government that land admeasuring 224

acres be released from acquisition. Thereafter, appropriate notification under

Section 6 of the Act was issued on 25.08.2005 in respect of rest of the land

admeasuring 688 acres.

(iv) This acquisition was subject matter of challenge in number of

Writ Petitions filed by the landholders and the subsequent purchasers viz.

builders/private entities.

(v) Even after issuance of notification under Section 6 of the Act,

the builders/private entities continued approaching the landholders. It was

submitted that the landholders were being shown Award Nos.7, 8, 9, 10 and

12, all passed on 09.03.2006 in respect of adjoining villages for the same

purpose namely setting up of Chaudhary Devi Lal Industrial Township, 4

where compensation was awarded @ Rs.12.5 lakhs per acre. In all these

cases, notifications under Section 4 were issued on 17.09.2004 while

declarations under Section 6 were issued on 27.10.2004 and the lands

covered under Award Nos. 7, 8, 9, 10 and 12 were i) 114 Kanals 02 Marlas,

ii) 68 Kanals 15 Marlas, iii) 43 Biswas, iv) 65 Kanals 08 Marlas and v)

3515 Kanals 01 Marlas respectively. It was submitted that the landholders

were thus cornered with the prospect of impending acquisition and the idea

that the compensation would be awarded @ Rs.12.5 lakhs per acre and were

persuaded to enter into transactions with builders/private respondents

transferring their holdings @ Rs.20-25 lakhs per acre.

(vi) On 02.08.2007 notices under Section 9 of the Act were issued

calling upon the landholders to appear on 26.08.2007 for pronouncement of

award. Soon after such notice, the builder/private entities started enhancing

the price and bought the lands from the landholders at a price around Rs.80

lakhs per acre.

(vii) On 24.08.2007, the State Government passed an order dropping

the acquisition and stating that a fresh notification would be issued in place

of the present proceedings. The reasons given in the order dated 24.08.2007

were as under:

“In this connection, it is informed that State Government has notified that certain parcels of land have been released by 5

Government on the recommendation of Minister’s Committee separately. Some of these parcels are acquired in the land acquisition proceedings under consideration. Further, Town and Country Planning Department has also informed that there are several cases wherein builders applied for licence/CLU on the land which also form part of the acquisition proceedings. Furthermore, in a number of cases the courts have stayed dispossession of land. In the circumstances, it is difficult at this stage to make up a view as what could be the shape and size of the land eventually being acquired by Government. It will not be appropriate to go ahead with these proceedings in the present form. State Government has, therefore, ordered that a fresh notification be issued in place of the present proceedings indicating therein as to which are the lands that are available for acquisition without any encumbrances.”

(viii) On 20.09.2007 Haryana State Industrial and Infrastructure

Development Corporation (for short HSIIDC) submitted a proposal to

constitute an Inter Departmental Committee to survey the area and submit its

recommendations for initiating fresh acquisition proceedings. On

09.10.2007 pending Writ Petitions filed by the landholders and the

subsequent purchasers were disposed of by the High Court as having

become infructuous in view of the dropping of the acquisition on 24.08.2007

and subsequent decision to constitute an Inter Departmental Committee.

(ix) On 27.12.2007 licence Nos.283 and 284 were issued by the

State Government for setting up a housing society.

(x) On 26.03.2008 the Inter Departmental Committee submitted a

report recommending complete withdrawal of acquisition. It was stated in

the report that 12 applications for grant of licence along with requisite fees 6

were submitted by various colonizers in respect of an area of about 362

acres.

(xi) Around 22.09.2009, approvals of building plans of group

housing societies and schemes of private builders came to be granted.

(xii) Having come to know that the lands under acquisition were

now being utilized for private gain by various builders/colonizers, the

farmers started agitation against the process adopted by the Governmental

machinery.

(xiii) On 29.01.2010 a decision was taken by the State Government

in Industries and Commerce Department to close the acquisition proceedings

in view of the recommendations of the Inter Departmental Committee dated

26.03.2008 which in turn had been accepted by the HSIIDC.

(xiv) The farmers’ agitation against the decision of the State

Government favouring the builders was widely reported in newspapers on

01.03.2011. The agitation continued beyond August and September, 2011.

On 20.09.2011 a request was made by sending communications to various

functionaries for registration of FIR in respect of fraud played by the

officials of the Land Acquisition Department as well as the Director, Town

Planning in active connivance with the builders.

7

(xv) On 19.12.2011 the aforesaid Writ Petition No.23769 of 2011

was filed in the High Court of Punjab and Haryana at Chandigarh by 117

landholders. It was submitted that the entire action of initiating the

acquisition and thereby compelling writ petitioners/landholders to divest

their valuable and fertile land at throwaway prices under the threat of

acquisition to certain private builders and then dropping the acquisition just

two days before the date fixed for declaration of award was deliberate and

was fraught with malice.

(xvi) In the written statement filed by Respondent No.3 – ABW

Infrastructure Limited, it was submitted that the answering respondent had

obtained requisite licences for its residential as also commercial/group

housing project namely ABW Niketan and had raised loans to the tune of

Rs.170,00,00,000/-.

(xvii) In their written statements, Respondent Nos.4 and 5 namely

Metropolis Realtors Pvt. Ltd. and Flair Realtors Pvt. Ltd. submitted that both

these Companies were incorporated on 03.02.2006; that the prices of lands

in and around Gurgaon were increasing as Gurgaon city was developing fast

and another factor causing rise in prices was that Master Plan for the area –

i.e. Gurgaon Development Plan was notified on 05.02.2007. 8

(xviii) The written statement submitted by Respondent No.6 –

Metropolis Infrastructure Pvt. Ltd. stated that said Company was

incorporated on 19.04.2006. Rest of the submissions were on lines similar

to that of Respondent Nos.4 and 5.

(xix) On 06.12.2012 written statement was filed by State of Haryana

justifying its action of withdrawal of acquisition. It was submitted that the

writ petitioners had approached the Court more than 4½ years after the

decision of the State Government of dropping the acquisition proceedings.

It was denied that there was any nexus between the builders and the State

officials or that the exercise of acquisition was in any manner mala fide or

fraudulent.

(xx) In their replications filed on 15.01.2013, it was submitted by the

writ petitioners that most of the lands were purchased by the builders or their

substitute companies after the issuance of the Notification under Section 4 of

the Act and yet, the sale deeds executed between the parties made no

mention of factum of such notification. Further, the escalation of prices in

last 20 days namely after the issuance of the notices under Section 9 showed

that the builders were not only aware but were also sure that the acquisition

would be dropped by the State Government. The hike in price was 9

essentially to lure the landholders as after dropping of the acquisition there

would be no threat to the landholders.

(xxi) On 24.02.2014 the High Court directed the State of Haryana to

give details about various acquisitions initiated around the time in question

for the same public purpose namely, setting up of Chaudhary Devi Lal

Industrial Township.

(xxii) Accordingly, on or about 21.03.2014 an additional affidavit was

filed on behalf of State of Haryana giving relevant details in a tabular chart.

These details appear to be in addition to the lands covered under Awards 7,

8, 9, 10 and 12 of 09.03.2006. The relevant tabular chart was as under:-

Details of Sections 4 and 6 notifications along with the Revenue Estates as mentioned in the written statement dated 06.12.2012 Sl. Events 912 acres, 24 acres, 163 acres, 3718 acres, 3510 acres, No. IMT, IMT, IMT, IMT, IMT, Manesar Manesar Manesar Manesar Manesar 1 2 3 4 5 6 7

1. Date of 27.08.2004 27.12.2005 25.11.2005 08.12.2006 25.04.2008 Sec. 4 Notification

2. Land Area 912A-0 K-7M 24A-4K-5M 163A-3K-15M 3718A-6K-9M 3510A-5K-1M Notified U/S 4

3. Villages Lakhnaula, Manesar Manesar, Fazilwas, Fazilwas, Naurangpur, Khoh, Kukrola, Kukrola, Manesar Kasan Kharkhri, Kharkhri, Bas Bas Lambi, Lambi, Mokalwas, Mokalwas, Seharavan Seharavan Fakharpur. Fakharpur.

4. Purpose Setting up of Setting up Setting up of Setting up of Setting up of Chaudhary of the Chaudhary Chaudhary Devi Lal Chaudhary Industrial Devi Lal Devi Lal Industrial Devi Lal Model Industrial Industrial Model Industrial Township, Model Model Township, Model Manesar, to Township to Township to 10

Manesar, to Township, be planned be planned as be planned as be planned as Manesar, to and an integrated an integrated an integrated be planned developed complex for complex for complex for as an as an Industrial, Industrial, residential, integrated integrated Commercial Commercial recreational complex complex for and other and other and other for industrial, public public public residential, residential, utilities by utilities by utilities. recreational recreational the HSIIDC. the HSIIDC.

and other and other public public utilities. utilities, etc. 5. Date of 25.08.2005 15.07.2006 24.11.2006 18.01.2008 09.03.2009 Sec. 6 22.04.2009 Notification 6. Land Area 688A-3K-12M 24A-4K-5M 162A-3K-14M 3510A-5K-1 M 90A-5K-14M Notified 3325A-3K-16M u/S 6 7. Date of Award not 26.06.2008 24.02.2007 Section 6 24.08.2009 Award announced as Notification Award in the was respect of acquisition inadvertently 1128 acres proceedings issued after was were allowed expiry of the announced on to lapse vide period of one 21.04.2011. government year from the order dated date of last Award of the 24.08.2007 publication of remaining Section 4 land was not notification announced in and became view of the a legal decision of nullity. Fresh the Cabinet Section 4 Sub- notification Committee for 3510 on acres was infrastructure issued on and explained 25.04.2008. in paragraph 6 of the reply on merits of the written statement dt. 06.12.2012.

(xxiii)Thus, in addition to lands covered by said Awards dated

09.03.2006, about 1315 acres of land stood acquired whereas 688 acres of 11

land covered by Declaration under Section 6 of the Act in the present case

was dropped from acquisition. It is relevant to note that in relation to

acquisition referred to in Column No.5 vide award dated 24.02.2007

(annexed at page-307 in the Paper book) compensation was assessed at the

rate of Rs.12.5 lakhs per acre; identical to one assessed in Awards dated

09.03.2006.

(xxiv) The aforesaid petition as well as connected matters were

dismissed by the High Court vide its judgment under appeal. It was

observed that the landholders had taken no action after their writ petitions

were dismissed as infructuous by order dated 09.10.2007 and the present

action initiated more than 4½ years after such dropping of acquisition was

wholly belated. It was observed:

“It is the case of the petitioners, that they were forced to sell their property under the threat of acquisition to the private respondents and thus the sale deeds so executed by them in their favour, deserved to set-aside. However we are unable to agree with the said contention raised by the Ld. Counsel for the petitioners as at no stage did the petitioners ever raised hue and cry viz. the said acquisition proceedings. Even when the writ petitions were filed by them in the year 2005 impugning the said acquisition proceedings, then also no grievance was raised by them in this regard and in fact during the pendency of these writ petitions, they even sold off their land to the private respondents for consideration and even got sale deeds executed in their favour. Even when the said writ petitions were dismissed as infructuous vide order dated 09.10.2007, then also no such distress or grievance was raised by them before this Court. Until the filing of the present writ petition, no action much less coercive action was taken by the petitioners against the respondents viz. setting aside of the sale deeds on the ground of fraud which thus 12

apparently shows that not only did they acquiesced to the dropping of the said acquisition proceedings by the State Government but also waived off their right to challenge the same as well as the sale deeds executed by them in favour of the private respondents in view of Article 59 of the Limitation Act and thus now at this stage they have no vested or accrued right to challenge the said sale deeds voluntarily executed by them in favour of the private respondents and that too after a long yawning gap of 10 years in view of Section 31 of the Specific Relief Act, for which the present writ petitions being hit by delay and latches cannot be entertained for initiating such an action.”

4. The Landholders being aggrieved by the decision of the High Court

dated 15.12.2014 filed petitions for special leave to appeal in this Court.

After hearing both sides this Court granted special leave on 06.10.2015 and

continued the interim order granted earlier which was to injunct any further

construction on the lands in question. This Court also recorded the

submission of the Counsel for the State that investigation was entrusted to

CBI and directed CBI to place its report before this Court, as and when the

investigation was over. An interim report was filed by CBI in March, 2017.

On 30.01.2017 Mr. C.A. Sundaram, learned Senior Advocate was appointed

Amicus Curiae to assist the Court. The subsequent order dated 21.03.2017

records that the CBI had filed its interim report, a copy of which was

directed to be given to the learned Amicus Curiae. The matters were

thereafter taken up for hearing.

13

5. Appearing for the appellants in the lead matter, Mr. Dhruv Mehta,

learned Senior Advocate submitted:

(a) The licences granted by the State Government to the

private builders for development, in the face of the fact that the

lands were notified for acquisition, were nothing but an abuse

of power and such exercise was directly in breach of the

relevant policy. In his submission, the policy dated 19.12.2006

issued by the State Government provided that the licences could

be granted where the applicants/land owners had applied for

licences before the issuance of Notification under Section 4 of

the Act and the release could be considered on individual merits

of each case. He further submitted that as accepted by the State

Government, out of 15 licences granted by the State

Government, 8 were granted between the date of issuance of

Notification under Section 6 and the date when the acquisition

was dropped i.e. on 24.08.2007 and other 7 licences were

granted after 24.08.2007. Thus all the licences, as a matter of

fact, were granted after the issuance of Notification under

Section 6 of the Act.

14 (b) He submitted that the purchases made by the builders in

the present case were after the lands were notified under

Section 4 of the Act on 27.08.2004. At least sixty sale deeds

were executed between the issuance of Notifications under

Sections 4 and 6 of the Act while four sale deeds were executed

on the date of declaration under Section 6 i.e. on 25.08.2005

and fifty sale deeds were executed after the issuance of

Notification under Section 6 and prior to the dropping of

acquisition vide decision dated 24.08.2007. The fact that the

builders had enhanced the price and sold the lands at a price of

Rs.80 lakhs and above per acre after the issuance of notice

under Section 9, clearly indicated that they were aware that the

land acquisition proceedings would be dropped.

(c) Though the declared intent while initiating acquisition

was to sub-serve public interest, the State Government kept on

granting licences in respect of lands covered under acquisition

in the teeth of its relevant policy. A colourable exercise of

power was evident and substantiated by the Report dated

26.03.2008 which indicated that 12 licence applications were

pending in respect of area aggregating approx. 362 acres and 15

that was taken to be good reason to withdraw the lands from

acquisition finally.

(d) This entire mechanism was deliberately employed so that

valuable lands belonging to the landholders could be cornered

by a set of builders/private entities and after having seen that

the desired result was obtained, the acquisition was dropped

and later completely withdrawn.

(e) Since the entire decision making process was nothing but

an abuse of and fraud on power, the landholders were justified

in seeking annulment of all the transactions. In his submission,

though annulment of transactions can normally be in an action

between the vendor and vendee, since the transactions were

directly as a result of abuse of and fraud on power, a Writ Court

could certainly deal with such issues and while granting relief

against such fraud on power, incidental and consequential

directions could also be passed annulling such transactions.

Reliance was placed on the decisions of this Court in Greater

Noida Industrial Development Authority v. Devender Kumar

and Others1 and in Uddar Gagan v. Sant Singh & Others2.

1 2011 (12) SCC 375 2 2016 (11)SCC 378 16

Learned counsel appearing for other appellants in connected matters

adopted the submissions of Mr. Dhruv Mehta, learned Senior Advocate.

