RAMESHWAR & OTHERS versus STATE OF HARYANA & OTHERS

[2018] 5 S.C.R. 205

RAMESHWAR & OTHERS

STATE OF HARYANA & OTHERS

(Civil Appeal No. 8788 of 2015)

MARCH 12, 2018

[ADARSH KUMAR GOEL AND UDAY UMESH LALIT, JJ.]

Land Acquisition:

Notification u/s. 4 of Land Acquisition Act, 1894 – For settingup of Industrial Township – Objections u/s. 5A filed – Soon afterinitiation of acquisition proceedings various sale deed executed byland-holders in favour of certain builders/private entities – AfterNotification u/s. 6 also builders/private entities continuedapproaching the land-holders showing other awards passed inrespect of adjoining land for the same purpose whereincompensation was granted @ 12.5 lakhs and offered higherpurchase prizes – After notices u/s. 9 for pronouncement of awards,the builders/private entities started enhancing the price and boughtthe land from the land-holders at price around Rs.80 lakhs peracre – Thereafter the State by order dated 24.8.2007 dropped theacquisition proceedings stating that fresh Notification would beissued – Pending writ petitions by land-holders challenging theacquisition proceedings were disposed of as infructuous – BuildingPlans of Group Housing Societies and schemes of the builders/private entities (purchasers) were approved by the State – By orderdated 29.1.2001 decision was taken by the State Government inview of the recommendation of Inter Departmental Committee –Farmers, having come to know that the lands under acquisitionwere utilized by the builders/colonizers, started agitation – Requestwas also made for registration of FIR in respect of fraud played bythe officials in connivance with the builders – Writ petition by land-holders taking the plea that initiation of acquisition proceedingsand thereafter dropping of acquisition proceeding was deliberateand fraught with malice – High Court dismissed the writ petitionholding that challenge to the dropping of proceeding since initiated4½ years later, hence was belated – On appeal, Supreme Courtdirected CBI (to whom investigation in the matter had been entrusted

CDEF

Aby the State) to place its report before Supreme Court – Held:Decisions dated 24.8.2007 and 29.1.2010 were inconsistent withthe relevant policy of the State – They were also not consistent withRegional Plan under NCR Act and the Final Development Plan forGurgaon-Manesar – Public interest was not the underlying objectivebehind the decisions – The decisions were taken to conferBadvantages to builders/private entities – There was unholy nexusbetween Government machinery and the builders/private entities indevising modality to deprive the gullible land-holders of theirholdings – Thus, the decisions were result of fraud on power andwere not bona fide exercise of power – The facts of the case showCthat there was nothing wrong with the initiation of acquisitionproceedings, but during the process it was hijacked by vestedinterests – Therefore, mere invalidation of the transaction wouldnot be appropriate relief – Real and substantial relief would be inrestoring the situation where process of acquisition is made free

from such supervening vested interest and is enabled to achieve theDobjective that the acquisition was intended to sub-serve – Whenthere is fraud on power, duty of the Court is not only to set asidesuch exercise of power, but to see that there is no unjust enrichmentand there is full and substantial restoration – Unjust retention of

benefit would be against the fundamental principles of justice, equityEand good conscience – In the present case, as there was completedacquisition, the award is deemed to have been passed on the datewhen it was supposed to be pronounced – The greater victim in thepresent case was public interest – The land-holders who had soldtheir lands to the builders/private entities had receivedconsiderations greater than the amount awarded in other cases,Fhence they cannot be given benefit of annulment of transactionsand restorations of their holdings – The land-holders who had nottransferred their holdings and the purchasers of individualapartments from builder, cannot be subjected to any prejudice –Appropriate directions issued – Land Acquisition Act, 1894 – ss.G4,6, 9 and 11 – The Right of Fair Compensation and Transparencyin Land Acquisition, Rehabilitation and Resettlement Act, 2013 –s.24(1(b) – Haryana Development and Regulation of Urban AreasAct, 1975 – National Capital Regional Planning Board Act, 1985.

Relief:

Grant of relief – Held: Grant of relief must depend upon whothe real victim is and to what extent solace can be granted to suchreal victim.

Allowing the appeals, the Court

HELD: 1.1 In the present case, notification under Section4 of the Land Acquisition Act, 1894 was issued on 27.08.2004.After considering various objections made under Section 5A ofthe 1894 Act, the requirement of 688 Acres of land was assessedand declaration under Section 6 to that effect was issued on25.08.2005. All the lands purchased were after the issuance ofnotification under Section 4. Similarly para 18 of the interim reportsubmitted by CBI shows that over 444 Acres of land waspurchased by various builders/private entities after thenotification under Section 4. Going by the relevant policiesholding the field and the law laid down by this Court in *UddarGagan case, such purchases did not entitle the concernedbuilders/private entities to prefer any application for licence, norcould pendency of applications for licence be taken as relevantfactor while arriving at decision whether acquisition initiatedpursuant to notification dated 27.08.2004 be proceeded furtheror not. However, the record indicates that such purchases andthe pendency of applications for licence under the Haryana Act,was factor which did weigh while decisions dated 24.08.2007and 29.01.2010 were taken. factor which ought to have beendiscarded in terms of the declared policy statements, becamethe fulcrum for said decisions. Therefore, said decisions areinconsistent with and opposed to relevant policy statements.These decisions were not consistent with the Regional Plan underthe NCR Act and the Final Development Plan for Gurgaon-Manesar. [Para 22][261-G-H; 262-A-D]

1.2 The decisions dated 24.08.2007 and 29.01.2010 weretaken to confer advantages and benefits upon the builders/privateentities rather than to carry out or effectuate public purpose. Therecord indicates that various entities including certain“middlemen” cornered unnatural gains and walked away withhuge profits taking the entire process of acquisition for ride.

ASubstantial sums have exchanged hands in the form of settlementmoney. All the steps and stages show that the builders/privateentities were well aware that the acquisition would not go throughbut the landholders were confronted with the smoke screen ofacquisition and were cornered and persuaded in entering intotransactions with the builders/private entities. The transactionsBso entered into between the landholders and the concernedbuilders/private entities could not be said to be voluntary andfree from any influence. The unnatural and unreasonable bargainwas forced upon the landholders by creating façade of impendingacquisition. Public Interest was not the underlying concern orCobjective behind the decisions dated 24.08.2007 and 29.01.2010but the motive was to confer undue advantage on the builders/private entities. It is clear that considerations other than thosewhich were required to be bestowed, guided the exercise of powerin arriving at decisions dated 24.08.2007 and 29.01.2010. The

inescapable conclusion, therefore, is that there was an unholyDnexus between the governmental machinery and the builders/private entities in devising modality to deprive the innocentand gullible landholders of their holdings and jeopardize publicinterest which the acquisition was intended to achieve. [Para31][277-D-H; 278-A]E

1.3 The entire mechanism was deliberately employed sothat gullible landholders could be deprived of their holdings by aset of builders/private entities and after having seen that thedesired result was achieved, the acquisition was dropped andlater completely withdrawn. The decisions on the part of the

FState arrived at on 24.08.2007 and 29.01.2010 were clearly resultof fraud on power and cannot be said to be bona fide exercise ofpower. The initiation of class action and filing of Writ Petition inthe present matter was perfectly justified. [Para 31][278-B-C]

Collector (DM) v. Raja Ram Jaiswal (1985) 3 SCC 1:G[1985] 3 SCR 995; Royal Orchid Hotels Limited andAnother v. G. Jayarama Reddy and Others (2011) 10SCC 608 : [2011] 11 SCR 701; Greater Noida IndustrialDevelopment Authority v. Devender Kumar and Others(2011) 12 SCC 375; State of Punjab v. Gurdial Singh(1980) 2 SCC 471: [1980] 1 SCR 1071; S. PratapHSingh v. The State of Punjab (1964) 4 SCR 733; Express

Newspapers Pvt. Ltd. and others v. Union of India andothers (1986) 1 SCC 133 : [1985] 3 Suppl. SCR 382;Shrisht Dhawan (Smt) v. Shaw Bros. (1992) 1 SCC 534:[1991] 3 Suppl. SCR 446; Indian Council for Enviro-Legal Action v. Union of India (2011) 8 SCC 161 :[2011] 9 SCR 146; Uddar Gagan v. Sant Singh &Others (2016) 11 SCC 378 – relied on.

2.1 The relief to be granted must depend upon who thereal victim is and to what extent solace can be granted to suchreal victim. If the result of forcing land holders to enter intounnatural and unreasonable bargain was achieved by wrongfulutilization of the power conferred under the Act, in its writjurisdiction superior court would be justified in granting therelief of invalidating such transaction as consequential relief,while holding the State action to be bad and invalid. It is nobody’scase that public interest was adequately achieved and thereforethe acquisition was required to be dropped. The fact that otheracquisitions have been completed and have attained the requiredobjective is pointer in the direction that there was nothing wrongwith the initiation but somewhere along while the process wason, it was completely hijacked by vested interests. The Court,therefore, cannot grant mere declaration invalidating thetransaction and grant relief of restoring status ante. The realand substantial relief would be in restoring the situation wherethe process of acquisition is made free from such superveningvested interests and is enabled to achieve the objective that theacquisition was intended to sub-serve. [Para 33][278-G-H; 279-A-D]

2.2 Wherever there has been fraud on power, the duty ofthe Court is not only to set aside such exercise of power but tosee that there is no unjust enrichment directly or indirectly as aresult thereof and there is full and substantial restoration. unjustretention of benefit would be completely against the fundamentalprinciples of justice, equity and good conscience. So long as thedeprivation of party has not been fully compensated for, injusticeto that extent continues. Having found that there was clearcase of fraud on power as result of which unnatural andunreasonable gains have been derived by certain builders/privateentities, it is duty of the Court to grant full restitution. The

BCDE

Arestoration in real and substantial terms has to ensure that thepublic purpose, the acquisition was intended to achieve, standssub-served. In the present case there was completed acquisitionand the award deemed to have been passed on the date when itwas supposed to be pronounced i.e. on 26.08.2007.[Para 36][281-

2.3 The Land Acquisition Act, 1894 now stands replacedby “The Right of Fair Compensation and Transparency in LandAcquisition, Rehabilitation and Resettlement Act, 2013”. Interms of Section 24(1)(b) of 2013 Act, where an award had beenmade under Section 11 of the Act, the proceedings under theCprovisions of the 1894 Act would continue as if the 1894 Act hadnot been repealed. Thus, even if direction is passed that anaward be deemed to have been made on 26.08.2007, the provisionsof the 1894 Act would still continue to operate in respect of suchacquisition in question. [Para 37][281-G-H; 282-A]

2.4 On one hand, the real and substantial relief to be grantedin the matter would be not just restoring the status ante andinvalidating of the transactions but the relief ought to be that theprocess of acquisition is taken to its logical end and the objectivethat said acquisition was to achieve must be sub-served. On theEother hand, even while passing appropriate directions in thenature that there was deemed Award, the interest of thoselandholders who had not parted with their holdings and had facedthe acquisition and had not participated in the proceedings oughtto be secured. Further, the interest of purchasers of individualapartments is also required to be protected. [Para 38][282-F-G]F2.5 Wherever superior Court finds that the exercise ofpower by the executive was mala fide or that there was fraud ofpower, the full and substantial relief must be granted. Theprinciples of restitution and concept of unjust enrichment showthat no person who directly or indirectly was party to the fraudGof power be allowed to reap or retain any unjust enrichment.Though, it is through the acts on part of the landholders that thebuilders/private entities were brought on the scene, they are notheld to be pari delicto alongwith builders/private respondents.But at the same time they cannot be given benefit of annulmentof transactions and restoration of their holdings. The greaterH

victim in the matter was the public interest. The land-holders inany case had received considerations which were greater thanwhat 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 it is proposed to take the matter to its logical end andsay that there was deemed award, those who had not sold awaytheir holdings and had not in any manner either directly orindirectly, tried to jeopardize the process of acquisition, cannotat this length of time be subjected to any prejudice. Therefore,that body of land-holders who had not transferred their holdings,so also the purchasers of individual apartments have to beexcluded from the width of the directions of the Court. Thoughfraud vitiates every resultant action and on that principle everybeneficiary/purchaser in subsequent transaction must restoresuch benefit, an exception has to be made in favour of individualpurchasers of flats or apartments who are being left undisturbedwhile moulding the relief. Any payments made by them can beadjusted towards the amounts payable to the colonizer and theirpossession can be regularized by HUDA/HSIDC on suitableconditions by making allotment to them. [Para 38][282-H; 283-A-E]

Bhimandas Ambwani (Dead) through LRs. v. DelhiPower Company Limited (2013) 14 SCC 195 : [2013] 1SCR 996; K.B. Ramachandra Raje LRs. (Dead) by L.Rs.v. State of Karnataka and Others (2016) 3 SCC 422 :[2015] 11 SCR 974 – relied on.

3. The Court issued following directions:

(a) The decisions dated 24.08.2007 and 29.01.2010 are setaside as being brought about by mala fide exercise of power.

(b) An Award is deemed to have been passed on 26.08.2007in respect of lands (i) which were covered by declarationunder Section 6 in the present case and (ii) which weretransferred by the landholders during the period 27.08.2004till 29.01.2010. The lands which were not transferred bythe landholders during the period from 27.08.2004 till29.01.2010 are not governed by these directions.

(c) Subject to the directions issued hereafter, the landscovered under aforementioned direction (b), shall vest inthe HUDA/HSIDC.

(d) The period between 24.08.2007 and upto the date ofthis judgment shall not be counted for the purposes ofSection 24(2) of the Right to Fair Compensation andTransparency in Land Acquisition, Rehabilitation andResettlement Act, 2013.

(e) All transactions entered into during the period from24.08.2007 till 29.01.2010, pursuant to which the originallandholders transferred their holdings in favour of builders/private entities or third parties shall be subject to and theinterest of the respective parties shall be governed by thedirections issued hereafter.

(f) The sale consideration paid by the builders/privateentities to thelandholders shall be treated towardscompensation under the award and the landholders will notbe required to refund any amount to such builders/privateentities. The landholders will be at liberty to preferDReference under Section 18 of the Act. If the ReferenceCourt were to enhance the compensation, the amountsreceived by the landholders by way of consideration fromthe builders/private entities shall be appropriated towardssuch sum awarded by the Reference Court.

(g) The builders/private entities will be entitled to refund/reimbursement of any payment made to the landholders orthe amounts that had been spent on development of theland, such payments shall be made by HUDA or HSIDC onbeing satisfied about the extent of actual expenditure notFexceeding HUDA or HSIDC norms on the subject as thecase may be. Refund will however be in respect of amountat which the landholders sold the land and not of subsequentsales. The subsequent purchasers will have remediesagainst their respective vendors.

G(h) The third parties from whom money had been collectedby the builder/private entities will either be entitled torefund of the amount from and out of and to the extent ofthe amount payable to the builder/private entities in termsof above direction, available with the State, on their claimsbeing verified or will be allotted the plots or apartments atHthe agreed price or prevalent price, whichever is higher.

In cases where, constructions have been erected and theentire project is complete or is nearing completion, uponacceptance of the claim, the plots or apartments shall bemade over to the respective claimants on the same termsand conditions. Except for such verified and acceptedclaims, the remaining area or apartments will be completelyat the disposal of HUDA or HSIDC.

(i) As substantial sums were made over to “middle men”.In the pending investigation, the CBI may do well to unravelthe truth. In any case, such hefty sums which were madeover to “middle men” cannot be said to be rightfully earnedby and belonging to them. In fact, this actually representsthe return for being able to garner the lands in questionand getting requisite licences under the provisions of theHaryana Act and benefit derived out of fraud on power.This money rightfully belongs to the State and none other.The authorities of the State as well as the CentralGovernment to reach the depths of such transactions andrecover every single pie and make it over to the StateGovernment. complete investigation in the transactionsincluding unearthing unnatural gains received by “middlemen” 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 andResettlement of Land Acquisition Oustees” policy of theState/HUDA/HSIDC to the landholders.

(l) The State may revisit its policy of change of land use andgiving colonization licence in respect of land which is subjectmatter of acquisition.

(m) In respect of pending writ petition in the High Courtof Punjab and Haryana wherein appointment of Commissionof Enquiry to enquire into certain facts concerningacquisitions in respect of lands in Gurgaon-Manesar UrbanComplex was challenged, the High Court is requested todeal with and dispose of the matter as early as possible.[Para 39][283-F-H; 284-A-G; 285-B-C, D-F, H; 286-A-E]

ARamana Dayaram Shetty v. International AirportAuthority of India and Others (1979) 3 SCC 489 :[1979] 3 SCR 1014; State of M.P. and Others v. NandlalJaiswal and Others (1986) 4 SCC 566 : [1987] 1 SCR1; Amita Banta & Another v. State of Haryana (2010) 1RCR (Civil) 412 – referred to.

Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8788of 2015.

From the Judgment and Order dated 15.12.2014 of the High CourtGof Punjab & Haryana at Chandigarh in CWP No. 23769 of 2011.

WITH

C. A. Nos. 8794, 8791 and 8782 of 2015.

Maninder Singh, ASG, Anil Grover, Alok Sangwan, AAGs,C. A. Sundaram (AC), Dhurv Mehta, Kapil Sibal, Dr. A.M. Singhvi,Pinaki Misra, Vikas Singh, Rajesh Garg, Pallav Shishodia, Nidhesh Gupta,R. S. Suri, Rajiv Dhawan, Ms. Indu Malhotra, V. Giri, Narendar Hooda,Sidharth Luthra, Brijender Chahar, Sr. Advs, Ms. Rohini Musa, AbhishekGupta, Zafar Zwayat, Ms. Aakanksha Kaul, Apoorv P. Tripathi, RanbirSingh Yadav, Puran Mal Saini, Randeep Rai, Chetan Mittal,R.N. Karanjawala, Ms. Ruby Singh Ahuja, Ms. Deepti Sarin,Ms. Aakanksha Munjal, Milinda Sharma, Karan Dev Chopra, NikhilRohatgi, Mohit Khubchandani, Shashank Khurana, Nakul Gandhi, RajivAnand, Aanushkan Singhvi, Mrs. Manik Karanjawala, M/s. Karanjawala& Co., Mahesh Agarwal, Ankur Saigal, Rishabh Parikh, Ms. IshitaChakarbarty, Dinesh Kumar Dakoria, E.C. Agrawala,R. Balasubramanian, Prabhas Bajaj, Akshay Amritanshu, Rohit Rathi,Santosh Kumar, Pranav Kumar, Mukesh Kumar Maroria, Uday Gupta,Ms. Shivani Lal, M. K. Tripathi, Mrs. Sarla Chandra, Arjun Sayal,Abhishek Gupta, Satish Kumar, Manik Garg, Sanjay Kr. Visen, HirenDasan, Harish Dasan, Karri Venkata Reddy, Chand Qureshi, Mrs SarlaChandra, Ms. Vidhi Goel, Umesh Kumar Khaitan, Rohit K. Aggarwal,Avinash Kumar, L.S. Hasan, Ms. Nabita Hasan, Ms. Apoorva Bhumesh,Vikas Mehta, Prashant Singh, Tanvir Nagar, Ms. Anushreee Menon,Vikas Mehta, Shivendra Dwivedi, Aviral Dhirendra, Ms. Nida doon,Ms. Shruti Sen, Somesh Arora, Anupam Prasad, Rameshwar PrasadGoyal, Varun Singh, Ms. Meenakshi Chauhan, Varun Khanna, RakeshKumar, Praveen S., Rupesh Kumar S., Ms. Anubha Singh, Vinod Kapoor,Ms. B. Vijayalakshmi Menon, Dr. Surender Singh Hooda, Avadh BihariKaushik, R. C. Kaushik, Mrs. Shally Bhasin, Ms. Anzu K. Varkey,Ms. Ranjeeta Rohatgi, Parijat Kishore, Advs. for the appearing parties.