6. Learned Amicus Curiae initially filed a memo at which stage the

interim report of CBI was not filed in Court. After said copy was made

available to him pursuant to the Order dated 21.03.2017 he filed three more

memos. In his memo dated 28.03.2017 after referring to certain factual

aspects as emerging from the interim report of CBI, he submitted :-

“6. From all the above, it appears that lands were purchased by Builders during acquisition proceedings and also after acquisition proceedings were dropped on the basis that fresh acquisition proceedings would be initiated. It further appears that the builders in the meantime were working to have the acquisition proceedings dropped and their applications for building licenses were also being processed and the issuance of such licenses themselves became a reason for dropping all proceedings. It does not appear anywhere from the record that the sellers of the lands were aware that the acquisition proceedings would be dropped but it has been alleged by them in the writ petition that they were informed of such acquisition proceedings and were therefore, asked to sell their interests. It would appear that rather than running the risk of what the award would amount to and having to contest the matter for the grant of the award, the purchasers transferred their interest to the builders, who on their part, as based on the CBI Report, appear to have used every effort to ensure that the acquisition proceedings were themselves dropped.

7. xxx xxx xxx

8. In these circumstances, should this Hon’ble Court find that the case of the Petitioners/landholders is made out, and that they were in fact fraudulently enticed to sell their lands and there appears to be very suspicious circumstances in which the acquisition proceedings itself was dropped, the following could be considered:- 17

a. Insofar as the areas where no construction has been made and no third party interests through registered instruments to ultimate purchasers (not other builders) have been created, that the said sales be declared void and the lands restored to the original landholders who be directed to return the monies received by them;

b. Where third party interests have been created, the builders be directed to disgorge their profit/part of their profits on such sales, to be then distributed amongst the original landholders. To arrive at such profit the difference between the purchase price and the sale price less actual cost of construction could be applied. Insofar as plots are concerned, the difference between the buying and selling price could be determined;

c. The aforesaid directions could be passed based on the application of Sections 55(5) of the Transfer of Property Act and in particular, Sections 55(5)(a) and 55(6) of the said Act. Such orders could also be passed based on Sections 17(5) read with Section 17(2) and Sections 19 and 65 of the Contract Act;(Refer:- Coaks versus Boswell reported as (1886) IA 232/Summers versus Griffiths reported as (1865) 35 Beavan 27/Mulla on Transfer of Property, 8th Edition, Page 376-381 and 407-409)

d. Apart from these, such reparation could also be made by application of the rule of Unjust Enrichment, which has been recognized as being applicable to cases in the field of equity, contract or tort (Refer:- Black’s Law Dictionary, 9th Edition / Indian Council for Enviro – Legal Action versus Union of India and Others reported as 2011 (8) SCC 161)

e. The Interim Report of the CBI discloses complicity on the part of Government officials in the entire process. In such event, not only would transactions within this entire conspiracy be fraudulent, if they are traced to mala fide exercise of the State’s power, they would also be against public policy.

f. In view of the inordinate increase in the price of land it would not be practical to require the State Government to 18

pay the present consideration or be called upon to acquire these lands and as that would be a drain on the public exchequer. It would perhaps be best to restore status ante insofar as practicable i.e., lands on which constructions have not been made or which have not been plotted and transferred to third party individuals (not builders). In the case of constructions at a nascent stage, it can be determined whether bona fide third party interests have been created and in the absence thereof, status ante could be restored. In the remaining cases, payment of compensation could be directed through payment of consideration to the original landholders as per (b) above.

g. The manner in which the amounts could be returned could be in the manner as held by this Hon’ble Court in the case of Uddar Gagan Properties Ltd. v. Sant Singh reported as 2016 (11) SCC 378.

h. So far as the conduct of the acquisition proceedings and culpability of persons, government officials and builders in this regard, the CBI may continue its investigation and decide if any action is warranted, and take such action as is found to be necessary.”

7. In his memo dated 05.04.2017 it was submitted :-

“1. Should this Hon’ble Court conclude that there was a fraud in the entire proceedings, it should result in just restitution depending on the Parties involved in the fraud (in pari delicto) and the parties not so involved.

2. Should this Hon’ble Court hold that the land owners were not in pari delicto the reliefs as suggested in Memo No. 2 dated 28.03.2017 may be considered.

3. Should this Hon’ble Court hold that the land owners were also in pari delicto, the following may be considered:-

a. There were 4 Parties involved in the entire net of transactions:-

i. The landowners;

ii. The Builders;

iii. The Officers of the State; and 19

iv. The State itself (as paterfamilias of the public)

4. If builders and officers of the State were involved in the fraud and the land owners were in pari delicto, the actual party deceived would be the State and therefore, the beneficiary of any profits arising out of the fraudulent transactions, ought to go to the State to be utilized for a public purpose.”

5. The manner in which this could be achieved could be:-

a. The recommendation of the HPC dated 26.03.2008 to close the acquisition proceedings and the decision/Notification dated 29.01.2010 dropping the acquisition proceedings for the subject properties could be quashed;

b. Upon quashing of the said Notifications/Recommendations, the acquisition proceedings already initiated would resume proprio vigore from the stage where it stood and to that extent would continue to be an acquisition under the Land Acquisition Act, 1894;

c. The period during which the acquisition proceedings stood withdrawn, i.e., 24.08.2007 till the date of this Hon’ble Court’s order would be excluded for the purpose of passing of an award and inasmuch as an award was to be declared on 24.08.2007, an award now passed for the said land (in a time bound manner) would be deemed to have been passed on 24.08.2007;

d. The compensation payable under the said award would be based on the market value of the land in the same manner as if the award was passed on 24.08.2007.

e. The said amounts would be deposited and the landholders would be entitled to withdraw the amount representing the difference between what they actually received from the builders and what they were actually awarded.

f. The land would thereupon vest in the State;

g. The transferee builders who are the current owners of the land would have a right to seek allotment of the same from the State, consideration for which would be determined at the present days’ market value or market value as on such other 20

date as this Hon’ble Court may deem fit. Credit would be given to the builders for the amounts that they had paid to the original landholders and which is adjusted in (e) above;

h. In the event that the builders do not wish to purchase the land at such rate, the land may be auctioned by the State; and

i. Out of the price secured in the auction the amount paid for the acquisition would be deducted. The actual construction costs of any construction made on the lands would also be adjusted and the balance would be retained by the State for use for a public purpose of the area, providing of housing, rehabilitation, etc. by applying the principles of Section 88 of the Indian Trusts Act, 1882.”

8. Mr. Vikas Singh, learned Senior Advocate appearing on behalf of

respondent No.3 - ABW Infrastructure Limited filed an extensive list of

dates and relevant material detailing various transactions under which his

client came to purchase the lands in question. The transactions referred to in

the list of dates and accompanying documents, put in tabular chart by us are

as under:

S. Date Name of Area No. of Price Paid Average No Purchaser purchas Sale [Price paid ed Deeds per acre] 1 20.10.04 M/s Indo Asian 14.997 Eight (8) 3,81,71,875/- 2545301/- to Construction Co. Acres 17.11.04 Pvt. Ltd. 2 2.11.04 M/s NCR 10.409 Eight (8) 2,60,46,875/- 2502342/- to Properties Pvt. Acres 3.1.05 Ltd. 3 24.11.04 M/s Sheel 37.44 Twenty 5,69,95,612/- 15,22,319/- to Buildcon Pvt. Acres nine 17.5.05 Ltd. (29) 4 27.12.04 M/s Divya Jyoti 7.494 Eight (8) 1,90,00,002/- 25,35,362/- to Enterprises Pvt. Acres 21.6.05 Ltd. 21

5 31.12.04 M/s Beeta 4.881 Five (5) 1,21,87,500/- 24,96,927/- to Promoters Pvt. Acres 15.3.05 Ltd. 6 4.01.05 M/s Mount Valley 16.675 Thirteen 9,04,27,500/- 54,22,939/- to Estates Pvt. Ltd. Acres (13) 5.12.05 7 25.2.05 M/s Progressive 25.041 Fourteen 4,37,15,875/- 17,45,772/- to Buildtech Pvt. Acres (14) 21.10.05 Ltd. 8 25.2.05 M/s Ecotech 25.378 Sixteen 5,38,69,700/- 21,22,693/- to Buildcon Pvt. Acres (16) 25.11.05 Ltd. 9 31.5.05 M/s Dugman 18.875 Eleven 8,02,52,375/- 42,51,781/- to Engineers Pvt. Acres (11) 8.11.05 Ltd. 10 25.8.05 M/s Miraz 9.181 Eleven 3,67,25,000/- 40,00,109/- to Overseas Pvt. Acres (11) 14.11.05 Ltd. 11 25.8.05 M/s Yorks Hotels 19.697 Twelve 7,87,87,500/- 39,99,975/- to Pvt. Ltd. Acres (12) 6.12.05

On 25.08.2005 Declaration under Section 6 for an area of 688 Acres out of 912 acres was notified.

12 16.12.05 M/s Jassum 5.422 Six (6) 2,36,38,295/- 43,59,700/-

to Infrastructure Pvt. Acres 30.04.07 Ltd. 13 16.1.06 M/s Galaxy 3.656 Three 1,46,25,000/- 40,00,274/- Colonisers Pvt. Acres (3) 14 23.2.07 ABW 11.4406 Three 9,72,46,500/- 85,00,104/- Infrastructure 25 (3) Ltd.= Acres Respondent No.3 15 26.2.07 Respondent No.3 1.475 One (1) 1,18,00,000/- 80,00,000/- Acres

16 2.3.07 Respondent No.3 0.8895 One (1) 80,00,000/- 89,92,974/- 83333 Acres 17 18.06.07 M/s Jassum 6.46 Seven 4,88,00,000/- 75,54,180/- to Towers Pvt. Ltd. Acres (7) 20.08.07 18 20.6.07 M/s Jassum 13.250 Eight (8) 10,62,50,000/ 80,18,868/- to Estates Pvt. Ltd. Acres 21.8.07

24.08.2007 decision was taken by the State to drop the acquisition proceedings. 22

19 24.12.07 M/s Jassum 1.3275 Two 1,59,50,000/- 1,20,15,066/-

& 2.8.08 Towers Pvt. Ltd. Acres (2) 20 17.2.11 Respondent No.3 0.76875 One 1,92,18,750/- 2,50,00,000/- Acres (1) 21 27.2.11 Respondent No.3 0.025 One 4,48,000/- 1,79,20,000/- Acres (1) 22 18.3.11 Respondent No.3 0.76875 One 1,92,18,750/- 2,50,00,000/- Acres (1) Total 235.55121 90,13,75,109/- Acres

The aforesaid chart discloses that the average price paid was initially

in the region of Rs.25 lakhs per acre. Soon after the issuance of Section 6

declaration, the price rose to Rs.40 lakhs or above. But just before

24.08.2007 i.e. the date when the State Government decided to drop the

acquisition, the price was in the region of Rs.80 lakhs per acre. The price

paid after the decision to drop the proceedings was above Rs.1.2 crores per

acre. The documents placed by Mr. Vikas Singh, learned Senior Advocate

do indicate the names of vendors as well. However, for facility we have not

included the names of vendors but have given the other details in the chart.

The documents further indicate that all these lands purchased by the first

purchasers as indicated in the tabular chart were then taken over by the

respondent No.3; one of the ways being-where the controlling interest in the

first purchaser Companies was transferred to Respondent No.3 and one Mr.

Atul Bansal was appointed as Director of said companies. 23

9. The documents placed on record by Mr. Vikas Singh, learned Senior

Advocate, further indicate that soon after the aforementioned purchases,

applications for grant of licences were made as under:-

A. Aditya Buildwell Pvt. Ltd. and its associate companies namely;

Frost Falcon Industries Ltd., Iceberg Industries Ltd., Mount Valley

Estate Pvt. Ltd., Yorks Hotel Pvt. Ltd., Miraj Overseas Pvt. Ltd.,

Galaxy Colonires Pvt. Ltd., Dough Man Engineers Pvt. Ltd., Jassum

Infrastructure Pvt. Ltd., Sheel Buildcon Pvt. Ltd., Progressive

Buildcon Pvt. Ltd., Eco Tech Buildcon Pvt. Ltd., Indo Asian

Construction Co. Ltd., Beeta Promoters Pvt. Ltd., Divya Jyoti

Enterprises Pvt. Ltd., NCR Properties Pvt. Ltd., applied for licence to

set up a Township alongwith Demand Draft for Rs.85 lakhs towards

Scrutiny and Licence fees. The area was stated to be 190 Acres.

Paras 5 and 7 to 9 of the application were:-

"5 Whether applicant is income YES . tax player, if so, the amount of PAN : AAECA – 5466H income tax paid during each of NIL – in last three years the last three years because of construction work in progress

7. Whether the applicant had ever NO been granted permission to set a colony under any other law, if so, details thereof.

8. Whether the applicant had ever NO established a colony or is establishing a colony and if so, the details thereof.

9. Any other information the The Aditya Buildwell 24

applicants like to furnish. Private Limited, the main applicant company, is in process of converting into a Public Limited Company shortly by name ‘ABW Infrastructure Limited.

The ABW group of companies are already developing number of shopping cum

commercials Malls and in process of developing the Township in Mohali, Chandigarh the total projects more than worth Rs.1000.00 crores are in development in progress.”

B. ABW Infrastructure Ltd. and its group companies namely;

Progressive Buildtech Pvt. Ltd., Sheel Buildcon Pvt. Ltd., Divya Jyoti

Enterprises Pvt. Ltd., Beeta Promoters Pvt. Ltd., Ecotech Buildcon

Pvt. Ltd. and Jassum Estates Pvt. Ltd., applied for licence to set up a

Group Housing Project of 15.35625 acres alongwith Demand Drafts

for Rs.20 lakhs towards Scrutiny and Licence fees. Paras 5 and 7 to 9

of the application were:-

“5. Whether applicant is income YES tax payer, if so, the amount of income tax paid during each of PAN : AAECA-5466H the last three years. Assessment Year: 2007-08 Rs.77,49,859/- NIL- 2005-06, 2006-07 Construction work in progress. 7. Whether the applicant had ever NO been granted permission to set 25

a colony under any other law, if so, details thereof. 8. Whether the applicant had ever NO establishes a colony or is establishing a colony and if so, the details thereof. 9. Any other information the ‘ABW Infrastructure applicants like to furnish. Limited’ The ABW Group of Companies are already developing number of shopping cum commercials Malls and in process of developing the Township in Mohali, Chandigarh the total projects more than worth Rs.1000.00 crores are in development and in progress.”

In none of these two cases the applicants themselves had any prior

experience and between them, only one had paid Income tax and that too

only in one financial year. Both had given same PAN numbers.

10. Since the documents also indicated that after having applied for

issuance of licences, respondent No.3 had transferred licence Nos.283 and

284 and sold 33.55 acres of land covered by such licences to DLF Homes

Developers Pvt. Ltd., this Court directed respondent No.3 to file statement

of profit made by it in respect of such transactions and the following

statement was filed by Respondent No.3:

PROFIT MADE BY RESPONDENT NO.3 BY TRANSFERRING LICENSE NO.283 & 284 AND SELLING 33.55 ACRES OF LAND TO DLF HOMES DEVELOPERS PVT. LTD.

26 1 Amount received by Respondent 150,95,55,301.00 No.3 by transferring License No.283 & 284 and selling 33.55 Acres of land to DLF Homes Developers Pvt.

Ltd.

2 Amount paid by Respondent No.3 for purchasing controlling stake and land in following companies w.r.t.

Licence No.283 (13.89 Acres of Land):

(a) Dugman Engineering Pvt. Ltd. 3,05,53,666.68

(b) Sheel Buildcon Pvt. Ltd. 2,32,33,836.69

(c) Yorks Hotels Pvt. Ltd. 93,49,327.50 6,31,25,830,86 3 Fees paid to the State Government 2,27,87,845.00 4 (2 + 3) 8,59,13,675.00 5 Amount paid by Respondent No.3 for purchasing controlling stake and land in following companies w.r.t.