Petitioner-in-person.

The Judgment of the Court was delivered by

UDAY UMESH LALIT, J. 1. These appeals by special leaveare directed against the common Judgment and Order dated 15.12.2014passed by the High Court of Punjab and Haryana at Chandigarh dismissingCivil Writ Petition No.23769 of 2011 with other connected matters. Appealarising from Civil Writ Petition No.23769 of 2011 namely Civil AppealNo.8788 of 2015, has been taken as the lead matter and the facts statedtherein are dealt with in detail.

ABCDEF

A2. The aforesaid Civil Writ Petition No.23769 of 2011 was filedby 117 landholders for the following principal relief:

“a) Issue writ direction or order, especially in the nature of certiorariquashing the entire action of the respondents who invoked Sections4 & 6 for the alleged public purpose but ultimately compelled theBpetitioners to be divested of their valuable and fertile land atthrowaway prices under the threat of acquisition to the privatepersons and consequently after issuing Section 6 and at the stageof final proceedings under Section 9, the acquisition was withdrawnwith fraudulent intentions after the land was purchased by theprivate builders in active connivance with State functionaries andCfurther the entire acquisition proceedings were initiated with malafide intention, illegally and in violation of the provisions of theLand Acquisition Act. The same is vitiated by fraud and alltransactions including the sale deeds etc. are liable to be set asidewithout invoking the provisions of Part VII of the Act and with aDfurther prayer for an enquiry/investigation through an independentagency in respect of the entire fraud played by the respondentsand their officials;….”

3. The relevant facts leading to the filing and disposal of theaforesaid writ petition were:-E

(i) On 27.08.2004 Haryana Government, Industries Departmentissued Notification under Section 4 of the Land Acquisition Act, 1894(“Act” for short) for acquiring lands admeasuring about 912 Acres fromthree villages namely, Manesar, Lakhnoula and Naurangpur, Tehsil andDistrict Gurgaon for setting up Chaudhari Devi Lal Industrial Township,Fto be planned as an Integrated Complex for residential, recreational andother public purposes. The notification was duly published in newspapers.The landholders including some of the writ petitioners filed their objectionsunder Section 5A of the Act.

(ii) Soon after the initiation of acquisition, various sale deeds wereGexecuted by the landholders including some of the writ petitioners infavour of certain builders/private entities. Some such builders/privateentities who had recently purchased the lands also preferred objectionsunder Section 5A of the Act.

(iii) On 26.02.2005, report was prepared by Land AcquisitionCollector recommending to the State Government that land admeasuringH

224 acres be released from acquisition. Thereafter, appropriate notificationunder Section 6 of the Act was issued on 25.08.2005 in respect of restof the land admeasuring 688 acres.

(iv) This acquisition was subject matter of challenge in number ofWrit Petitions filed by the landholders and the subsequent purchasersviz. builders/private entities.

(v) Even after issuance of notification under Section 6 of the Act,the builders/private entities continued approaching the landholders. Itwas 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 forthe same purpose namely setting up of Chaudhary Devi Lal IndustrialTownship, where compensation was awarded @ Rs.12.5 lakhs per acre.In all these cases, notifications under Section 4 were issued on 17.09.2004while declarations under Section 6 were issued on 27.10.2004 and thelands covered under Award Nos. 7, 8, 9, 10 and 12 were i) 114 Kanals02 Marlas, ii) 68 Kanals 15 Marlas, iii) 43 Biswas, iv) 65 Kanals 08Marlas and v) 3515 Kanals 01 Marlas respectively. It was submittedthat the landholders were thus cornered with the prospect of impendingacquisition and the idea that the compensation would be awarded @Rs.12.5 lakhs per acre and were persuaded to enter into transactionswith 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 issuedcalling upon the landholders to appear on 26.08.2007 for pronouncementof award. Soon after such notice, the builder/private entities startedenhancing the price and bought the lands from the landholders at pricearound Rs.80 lakhs per acre.

(vii) On 24.08.2007, the State Government passed an orderdropping the acquisition and stating that fresh notification would beissued in place of the present proceedings. The reasons given in theorder dated 24.08.2007 were as under:

“In this connection, it is informed that State Government has notifiedthat certain parcels of land have been released by Governmenton the recommendation of Minister’s Committee separately. Someof these parcels are acquired in the land acquisition proceedingsunder consideration. Further, Town and Country PlanningDepartment has also informed that there are several cases wherein

Abuilders applied for licence/CLU on the land which also form partof the acquisition proceedings. Furthermore, in number of casesthe courts have stayed dispossession of land. In the circumstances,it is difficult at this stage to make up view as what could be theshape and size of the land eventually being acquired byGovernment. It will not be appropriate to go ahead with theseBproceedings in the present form. State Government has, therefore,ordered that fresh notification be issued in place of the presentproceedings indicating therein as to which are the lands that areavailable for acquisition without any encumbrances.”

(viii) On 20.09.2007 Haryana State Industrial and InfrastructureCDevelopment Corporation (for short HSIIDC) submitted proposal toconstitute an Inter Departmental Committee to survey the area andsubmit its recommendations for initiating fresh acquisition proceedings.On 09.10.2007 pending Writ Petitions filed by the landholders and thesubsequent purchasers were disposed of by the High Court as havingDbecome infructuous in view of the dropping of the acquisition on24.08.2007 and subsequent decision to constitute an Inter DepartmentalCommittee.

(ix) On 27.12.2007 licence Nos.283 and 284 were issued by theState Government for setting up housing society.E

(x) On 26.03.2008 the Inter Departmental Committee submitteda report recommending complete withdrawal of acquisition. It was statedin the report that 12 applications for grant of licence along with requisitefees were submitted by various colonizers in respect of an area of about362 acres.F(xi) Around 22.09.2009, approvals of building plans of group housingsocieties and schemes of private builders came to be granted.

(xii) Having come to know that the lands under acquisition werenow being utilized for private gain by various builders/colonizers, thefarmers started agitation against the process adopted by the GovernmentalGmachinery.

(xiii) On 29.01.2010 decision was taken by the State Governmentin Industries and Commerce Department to close the acquisitionproceedings in view of the recommendations of the Inter DepartmentalCommittee dated 26.03.2008 which in turn had been accepted by theHHSIIDC.

(xiv) The farmers’ agitation against the decision of the StateGovernment favouring the builders was widely reported in newspaperson 01.03.2011. The agitation continued beyond August and September,2011. On 20.09.2011 request was made by sending communications tovarious functionaries for registration of FIR in respect of fraud playedby the officials of the Land Acquisition Department as well as the Director,Town Planning in active connivance with the builders.

(xv) On 19.12.2011 the aforesaid Writ Petition No.23769 of 2011was filed in the High Court of Punjab and Haryana at Chandigarh by117 landholders. It was submitted that the entire action of initiating theacquisition and thereby compelling writ petitioners/landholders to divesttheir valuable and fertile land at throwaway prices under the threat ofacquisition to certain private builders and then dropping the acquisitionjust two days before the date fixed for declaration of award was deliberateand was fraught with malice.

(xvi) In the written statement filed by Respondent No.3 – ABWInfrastructure Limited, it was submitted that the answering respondenthad obtained requisite licences for its residential as also commercial/group housing project namely ABW Niketan and had raised loans to thetune of Rs.170,00,00,000/-.

(xvii) In their written statements, Respondent Nos.4 and 5 namelyMetropolis Realtors Pvt. Ltd. and Flair Realtors Pvt. Ltd. submitted thatboth these Companies were incorporated on 03.02.2006; that the pricesof lands in and around Gurgaon were increasing as Gurgaon city wasdeveloping fast and another factor causing rise in prices was that MasterPlan for the area – i.e. Gurgaon Development Plan was notified on05.02.2007.

(xviii) The written statement submitted by Respondent No.6 –Metropolis Infrastructure Pvt. Ltd. stated that said Company wasincorporated on 19.04.2006. Rest of the submissions were on lines similarto that of Respondent Nos.4 and 5.

(xix) On 06.12.2012 written statement was filed by State ofHaryana justifying its action of withdrawal of acquisition. It wassubmitted that the writ petitioners had approached the Court more than4½ years after the decision of the State Government of dropping theacquisition proceedings. It was denied that there was any nexus between

Athe builders and the State officials or that the exercise of acquisition wasin any manner mala fide or fraudulent.