Licence No.284 (19.643 Acres of land):

(a)Mount Valley Estates Pvt. Ltd. 2,75,88,326.750

(b)Sheel Buildcon Pvt. Ltd. 53,40,980.826

(c) NCR Properties Pvt. Ltd. 38,24,509.704

(d)Divya Jyoti Enterprises Pvt. Ltd. 2,08,91,978.770

(e)Progressive Buildtech Pvt. Ltd. 2,05,66,820.370

(f) Beeta Promoters Pvt. Ltd. 2,54,521.440

(g)Indo Asian Construction Co. Pvt. 2,43,39,673.130 Ltd.

(h) Dugman Engineers Pvt. Ltd. 2,43,742.600 (i) Miraz Overseas Pvt. Ltd. 18,12,337.600 (j) Yorks Hotels Pvt. Ltd. 18,02,280.000 (k) Jassum Infrastructure Pvt. Ltd. 65,78,935.530 11,39.44,106.00 6 Fees paid to State Government 3,27,16,317.00 7 (5 + 6) 14,66,60,423.00 8 Amount paid by Respondent No.3 119,69,50,000.00 under Settlement cum Cancellation of Agreement to Sell 9 (4+7+8) 142,95,24,098.00 10 Profit made by Respondent No.3 (1-9) 8,00,31,203.00

The aforesaid statement indicates that various entities who had

initially purchased the lands from the landholders, had sold the said lands to 27

Respondent No.3 and were paid sums reflected at Sl. Nos.2 and 5 above

amounting to Rs.17.70 crores (approx.) for acquiring such interest in said

lands. Thereafter, amount of Rs.5.45 crores (approx.) was paid by way of

fees to the Government. However, more than Rs.150 crores was received on

transfer to DLF Homes Developers Pvt. Ltd. For an applicant who

reportedly paid income tax only once during last three years, this by itself

constitutes phenomenal earning. From and out of such earnings an amount

of Rs.119.695 crores was paid by Respondent No.3 under Settlement-cum-

Cancellation of Agreement of Sell as indicated at Serial No.8.

11. On an inquiry by this Court regarding details of such amounts paid by

respondent No.3 as indicated at Serial No.8, those documents were filed on

record. The documents make an interesting reading. By way of sample,

documents pertaining to transactions between Beeta Promoters P. Ltd. and

the intending purchaser Arison Builders P. Ltd. are dealt with in some detail:

(a) By Agreement of Sale dated 09.10.2007 entered into between

M/s Beeta Promoters Pvt. Ltd. = Vendor and M/s Arison Builders Pvt.

Ltd. = Vendee, certain lands were agreed to be sold @ Rs.58.60 lakhs

per acre and cheque for Rs 1 lakh and Rs.1 lakh in cash were paid as

advance. The relevant portion of the Agreement dated 09.10.2007

was as under:

28

“Whereas ‘the Seller’ is the sole and absolute owner and also in possession of piece of land admeasuring 0.12 Acre land forming part of Rect. No.54 Killa No.6/1 (3-16), 15/2/1 (2-

16), the extent of their 7/48 share i.e. situated at village Manesar, Tehsil & District Gurgaon Haryana;

And whereas ‘the Seller’ has agreed to sell and ‘the Purchasers’ have agreed to purchase the piece of land already owned and in the possession of the First Party as already mentioned above at the rate of Rs.58,60,000/- (Rupees fifty eight lakhs and sixty thousand) per acre,

And whereas ‘the Seller’ has received a sum of Rs.1,00,000/- in cash on 09.10.2007 and Rs.1,00,000/- (Rupees one lakh only) vide Cheque No.579592 dated 25.10.2007 drawn on Punjab National Bank, towards earnest money, the receipt of which is hereby acknowledged and confirmed by ‘the Seller’ and the balance agreed consideration amount, shall be payable by ‘the Purchaser’ to ‘the Seller’ as per the following schedule:-

(1)On or before 30.12.2007 Rs. 2,00,000/-(Rs.Two lakhs Only) (2)On or before30.05.2008 Rs.3,03,200/- (Rs.Three lakhs three thousand and two hundred only) Balance amount only i.e. the full and final consideration.

NOW THIS AGREEMENT OF SALE WITNESSETH AS UNDER:-

1. That the settled price of Rs.7,03,200/- (Rupees seven lakhs three thousand two hundred only) for sale of 0.12 acres of land in Village Manesar District Gurgaon Haryana by First Party to Second Party, as mentioned in the preamble shall neither be reduced nor enhanced by either party.

2. That ‘the Seller’ shall be bound to execute the sale deed/proper documents for the transfer of the land and get the same registered in the name of the second party or their nominees on receiving of the balance consideration as per schedule of payment given above.

29 3. That all the expenses of the execution and registration of the documents shall be payable and borne by ‘the purchasers’.

4. That the actual physical and vacant possession of the above said land shall be delivered by ‘the Seller’ to ‘the Purchasers’ at the time of registration of the land after receiving the full and final payment.”

(b) By Settlement Agreement-cum-Cancellation of Agreement to

Sell executed on 30.08.2008 between the aforesaid parties, the earlier

arrangement entered vide Agreement of Sale dated 09.10.2007 was

cancelled. While cancelling that arrangement, settlement amount of

Rs.3.50 crores per acre was paid to the vendee as full and final

settlement between the parties and discharge of all claims. The

document narrates that though the cheque for Rs.1 lakh was given on

the date when the agreement to sell was executed on 09.10.2017, said

cheque was never encashed and was returned to the vendee. Thus, the

land which was agreed to be sold @ Rs.58 lakhs per acre was not sold

at all but by way of settlement Rs.3.5 crores per acre was made over

to the vendee. Interestingly, nothing was received by the vendor by

way of advance/earnest through Bank channels as the cheque was

admittedly never encashed. The relevant portions from the

Settlement-cum-Cancellation of Agreement to Sell dated 30.08.2008

were as under:

30 “And whereas ‘the parties’ has entered into agreement to sell dated 9th October, 2007, as per the terms of agreements described therein.

And whereas ‘the Seller’ has agreed to sell and ‘the Purchasers’ have agreed to purchase the piece of land already owned and in the possession of the First Party as already mentioned above at the rate of Rs.58,60,000/- (Rupees fifty eight lakhs sixty thousand only) per acre.

And where ‘the Seller’ has received a sum of Rs.1,00,000/- (Rupees one lakh only) vide Cheque No.579592 drawn on Punjab National Bank and Rs.1,00,000/- (Rupees one lakh only) in cash towards earnest money and the balance agreed consideration amount, was payable by ‘the Purchasers’ to ‘the Seller’ as per the following schedule:-

(1)On or before 30.12.2007 Rs. 2,00,000/-(Rs.Two lakhs Only) (2)On or before 30.05.2008 Rs. 3,03,200/- (Rs.Three lakhs three thousand and two hundred only) Balance amount only i.e. the full and final consideration.

And whereas the seller offered to buy back the said land and has not encashed the Cheque No.579592 drawn on Punjab National Bank, received towards earnest money, and also offered to return the same to the purchaser and also agreed to settle the transaction amicably.

NOW THIS AGREEMENT WITNESSETH AS UNDER:-

1. That this agreement shall be effective from the date of signing and shall constitute full and final settlement between the parties of all the respective past and future rights and obligation of parties under agreement to sell dated 9 th October, 2007 for sale of 0.12 acres forming part of Rect.

No.54 Killa No. 6/1 (3-16), 15/2/1 (2.16), the extent of their 7/48 share i.e. situated at village Manesar, Tehsil & District Gurgaon, Haryana.

31

2. That ‘the Seller’ shall pay the settlement amount of Rs.3,50,00,000/- per acre to the purchaser towards full and final settlement between the parties and discharge of all claims against the land as acquired by the second party through agreement to sell dated 9th October, 2007 for sale of 0.12 Acres of land in Village Manesar, District Gurgaon, Haryana.

3. That the said total settlement amount Rs.42,00,000/- (Forty two lakhs only) shall be paid on or before 31.03.2009 as per the schedule enclosed.

4. That on receipt of full and final settlement amount, the second party hereby completely and expressly waives, releases, relinquish and forever discharges all claims against the land as acquired by the second party through agreement to sell dated 9th October, 2007 for sale of 0.12 acres of land in Village Manesar, District Gurgaon, Haryana.”

Identical agreements for sale followed by Settlement Agreements-

cum-Cancellation of Agreements to sell were entered into by all the

concerned, as set out hereafter.

12. The details of the relevant agreements to sale and Settlement-cum-

Cancellation agreements to sell as filed by respondent No.3 are put in a

tabular chart by us. Except in the case at Serial No.1 where part of earnest

money was deposited in cash, in all other cases, earnest was paid by

cheques. However, in none of the cases any cheque which was issued as

advance-cum-earnest money was encashed. The relevant recitals in these

agreements are identical to those extracted hereinabove. The compensation 32

paid to the vendee in every case is on or about 30.08.2008 and at a consistent

rate of Rs.3.50 crores per acre. The said chart is as under:

S. Vendor Purchaser Area of Date of Adv. Amt. Date of Compensation No. land Agreement of recd. By Settlement Amt. (Rs.) (Acres) Sale deed cheque Agreement with (Rs.) transaction amount 1 Beeta Arison 0.12 09.10.2007 2,00,000 30.8.2008 42,00,000 Promoters P. Builders P. Rs.7,03,200 Ltd. Ltd.

2. Divyajyoti Arison 2.47 03.10.2007 50,00,000 30.8.2008 8,64,50,000 Enterprises P. Builders P. Rs.1,44,74,200 Ltd. Ltd.

3. Dugman Kripa 2.6 14.10.2007 50,00,000 30.8.2008 9,10,00,000 Engineers P. Finvest Pvt. Rs.1,51,58,000 Ltd. Ltd.

Gee Ispat 3.28 17.10.2007 6500000 30.8.2008 11,48,00,000 Ltd. Rs,1,91,55,200

Hansh 0.80 20.10.2007 1000000 30.8.2008 2,80,00,000 Metals Ltd. Rs.46,72,000

4 Indo Asian Hari Om 0.8 08.10.2007 8,00,000 30.8.2008 2,99,60,000 Construction Ispat and Rs.46,80,000 Pvt. Ltd. Alloyes Pvt. Ltd.

Ishom 25.10.2007 Photo 2.43 Rs.1,42,15,500 50,00,000 30.8.2008 9,10,03,500 Colour Photo Lab Pvt. Ltd.

Matara 1.5 18.10.2007 30,00,000 30.8.2008 5,61,56,500 Traders & Rs.87,75,000 Finance Pvt. Ltd. Pashupati 0.9 23.10.2007 10,00,000 27.08.2008 3,37,05,000 Casting Rs.52,65,000 Ltd.

5 Jassum Shree 1.3 10.10.2007 24,00,000 30.08.2008 4,53,00,000 Infrastructure Bihari Rs.76,05,000 Pvt. Ltd. Forgings P. Ltd. Dasna Steel .21 10.10.2007 200000 30.8.2008 75,50,000 33

Pvt. Ltd. Rs.12,28,500

6 Miraza Arison 0.4 10.10.2007 5,00,000 30.08.2008 1,40,00,000 Overseas Pvt. Builders Rs.23,44,000 Ltd. Pvt. Ltd.

7 Mountvally Ramdoot 1 19.10.2007 10,00,000 30.08.2008 3,60,00,000 Estates P. Ltd. Steels Rs.58,45,000 P.Ltd.

Maya 1.13 22.10.2007 20,00,000 30.08.2008 3,95,50,000 Industries Rs.23,20,000

Baba 0.4 19.10.2007 8,00,000 30.08.2008 1,30,00,000 Alloys P. Rs.66,04,850 Ltd. 8 NCR Ritansh 1.43 28.10.2007 25,00,000 30.8.2008 5,00,50,000 Properties Developers Rs.83,79,800 Pvt. Ltd. and Financing Pvt. Ltd. 9 Progressive Arison 2.25 06.10.2007 42,00,000 30.08.2008 7,87,50,000 Buildtech Builders Rs.1,31,85,000 P.Ltd. Pvt. Ltd Shree 1.48 Rs.86,72,800 25,00,000 30.8.2008 5,18,00,000 Bihari Forging P. Ltd. 10 Sheel Arison 1 06.10.2007 15,00,000 30.8.2008 3,63,60,000 Buildcon P. Builders P. Rs.58,60,000 Ltd. Ltd. Maya 2.47 19.10.2007 45,00,000 30.8.2008 8,98,09,200 Industries Rs.1,44,24,800 Ltd.

RP Vyapar 1.9 19.10.2007 30,00,000 30.08.2008 6,90,73,800 Pvt. Ltd.) Rs.1,11,34,000

Swarup 1.2 12.10.2007 20,00,000 25.08.2008 4,36,32,000 Rolling Rs.70,20,000 Mills P. Ltd. 11 Yorks Hotels Ritansh 0.17 26.10.2007 2,00,000 30.8.2008 59,50,000 P. Ltd. Developers Rs.9,95,350 and Financing P. Ltd.

Hasan Steel 1.7 20.10.2007 30,00,000 30.8.2008 5,95,00,000 & Alloys Rs.99,53,500 Pvt. Ltd. Global .61 23.10.2007 10,00,000 30.08.2008 2,13,50,000 Alloys P. Rs.35,71,550 Ltd. 33.55 119,69,50,000 34

13. Mr. Vikas Singh, learned Senior Advocate also invited our attention to

the provisions of the Haryana Development and Regulation of Urban Areas

Act, 1975 (hereinafter referred to as the “Haryana Act”) and submitted that

the Haryana Act provided for colonization encouraging private participation

wherein builders or colonizers become partners with State in ensuring

planned development. It was submitted that the writ petition in the present

case was bereft of any material particulars and suffered from non-disclosure

of collaboration agreements entered into between the builders and the writ

petitioners whereunder certain additional benefits were given to the

landholders. In his submission, the High Court was justified in dismissing

the petition and exemplary costs ought to be imposed on the writ petitioners

for embarking on what he termed as adventurous litigation. Ms. Indu

Malhotra, learned Senior Advocate appearing for respondent Nos. 4 – M/s

Metropolis Realtors Pvt. Ltd. and 6 – M/s Metro Infrastructure Pvt. Ltd.

submitted that after National Capital Region Plan was notified on

17.09.2005, Draft Master Plan for Gurgaon Manesar was notified on

11.07.2006, followed by Final Development Plan which was notified on

05.02.2007. The act on the part of the State in dropping the acquisition on

24.08.2007 was completely consistent with the Final Development Plan 35

notified on 05.02.2007. Mr. V. Giri, learned Senior Advocate appearing for

respondent No.5 – Flair Realtors Pvt. Ltd. submitted that each writ petitioner

had a separate cause of action and therefore must come out and place his

individual case and the facts relevant thereto. In his submission in a matter

such as the present one, no public law remedy could be invoked and there

could be no class action. He further submitted that there was total dearth of

pleadings and nothing was alleged or proved as regards element of fraud or

mala fides so as to vitiate the transactions in entirety.