(xx) In their replications filed on 15.01.2013, it was submitted bythe writ petitioners that most of the lands were purchased by the buildersor their substitute companies after the issuance of the Notification underBSection 4 of the Act and yet, the sale deeds executed between the partiesmade no mention of factum of such notification. Further, the escalationof prices in last 20 days namely after the issuance of the notices underSection 9 showed that the builders were not only aware but were alsosure that the acquisition would be dropped by the State Government.The hike in price was essentially to lure the landholders as after droppingCof the acquisition there would be no threat to the landholders.

(xxi) On 24.02.2014 the High Court directed the State of Haryanato give details about various acquisitions initiated around the time inquestion for the same public purpose namely, setting up of ChaudharyDevi Lal Industrial Township.

(xxii) Accordingly, on or about 21.03.2014 an additional affidavitwas filed on behalf of State of Haryana giving relevant details in tabularchart. These details appear to be in addition to the lands covered underAwards 7, 8, 9, 10 and 12 of 09.03.2006. The relevant tabular chart wasas under:-

221ABCDEFGH

(xxiii) Thus, in addition to lands covered by said Awards dated09.03.2006, about 1315 acres of land stood acquired whereas 688 acresof land covered by Declaration under Section 6 of the Act in the presentGcase was dropped from acquisition. It is relevant to note that in relationto acquisition referred to in Column No.5 vide award dated 24.02.2007(annexed at page-307 in the Paper book) compensation was assessed atthe rate of Rs.12.5 lakhs per acre; identical to one assessed in Awardsdated 09.03.2006.

(xxiv) The aforesaid petition as well as connected matters weredismissed by the High Court vide its judgment under appeal. It wasobserved that the landholders had taken no action after their writ petitionswere dismissed as infructuous by order dated 09.10.2007 and the presentaction initiated more than 4½ years after such dropping of acquisitionwas wholly belated. It was observed:

“It is the case of the petitioners, that they were forced to selltheir property under the threat of acquisition to the privaterespondents and thus the sale deeds so executed by them in theirfavour, deserved to set-aside. However we are unable to agreewith the said contention raised by the Ld. Counsel for the petitionersas at no stage did the petitioners ever raised hue and cry viz. thesaid acquisition proceedings. Even when the writ petitions werefiled by them in the year 2005 impugning the said acquisitionproceedings, then also no grievance was raised by them in thisregard and in fact during the pendency of these writ petitions,they even sold off their land to the private respondents forconsideration and even got sale deeds executed in their favour.Even when the said writ petitions were dismissed as infructuousvide order dated 09.10.2007, then also no such distress or grievancewas raised by them before this Court. Until the filing of the presentwrit petition, no action much less coercive action was taken bythe petitioners against the respondents viz. setting aside of thesale deeds on the ground of fraud which thus apparently showsthat not only did they acquiesced to the dropping of the saidacquisition proceedings by the State Government but also waivedoff their right to challenge the same as well as the sale deedsexecuted by them in favour of the private respondents in view ofArticle 59 of the Limitation Act and thus now at this stage theyhave no vested or accrued right to challenge the said sale deedsvoluntarily executed by them in favour of the private respondentsand that too after long yawning gap of 10 years in view ofSection 31 of the Specific Relief Act, for which the present writpetitions being hit by delay and latches cannot be entertained forinitiating such an action.”

4. The Landholders being aggrieved by the decision of the HighCourt dated 15.12.2014 filed petitions for special leave to appeal in thisCourt. After hearing both sides this Court granted special leave on

A06.10.2015 and continued the interim order granted earlier which was toinjunct any further construction on the lands in question. This Court alsorecorded the submission of the Counsel for the State that investigationwas entrusted to CBI and directed CBI to place its report before thisCourt, as and when the investigation was over. An interim report wasfiled by CBI in March, 2017. On 30.01.2017 Mr. C.A. Sundaram, learnedBSenior Advocate was appointed Amicus Curiae to assist the Court. Thesubsequent order dated 21.03.2017 records that the CBI had filed itsinterim report, copy of which was directed to be given to the learnedAmicus Curiae. The matters were thereafter taken up for hearing.

5. Appearing for the appellants in the lead matter, Mr. Dhruv Mehta,Clearned Senior Advocate submitted:

(a) The licences granted by the State Government to the privatebuilders for development, in the face of the fact that the landswere notified for acquisition, were nothing but an abuse of powerand such exercise was directly in breach of the relevant policy.DIn his submission, the policy dated 19.12.2006 issued by the StateGovernment provided that the licences could be granted wherethe applicants/land owners had applied for licences before theissuance of Notification under Section 4 of the Act and the releasecould be considered on individual merits of each case. He furtherEsubmitted that as accepted by the State Government, out of 15licences granted by the State Government, 8 were granted betweenthe date of issuance of Notification under Section 6 and the datewhen the acquisition was dropped i.e. on 24.08.2007 and other 7licences were granted after 24.08.2007. Thus all the licences, asa matter of fact, were granted after the issuance of NotificationFunder Section 6 of the Act.

(b) He submitted that the purchases made by the builders in thepresent case were after the lands were notified under Section 4of the Act on 27.08.2004. At least sixty sale deeds were executedbetween the issuance of Notifications under Sections 4 and 6 ofthe Act while four sale deeds were executed on the date ofdeclaration under Section 6 i.e. on 25.08.2005 and fifty sale deedswere executed after the issuance of Notification under Section 6and prior to the dropping of acquisition vide decision dated24.08.2007. The fact that the builders had enhanced the price

and sold the lands at price of Rs.80 lakhs and above per acreafter the issuance of notice under Section 9, clearly indicated thatthey were aware that the land acquisition proceedings would bedropped.

(c) Though the declared intent while initiating acquisition was tosub-serve public interest, the State Government kept on grantinglicences in respect of lands covered under acquisition in the teethof its relevant policy. colourable exercise of power was evidentand substantiated by the Report dated 26.03.2008 which indicatedthat 12 licence applications were pending in respect of areaaggregating approx. 362 acres and that was taken to be goodreason to withdraw the lands from acquisition finally.

(d) This entire mechanism was deliberately employed so thatvaluable lands belonging to the landholders could be cornered bya set of builders/private entities and after having seen that thedesired result was obtained, the acquisition was dropped and latercompletely withdrawn.

(e) Since the entire decision making process was nothing but anabuse of and fraud on power, the landholders were justified inseeking annulment of all the transactions. In his submission, thoughannulment of transactions can normally be in an action betweenthe vendor and vendee, since the transactions were directly as aresult of abuse of and fraud on power, Writ Court could certainlydeal with such issues and while granting relief against such fraudon power, incidental and consequential directions could also bepassed annulling such transactions. Reliance was placed on thedecisions of this Court in Greater Noida Industrial DevelopmentAuthority v. Devender Kumar and Others[1] and in Uddar Gaganv. Sant Singh & Others[2].

Learned counsel appearing for other appellants in connectedmatters adopted the submissions of Mr. Dhruv Mehta, learned SeniorAdvocate.

6. Learned Amicus Curiae initially filed memo at which stagethe interim report of CBI was not filed in Court. After said copy wasmade available to him pursuant to the Order dated 21.03.2017 he filed

1 2011 (12) SCC 375

2 2016 (11) SCC 378

Athree more memos. In his memo dated 28.03.2017 after referring tocertain factual aspects as emerging from the interim report of CBI, hesubmitted :-

“6. From all the above, it appears that lands were purchased byBuilders during acquisition proceedings and also after acquisitionBproceedings were dropped on the basis that fresh acquisitionproceedings would be initiated. It further appears that the buildersin the meantime were working to have the acquisition proceedingsdropped and their applications for building licenses were also beingprocessed and the issuance of such licenses themselves becamea reason for dropping all proceedings. It does not appear anywhereCfrom the record that the sellers of the lands were aware that theacquisition proceedings would be dropped but it has been allegedby them in the writ petition that they were informed of suchacquisition proceedings and were therefore, asked to sell theirinterests. It would appear that rather than running the risk ofDwhat the award would amount to and having to contest the matterfor the grant of the award, the purchasers transferred their interestto the builders, who on their part, as based on the CBI Report,appear to have used every effort to ensure that the acquisitionproceedings were themselves dropped.

E7. xxx

xxx

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

a. Insofar as the areas where no construction has been madeand no third party interests through registered instrumentsto ultimate purchasers (not other builders) have beencreated, that the said sales be declared void and the landsrestored to the original landholders who be directed to returnthe monies received by them;

b. Where third party interests have been created, the buildersbe directed to disgorge their profit/part of their profits onsuch sales, to be then distributed amongst the originallandholders. To arrive at such profit the difference between

the purchase price and the sale price less actual cost ofconstruction could be applied. Insofar as plots areconcerned, the difference between the buying and sellingprice could be determined;

c. The aforesaid directions could be passed based on theapplication of Sections 55(5) of the Transfer of PropertyAct and in particular, Sections 55(5)(a) and 55(6) of thesaid Act. Such orders could also be passed based onSections 17(5) read with Section 17(2) and Sections 19 and65 of the Contract Act;(Refer:- Coaks versus Boswellreported as (1886) IA 232/Summers versus Griffithsreported as (1865) 35 Beavan 27/Mulla on Transfer ofProperty, 8[th] Edition, Page 376-381 and 407-409)

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

e. The Interim Report of the CBI discloses complicity on thepart of Government officials in the entire process. In suchevent, not only would transactions within this entireconspiracy be fraudulent, if they are traced to mala fideexercise of the State’s power, they would also be againstpublic policy.

f. In view of the inordinate increase in the price of land itwould not be practical to require the State Government topay the present consideration or be called upon to acquirethese lands and as that would be drain on the publicexchequer. It would perhaps be best to restore status anteinsofar as practicable i.e., lands on which constructions haveGnot been made or which have not been plotted andtransferred to third party individuals (not builders). In thecase of constructions at nascent stage, it can bedetermined whether bona fide third party interests have beencreated and in the absence thereof, status ante could berestored. In the remaining cases, payment of compensationH

Acould be directed through payment of consideration to theoriginal landholders as per (b) above.