14. Dr. A. M. Singhvi, learned Senior Advocate appearing for DLF Home

Developers Pvt. Ltd. submitted that his client had purchased 33 acres of land

not directly from any of the land owners but from respondent No.3

alongwith requisite licences. According to him, his client purchased the

land and the licences when the writ petitions were withdrawn and there was

no fetter at all; that his client had paid market price at the rate of Rs.4.5

crores per acre and was bona fide transferee in good faith and that there was

no averment either in the High Court or in this Court suggesting that his

client was involved in any act of fraud or illegality. He further submitted

that his client has already transferred the constructed areas or apartments to

various purchasers. Relying on the decisions of this Court in Ramana 36

Dayaram Shetty v. International Airport Authority of India and Others3

where five months delay in preferring writ petition was found to be fatal

especially when third party rights had intervened and in State of M.P. and

Others v. Nandlal Jaiswal and Others4 where eight months delay was found

to be fatal where again third party rights had intervened, it was submitted

that no case was made out and the view taken by the High Court ought to be

affirmed. Similar submissions were made by Mr. Kapil Sibal, learned

Senior Advocate for the same client in a different matter. In his submission,

if at all any disgorgement as suggested by the learned Amicus Curiae is to be

made, it ought to be by respondent No.3 i.e. the client of Mr. Vikas Singh,

learned Senior Advocate and not by DLF Home Developers Pvt. Limited

which had paid market value for the land it purchased. Mr. Suri, learned

Senior Advocate appearing for flat purchasers from DLF Home Developers

Pvt. Ltd. submitted that his clients, coming from middle class, had put in all

their savings in purchase of flats. Out of 1348 flats constructed in the

complex, 1237 flats were sold and more than 500 apartments were already

registered in the names of apartment purchasers.

15. Mr. Nidhesh Gupta, learned Senior Advocate appearing for Earl

Infotech Pvt. Ltd. and for Frontier Infrastructure Developers Pvt. Ltd. made 3 (1979) 3 SCC 489 4 (1986) 4 SCC 566 37

similar submissions. He submitted that the case in hand was completely

different from the fact situation considered by this Court in Uddar Gagan

(supra) in as much as neither was there any distress sale by the land owners

nor was there any award made under the provisions of the Act. He further

submitted that the entire case set up by the writ petitioners was based on

assumptions as to the existence of unjust enrichment and fraud. Mr. Pallav

Shishodiya, learned Senior Advocate appearing for Akme Projects Ltd.

submitted on similar lines.

16. Dr. Rajeev Dhawan, learned Senior Advocate appearing for PP

Realtors Pvt. Ltd. submitted that in an individual case a sale could be

invalidated if fraud stood proved on grounds available under the Contract

Act, while if sales were sought to be invalidated as a class action then it

could only be done on grounds of mala fides in public law. It was submitted

that fraud in terms of section 17 of the Contract Act had to be transaction

based and strictly established. He further submitted that the reason given for

dropping of the acquisition was that licences in respect of about 360 acres of

land were under consideration while disputes were raised in respect of rest

of the land. At no stage after the disposal of the petitions by the High Court

any grievance was raised by the land owners and they must be deemed to

have waived their rights. In his submission, land owners were looking for 38

windfall gains when they were asking for setting aside of all the transactions

as a class action and that the writ petition was nothing but an abuse of the

process of law.

17. Mr. Narender Hooda, leaned Senior Advocate appearing for an

individual namely Shri Arvind Walia who had purchased 11 acres of land,

submitted that one Mamraj had sold said land in February, 2005. Along with

his written submissions, Mr. Hooda placed on record and relied upon

Minutes of the Meeting regarding policy issues held on 07.08.1991. Mr.

Sidharth Luthra, learned Senior Advocate appearing for Paradise Systems

Pvt. Ltd., submitted on lines similar to those adopted by the other leaned

Senior Counsel. Mr. B. S. Chahar, learned Senior Advocate appearing in

I.A. No.20 in Civil Appeal No.8788 of 2015 submitted that his clients had

bought plots, shops and flats only after December, 2009 i.e. after the State

had dropped the acquisition and after the pending writ petitions were

disposed of by the High Court.

18. The learned Counsel appearing for State of Haryana adopted the

submissions of the learned Amicus Curiae and submitted that if this Court

were to come to the conclusion that the exercise of power by the

functionaries of the State in the present case was colourable and such 39

exercise was fraud on power, then not only should the guilty be booked on

criminal side, but on the civil side the mechanism suggested by the learned

Amicus Curiae be adopted.

19. Though copies of the interim report of CBI were not given to the

parties, some factual aspects dealt with in the report, namely the allegations

in the FIR and certain bare minimum facts as found from the record, need to

be adverted to. Paras 2 and 18 to 21of the Report were as under:-

“2. It is alleged in the FIR that the Government of Haryana had issued notification u/S 4 of the Land Acquisition Act, 1894 on 27.08.2004 and u/S 6 on 25.08.2005 of Land Acquisition Act, 1894 for acquisition of land measuring about 912 acres for setting up an Industrial Model Township in Villages Manesar, Naurangpur and Lakhnoula in Distt. Gurgaon. A large number of land owners, in haste, had sold out about 350 acres of land at throw away rates of Rs.20 to 25 lakhs per acre. It is further alleged that when some land was not sold by the farmers, the Government issued notification u/S 9 of Land Acquisition Act and, thereafter, the private builders had purchased remaining 50 acres of land at the rate of even Rs.1.50 crores per acre. It is further alleged that when all the land had been grabbed from the land owners by land mafia under the threat of acquisition at meager rates, an order was passed by the competent authority i.e. the Director of Industries on 24.08.2007 releasing this land from the acquisition process and the land was released in violation of the government policy, in favour of the builders, their companies and agents, instead of the original land owners. In the above manner, land measuring about 400 acres whose market value at that time was above Rs.4 crores per acre, totaling about Rs.1600 crores, was purchased by the above mentioned criminal conspirators from the innocent land owners for only about Rs.100 crores. Thus, some politicians who were also important functionaries of the State Government, Government Officers and their agents caused a wrongful loss of Rs.1500 crores to the land owners of Village Manesar, Naurangpur and Lakhnoula of District, Gurgaon and corresponding wrongful gain to themselves.

40 18. That about 444 acres 2 kanal 10 marla of land notified u/S 4 of Land Acquisition Act, 1894 was purchased by the private builders/companies after the date of notification. The details of land purchased by the builders/companies after issue of notification u/Ss 4 & 6 of Land Acquisition Act, is as under:

S.No Name of the Company TOTAL LAND . Acr Kanal Marla e 1. Pegasus Land and Housing Pvt. - 6 14 Ltd. WZ 172, Palam Colony, New Delhi 2. Karma Lakelands Pvt. Ltd., 5 2 3 6 Green Avenue, Vasant Kunj, New Delhi 3. Amtek Auto Limited Plot No. 10 11 0 16, Industrial Area, Rozka Meo, Sohna 4. M/s Manesar Developers Pvt. 2 4 17 Ltd. 0 1 15 M/s Sisodiya Education Society 2 0 15 M/s Northern India Projects Pvt. Ltd.

M/s Earl Infotech Pvt. Ltd. 5/71 3 1 15 WEA Padam Singh Road, Karol Bagh, New Delhi 0 5 12.5 M/s Gurunanak Infrastructure Developers Pvt. Ltd. 8 8 14.5 Total 5. Indo Asian Construction Co. 14 7 3 Pvt. Ltd., Rectangle-1, D4, Saket District Centre, Saket, New Delhi NCR Properties Pvt. Ltd. 11 2 5 Rectangle-1, D4 Saket Distt. Centre, Saket, New Delhi Divya Jyoti Enterprises Pvt. 3 0 19 Ltd. Rectangle-1, D4, Saket District Centre Sheel Buildcon Pvt. Ltd. 45 1 6 41

Rectangle-1 D4, Saket District Centre, Saket, New Delhi Ecotech Buildcon Pvt. Ltd. 23 2 17.5 Rectangle-1, D4, Saket District Centre, Saket, New Delhi Progressive Buildtech Pvt. Ltd. 22 2 2 Dugman Engineers Pvt. Ltd. 23 0 3 Rectangle-1, D4, Saket District Centre, Saket, New Delhi Mount Valley Estates Pvt. Ltd., 19 4 11 Rectangle-1, D4, Saket District Centre, Saket, New Delhi Galaxy Colonizers Pvt. Ltd. 3 5 5 Rectangle 1, D4, Saket District Centre, Saket, New Delhi ABW Infrastructure Pvt. Ltd. 12 4 9 Rectangle-1, D4, Saket District Centre, Saket, New Delhi M/s Miraj Overseas Ltd. 9 1 9 M/s Beeta Promoters Pvt. Ltd. 3 3 7 M/s Jassum Estate Pvt. Ltd. 17 1 12 M/s Jassum Inf. Pvt. Ltd. O/o 5 2 9 64, Purvi Marg, New Delhi- Amit Bhasin M/s Jassum Towers Pvt. Ltd. 9 7 3.5 O/o 208-210 SF Rectangle 1, D4, Saket, New Delhi- Sachin Arora M/s Yorks Hotel Pvt. Ltd. 24 6 16 Total 248 5 17 6. Paradise System Pvt. Ltd. E-20 13 1 11 Lajpat Nagar-III, New Delhi DJ Tradelink Pvt. Ltd., 201, 3 7 9 Surya Kiran Building, 19, KG Marg, Delhi Total 17 1 0 7. Kaliber Associates Pvt. Ltd., E- 1 1 12 20, Lajpat Nagar-III, New Delhi 8. Blue Ocean Construction Pvt. 1 0 11 Ltd. A-9/23 Vasant Vihar 9. DK Steels and Metals Sales Pvt. 4 4 13 Ltd. A-21/1 Naraina Indl. Area, 42

Phase II, New Delhi (Seller) 10. Metropolis Realtors Pvt. Ltd., 18 0 16 20-A, Rajpura Road, Civil Lines, New Delhi Flair Realtors Pvt. Ltd., 20-A, 2 5 9 Rajpura Road, Civil Lines, New Delhi Metropolis Inf. Pvt. Ltd. 20-A, 9 0 18 Rajpura Road, Civil Lines, New Delhi Total 29 7 3 11. PP Realtors Pvt. Ltd. B-15, 5 7 17 Freedom Fighter Enclave, Neb Sarai, New Delhi 12. Logical Developers Pvt. Ltd., 31 4 9 17-B, NGF House, Asaf Ali Rd. New Delhi Sarvodya Buildcon P. Ltd., 17- 1 7 7 B, MGF House, Asaf Ali Road, New Delhi Total 33 3 16 13. Gibbon Propbuild P. Ltd. ECE 17 2 3 Hs., 28, KG Mrg. ND 14. M/s Alana Builders & Dev. Ltd. 2 5 4 O/oP-39, Basement, NDSE Part II, New Delhi -Dinesh Kumar 15 M/s Frontiers Infs. Dev. P. Ltd. 2 0 13 O/o 38-B, Model Town, Phagwara Punjab- Subodh Nayyar 16. M/s Angelique International 19 4 9.5 Ltd. O/o 104-107, Hemkunt Tower, 98, NP, N.D. 17. M/s Sukh Shanti Estate P. Ltd. 6 0 18 O/o C-52, Shivalik Delhi- Suman Chhabra 18 M/s Innovative Infra. 1 5 8 Developers P. Ltd. Reg. Off 736, Sec.14, Urban Estate, Gurgaon 19. Chirayu Buildtech P. Ltd. 6 5 7 20. Prosperous Construction Pvt. 17 7 1 Ltd. 21. Unitech Ltd. 4 7 3 Total 444 2 10 43

19. That investigation further revealed that out of the above land purchased by the private builders/companies, one company namely M/s Aditya Buildwell Pvt. Ltd. (now known an ABW Infrastructure Ltd.) and its associates companies had purchased maximum land measuring around 248 acres 5kanal 17maral. Shri Atul Bansal is the Director of M/s Aditya Buildwell Pvt. Ltd. His company M/s Aditya Buildwell Pvt. Ltd. and associate companies namely M/s Jassum Towers Pvt. Ltd. and M/s Jassum Infrastructure Pvt. Ltd. had purchased total land measuring around 44 acres 7 kanal 13.5 marla.

That Sh. Atul Bansal had also taken over the following companies along with their lands measuring about 204 acres during this period, which were purchased by the different builders/directors of these companies:-

SI. Name of the Land Date of purchase of Date of No. Company purchase land from villagers transfer of (in acre). land along with company to Atul Bansal

1. NCR Properties 11 acres November,2004 to 29.06.2007 Pvt. Ltd. 2kanal January, 2005 5marla

2. Yorks Hotel 24 acres August, 2005 to 02.03.2007 Pvt. Ltd. 6kanal December,2005 16marla

3. Dugman 23acres May, 2005 to 02.03.2007 Engineers Pvt. 0kanal November 2005 Ltd. 3marla

4. Miraz Overseas 9acres August, 2005 to 02.03.2007 Pvt. Ltd. 1kanal November, 2005 9marla

5. Galaxy Colonizers 3acres August, 2005 to 07.03.2007 Pvt. Ltd. 5kanal January, 2006 5marla

6. Sheel Buildcon 45acres November, 2004 to 22.04.2008 Pvt. Ltd. 1kanal May, 2005 6marla

7. Progressive 22acres February , 2005 to 22.04.2008 Buildtech Pvt. Ltd. 2kanal October, 2005 2marla

8. Ecotech Buildcon 23acres February , 2005 to 22.04.2008 Pvt. Ltd. 2kanal November 2005 17.5marla

9. Beeta Promoters 3acres December, 2004 to 25.11.2007 Pvt. Ltd. 3kanal March , 2005 44

7marla

10. Divya Jyoti 3acres December, 2004 to 13.02.2008 Enterprises Pvt. 0kanal June, 2005 Ltd. 19marla

11. Indo Asian 14acres October,2004 to 21.11.2007 Construction Co. 7kanal November, 2004 Pvt. Ltd. 3marla

12. Mount Valley 19acres January, 2005 to 17.05.2008 Estates Pvt. Ltd. 4kanal December,2005 11marla

20. That investigation has revealed that Shri Atul Bansal, Director of M/s Aditya Buildwell Pvt. Ltd. and its below mentioned groups and associate companies had applied for grant of license to set up a township including group housing in an area of 190 acres in Sector- 1A, IMT, Manesar, Gurgaon to the Director, Town and Country Planning, Haryana, Chandigarh on 28.12.2006:-

(i) Frost Falcon Industries Ltd. Sonepat (ii) Iceberg Industries Ltd. (iii) Mount Valley Estate Pvt. Ltd. (iv) Yorks Hotel Pvt. Ltd. (v) Miraj Overseas Pvt. Ltd. (vi) Galaxy Colonizers Pvt. Ltd. (vii) Dough Man Engineers Pvt. Ltd. (viii) Jassum Infrastructure Pvt. Ltd. (ix) Sheel Buildcon Pvt. Ltd. (x) Progressive Buildcon Pvt. Ltd. (xi) Eco Tech Buildcon Pvt. Ltd. (xii) Indo Asian Construction Co. Ltd. (xiii) Beeta Promoters Pvt. Ltd. (xiv) Divya Jyoti Enterprises Pvt. Ltd. (xv) NCR Properties Pvt. Ltd.

21. That investigation further revealed that the above case of grant of license to M/s Aditya Buildwell Pvt. Ltd. was examined in the department of Town and Country Planning, Haryana. The Department of Town and Country Planning obtained the report from the HSIIDC regarding status of acquisition of land. The HSIIDC vide letter No. 2206 dated 19.01.2007 intimated that the land in question had been notified u/S 6 of LAA, 1894 by the department of Industries for providing dedicated labour housing to the plot – holders/industrial workers in IMT Manesar and requested that the application should be rejected. Despite the above report of HSIIDC, 45

the Town & Country Planning Department vide letter dated 25.01.2007 asked the applicant to deposit the deficit amount of license fee of Rs.15,11,00,696/-. However, the applicant instead of depositing the deficit amount of license fee had submitted request vide letter dated 14.03.2007 that the area applied for grant of license (total 190 acres) may be segregated as under:-

Commercial 3 acres Group housing 25.39 acres Group Housing 13.94 acres IT Park 11.28 acres IT Park 13.72 acres Residential Plotted 122.67 acres”

Rest of the portions of the interim report being in the nature of

deduction or conclusion from facts, are not considered by us.

20. Since the basic reason which weighed with the State Government in

arriving at decisions dated 24.08.2007 and 29.01.2010 was the fact that

several applications were preferred by builders for licence/CLU in respect of

lands forming part of the acquisition proceedings, we deal with relevant

statutory framework at the outset.

A] Appropriate resolutions in terms of Article 252 of the

Constitution having been passed by the Houses of Legislatures of the

States of Haryana, Rajasthan and Utter Pradesh, the National Capital

Region Planning Board Act, 1985 (hereinafter referred to as the “NCR

Act”) was enacted to provide for the constitution of Planning Board

for preparation of a plan for the development of the National Capital 46

Region. Reading of Section 2(f) with Schedule to the Act shows that

the tehsils of Gurgaon, Nuh and Firojpur-Jhirka of district Gurgaon

form part of National Capital Region. Chapter IV of the NCR Act

deals with constitution and incorporation of the National Capital

Region Planning Board. Chapter IV of the NCR Act deals with “the

Regional Plan” which in terms of Section 10 “shall be a written

statement and shall be accompanied by such maps, diagrams,

illustrations and descriptive matters” and “shall indicate the manner in

which the land in the National Capital Region shall be used, whether

by carrying out development thereon or by conservation or

otherwise”. Section 29 of the NCR Act states, “on and from the

coming into operation of the finally published Regional Plan, no

development shall be made in the region which is inconsistent with

the Regional Plan as finally published”. According to Section 40,

acquisition or determination of any right or interest in the land to give

effect to any Regional Plan shall be made by the concerned State.

B] The Regional Plan 2001 prepared under the NCR Act was

superseded by the Regional Plan 2021, notified on 19.09.2005. Para

17.5 of this Regional Plan 2021 deals with “Zoning Regulations”

under which four zones are contemplated namely i) 17.5.1: 47

Controlled/Development/Regulated Zone, ii) 17.5.2: Highway

Corridor Zone, iii) 17.5.3: Natural Conservation Zone and iv) 17.5.4:

Agriculture (Rural) Zone outside Controlled/Development/Regulated

Areas. Para 17.5 stipulates, “…The elaboration of the land use details

and zoning regulations would be incorporated in the Sub-regional

Plans and Master/Development Plans by the respective State

Governments.”

Para 17.5.1 further clarifies as under:-

“The local authority according to the prescribed uses in the Master/Development Plans will govern detailed land uses within the urbanisable area. The Master/Development Plans of all the towns will be prepared within the framework of the Regional Plan-2021 and Sub-regional Plans. In case any amendment is required in the acts to implement the policies of Regional Plan 2021 that be done by the respective State Governments appropriately.”

The Master/ Development Plans in respect of all towns, in terms of

Para 17.5.1, were thus required to be prepared within the framework

of the Regional Plan 2021.

C] Final Development Plan for Gurgaon Manesar Urban Complex

was published by Government of Haryana, Town and Country

Planning Department vide notification dated 05.02.2007. Annexure A

to this notification titled as “Explanatory Note on the Final 48

Development Plan 2021 AD for the controlled area of Gurgaon-

Manesar Urban Complex” stated as under:-

“The Gurgaon-Manesar Urban Complex which is known for Automobile Industries, Modern Commercial Malls, Towers of Cyber Parks and Software Development is situated on prime location on National Highway No. 8, only at a distance of 4 kilometers from the Indira-Gandhi International Air Port and is well linked with all capitals of the world through airways. The name of this town emerged on the world map in 1972, when world famed Maruti Industry was set up in Gurgaon with the collaboration of Suzuki Company of Japan. Now with the coming up of multinational companies like Hero Honda Motor, Honda Motors Ltd, Denso etc. in automobile sector and Microsoft, I.B.M. Nokia, Canon, Dupont, Sapient, British Airways, American Express, ABN Amro Bank, Alcatel, Nestle, Convergys, Hewitt, Vertex, Fidelity Investment, E.Vallue, Keine World India, Becton Dickinson India Private Limited in software development sector; the Gurgaon-Manesar Urban Complex has become abode of International Companies. With the result, the biggest cyber city of India spreading in an area of about 90 acres in addition to numerous cyber parks are being developed in Gurgaon itself within a radius of 15 kilometers from the International airport in private sector to accommodate the needs of software development units of multinational companies.

The availability of high level infrastructure of Airways, Railways, Highways, International Embassies and world famed medical and educational institutions in its close proximity at National Capital of Delhi have become the main factors of attraction for international companies for setting up their business at Gurgaon. In order to meet the demand of foreign investors and also to set up high-tech non polluting industrial units, the Haryana Government initially with the collaboration of Japanese entrepreneurs started setting up Industrial Model Township at Manesar in 1992 through Haryana State Industrial Development Corporation. The said Corporation has developed about 700 hectares land at Manesar and now the developed land is being made available to all entrepreneurs of the world including India.

49 The Haryana Urban Development Authority in public sector and licenced colonizers in private sector through Town and Country Planning Department have also played prime role in achieving planned development in Gurgaon-Manesar Urban Complex. The Haryana Urban Development Authority and the licenced colonizers collectively have developed about 8000 hectares land for residential, commercial, institutional and industrial purposes to meet the increasing demand of the public.

The areas of Gurgaon-Manesar Urban Complex which have so far been developed in public and private sector including existing town and village abadies would accommodate 22 lakhs population. In order to cater the future demand of Gurgaon-Manesar Urban Complex an additional area of 21733 hectares has been added in the form of urbanisable area for the said complex to accommodate 15 lacs additional population. Thus, the total urbanisable area of Gurgaon-Manesar Urban Complex would accommodate 37 lakhs population by 2021 AD.”

This Explanatory Note brings out the potential and importance

of Gurgaon-Manesar Urban Complex. It shows that 8000 Hectares of

land was already put to residential, commercial, institutional and

industrial purposes and additional 21733 Acres of land was to be

added to meet the ever increasing demand.

D] Zoning Regulations were set out in Annexure B to the

Notification dated 05.02.2007. Paragraph VII of said Annexure B

dealt with the extent of private participation and role of Government

or Public Authorities in such development. Said Paragraph VII was as

under:-

50 “VII. Sectors to be developed exclusively through Government Enterprises:

(1) Change of land use and development in sectors which are reserved for the public and semi-public zone shall be taken only and exclusively through the Government or a Government undertaking or a public authority approved by the Government in this behalf and no permission shall be given for development of any colony within these sectors.

(2) For the development of sectors reserved for commercial use, private developers shall be permitted to develop to the extent of 50% of the sector area as per the layout plan approved by competent authority, after obtaining license under Act No. 8 of 1975. Balance 50% area shall be developed exclusively by the Government or a Government undertaking or by a public authority approved by the Government.

(3) Notwithstanding the provision of clause (1) and (2) above, the Government may reserve at any time, any other sector for development exclusively by it or by its agencies indicated above.”

E] The Haryana Act was enacted in the year 1975 to regulate the

use of land in order to prevent ill-planned and haphazard urbanization

in and around towns and for development of infrastructure sector and

infrastructure projects for the benefit of the State of Haryana and for

matters connected therewith. Sections 2(c), 2(d) and 2(k) of the

Haryana Act define “colony”, “colonizer” and “owner” respectively.

Section 3 of the Haryana Act deals with “Application for licence” and

entitles an owner desiring to convert his land into a colony to make an

application to the Director for the grant of licence to develop a colony. 51

Sub-Section (2) of said Section 3 stipulates that on receipt of such

application by the owner, the Director shall among other things

enquire into the “capacity to develop a colony”. Section 3 lays down

parameters and guidelines for grant of such licence which include

inter alia furnishing to the Director a bank guarantee equal to 25 per

centum of the estimated cost of development works and a bank

guarantee equal to 37½ per centum of the estimated cost of the

development works in case of cyber city or cyber park. Unlike sub-

Section (1) which uses the expression “owner”, the expressions

“applicant” and “colonizer” are used in sub-Section (3) onwards.

Section 3AA deals with “Establishment and constitution of Board”

while the “Functions and Powers of Board” are dealt with in Section

3AC. In terms of sub-Section (2) of Section 3AC, the Board is to act

as a Nodal Agency to coordinate all efforts of the Government

regarding the development and implementation of infrastructure

sectors and infrastructure projects for the benefit of State, involving

private participation and funding from sources other than those

provided by the State budget. Sub-clauses (f) and (g) of said sub-

Section(2) deal with functions such as formulating clear and

transparent policies and identifying sectoral concessions to attract 52

private participation. Section 3AE empowers the Government to

issue such directions to the Board on matters concerning the

infrastructure sectors and the infrastructure projects in the State and

states that the Boards shall be bound by such directions.

F] The directions were issued by the Government from time to

time, in exercise of the power so vested. The minutes of the meeting

regarding policy issues “concerning Urban Development in Haryana”

held on 07.08.19915 under the Chairmanship of the Chief Minister

show that the issues concerning urban development were discussed in

detail. Paras 2 to 5 of the minutes were as under:-

“2. COMPETENT AUTHORITY TO GRANT LICENSES:

The opinion of LR was considered and it was

accordingly decided that DTCP should be the competent authority to grant licence under the Act. On a suggestion from DTCP, however, it was felt that the grant of licence may have wider implications for State Government. It was, therefore, decided that such licences may be granted with prior internal concurrence of the State Government at Minster’s level. The State Government will however, exercise appellate powers under the Act in accordance with the opinion of the LR.

3. CONFORMITY OF THE SITE TO THE DEVELOPMENT PLAN/SECTOR PLAN:

The LR’s opinion on the matter was discussed and it was clarified by the LR that legally the colony to be licensed has to conform to the Development Plan and not to sector

5 Relied upon by Mr. Narender Hooda, Senior Advocate 53

demarcation. It was pointed out that the land under application may not always be in a regular shape or in one sector. No minimum limit on proportion of the total area to the area of the sector could, therefore, be stipulated.

4. SIZE OF THE COLONY:

It was decided that except for additional licences for contiguous area/pockets, the minimum area required for the grant of licence shall be 100 acres for an applicant company/group of companies as heretofore.

5. LAND ACQUISITION AND LICENCING:

It was pointed out that in urbanisable areas of Development Plan, both HUDA and private sector take steps to acquire land for development. In a number of cases individuals may acquire land and before they are able to apply/get a license, the area may be notified for acquisition of HUDA. It was, therefore, decided that in the interest of equity in cases where applicants have applied for licence or have acquired land but could not apply for licence before the issue of acquisition notification, release of land could be considered on individual merits of each case.”

G] On 19.12.2006 “Policy for grant of licences and change of land

use cases6” was issued in the form of a Memo from the office of

Financial Commissioner and Principal Secretary to Government of

Haryana, Town and Country Planning Department. Paragraph 5 of

this Memo dated 19.12.2006 was:-

“5) Land Acquisition and Licensing:- Where applicants/land owners have applied for licence before the issue of acquisition notification under section 4 of the Land Acquisition Act, 1894, release of land could be considered on individual merits of each case.” 6 Relied upon by Mr. Dhruv Mehra, Senior Advocate 54

This Policy was given effect from 07.06.2005.

H] There were similar Policy statements between 07.08.1991 and

19.12.2006 and even after 19.12.2006 as dealt with and discussed by

the High Court of Punjab and Haryana in its Judgment in Amita

Banta & Another v. State of Haryana7. Relevant portion of para 11

of said decision is as under:-

“…………………….

Policy dated 6.1.2000

Memorandum

Minister-in-Charge Town and Country

Planning Minister

Administrative Secretary Commissioner and

Secretary to Govt.

Haryana, Town and Country Planning Department

Sub: Release of land from acquisition where Developers/colonizers have purchased land before the issue of notification under Section 4 of the Land Acquisition Act but submitted application for licence for commercial colonies thereof afterwards.

xx xxx xxx xxxx

It has been felt that apart from providing accommodation for locating commercial officers, a licence for a commercial colony results into receipt of 7 (2010) 1 RCR (Civil) 412 55

handsome amount to the State Treasury/Haryana Urban Development Authority and it will be in public interest to encourage establishment of such colonies.

Earlier a decision was taken by the CMM (copy of memorandum and decision is placed at Annexure B and C) to release the land from acquisition where developers/colonizers have purchased land before the issue of notification under Section 4 of the Land Acquisition Act, but submitted applications for grant of licence for setting up of residential colony afterwards. But it is a general decision and it is felt that in view of the reasons explained above, the licences for commercial colonies should be treated differently.

It is therefore, proposed that if the department intends to issue licence for commercial colony with the internal concurrence of the Government over a land where the owner had purchased it before the notification under Section 4 of the Land Acquisition Act was issued, the release of such land may be allowed before issue of letter of intent.

Policy dated 06.03.2000

It has also been observed that the resources of HUDA have reduced in the recent past, and acquisition activity and development of residential sectors has become costly and time consuming affair due to litigation and, therefore, it would be appropriate to assign a greater role to private sector. But as per decision taken by the CMM in their meeting held on 30.07.98 even if the department finds that the application for grant of licence for residential colony fulfils policy/technical parameters, the land is to be released from acquisition only on the recommendations of the Chief Administrator, HUDA. This results into procedural delay. Since the department of Town and Country Planning, Haryana is responsible for integrated development of urban areas, therefore with a view to avoid procedural delays, it is proposed that on the analogy of decision taken by the CMM on 06.01.2000, the land purchased by the colonizer before issuance of notification under Section 56 4 of the Land Acquisition Act, 1894 where the Director Town and Country Planning, Haryana decides to issue licence for residential colony and obtained the concurrence of the Government for the same, may be released from acquisition.

Policy dated 26.10.2007

5. Any land in respect of which an application under Section 3 of the Haryana Development and Regulation of Urban Areas Act, 1975 has been made by the owners prior to the award for converting the land into a colony, may also be considered for release subject to the condition that the ownership of the land should be prior to the notification under Section 4 of the Act.

6. That the Government may also consider release of land in the interest of integrated and planned development for the lands where the owners have approached the Hon'ble Courts and have obtained stay dispossession.

Provided that the Government may release any land on the grounds other than stated above under Section 48(1) of the Act under exceptionally justifiable circumstances for the reasons to be recorded in writing.

………………..”

21. From consideration of afore-stated statutory framework, it is clear:-

A. The Regional Plan of 2021, notified on 19.09.2005 contemplated that

Master/Development Plans in respect of towns were required to be prepared

within the framework of said Regional Plan. Accordingly, Final

Development Plan for Gurgaon Manesar Urban Complex was published on

05.02.2007. The Explanatory Note, as set out hereinabove brings out 57

potential of the lands situate in said Urban Complex. According to the zonal

requirements as set out in Annexure-B of said Notification dated 05.02.2007,

the extent of private participation was restricted to 50% for development of

sectors reserved for commercial use and rest could be developed only by the

Government or Government undertaking or by a public authority approved

by the Government.

B. In terms of provisions of the Haryana Act and more particularly

Section 3(2), “Capacity to develop a colony” would be a factor relevant for

consideration whenever an application for licence was preferred by any

owner. Though the provisions of Haryana Act do contemplate coordination

of all efforts with regard to development and implementation of

infrastructure, sectors and projects with involvement of private participation,

the directions issued by the Government have laid down, in clear terms, the

extent and scope of such private participation.

C. In accordance with Section 40 of the NCR Act, the concerned States

are expected to give effect to any Regional Plan by taking resort to power of

acquisition. The inter-play between exercise of such power of acquisition

and private participation by permitting licences to owners/colonizers was a

matter dealt with by Policy Guidelines issued by the Government from time 58

to time. In terms of policy statements dated 07.08.1991, 06.01.2000 and

06.03.2000 where applicants had applied for licence or had acquired land but

could not apply for licence before the issue of acquisition notification,

release of land could still be considered on individual merits of each case.