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

h. So far as the conduct of the acquisition proceedings andculpability of persons, government officials and builders inthis regard, the CBI may continue its investigation anddecide if any action is warranted, and take such action as isfound to be necessary.”

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

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

2. Should this Hon’ble Court hold that the land owners were notin pari delicto the reliefs as suggested in Memo No. 2 dated28.03.2017 may be considered.

3. Should this Hon’ble Court hold that the land owners were alsoEin 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

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

4. If builders and officers of the State were involved in the fraudand the land owners were in pari delicto, the actual partydeceived would be the State and therefore, the beneficiary of anyprofits arising out of the fraudulent transactions, ought to go to theState to be utilized for public purpose.”

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

a. The recommendation of the HPC dated 26.03.2008 to closethe acquisition proceedings and the decision/Notificationdated 29.01.2010 dropping the acquisition proceedings forthe subject properties could be quashed;

b. Upon quashing of the said Notifications/Recommendations,the acquisition proceedings already initiated would resumeproprio vigore from the stage where it stood and to thatextent would continue to be an acquisition under the LandAcquisition Act, 1894;

c. The period during which the acquisition proceedings stoodwithdrawn, i.e., 24.08.2007 till the date of this Hon’bleCourt’s order would be excluded for the purpose of passingof an award and inasmuch as an award was to be declaredon 24.08.2007, an award now passed for the said land (in atime bound manner) would be deemed to have been passedon 24.08.2007;

d. The compensation payable under the said award would bebased on the market value of the land in the same manneras if the award was passed on 24.08.2007.

e. The said amounts would be deposited and the landholderswould be entitled to withdraw the amount representing thedifference between what they actually received from thebuilders 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 theland would have right to seek allotment of the same fromthe State, consideration for which would be determined atthe present days’ market value or market value as on suchother date as this Hon’ble Court may deem fit. Credit wouldbe given to the builders for the amounts that they had paidto the original landholders and which is adjusted in (e) above;

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

i. Out of the price secured in the auction the amount paid forthe acquisition would be deducted. The actual construction

230SUPREME COURT REPORTS

Acosts of any construction made on the lands would also beadjusted and the balance would be retained by the State foruse for public purpose of the area, providing of housing,rehabilitation, etc. by applying the principles of Section 88of the Indian Trusts Act, 1882.”

B8. Mr. Vikas Singh, learned Senior Advocate appearing on behalfof respondent No.3 - ABW Infrastructure Limited filed an extensive listof dates and relevant material detailing various transactions under whichhis client came to purchase the lands in question. The transactionsreferred to in the list of dates and accompanying documents, put in tabularchart by us are as under:

ABCDEFGH

The aforesaid chart discloses that the average price paid wasinitially in the region of Rs.25 lakhs per acre. Soon after the issuance ofESection 6 declaration, the price rose to Rs.40 lakhs or above. But justbefore 24.08.2007 i.e. the date when the State Government decided todrop 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 aboveRs.1.2 crores per acre. The documents placed by Mr. Vikas Singh,learned Senior Advocate do indicate the names of vendors as well.FHowever, for facility we have not included the names of vendors buthave given the other details in the chart. The documents further indicatethat all these lands purchased by the first purchasers as indicated in thetabular chart were then taken over by the respondent No.3; one of theways being-where the controlling interest in the first purchaser CompaniesGwas transferred to Respondent No.3 and one Mr. Atul Bansal wasappointed as Director of said companies.

9. The documents placed on record by Mr. Vikas Singh, learnedSenior Advocate, further indicate that soon after the aforementionedpurchases, 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 ValleyEstate 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., IndoAsian Construction Co. Ltd., Beeta Promoters Pvt. Ltd., DivyaJyoti Enterprises Pvt. Ltd., NCR Properties Pvt. Ltd., applied forlicence to set up Township alongwith Demand Draft for Rs.85lakhs towards Scrutiny and Licence fees. The area was stated tobe 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 NO

7. Whether the applicant had ever been granted permission to set colony under any other law, if so, details thereof.

8.Whether the applicant had NOever established colony or is establishing colony and if so, the details thereof.

9. Any other information the applicants like to furnish.

The Aditya Buildwell Private Limited, the main applicant company, is in process of converting into Public Limited Company shortly by name ‘ABW FInfrastructure 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.”

AB. ABW Infrastructure Ltd. and its group companies namely;Progressive Buildtech Pvt. Ltd., Sheel Buildcon Pvt. Ltd., DivyaJyoti Enterprises Pvt. Ltd., Beeta Promoters Pvt. Ltd., EcotechBuildcon Pvt. Ltd. and Jassum Estates Pvt. Ltd., applied for licenceto set up Group Housing Project of 15.35625 acres alongwithDemand Drafts for Rs.20 lakhs towards Scrutiny and LicenceBfees. 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 PAN : AAECA-5466H of 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 NO ever been granted permission Dto set colony under any other law, if so, details thereof.

8. Whether the applicant had NO ever establishes colony or is establishing colony and if Eso, the details thereof.

In none of these two cases the applicants themselves had anyprior experience and between them, only one had paid Income tax andthat too only in one financial year. Both had given same PAN numbers.

6H007-08 2006-07 ork in

Limited’ roup of already ber of mmercials rocess of wnship in the total an worth are in nd in

10. Since the documents also indicated that after having appliedAfor issuance of licences, respondent No.3 had transferred licence Nos.283and 284 and sold 33.55 acres of land covered by such licences to DLFHomes Developers Pvt. Ltd., this Court directed respondent No.3 to filestatement of profit made by it in respect of such transactions and thefollowing statement was filed by Respondent No.3:

PROFIT MADE BY RESPONDENT NO.3 BYTRANSFERRING LICENSE NO.283 & 284 AND SELLING33.55 ACRES OF LAND TO DLF HOMES DEVELOPERS

PVT. LTD.

The aforesaid statement indicates that various entities who hadCinitially purchased the lands from the landholders, had sold the said landsto Respondent No.3 and were paid sums reflected at Sl. Nos.2 and 5above amounting to Rs.17.70 crores (approx.) for acquiring such interestin said lands. Thereafter, amount of Rs.5.45 crores (approx.) was paidby way of fees to the Government. However, more than Rs.150 croreswas received on transfer to DLF Homes Developers Pvt. Ltd. For anDapplicant who reportedly paid income tax only once during last threeyears, this by itself constitutes phenomenal earning. From and out ofsuch earnings an amount of Rs.119.695 crores was paid by RespondentNo.3 under Settlement-cum-Cancellation of Agreement of Sell asindicated at Serial No.8.E

11. On an inquiry by this Court regarding details of such amountspaid by respondent No.3 as indicated at Serial No.8, those documentswere filed on record. The documents make an interesting reading. Byway of sample, documents pertaining to transactions between BeetaPromoters P. Ltd. and the intending purchaser Arison Builders P. Ltd.Fare dealt with in some detail:

(a) By Agreement of Sale dated 09.10.2007 entered into betweenM/s Beeta Promoters Pvt. Ltd. = Vendor and M/s Arison BuildersPvt. Ltd. = Vendee, certain lands were agreed to be sold @Rs.58.60 lakhs per acre and cheque for Rs 1 lakh and Rs.1 lakhGin cash were paid as advance. The relevant portion of theAgreement dated 09.10.2007 was as under:

“Whereas ‘the Seller’ is the sole and absolute owner and alsoin possession of piece of land admeasuring 0.12 Acre landforming 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 andin the possession of the First Party as already mentioned aboveat the rate of Rs.58,60,000/- (Rupees fifty eight lakhs and sixtyBthousand) per acre,

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

NOW THIS AGREEMENT OF SALE WITNESSETH ASUNDER:-

1. That the settled price of Rs.7,03,200/- (Rupees seven lakhsthree thousand two hundred only) for sale of 0.12 acres ofland in Village Manesar District Gurgaon Haryana by FirstParty to Second Party, as mentioned in the preamble shallneither 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 thesame registered in the name of the second party or theirGnominees on receiving of the balance consideration as perschedule of payment given above.

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

A4. That the actual physical and vacant possession of the abovesaid land shall be delivered by ‘the Seller’ to ‘the Purchasers’at the time of registration of the land after receiving the fulland final payment.”