The scope got further restricted by policy statement of 19.12.2006, in terms

of para 5 whereof, if the applicants/landholders had applied for licence

before the issue of acquisition notification under Section 4 of the LA Act,

release of land could be considered on individual merits of each case. As

this policy was given effect from 07.06.2005, it could possibly be stated that

the earlier policies ought to apply to cases before 07.06.2005. But in any

case, for said policies dated 07.08.1991, 06.01.2000 and 06.03.2000 to

apply, the purchase by applicants had to be before the issue of acquisition

notification. Same thought was expressed in the Policy dated 26.10.2007,

“….that the ownership of the land should be prior to the notification under Section

4 of the Act.” Further, the extent of such participation ought to be in terms of

zonal requirements set out in Annexure B to the Final Development Plan

dated 05.02.2007.

22. It must be noted at the outset that the aforementioned Policy dated

06.03.2000 was considered by this Court in Uddar Gagan (supra) and in

paragraph 21 of its judgment, this Court had observed, “… the policy is 59

applicable only to release of such land from acquisition as is owned/purchased by

the developers before the issue of notification under Section 4 of the Land

Acquisition Act, 1894. This condition was required to be strictly complied with

and no person other than original owners prior to acquisition could directly or

indirectly avail of the said policy”. In the present case, notification under

Section 4 of the Act was issued on 27.08.2004. After considering various

objections made under Section 5A of the Act, the requirement of 688 Acres

of land was assessed and declaration under Section 6 to that effect was

issued on 25.08.2005. The material placed on record by Mr. Vikas Singh,

learned Senior Advocate shows that all lands purchased by his client were

after the issuance of notification under Section 4 of the Act. Similarly para

18 of the interim report submitted by CBI shows that over 444 Acres of land

was purchased by various builders/private entities after such notification

under Section 4 of the Act. Going by the relevant policies holding the field

and the law laid down by this Court in para 21 of its judgment in Uddar

Gagan (Supra), such purchases did not entitle the concerned builders/private

entities to prefer any application for licence, nor could pendency of such

applications be taken as a relevant factor while arriving at a decision

whether acquisition initiated pursuant to notification dated 27.08.2004 be

proceeded further or not. However, the record indicates that such purchases

and the pendency of applications for licence under the Haryana Act, was a 60

factor which did weigh while decisions dated 24.08.2007 and 29.01.2010

were taken. A factor which ought to have been discarded in terms of the

declared policy statements, became the fulcrum for said decisions. We have

therefore, no hesitation in holding that said decisions are inconsistent with

and opposed to relevant policy statements. We also reject the submission

advanced on behalf of builders/private entities that these decisions were

consistent with the Regional Plan under the NCR Act and the Final

Development Plan for Gurgaon-Manesar.

23. But the issues raised in the present case go way beyond mere

invalidity or illegality of those decisions dated 24.08.2007 and 29.01.2010.

What is being projected is that those decisions dated 24.08.2007 and

29.01.2010 were part of a well devised and designed attempt to deprive the

landholders and enrich builders/private entities, which would broadly

depend upon answers to the following questions:-

a] Whether the transactions entered into between the landholders

and the concerned builders/private entities in the present case could be said

to be voluntary and free from any influence.

b] Whether the decisions on part of the state machinery arrived at

on 24.08.2007 and 29.01.2010 could be said to be guided by considerations 61

other than those for which the power was conferred; or in other words: was

there a fraud on power.

24. Before we deal with the aforesaid issues, certain crystalized facets of

the matter as evident from facts as narrated above and the statutory

framework, need to be noted:-

(a) The concerned lands fall in National Capital Region to which

the provisions of Regional Plan, 2021 prepared under the NCR Act

and Final Development Plan for Gurgaon-Manesar Urban Complex

prepared by Government of Haryana do apply. The Explanatory Note

set out in Annexure A to said Final Development Plan brings out the

potential of the lands in Gurgaon-Manesar and acknowledges its

proximity with Delhi, locational advantages and importance of said

lands.

(b) Though Regional Plan, 2021 and Final Development Plan for

Gurgaon-Manesar Region Complex were notified on 19.09.2005 and

05.02.2007 respectively, it can well be assumed that stages anterior to

preparation and notification of said plans coincided with the initiation

of acquisition in the present case. In any case, the potential of said

lands was not something which arose out of the blue for the first time 62

in 2007 and it can safely be inferred that such potential was to the

knowledge of everybody concerned.

(c) All the transactions in the present case under which the

builders/private entities purchased the lands, were entered into after

the initiation of acquisition on 27.08.2004. As disclosed in the

material placed on record by Mr. Vikas Singh, learned Senior

Advocate, his client alone had purchased more than 235 acres of land

while as per interim report of CBI, an extent of 444 acres of land was

purchased by builders/private entities after the initiation of

acquisition. Thus, substantial portion of land out of 688 acres of land

as specified in declaration under Section 6 of the Act was purchased

by builders/private entities.

(d) Around the time when those purchases were made by

builders/private respondents, Awards were declared on 09.03.2006

and 24.02.2007 in respect of lands from adjoining Villages where the

acquisition was also initiated for the same public purpose. The

compensation awarded was at the rate Rs.12.5 lakhs per acre.

(e) Although the relevant policies did not permit anyone who

purchased the concerned lands after initiation of acquisition to prefer 63

an application for licence, the builders/private entities merrily went

about purchasing the interest of concerned landholders after such

initiation. Most of these companies were incorporated after the

acquisition was initiated and had no experience in colonization. Yet

substantial and sizeable holding was purchased by them. This is

reflective of the intent to cash in on an opportunity made available and

garner as much holding as possible. The subsequent transactions of

sale by them are also indicative of the attempts to profiteer in the

matter rather than any bona fide attempt to develop and colonize the

property.

(f) Faced with impending acquisition initiated on 27.08.2004, the

landholders were persuaded to enter into transactions with

builders/private respondents. The Tabular Chart as set out by way of

example in paragraph 8 hereinabove shows that the average price was

initially in the region of Rs.25 lakhs per acre which rose to Rs.40

lakhs per acre or above after the issuance of declaration under Section

6 of the Act. The price so received was greater than the rate awarded

in Awards dated 09.03.2006 and 24.02.2007.

64

(g) Notices under Section 9 of the Act were issued by the

Authorities on 02.08.2007 calling upon the landholders to appear for

pronouncement of award on 26.08.2007. The record indicates that the

price paid by the builders/private entities just before 24.08.2007 was

in the region of Rs.80 lakhs per acre. This further discloses, as

rightly submitted by Mr. Dhruv Mehta, learned Senior Advocate that

builders/private entities were aware that the award would not be

declared but the land acquisition proceedings would be dropped.

(h) At least 60 sale deeds were executed between the issuance of

Notifications under Sections 4 and 6 of the Act, four sale deeds were

executed on the day the declaration under Section 6 was issued and 50

sale deeds were executed after the issuance of Notification under

Section 6 and prior to the dropping of acquisition on 24.08.2007.

Thus about 114 sale deeds were executed after the initiation of

acquisition and prior to the dropping of acquisition vide decision

dated 24.08.2007.

(i) The sale deeds in favour of the builders/private entities do not

even mention the factum about the issuance of any Notification under

Section 4 of the Act, nor any urgency or necessity for the family to 65

dispose of its holdings find any specific clear mention. The sales in

question were effected only because of impending acquisition.

(j) The material placed on record by Mr. Vikas Singh, learned

Senior Advocate discloses a disturbing feature. The lands which were

purchased for a price ranging from Rs.25 lakhs per acre soon after the

initiation of acquisition which price rose to Rs.80 lakhs per acre just

before dropping of the acquisition, were finally purchased by DLF

Home Developers Ltd. at the rate of Rs.4½ crores per acre. Further,

the fact that settlement money at the rate of Rs.3½ crores per acre was

made over to entities which apparently had done nothing in the matter

is quite shocking. Neither had these entities procured the lands from

the original landholders nor were they ultimate developers who

wanted to develop the property. Such entities can certainly be termed

as “middle men” who walked away with tremendous amount of

money or benefit at the rate of Rs.3½ crores per acre. Was that a

mere bonanza or a deal denoting quid pro quo?

(k) It is true that the price of Rs. 4½ crores per acre was paid in

respect of land as well as the licences and well after the dropping of

the acquisition and withdrawal of writ petitions pending in the High 66

Court. However this price or the rate shows the tremendous

difference between the return received by the original landholders and

the actual potential of the land.

(l) In terms of paragraph VIII of Annexure B to the Final

Development Plan for Gurgaon-Manesar Urban Complex the extent of

private participation was extremely limited and in terms of relevant

policy under the Haryana Act no licence could be issued in case any

purchase of land was made after the initiation of the acquisition. Yet

the concerned Authorities not only entertained such applications for

licence but pendency of such applications was taken as a factor for

withdrawal from acquisition. Something which ought to have been

rejected and discarded outright became the foundation for decision in

favour of builders/private entities.

(m) The interim report of CBI in para 21 indicates that objection

was taken by HSIIDC and it was prayed that application for licence be

rejected. Going by aforesaid paragraph VIII of Annexure B and the

relevant policy, such application could never have been entertained

but it was so done favourably.

67

25. In cases where the power conferred under the provisions of the Act

was utilized to favour a private person or entity, this Court has always come

down heavily. In Uddar Gagan (supra) which was relied upon by Mr.

Dhruv Mehta, learned Senior Advocate and the learned Amicus Curie, the

question which arose for consideration inter alia, was whether the power of

the State to withdraw from acquisition under Section 48 of the Act after the

award had been passed, was utilized to facilitate transfer of title of the land

of original owners to a private builder to advance the business interest of the

builder. In that case, the builder had purchased the interest of the original

landholders after the acquisition was initiated like in the present case and at

his instance the lands were released from acquisition at which stage the

original landholders had invoked writ jurisdiction and challenged the entire

action. The High Court set aside the release orders, quashed the acquisition

and went on to direct that the lands be restored to the original land-owners.

While considering the matter in an appeal at the instance of the builder, this

Court dealt with the observations of the High Court in Paragraph 5.

Paragraphs 70 and 80 of the High Court judgment which were inter alia

quoted by this Court were as under:-

“70. To say that the landowners entered into varied contracts with Respondent 11 voluntarily, willingly or without undue pressure is too farcical to be believed. There is a natural and conventional bondage between the land and its tiller. A farmer seldom sells the 68

land save for the compelling reasons. Agriculture being their only source of survival, the loss of land is a terrible nightmare for any farmer. The Land Acquisition Collectors never assess the compensation as per actual market value of the land and the only yardstick to be followed is the Collector’s rate fixed for the purpose of registration charges. The farmer cannot sell the land in open market as on issuance of Section 4 notification all sale transactions are invariably banned. These moments of fear and anxiety must have prompted Respondent 11 to indulge in the best bargain. For the farmers the offer was like “better you give the wool than the whole sheep”. There was no free trade for the farmers. Their choice was limited: to accept the State compensation at the Collector’s rate or a better offer given by State-sponsored private builder. There was inequality of bargaining power. The determination of land value was not at all in the control of farmers. They were groping in the dark. They had no clue that the land will be released. They accepted the unreasonable and unfair unilateral terms and lost their land.

80. … Secondly, it is not a case of challenging the sale deeds for the breach of any bilateral terms and conditions or on the conventional grounds where a question of fact has to be proved. The incidental relief to declare the sale deeds as null and void is an offshoot of the broader issues raised by the petitioners including those hovering around the systematic colourable exercise of power by the State apparatus. A constitutional court while performing its solemn duty as a trustee of the fundamental rights of the citizens shall thus be well within its right to lift the veil and unmask the private object behind an acquisition carried out in disregard to the mandate of Articles 14 and 300-A of the Constitution.”

26. This Court affirmed the view taken by the High Court as regards

quashing of release orders but upheld the acquisition and awards. It further

directed that the lands in question vested in State free from all

encumbrances. In the context of the present case, the following observations

of this Court in Uddar Gagan (supra) in paragraphs 18, 19, 22 and 23 are

quite crucial:-

69

“18. …. entertaining an application for releasing of land in favour of the builder who comes into picture after acquisition notification and release of land to such builder tantamounts to acquisition for a private purpose. It amounts to transfer of resources of poor for the benefit of the rich. It amounts to permitting profiteering at the cost of livelihood and existence of a farmer. This is against the philosophy of the Constitution and in violation of guaranteed fundamental rights of equality and right to property and to life. What cannot be done directly cannot be done indirectly also.

19. ….. It is patent that the State has enabled the builder to enter the field after initiation of acquisition to seek colonisation on the land covered by acquisition. In the absence of the State’s action, it was not possible for the builder to enter into the transactions in question which was followed by withdrawal from acquisition.

22. ….. When the land sought to be acquired for a public purpose is allowed to be transferred to private persons, any administrative action or private transaction could be held to be vitiated by fraud.

23. …. Fraud on power voids the action of the authority. Mala fides can be inferred from undisputed facts even without naming a particular officer and even without positive evidence.”

27. For the present purposes, contents of paragraphs 29 and 30 of the

decision in Uddar Gagan (supra) and the directions issued in paragraph 33

are extracted:-

“29. Once release of land under acquisition is found to be mala fide or arbitrary exercise of power, acquisition of released land stands revived. The operative direction of the High Court to quash the acquisition to the extent it has neither been challenged nor concerns the land transferred to a private builder by abusing the power of acquisition or on account of any extraneous considerations does not appear to be justified. Similarly the direction of permitting the builder to retain the land of those landowners who are not able to refund the sale consideration received by them may permit the builder to illegally retain the land. Moreover, it may not be practicable in the present fact situation to restore the land to the 70

landowners but they can be duly compensated while restoring the land to the State to use it for notified public purpose. Person whose land is taken for houses for others cannot be rendered homeless and unemployed. This will be sheer exploitation. In view of the conduct of the builder, agreeing with the view of the High Court, we do not propose to allow any interest to the builder while permitting refund/reimbursement to it. From the impugned judgment there is nothing to show that the developments which are now relied upon had taken place on the date of filing of the writ petition. It has been specifically held in para 89 of the impugned judgment that no development had taken place till the judgment of the High Court. Any subsequent transactions or development are of no consequence for rights of parties. Any subsequent transactions entered into by the builder cannot be taken into account and are hit by the principle of lis pendens. In any case it was for the builder to inform the third par- ties to whom the plots have been sold, that the land was under litiga- tion. If the third parties have purchased the land knowing fully about the litigation, they have clearly taken risk and their remedy will be only against the builder. If pendency of litigation was suppressed, the third parties can take their remedies against the builder. Without prejudice to their said private remedies, the court may try to balance equities to the extent possible. We are also of the view that if the authorities have proceeded to entertain applications for licence to give undue benefit to the builder by way of helping him to take over land under the cloud of acquisition, it may call for action against those who have misused their power and to find out the considerations for such misuse.

30. Land is scarce natural resource. Owner of land has guarantee against being deprived of his rights except under a valid law for compelling needs of the society and not otherwise. The commercial use of land can certainly be rewarding to an individual. Initiation of acquisition for public purpose may deprive the owner of valuable land but it cannot permit another person who may be able to get permission to develop colony to take over the said land. If the law allows the State to take land for housing needs, the State itself has to keep the title or dispose of land consistent with Article 14 after completion of acquisition. If after initiation of acquisition, process is not to be completed, land must revert back to owner on the date of Section 4 notification and not to anyone else directly or indirectly.

This is not what has happened.

………..

71

33. Keeping the above in mind, we are of the view that ends of justice will be served by moulding the relief as follows:

33.1. Notifications dated 11-4-2002, 8-4-2003 and awards dated 6-4-2005 are upheld. The land covered thereby vests in HUDA free from all encumbrances. HUDA may forthwith take possession thereof.

33.2. All release orders in favour of the builder in respect of land covered by the award in exercise of powers under Section 48 are quashed.