(b) By Settlement Agreement-cum-Cancellation of Agreement toSell executed on 30.08.2008 between the aforesaid parties, theearlier arrangement entered vide Agreement of Sale dated09.10.2007 was cancelled. While cancelling that arrangement,settlement amount of Rs.3.50 crores per acre was paid to thevendee as full and final settlement between the parties anddischarge of all claims. The document narrates that though thecheque for Rs.1 lakh was given on the date when the agreementto sell was executed on 09.10.2017, said cheque was neverencashed and was returned to the vendee. Thus, the land whichwas agreed to be sold @ Rs.58 lakhs per acre was not sold at allbut by way of settlement Rs.3.5 crores per acre was made overto the vendee. Interestingly, nothing was received by the vendorby way of advance/earnest through Bank channels as the chequewas admittedly never encashed. The relevant portions from theSettlement-cum-Cancellation of Agreement to Sell dated30.08.2008 were as under:

“And whereas ‘the parties’ has entered into agreement to selldated 9[th] October, 2007, as per the terms of agreementsdescribed therein.

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

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

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

NOW THIS AGREEMENT WITNESSETH AS UNDER:-

1. That this agreement shall be effective from the date ofsigning and shall constitute full and final settlement betweenthe parties of all the respective past and future rights andobligation of parties under agreement to sell dated 9[th] October,2007 for sale of 0.12 acres forming part of Rect. No.54 KillaNo. 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.

2. That ‘the Seller’ shall pay the settlement amount ofRs.3,50,00,000/- per acre to the purchaser towards full andfinal settlement between the parties and discharge of all claimsagainst the land as acquired by the second party throughagreement to sell dated 9[th] October, 2007 for sale of 0.12 Acresof land in Village Manesar, District Gurgaon, Haryana.

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

4. That on receipt of full and final settlement amount, the secondparty hereby completely and expressly waives, releases,relinquish and forever discharges all claims against the land asacquired by the second party through agreement to sell dated9[th] October, 2007 for sale of 0.12 acres of land in VillageManesar, District Gurgaon, Haryana.”

AIdentical agreements for sale followed by Settlement Agreements-cum-Cancellation of Agreements to sell were entered into by all theconcerned, 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 putBin tabular chart by us. Except in the case at Serial No.1 where part ofearnest money was deposited in cash, in all other cases, earnest waspaid by cheques. However, in none of the cases any cheque which wasissued as advance-cum-earnest money was encashed. The relevantrecitals in these agreements are identical to those extracted hereinabove.The compensation paid to the vendee in every case is on or aboutC30.08.2008 and at consistent rate of Rs.3.50 crores per acre. The said

chart is as under:

DEFG

241ABCDEFGH

13. Mr. Vikas Singh, learned Senior Advocate also invited ourattention to the provisions of the Haryana Development and Regulationof Urban Areas Act, 1975 (hereinafter referred to as the “Haryana Act”)and submitted that the Haryana Act provided for colonization encouragingprivate participation wherein builders or colonizers become partners withState in ensuring planned development. It was submitted that the writpetition in the present case was bereft of any material particulars andsuffered from non-disclosure of collaboration agreements entered intobetween the builders and the writ petitioners whereunder certain additionalbenefits were given to the landholders. In his submission, the High Courtwas justified in dismissing the petition and exemplary costs ought to beimposed on the writ petitioners for embarking on what he termed asadventurous litigation. Ms. Indu Malhotra, learned Senior Advocateappearing for respondent Nos. 4 – M/s Metropolis Realtors Pvt. Ltd.and 6 – M/s Metro Infrastructure Pvt. Ltd. submitted that after NationalCapital Region Plan was notified on 17.09.2005, Draft Master Plan forGurgaon Manesar was notified on 11.07.2006, followed by FinalDevelopment Plan which was notified on 05.02.2007. The act on thepart of the State in dropping the acquisition on 24.08.2007 was completelyconsistent with the Final Development Plan notified on 05.02.2007. Mr.V. Giri, learned Senior Advocate appearing for respondent No.5 – FlairRealtors Pvt. Ltd. submitted that each writ petitioner had separatecause of action and therefore must come out and place his individualcase and the facts relevant thereto. In his submission in matter suchas the present one, no public law remedy could be invoked and therecould be no class action. He further submitted that there was totaldearth of pleadings and nothing was alleged or proved as regards elementof fraud or mala fides so as to vitiate the transactions in entirety.

14. Dr. A. M. Singhvi, learned Senior Advocate appearing forDLF Home Developers Pvt. Ltd. submitted that his client had purchased33 acres of land not directly from any of the land owners but fromrespondent No.3 alongwith requisite licences. According to him, hisclient purchased the land and the licences when the writ petitions werewithdrawn and there was no fetter at all; that his client had paid marketprice at the rate of Rs.4.5 crores per acre and was bona fide transfereein good faith and that there was no averment either in the High Court orin this Court suggesting that his client was involved in any act of fraud orillegality. He further submitted that his client has already transferred the

CDE

Aconstructed areas or apartments to various purchasers. Relying on thedecisions of this Court in Ramana Dayaram Shetty v. InternationalAirport Authority of India and Others[3]where five months delay inpreferring writ petition was found to be fatal especially when third partyrights had intervened and in State of M.P. and Others v. Nandlal Jaiswaland Others[4] where eight months delay was found to be fatal whereBagain third party rights had intervened, it was submitted that no casewas made out and the view taken by the High Court ought to be affirmed.Similar submissions were made by Mr. Kapil Sibal, learned SeniorAdvocate for the same client in different matter. In his submission, ifat all any disgorgement as suggested by the learned Amicus Curiae is toCbe made, it ought to be by respondent No.3 i.e. the client of Mr. VikasSingh, 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 HomeDevelopers Pvt. Ltd. submitted that his clients, coming from middle class,had put in all their savings in purchase of flats. Out of 1348 flatsDconstructed in the complex, 1237 flats were sold and more than 500apartments were already registered in the names of apartmentpurchasers.15. Mr. Nidhesh Gupta, learned Senior Advocate appearing forEarl Infotech Pvt. Ltd. and for Frontier Infrastructure Developers Pvt.ELtd. made similar submissions. He submitted that the case in hand wascompletely different from the fact situation considered by this Court inUddar Gagan (supra) in as much as neither was there any distress saleby the land owners nor was there any award made under the provisionsof the Act. He further submitted that the entire case set up by the writ

Fpetitioners was based on assumptions as to the existence of unjustenrichment and fraud. Mr. Pallav Shishodiya, learned Senior Advocateappearing for Akme Projects Ltd. submitted on similar lines.

16. Dr. Rajeev Dhawan, learned Senior Advocate appearing forPP Realtors Pvt. Ltd. submitted that in an individual case sale could beGinvalidated if fraud stood proved on grounds available under the ContractAct, while if sales were sought to be invalidated as class action then itcould only be done on grounds of mala fides in public law. It wassubmitted that fraud in terms of section 17 of the Contract Act had to be 3 (1979) 3 SCC 489 4 (1986) 4 SCC 566H

transaction based and strictly established. He further submitted that thereason given for dropping of the acquisition was that licences in respectof about 360 acres of land were under consideration while disputes wereraised in respect of rest of the land. At no stage after the disposal of thepetitions by the High Court any grievance was raised by the land ownersand they must be deemed to have waived their rights. In his submission,land owners were looking for windfall gains when they were asking forsetting aside of all the transactions as class action and that the writpetition was nothing but an abuse of the process of law.

17. Mr. Narender Hooda, leaned Senior Advocate appearing foran individual namely Shri Arvind Walia who had purchased 11 acres ofland, submitted that one Mamraj had sold said land in February, 2005.Along with his written submissions, Mr. Hooda placed on record andrelied upon Minutes of the Meeting regarding policy issues held on07.08.1991. Mr. Sidharth Luthra, learned Senior Advocate appearingfor Paradise Systems Pvt. Ltd., submitted on lines similar to those adoptedby the other leaned Senior Counsel. Mr. B. S. Chahar, learned SeniorAdvocate appearing in I.A. No.20 in Civil Appeal No.8788 of 2015submitted that his clients had bought plots, shops and flats only afterDecember, 2009 i.e. after the State had dropped the acquisition andafter the pending writ petitions were disposed of by the High Court.18. The learned Counsel appearing for State of Haryana adoptedthe submissions of the learned Amicus Curiae and submitted that if thisCourt were to come to the conclusion that the exercise of power by thefunctionaries of the State in the present case was colourable and suchexercise was fraud on power, then not only should the guilty be bookedon criminal side, but on the civil side the mechanism suggested by thelearned Amicus Curiae be adopted.

19. Though copies of the interim report of CBI were not given tothe parties, some factual aspects dealt with in the report, namely theallegations in the FIR and certain bare minimum facts as found from therecord, need to be adverted to. Paras 2 and 18 to 21of the Report wereas under:-

“2. It is alleged in the FIR that the Government of Haryana hadissued notification u/S 4 of the Land Acquisition Act, 1894 on27.08.2004 and u/S 6 on 25.08.2005 of Land Acquisition Act, 1894for acquisition of land measuring about 912 acres for setting up

Aan Industrial Model Township in Villages Manesar, Naurangpurand Lakhnoula in Distt. Gurgaon. large number of land owners,in haste, had sold out about 350 acres of land at throw away ratesof Rs.20 to 25 lakhs per acre. It is further alleged that whensome land was not sold by the farmers, the Government issuednotification u/S 9 of Land Acquisition Act and, thereafter, theBprivate builders had purchased remaining 50 acres of land at therate of even Rs.1.50 crores per acre. It is further alleged thatwhen all the land had been grabbed from the land owners by landmafia under the threat of acquisition at meager rates, an orderwas passed by the competent authority i.e. the Director ofCIndustries on 24.08.2007 releasing this land from the acquisitionprocess and the land was released in violation of the governmentpolicy, in favour of the builders, their companies and agents, insteadof the original land owners. In the above manner, land measuringabout 400 acres whose market value at that time was above Rs.4crores per acre, totaling about Rs.1600 crores, was purchased byDthe above mentioned criminal conspirators from the innocent landowners for only about Rs.100 crores. Thus, some politicians whowere also important functionaries of the State Government,Government Officers and their agents caused wrongful loss ofRs.1500 crores to the land owners of Village Manesar, NaurangpurEand Lakhnoula of District, Gurgaon and corresponding wrongfulgain to themselves.

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

247ABCDEFGH

ABCDEFGH

[2018] 5 S.C.R.

19. That investigation further revealed that out of the above landpurchased by the private builders/companies, one company namelyM/s Aditya Buildwell Pvt. Ltd. (now known an ABW InfrastructureLtd.) and its associates companies had purchased maximum landmeasuring around 248 acres 5kanal 17maral. Shri Atul Bansal isthe Director of M/s Aditya Buildwell Pvt. Ltd. His company M/sAditya Buildwell Pvt. Ltd. and associate companies namely M/sJassum Towers Pvt. Ltd. and M/s Jassum Infrastructure Pvt.Ltd. had purchased total land measuring around 44 acres 7 kanal13.5 marla. That Sh. Atul Bansal had also taken over the followingcompanies along with their lands measuring about 204 acres duringthis period, which were purchased by the different builders/directorsof these companies:--

CDE

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

(i) Frost Falcon Industries Ltd. SonepatG(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 ofgrant of license to M/s Aditya Buildwell Pvt. Ltd. was examinedin the department of Town and Country Planning, Haryana. TheDepartment of Town and Country Planning obtained the reportfrom the HSIIDC regarding status of acquisition of land. TheHSIIDC vide letter No. 2206 dated 19.01.2007 intimated that theland in question had been notified u/S 6 of LAA, 1894 by thedepartment of Industries for providing dedicated labour housingto the plot – holders/industrial workers in IMT Manesar andrequested that the application should be rejected. Despite theabove report of HSIIDC, the Town & Country PlanningDepartment vide letter dated 25.01.2007 asked the applicant todeposit the deficit amount of license fee of Rs.15,11,00,696/-.However, the applicant instead of depositing the deficit amount oflicense fee had submitted request vide letter dated 14.03.2007that the area applied for grant of license (total 190 acres) may besegregated as under:-

ARest of the portions of the interim report being in the nature ofdeduction or conclusion from facts, are not considered by us.

20. Since the basic reason which weighed with the StateGovernment in arriving at decisions dated 24.08.2007 and 29.01.2010was the fact that several applications were preferred by builders forBlicence/CLU in respect of lands forming part of the acquisitionproceedings, we deal with relevant statutory framework at the outset.

A] Appropriate resolutions in terms of Article 252 of theConstitution having been passed by the Houses of Legislatures ofthe States of Haryana, Rajasthan and Utter Pradesh, the NationalCCapital Region Planning Board Act, 1985 (hereinafter referred toas the “NCR Act”) was enacted to provide for the constitution ofPlanning Board for preparation of plan for the development ofthe National Capital Region. Reading of Section 2(f) with Scheduleto the Act shows that the tehsils of Gurgaon, Nuh and Firojpur-Jhirka of district Gurgaon form part of National Capital Region.DChapter IV of the NCR Act deals with constitution andincorporation of the National Capital Region Planning Board.Chapter IV of the NCR Act deals with “the Regional Plan” whichin terms of Section 10 “shall be written statement and shall beaccompanied by such maps, diagrams, illustrations and descriptiveEmatters” and “shall indicate the manner in which the land in theNational Capital Region shall be used, whether by carrying outdevelopment thereon or by conservation or otherwise”. Section29 of the NCR Act states, “on and from the coming into operationof the finally published Regional Plan, no development shall bemade in the region which is inconsistent with the Regional Plan asFfinally published”. According to Section 40, acquisition ordetermination of any right or interest in the land to give effect toany Regional Plan shall be made by the concerned State.

B] The Regional Plan 2001 prepared under the NCR Act wassuperseded by the Regional Plan 2021, notified on 19.09.2005.Para 17.5 of this Regional Plan 2021 deals with “ZoningRegulations” under which four zones are contemplated namely i)17.5.1: Controlled/Development/Regulated Zone, ii) 17.5.2:Highway Corridor Zone, iii) 17.5.3: Natural Conservation Zoneand 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 wouldbe incorporated in the Sub-regional Plans and Master/DevelopmentPlans by the respective State Governments.”

Para 17.5.1 further clarifies as under:-

“The local authority according to the prescribed uses in theMaster/Development Plans will govern detailed land uses withinthe urbanisable area. The Master/Development Plans of allthe towns will be prepared within the framework of the RegionalPlan-2021 and Sub-regional Plans. In case any amendment isrequired in the acts to implement the policies of Regional Plan2021 that be done by the respective State Governmentsappropriately.”

The Master/ Development Plans in respect of all towns, in termsof Para 17.5.1, were thus required to be prepared within theframework of the Regional Plan 2021.

C] Final Development Plan for Gurgaon Manesar Urban Complexwas published by Government of Haryana, Town and CountryPlanning Department vide notification dated 05.02.2007. AnnexureA to this notification titled as “Explanatory Note on the FinalDevelopment Plan 2021 AD for the controlled area of Gurgaon-Manesar Urban Complex” stated as under:-

“The Gurgaon-Manesar Urban Complex which is known forAutomobile Industries, Modern Commercial Malls, Towers ofCyber Parks and Software Development is situated on primelocation on National Highway No. 8, only at distance of 4kilometers from the Indira-Gandhi International Air Port and iswell linked with all capitals of the world through airways. Thename of this town emerged on the world map in 1972, whenworld famed Maruti Industry was set up in Gurgaon with thecollaboration of Suzuki Company of Japan. Now with thecoming up of multinational companies like Hero Honda Motor,Honda Motors Ltd, Denso etc. in automobile sector andMicrosoft, I.B.M. Nokia, Canon, Dupont, Sapient, BritishAirways, American Express, ABN Amro Bank, Alcatel, Nestle,Convergys, Hewitt, Vertex, Fidelity Investment, E.Vallue, KeineWorld India, Becton Dickinson India Private Limited in softwaredevelopment 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 90acres in addition to numerous cyber parks are being developedin Gurgaon itself within radius of 15 kilometers from theInternational airport in private sector to accommodate the needsof software development units of multinational companies.

The availability of high level infrastructure of Airways,Railways, Highways, International Embassies and world famedmedical and educational institutions in its close proximity atNational Capital of Delhi have become the main factors ofattraction for international companies for setting up theirbusiness at Gurgaon. In order to meet the demand of foreigninvestors and also to set up high-tech non polluting industrialunits, the Haryana Government initially with the collaborationof Japanese entrepreneurs started setting up Industrial ModelTownship at Manesar in 1992 through Haryana State IndustrialDevelopment Corporation. The said Corporation has developedabout 700 hectares land at Manesar and now the developedland is being made available to all entrepreneurs of the worldincluding India.The Haryana Urban Development Authority in public sectorand licenced colonizers in private sector through Town andCountry Planning Department have also played prime role inachieving planned development in Gurgaon-Manesar UrbanComplex. The Haryana Urban Development Authority and thelicenced colonizers collectively have developed about 8000hectares land for residential, commercial, institutional andindustrial purposes to meet the increasing demand of the public.

The areas of Gurgaon-Manesar Urban Complex which haveso far been developed in public and private sector includingexisting town and village abadies would accommodate 22 lakhspopulation. In order to cater the future demand of Gurgaon-Manesar Urban Complex an additional area of 21733 hectareshas been added in the form of urbanisable area for the saidcomplex to accommodate 15 lacs additional population. Thus,the total urbanisable area of Gurgaon-Manesar Urban Complexwould accommodate 37 lakhs population by 2021 AD.”

This Explanatory Note brings out the potential and importance ofGurgaon-Manesar Urban Complex. It shows that 8000 Hectaresof land was already put to residential, commercial, institutionaland industrial purposes and additional 21733 Acres of land was tobe added to meet the ever increasing demand.

D] Zoning Regulations were set out in Annexure to theNotification dated 05.02.2007. Paragraph VII of said AnnexureB dealt with the extent of private participation and role ofGovernment or Public Authorities in such development. SaidParagraph VII was as under:-

“VII. Sectors to be developed exclusively through GovernmentEnterprises:

(1) Change of land use and development in sectors which arereserved for the public and semi-public zone shall be takenonly and exclusively through the Government or Governmentundertaking or public authority approved by the Governmentin this behalf and no permission shall be given for developmentof any colony within these sectors.