33.3. Consequently, all licences granted in respect of the land covered by acquisition will stand transferred to HUDA. 33.4. Sale deeds/other agreements in favour of the builder in respect of the said land are quashed. The builder will not be entitled to recover the consideration paid to the owners but will be entitled to reimbursement as indicated hereinafter. Creation of any third-party rights by the builder also stands quashed.

33.5. The sale consideration paid by the builder to the landowners will be treated as compensation under the award. The landowners will not be required to refund any amount. The landowners who have not received compensation will be at liberty to receive the same. The landowners will also be at liberty to prefer reference under Section 18 of the 1894 Act within a period of three months, if such reference has not been earlier preferred. 33.6. The builder will be entitled to refund/reimbursement of any payments made to the State, to the landowners or the amount spent on development of the land, from HUDA on being satisfied about the extent of actual expenditure not exceeding HUDA norms on the subject. Claim of the builder will be taken up after settling claim of third parties from whom the builder has collected money. No interest will be payable on the said amount.

33.7. The third parties from whom money has been collected by the builder will be entitled to either the refund of the amount, out of and to the extent of the amount payable to the builder under the above direction, available with the State, on their claims being verified or will be allotted the plots at the price paid or price prevalent, whatever is higher. No interest will be payable on the said amount. 33.8. The State shall give benefit of “Rehabilitation and Resettlement of Land Acquisition Oustees” policy of the State/HUDA to the landowners. Area so required shall be reserved out of the acquired land itself.

33.9. The State Government may enquire into the legality and bona fides of the action of the persons responsible for illegally 72

entertaining the applications of the builder and releasing the land to it, when it had no title to the land on the date of the notification under Section 4 of the 1894 Act and proceed against them in accordance with law.

33.10. This judgment be complied with within one year. 33.11. Quarterly progress report of the action taken in pursuance of this judgment be filed by the State in this Court and final report of compliance may be filed within one month after expiry of one year from today for such further direction as may become necessary.”

28. Apart from the decisions of this Court in Uddar Gagan (supra)

following decisions of this Court are noteworthy:

a] In Collector (DM) v. Raja Ram Jaiswal8, it was observed by

this Court:-

“26. Where power is conferred to achieve a purpose it has been repeatedly reiterated that the power must be exercised reasonably and in good faith to effectuate the purpose. And in this context 'in good faith' means 'for legitimate reasons'! Where power is exercised for extraneous or irrelevant considerations or reasons, it is unquestionably a colourable exercise of power or fraud on power and the exercise of power is vitiated. If the power to acquire land is to be exercised, it must be exercised bona fide for the statutory purpose and for none other. If it is exercised for an extraneous, irrelevant or non-germane consideration, the acquiring authority can be charged with legal mala fides. In such a situation there is no question of any personal ill-will or motive. In Municipal Council of Sydney v. Campbell9 it was observed that irrelevant considerations on which power to acquire land is exercised, would vitiate compulsory purchase orders or scheme depending on them…….”

b] In Royal Orchid Hotels Limited and Another v. G. Jayarama

Reddy and Others10, this Court was called upon to consider question 8 (1985) 3 SCC 1 9 1925 AC 338 at p. 375 10 (2011) 10 SCC 608 73

whether land acquired by the State Government for specified purpose

namely Golf-cum-Hotel Resort could be transferred to a private individual.

The observations in paragraph 38 are relevant for the present purposes:-

“38. The courts have repeatedly held that in exercise of its power of eminent domain, the State can compulsorily acquire land of the private persons but this proposition cannot be overstretched to legitimize a patently illegal and fraudulent exercise undertaken for depriving the landowners of their constitutional right to property with a view to favour private persons. It needs no emphasis that if land is to be acquired for a company, the State Government and the company is bound to comply with the mandate of the provisions contained in Part VII of the Act. Therefore, the Corporation did not have the jurisdiction to transfer the land acquired for a public purpose to the companies and thereby allow them to bypass the provisions of Part VII. The diversification of the purpose for which land was acquired under Section 4(1) read with Section 6 clearly amounted to a fraud on the power of eminent domain. This is precisely what the High Court has held in the judgment under appeal and we do not find any valid ground to interfere with the same……”

c] In Greater Noida Industrial Development Authority v.

Devendra Kumar and Others11, validity of acquisition of about 156 hectares

of land and subsequent transfer of acquired land to the builders and whether

such transfer was colourable exercise of power came up for consideration of

this Court. In paragraph 43 this Court quoted the observations of Krishna

Iyer J in State of Punjab v. Gurdial Singh12 and later made following

observations in paragraph 49:-

11 (2011) 2 SCC 375 12 (1980) 2 SCC 471 74

“43. In this context, it will be useful to notice the observations made in State of Punjab v. Gurdial Singh. In that case, while pronouncing upon the correctness of the order passed by the Punjab and Haryana High Court which had quashed the acquisition of the respondents’ land on the ground of mala fide exercise of power, this Court observed: (SCC p. 475, para 9)

“9. … Legal malice is gibberish unless juristic clarity keeps it separate from the popular concept of personal vice. Pithily put, bad faith which invalidates the exercise of power— sometimes called colourable exercise or fraud on power and oftentimes overlaps motives, passions and satisfactions—is the attainment of ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal. If the use of the power is for the fulfilment of a legitimate object the actuation or catalysation by malice is not legicidal. The action is bad where the true object is to reach an end different from the one for which the power is entrusted, goaded by extraneous considerations, good or bad, but irrelevant to the entrustment. When the custodian of power is influenced in its exercise by considerations outside those for promotion of which the power is vested the court calls it a colourable exercise and is undeceived by illusion. In a broad, blurred sense, Benjamin Disraeli was not off the mark even in law when he stated:

‘I repeat … that all power is a trust—that we are accountable for its exercise—that, from the people, and for the people, all springs, and all must exist.’ Fraud on power voids the order if it is not exercised bona fide for the end designed. Fraud in this context is not equal to moral turpitude and embraces all cases in which the action impugned is to effect some object which is beyond the purpose and intent of the power, whether this be malice-laden or even benign. If the purpose is corrupt the resultant act is bad. If considerations, foreign to the scope of the power or extraneous to the statute, enter the verdict or impel the action, mala fides or fraud on power vitiates the acquisition or other official act.” ………

49. Before concluding, we consider it necessary to reiterate that the acquisition of land is a serious matter and before initiating the proceedings under the 1894 Act and other similar legislations, the 75

Government concerned must seriously ponder over the consequences of depriving the tenure-holder of his property. It must be remembered that the land is just like mother of the people living in the rural areas of the country. It is the only source of sustenance and livelihood for the landowner and his family. If the land is acquired, not only the present but the future generations of the landowner are deprived of their livelihood and the only social security. They are made landless and are forced to live in slums in the urban areas because there is no mechanism for ensuring alternative source of livelihood to them. Mindless acquisition of fertile and cultivable land may also lead to serious food crisis in the country.”

29. The decisions referred in the preceding paragraphs were delivered in

the context of exercise of power under the provisions of the Act. In addition,

there are few other decisions which were rendered in other fields but

considered the issues regarding “fraud on power”; notable amongst them

being: S. Pratap Singh v. The State of Punjab13, Express Newspapers Pvt.

Ltd. and others v. Union of India and others14and observations by R.M.

Sahai J in Shrisht Dhawan (Smt) v. Shaw Bros.15 The issue concerning

unjust enrichment was dealt with by this Court very succinctly in Indian

Council for Enviro-Legal Action v. Union of India16 as under :

“151. Unjust enrichment has been defined as:

“Unjust enrichment.—A benefit obtained from another, not intended as a gift and not legally justifiable, for which the beneficiary must make restitution or recompense.” See Black’s Law Dictionary, 8th Edn. (Bryan A. Garner) at p. 1573. A claim for unjust enrichment arises where there has been an “unjust

13 (1964) 4 SCR 733 14 (1986)1 SCC 133 15 (1992) 1 SCC 534, at page 553 :

16 (2011) 8 SCC 161, at page 234 76

retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity and good conscience”.

152. “Unjust enrichment” has been defined by the court as the unjust retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity and good conscience. A person is enriched if he has received a benefit, and he is unjustly enriched if retention of the benefit would be unjust. Unjust enrichment of a person occurs when he has and retains money or benefits which in justice and equity belong to another.

153. Unjust enrichment is “the unjust retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity and good conscience”. A defendant may be liable “even when the defendant retaining the benefit is not a wrongdoer” and “even though he may have received [it] honestly in the first instance”. (Schock v. Nash17, A 2d, 232-33.)

154. Unjust enrichment occurs when the defendant wrongfully secures a benefit or passively receives a benefit which would be unconscionable to retain. In the leading case of Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd.18, Lord Wright stated the principle thus: (AC p. 61)

“… Any civilised system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit that is to prevent a man from retaining the money of or some benefit derived from another which it is against conscience that he should keep. Such remedies in English law are generically different from remedies in contract or in tort, and are now recognised to fall within a third category of the common law which has been called quasi-contract or restitution.”

17 732 A 2d 2017 (Delaware 1999) 18 1943 AC 32 77

155. Lord Denning also stated in Nelson v. Larholt19as under: (KB p. 343) “… It is no longer appropriate, however, to draw a distinction between law and equity. Principles have now to be stated in the light of their combined effect. Nor is it necessary to canvass the niceties of the old forms of action. Remedies now depend on the substance of the right, not on whether they can be fitted into a particular framework. The right here is not peculiar to equity or contract or tort, but falls naturally within the important category of cases where the court orders restitution, if the justice of the case so requires.”

156. The above principle has been accepted in India. This Court in several cases has applied the doctrine of unjust enrichment. …..…

159. Unjust enrichment is basic to the subject of restitution, and is indeed approached as a fundamental principle thereof. They are usually linked together, and restitution is frequently based upon the theory of unjust enrichment. However, although unjust enrichment is often referred to or regarded as a ground for restitution, it is perhaps more accurate to regard it as a prerequisite, for usually there can be no restitution without unjust enrichment. It is defined as the unjust retention of a benefit to the loss of another or the retention of money or property of another against the fundamental principles of justice or equity and good conscience. A person is enriched if he has received a benefit, and he is unjustly enriched if retention of the benefit would be unjust. Unjust enrichment of a person occurs when he has and retains money or benefits which in justice and equity belong to another.

160. While the term “restitution” was considered by the Supreme Court in South Eastern Coalfields Ltd. v. State of M.P.20 and other cases excerpted later, the term “unjust enrichment” came to be considered in Sahakari Khand Udyog Mandal Ltd. v. CCE & Customs21. This Court said: (Sahakari Khand case, SCC p. 748, para 31) “31. … ‘unjust enrichment’ means retention of a benefit by a person that is unjust or inequitable.

19 (1948) 1 KB 339 20 (2003) 8 SCC 648 21 (2005) 3 SCC 738 78

‘Unjust enrichment’ occurs when a person retains money or benefits which in justice, equity and good conscience, belong to someone else.”

161. The terms “unjust enrichment” and “restitution” are like the two shades of green—one leaning towards yellow and the other towards blue. With restitution, so long as the deprivation of the other has not been fully compensated for, injustice to that extent remains. Which label is appropriate under which circumstances would depend on the facts of the particular case before the court. The courts have wide powers to grant restitution, and more so where it relates to misuse or non-compliance with court orders.”

30. As held in State of Punjab v. Gurdial Singh (Supra) when a

custodian of power is influenced in its exercise by considerations outside

those for promotion of which the power is vested, such exercise is nothing

but colourable exercise of power and that the power of the State to acquire

lands of private persons compulsorily cannot be overstretched to legitimize a

patently illegal and fraudulent exercise undertaken to favour certain private

persons. This principle has been followed consistently. While dealing with

fact situation arising in the context of exercise of power under the provisions

of the Act and its interplay with the power under the provisions of the

Haryana Act and the concerned policies, the observations of this Court in the

decision in Uddar Gagan (supra) are crucial. They cull out principles that

entertaining an application for releasing of land in favour of a builder who

came into picture after acquisition had been initiated amounts to transfer of

resources of poor for the benefit of the rich and that no legitimacy can be 79

conferred to an abuse of power to advance such purpose. Further, mala fides

could be inferred from undisputed facts even without naming a particular

officer. But the salutary principle discernable from Uddar Gagan (supra)

lies in the relief granted by this Court in paragraph 33. This Court agreed

with the High Court that there was fraud on power but did not sustain the

relief of return of lands to the landholders. The real victim of abuse of

power or fraud on power was “public interest”; for furtherance of which the

acquisition was sustained and appropriate directions were passed. This

Court therefore severed that part which was found to be bad but sustained

acquisition to sub-serve “public interest”.

31. If we consider the established or crystallized facets of the matter as

stated above, in the light of the principles emerging from the decisions

rendered by this Court, in our considered view the decisions dated

24.08.2007 and 29.01.2010 were taken to confer advantages and benefits

upon the builders/private entities rather than to carry out or effectuate public

purpose. The record indicates that various entities including certain

“middlemen” cornered unnatural gains and walked away with huge profits

taking the entire process of acquisition for a ride. Substantial sums have

exchanged hands in the form of settlement money. All the steps and stages

show that the builders/private entities were well aware that the acquisition 80

would not go through but the landholders were confronted with the smoke

screen of acquisition and were cornered and persuaded in entering into

transactions with the builders/private entities. The transactions so entered

into between the landholders and the concerned builders/private entities

could not be said to be voluntary and free from any influence. The unnatural

and unreasonable bargain was forced upon the landholders by creating

façade of impending acquisition. Public Interest was not the underlying

concern or objective behind those decisions dated 24.08.2007 and

29.01.2010 but the motive was to confer undue advantage on the

builders/private entities. It is clear that considerations other than those

which were required to be bestowed, guided the exercise of power in

arriving at decisions dated 24.08.2007 and 29.01.2010. The inescapable

conclusion, therefore, is that there was an unholy nexus between the

governmental machinery and the builders/private entities in devising a

modality to deprive the innocent and gullible landholders of their holdings

and jeopardize public interest which the acquisition was intended to achieve.

Mr. Dhruv Mehta, learned Senior Advocate is right in his submission that the

entire mechanism was deliberately employed so that gullible landholders

could be deprived of their holdings by a set of builders/private entities and

after having seen that the desired result was achieved, the acquisition was 81

dropped and later completely withdrawn. The decisions on the part of the

State arrived at on 24.08.2007 and 29.01.2010 were clearly a result of fraud

on power and cannot be said to be bona fide exercise of power. In our view,

the initiation of class action and filing of Writ Petition in the present matter

was perfectly justified and we reject all the submissions made by the learned

Counsel appearing for various builders/private entities.

32. We thus hold that:-

a] The transactions entered into between the landholders and the

concerned builders/private entities in the present case were not voluntary

and were brought about by fraudulent influence. Certain ‘middlemen’ and

builders enriched themselves at the expense of the landholders and public

interest which was to be achieved by acquisition.

b] The decisions dated 24.08.2007 and 29.01.2010 as well as

entertaining of applications for grant of licence from those who had bought

the lands after the acquisition was initiated, were not bona fide exercise of

power by the State machinery. The exercise of power under the Act was

guided by considerations extraneous to the provisions of the Act and as a

matter of fact, was designed to enrich the builders/private entities. These

decisions were nothing but fraud on power.

82 33. Having so found that the exercise of power in arriving at decisions

dated 24.08.2007 and 29.01.2010 as well as entertaining of applications for

licence from those who had bought the lands after the acquisition was

initiated, to be fraud on power; we now have to consider what relief be

granted in the present matter. The relief to be granted must depend upon

who the real victim is and to what extent solace can be granted to such real

victim. If the landholders are considered to be the real victim, Mr. Dhruv

Mehta, learned Senior Advocate is absolutely right in his submissions. If the

result of forcing land holders to enter into unnatural and unreasonable

bargain was achieved by wrongful utilization of the power conferred under

the Act, in its writ jurisdiction a superior court would be justified in granting

the relief of invalidating such transaction as a consequential relief, while

holding the State action to be bad and invalid. The law laid down by this

Court is quite clear and the objection that instead of a class action in the

realm of public law, each individual land holder must make good his

submissions on individual facts and seek relief of annulment of transaction

entered into by him has to be rejected. To the extent the unnatural and

unreasonable bargain was forced upon the landholders, there would be

justification in granting such relief. But in the circumstances, the public

interest which the acquisition was intended to achieve will never be sub- 83

served. It is nobody’s case that public interest was adequately achieved and

therefore the acquisition was required to be dropped. The fact that other

acquisitions have been completed and have attained the required objective is

a pointer in the direction that there was nothing wrong with the initiation but

somewhere along while the process was on, it was completely hijacked by

vested interests. We cannot, therefore, grant mere declaration invalidating

the transaction and grant relief of restoring status ante. The real and

substantial relief would be in restoring the situation where the process of

acquisition is made free from such supervening vested interests and is

enabled to achieve the objective that the acquisition was intended to sub-

serve.

34. At this stage an aspect needs elaboration and clarification. In Uddar

Gagan (supra) the proceedings for acquisition under the Act had culminated

in passing of an award. After the declaration of award, the lands were

withdrawn from acquisition under the provisions of Section 48 of the Act. In terms of the directions issued by this Court in paragraph 33 in Uddar

Gagan (supra) the withdrawal under Section 48 of the Act was set aside and

the acquisition and award were sustained by this Court. In essence

therefore, the lands in question continued to be under acquisition and

appropriate directions were thereafter passed by this Court adjusting the 84

competing claims of the concerned parties. In the present case, unlike Uddar

Gagan (supra) the acquisition was dropped just two days before the day the

award was to be pronounced. It is true that the entire process right upto

publishing the date for pronouncement of award was validly undertaken,

every possible submission was placed on record and all contentions were

taken by the persons or parties interested. It was not as if any person or any

party was denied any chance of raising objections or making submissions.

The acquisition was dropped for reasons, which in our considered view were

not germane at all and the entire exercise of dropping the acquisition was

fraud on power. If that fraud on power is to be invalidated, the real and

substantial restoration would be to ensure that the acquisition proceeds in the

logical direction and the public purpose is sub-served. In a way, the

directions required in the present matter may go beyond what Uddar Gagan

(supra) did.

35. In certain cases this Court, considering typical fact situation has

passed directions to complete the process of acquisition, for instance:

(a) In Bhimandas Ambwani (Dead) through Lrs. V. Delhi Power Com-

pany Limited22 it was found, “there had been no proceedings regarding

acquisition of the land in dispute”. However, as the authorities had taken

22 (2013) 14 SCC 195 85

over possession of the land and developed the same, this Court observed :

“In such a fact situation, the only option left out to the respondents is to make the award treating Section 4 notification as, on this date i.e. 12.02.2013 and we direct the Land Acquisition Collector to make the award after hearing the parties within a period of four months from today.”

(b) In K.B. Ramachandra Raje Urs(Dead) by L.Rs. V. State of Kar-

nataka and Others23, having held that the acquisition and allotment of 55

acres of land to respondent No.28- Society to be contrary to law, it was

noted that a full-fledged campus had come up in an area admeasuring 40

acres of land out of said 55 acres. It was therefore observed:

“Insofar as the remaining 40 acres of land allotted to Respondent 28 is concerned, we direct that compensation, in respect thereof, to the person/persons entitled to receive such compensation under the Land Acquisition Act, will follow the outcome of Writ Appeal No.1654 of 2008. The compensation under the Act will be paid by taking the date of the order of the learned Single Judge of the High Court i.e. 22-2-2001.”

Thus, in cases where there was no valid acquisition but the land was

taken possession of and developed, restoration of land to the landholders

was not found to be the appropriate, adequate and complete relief and this

Court directed that process of acquisition be initiated taking or treating

certain date to be the relevant date for initiation of the acquisition. If the

power can go to the extent of directing acquisition in such manner, in a case 23 (2016) 3 SCC 422 86

where an acquisition having been properly and validly initiated if the

supervening circumstances show that there was complete fraud on power in

dropping the acquisition, can the power of the superior court not extend

to/not be extended for passing appropriate directions to complete the acqui-

sition and sub-serve the public interest. But for such fraud on power, the

matter in the present case was ripe for pronouncement of award when the

acquisition was dropped just two days before the date of pronouncement.

All the steps leading to the publication of date for pronouncement of award

having been validly and correctly undertaken, can a direction not be passed

that there was a deemed award and completed acquisition.

36. Wherever there has been fraud on power, the duty of the Court is not

only to set aside such exercise of power but to see that there is no unjust

enrichment directly or indirectly as a result thereof and there is full and

substantial restoration. Going by the principles laid down by this Court in

Indian Council for Enviro-Legal Action (Supra) unjust retention of benefit

would be completely against the fundamental principles of justice, equity

and good conscience. It was observed therein that so long as the

deprivation of a party has not been fully compensated for, injustice to that

extent continues. Having found that there was a clear case of fraud on

power as a result of which unnatural and unreasonable gains have been 87

derived by certain builders/private entities, we consider it our duty to grant

full restitution. The restoration in real and substantial terms has to ensure

that the public purpose, the acquisition was intended to achieve, stands

sub-served. In our considered view, this is an appropriate case where this

Court has to declare that there was a completed acquisition and the award

deemed to have been passed on the date when it was supposed to be pro-

nounced i.e. on 26.08.2007. The suggested relief by the learned Amicus

Curiae is also on similar lines.

37. There are certain other elements which need attention at this stage.

The Act now stands replaced by “The Right of Fair Compensation and

Transparency in Land Acquisition, Rehabilitation and Resettlement Act,

2013”. In terms of Section 24(1)(b) of said 2013 Act, where an award had

been made under Section 11 of the Act, the proceedings under the

provisions of the Act would continue as if the Act had not been repealed.

Thus, even if a direction is passed that an award be deemed to have been

made on 26.08.2007, the provisions of the Act would still continue to

operate in respect of such acquisition in question. There is however, one

point which may pose some difficulty. Out of 688 acres of land which was

covered by Declaration under Section 6 of the Act in the present matter,

majority of the lands were taken over by builders/private entities and as 88

such presently the concerned landholders are not in possession of their

holdings. However, in case of certain other lands where no transactions

were entered into, as a result of dropping of the acquisition, those land

holders are presently in occupation without there being any cloud of

acquisition. If we restore status ante where the entirety of 688 acres of land

continues to be under acquisition, the interest of such landholders is bound

to be put to some prejudice. Those landholders are not parties to this

litigation, nor their interest in any manner, is represented in the proceedings.

They would now be visited with the prospect of losing their holdings. Those

who sold away their holdings to the builders/private entities after the

acquisition was initiated, naturally would not be prejudiced at all nor can

the builders/private entities who purchased the land after the land was

initiated can put up a plea of prejudice. However those who had never sold

the holdings and continued to face the prospect of acquisition will certainly

be put to prejudice. It is possible that some such landholders may have sold

away their holdings or may have applied and secured licences for

construction. In cases, where third party interests have thus intervened,

there would be some more concern.

38. The relief to be granted in the matter has therefore to take care of all

the aforesaid aspects. On one hand, the real and substantial relief to be 89

granted in the matter would be not just restoring the status ante and

invalidating of the transactions but the relief ought to be that the process of

acquisition is taken to its logical end and the objective that said acquisition

was to achieve must be sub-served. On the other hand, even while passing

appropriate directions in the nature that there was a deemed Award, the

interest of those landholders who had not parted with their holdings and had

faced the acquisition and had not participated in the proceedings ought to be

secured. Further, the interest of purchasers of individual apartments is also

required to be protected. It is axiomatic that wherever a superior Court

finds that the exercise of power by the executive was mala fide or that there

was fraud of power, the full and substantial relief must be granted. The

principles of restitution and concept of unjust enrichment as explained in

cases referred to hereinabove show that no person who directly or indirectly

was a party to the fraud of power be allowed to reap or retain any unjust

enrichment. Though, it is through the acts on part of the landholders that

the builders/private entities were brought on the scene, we don’t hold them

to be pari delicto alongwith builders/private respondents. But at the same

time they cannot be given benefit of annulment of transactions and

restoration of their holdings. The greater victim in the matter was the

public interest. The land holders in any case had received considerations 90

which were greater than what was awarded in Awards dated 09.03.2006 and

24.02.2007, which were the most proximate awards in terms of time.

However, even when we propose to take the matter to its logical end and

say that there was a deemed award, those who had not sold away their

holdings and had not in any manner either directly or indirectly, tried to

jeopardize the process of acquisition, cannot at this length of time be

subjected to any prejudice. We will therefore have to exclude that body of

landholders who had not transferred their holdings unlike the writ

petitioners and similarly situated landholders, so also the purchasers of

individual apartments from the width of our directions. Though fraud

vitiates every resultant action and on that principle every beneficiary/

purchaser in subsequent transaction must restore such benefit, an exception

has to be made in favour of individual purchasers of flats or apartments who

are being left undisturbed while moulding the relief. Any payments made

by them can be adjusted towards the amounts payable to the colonizer and

their possession can be regularized by HUDA/HSIDC on suitable

conditions by making allotment to them. This aspect will stand covered by

directions issued hereafter.

39. Having bestowed our attention to various competing elements and

issues we deem it appropriate to direct:

91

(a) The decisions dated 24.08.2007 and 29.01.2010 referred to

hereinabove are set aside as being brought about by mala fide exercise of

power. In our considered view, those decisions were clear case of fraud on

power and as such are annulled.

(b) The decision dated 24.08.2007 was taken when the matters

were already posted for pronouncement of the award on 26.08.2007. Since

all the antecedent stages and steps prior thereto were properly and validly

undertaken, and since the decision dated 24.08.2007 has been held by us to

be an exercise of fraud on power, it is directed that an Award is deemed to

have been passed on 26.08.2007 in respect of lands (i) which were covered

by declaration under Section 6 in the present case and (ii) which were

transferred by the landholders during the period 27.08.2004 till 29.01.2010.

The lands which were not transferred by the landholders during the period

from 27.08.2004 till 29.01.2010 are not governed by these directions.

(c) Subject to the directions issued hereafter, the lands covered

under aforementioned direction (b) shall vest in the HUDA/HSIDC, as may

be directed by the State of Haryana, free from all encumbrances.

HUDA/HSIDC may forthwith take possession thereof. Consequently all

licences granted in respect of lands covered by the deemed Award dated

26.08.2007 will stand transferred to HUDA/HSIDC. 92

(d) Since the dropping of acquisition on 24.08.2007 and subsequent

decision dated 29.01.2010 have been set aside, the period between

24.08.2007 and upto the date of this judgment shall not be counted for the

purposes of Section 24(2) of the Right to Fair Compensation and

Transparency in Land Acquisition, Rehabilitation and Resettlement Act,

2013.

(e) All transactions entered into during the period from 24.08.2007

till 29.01.2010, pursuant to which the original landholders transferred their

holdings in favour of builders/private entities or third parties shall be subject

to and the interest of the respective parties shall be governed by the

directions issued hereafter.

(f) Consistent with directions issued in Para 33 of Uddar Gagan

(Supra), the builders/private entities will not be entitled to recover the

consideration paid by them to the landholders. The sale consideration paid

by the builders/private entities to the landholders shall be treated towards

compensation under the award and the landholders will not be required to

refund any amount to such builders/private entities. The landholders will be

at liberty to prefer Reference under Section 18 of the Act within a period of

three months from today. For the purposes of maintaining such Reference

the reasoning that weighed while passing Awards dated 09.03.2006 and 93

24.02.2007 shall be the basis. If the Reference Court were to enhance the

compensation, the amounts received by the landholders by way of

consideration from the builders/private entities shall be appropriated towards

such sum awarded by the Reference Court. If the landholders are still

entitled to something more than what they had received from the

builders/private entities, the differential sum shall be made over to them by

the State of Haryana towards acquisition of their interest in the lands in

question. If however, what the landholders had received towards

consideration from the builders/private entities is found to be in excess of

what is awarded by the Reference Court, the remainder shall not be

recovered from them.

(g) Consistent with the directions issued by this Court in

Paragraphs 33.6 and 33.7 in Uddar Gagan (supra), the builders/private

entities will be entitled to refund/reimbursement of any payment made to the

landholders or the amounts that had been spent on development of the land,

such payments shall be made by HUDA or HSIDC on being satisfied about

the extent of actual expenditure not exceeding HUDA or HSIDC norms on

the subject as the case may be. Refund will however be in respect of amount

at which the landholders sold the land and not of subsequent sales. As

regards subsequent transactions, the subsequent purchasers will have 94

remedies against their respective vendors. Claims of builders/private entities

entitled to refund will be taken up after settling claims of third parties from

whom the builders/private entities had collected monies. No interest will be

payable on such amounts.

(h) The third parties from whom money had been collected by the

builder/private entities will either be entitled to refund of the amount from

and out of and to the extent of the amount payable to the builder/private

entities in terms of above direction, available with the State, on their claims

being verified or will be allotted the plots or apartments at the agreed price

or prevalent price, whichever is higher. Every such claim shall be verified by

HUDA or HSIDC. In cases where, constructions have been erected and the

entire project is complete or is nearing completion, upon acceptance of the

claim, the plots or apartments shall be made over to the respective claimants

on the same terms and conditions. Except for such verified and accepted

claims, the remaining area or apartments will be completely at the disposal

of HUDA or HSIDC, as the case may be, which shall be free and competent

to dispose of the same in accordance with the prevalent policy and

procedure.

In order to facilitate such exercise all third parties who had purchased

or had been allotted the plots or apartments shall prefer claims within one 95

month from today, which claim shall be verified within two months from

today.

(i) As found by us in the preceding paragraphs, substantial sums

were made over to “middle men”. In the pending investigation, the CBI

may do well to unravel the truth. In any case, such hefty sums which were

made over to “middle men” cannot be said to be rightfully earned by and

belonging to them. In fact, this actually represents the return for being able

to garner the lands in question and getting requisite licences under the

provisions of the Haryana Act and a benefit derived out of fraud on power.

In our view this money rightfully belongs to the State and none other. We

direct the authorities of the State as well as the Central Government to reach

the depths of such transactions and recover every single pie and make it over

to the State Government. A complete investigation in the transactions

including unearthing unnatural gains received by “middle men” shall be

undertaken by the CBI.

(j) If CBI has filed charge sheet before the concerned Court, the

same may be dealt with as per law.

(k) The State shall give benefit of “Rehabilitation and Resettlement

of Land Acquisition Oustees” policy of the State/HUDA/HSIDC to the 96

landholders. Area so required shall be reserved out of the acquired land

itself.

(l) The State may revisit its policy of change of land use and

giving colonization licence in respect of land which is subject matter of

acquisition.

(m) We are given to understand that a Commission of Enquiry was

appointed by the State of Haryana to enquire into certain facts concerning

acquisitions in respect of lands in Gurgaon Manesar Urban Complex and

that the matter is presently subject matter of challenge in a pending writ

petition in the High Court of Punjab and Haryana on account of which

further steps are held up. Without expressing any opinion on the merits or

demerits of such challenge, we request the High Court to deal with and

dispose of the matter as early as possible and preferably within two months

from the date of receipt of a copy of this order so that public interest may not

suffer by delay in such decision.

40. Before we close, we must record our sincere appreciation for the

efforts put in and for the invaluable assistance rendered by the learned

Amicus Curiae. His analytical approach and suggestions have helped us

immensely in resolving the issues.

97

41. The appeals stand allowed in the aforesaid terms. There shall be no

order as to costs.

…....….………………J. (Adarsh Kumar Goel)

……………………….J. (Uday Umesh Lalit)

New Delhi March 12, 2018