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

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

E] The Haryana Act was enacted in the year 1975 to regulate theuse of land in order to prevent ill-planned and haphazardurbanization in and around towns and for development ofinfrastructure sector and infrastructure projects for the benefit ofthe 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 HaryanaAct deals with “Application for licence” and entitles an owner

CDE

Adesiring to convert his land into colony to make an application tothe Director for the grant of licence to develop colony. Sub-Section (2) of said Section 3 stipulates that on receipt of suchapplication by the owner, the Director shall among other thingsenquire into the “capacity to develop colony”. Section 3 laysdown parameters and guidelines for grant of such licence whichBinclude inter alia furnishing to the Director bank guarantee equalto 25 per centum of the estimated cost of development works anda bank guarantee equal to 37½ per centum of the estimated costof the development works in case of cyber city or cyber park.Unlike sub-Section (1) which uses the expression “owner”, theCexpressions “applicant” and “colonizer” are used in sub-Section(3) onwards. Section 3AA deals with “Establishment andconstitution of Board” while the “Functions and Powers of Board”are dealt with in Section 3AC. In terms of sub-Section (2) ofSection 3AC, the Board is to act as Nodal Agency to coordinateall efforts of the Government regarding the development andDimplementation of infrastructure sectors and infrastructure projectsfor the benefit of State, involving private participation and fundingfrom sources other than those provided by the State budget. Sub-clauses (f) and (g) of said sub-Section(2) deal with functions suchas formulating clear and transparent policies and identifyingEsectoral concessions to attract private participation. Section3AE empowers the Government to issue such directions to theBoard on matters concerning the infrastructure sectors and theinfrastructure projects in the State and states that the Boards shallbe bound by such directions.

FF] The directions were issued by the Government from time totime, in exercise of the power so vested. The minutes of themeeting regarding policy issues “concerning Urban Developmentin Haryana” held on 07.08.1991[5] under the Chairmanship of theChief Minister show that the issues concerning urban developmentwere discussed in detail. Paras 2 to 5 of the minutes were asGunder:-

“2. COMPETENT AUTHORITY TO GRANT LICENSES:

The opinion of LR was considered and it was accordinglydecided that DTCP should be the competent authority to grant

H5 Relied upon by Mr. Narender Hooda, Senior Advocate

licence under the Act. On suggestion from DTCP, however,it was felt that the grant of licence may have wider implicationsfor State Government. It was, therefore, decided that suchlicences may be granted with prior internal concurrence of theState Government at Minster’s level. The State Governmentwill however, exercise appellate powers under the Act inaccordance with the opinion of the LR.

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

The LR’s opinion on the matter was discussed and itwas clarified by the LR that legally the colony to be licensedhas to conform to the Development Plan and not to sectordemarcation. It was pointed out that the land under applicationmay not always be in regular shape or in one sector. Nominimum limit on proportion of the total area to the area of thesector could, therefore, be stipulated.

4. SIZE OF THE COLONY:

It was decided that except for additional licences forcontiguous area/pockets, the minimum area required for thegrant 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 ofDevelopment Plan, both HUDA and private sector take stepsto acquire land for development. In number of casesindividuals may acquire land and before they are able to apply/get license, the area may be notified for acquisition of HUDA.It was, therefore, decided that in the interest of equity in caseswhere applicants have applied for licence or have acquiredland but could not apply for licence before the issue of acquisitionnotification, release of land could be considered on individualmerits of each case.”

G] On 19.12.2006 “Policy for grant of licences and change ofland use cases[6]” was issued in the form of Memo from the

7 Relied upon by Mr. Dhruv Mehra, Senior Advocate

Aoffice of Financial Commissioner and Principal Secretary toGovernment of Haryana, Town and Country Planning Department.Paragraph 5 of this Memo dated 19.12.2006 was:-

“5) Land Acquisition and Licensing:- Where applicants/landowners have applied for licence before the issue of acquisitionBnotification under section 4 of the Land Acquisition Act, 1894,release of land could be considered on individual merits of eachcase.”

This Policy was given effect from 07.06.2005.

H] There were similar Policy statements between 07.08.1991 andC19.12.2006 and even after 19.12.2006 as dealt with and discussedby the High Court of Punjab and Haryana in its Judgment in AmitaBanta & Another v. State of Haryana[7]. Relevant portion ofpara 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 notificationunder Section 4 of the Land Acquisition Act but submittedapplication for licence for commercial colonies thereofafterwards.

xx xxx xxx xxxxG

It has been felt that apart from providing accommodation forlocating commercial officers, licence for commercial colonyresults into receipt of handsome amount to the State Treasury/Haryana Urban Development Authority and it will be in public

7 (2010) 1 RCR (Civil) 412H

interest to encourage establishment of such colonies. Earlier adecision was taken by the CMM (copy of memorandum anddecision is placed at Annexure and C) to release the landfrom acquisition where developers/colonizers have purchasedland before the issue of notification under Section 4 of theLand Acquisition Act, but submitted applications for grant oflicence for setting up of residential colony afterwards. But itis general decision and it is felt that in view of the reasonsexplained above, the licences for commercial colonies shouldbe treated differently.

It is therefore, proposed that if the department intends to issuelicence for commercial colony with the internal concurrenceof the Government over land where the owner had purchasedit before the notification under Section 4 of the Land AcquisitionAct was issued, the release of such land may be allowed beforeissue of letter of intent.

Policy dated 06.03.2000

It has also been observed that the resources of HUDA havereduced in the recent past, and acquisition activity anddevelopment of residential sectors has become costly and timeconsuming affair due to litigation and, therefore, it would beappropriate to assign greater role to private sector. But asper decision taken by the CMM in their meeting held on 30.07.98even if the department finds that the application for grant oflicence for residential colony fulfils policy/technical parameters,the land is to be released from acquisition only on therecommendations of the Chief Administrator, HUDA. Thisresults into procedural delay. Since the department of Townand Country Planning, Haryana is responsible for integrateddevelopment of urban areas, therefore with view to avoidprocedural delays, it is proposed that on the analogy of decisiontaken by the CMM on 06.01.2000, the land purchased by thecolonizer before issuance of notification under Section 4 of theLand Acquisition Act, 1894 where the Director Town andCountry Planning, Haryana decides to issue licence forresidential colony and obtained the concurrence of theGovernment for the same, may be released from acquisition.

APolicy dated 26.10.2007

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

6. That the Government may also consider release of land inthe interest of integrated and planned development for the landswhere the owners have approached the Hon’ble Courts andhave obtained stay dispossession.

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

D………………..”

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

clear:-

A. The Regional Plan of 2021, notified on 19.09.2005 contemplatedthat Master/Development Plans in respect of towns were required to beEprepared within the framework of said Regional Plan. Accordingly, FinalDevelopment Plan for Gurgaon Manesar Urban Complex was publishedon 05.02.2007. The Explanatory Note, as set out hereinabove brings outpotential of the lands situate in said Urban Complex. According to thezonal requirements as set out in Annexure-B of said Notification datedF05.02.2007, the extent of private participation was restricted to 50% fordevelopment of sectors reserved for commercial use and rest could bedeveloped only by the Government or Government undertaking or by apublic authority approved by the Government.

B. In terms of provisions of the Haryana Act and more particularlyGSection 3(2), “Capacity to develop colony” would be factor relevantfor consideration whenever an application for licence was preferred byany owner. Though the provisions of Haryana Act do contemplatecoordination of all efforts with regard to development and implementationof infrastructure, sectors and projects with involvement of privateparticipation, the directions issued by the Government have laid down, inH

clear terms, the extent and scope of such private participation.

C. In accordance with Section 40 of the NCR Act, the concernedStates are expected to give effect to any Regional Plan by taking resortto power of acquisition. The inter-play between exercise of such powerof acquisition and private participation by permitting licences to owners/colonizers was matter dealt with by Policy Guidelines issued by theGovernment from time to time. In terms of policy statements dated07.08.1991, 06.01.2000 and 06.03.2000 where applicants had appliedfor licence or had acquired land but could not apply for licence beforethe issue of acquisition notification, release of land could still be consideredon individual merits of each case. The scope got further restricted bypolicy statement of 19.12.2006, in terms of para 5 whereof, if theapplicants/landholders had applied for licence before the issue ofacquisition notification under Section 4 of the LA Act, release of landcould be considered on individual merits of each case. As this policywas given effect from 07.06.2005, it could possibly be stated that theearlier policies ought to apply to cases before 07.06.2005. But in anycase, for said policies dated 07.08.1991, 06.01.2000 and 06.03.2000 toapply, the purchase by applicants had to be before the issue of acquisitionnotification. Same thought was expressed in the Policy dated 26.10.2007,“….that the ownership of the land should be prior to the notificationunder Section 4 of the Act.” Further, the extent of such participationought to be in terms of zonal requirements set out in Annexure to theFinal Development Plan dated 05.02.2007.

22. It must be noted at the outset that the aforementioned Policydated 06.03.2000 was considered by this Court in Uddar Gagan (supra)and in paragraph 21 of its judgment, this Court had observed, “… thepolicy is applicable only to release of such land from acquisition as isowned/purchased by the developers before the issue of notification underSection 4 of the Land Acquisition Act, 1894. This condition was requiredto be strictly complied with and no person other than original ownersprior to acquisition could directly or indirectly avail of the said policy”. Inthe present case, notification under Section 4 of the Act was issued on27.08.2004. After considering various objections made under Section5A of the Act, the requirement of 688 Acres of land was assessed anddeclaration under Section 6 to that effect was issued on 25.08.2005.The material placed on record by Mr. Vikas Singh, learned SeniorAdvocate shows that all lands purchased by his client were after the

Aissuance of notification under Section 4 of the Act. Similarly para 18 ofthe interim report submitted by CBI shows that over 444 Acres of landwas purchased by various builders/private entities after such notificationunder Section 4 of the Act. Going by the relevant policies holding thefield and the law laid down by this Court in para 21 of its judgment inUddar Gagan (Supra), such purchases did not entitle the concernedBbuilders/private entities to prefer any application for licence, nor couldpendency of such applications be taken as relevant factor while arrivingat decision whether acquisition initiated pursuant to notification dated27.08.2004 be proceeded further or not. However, the record indicatesthat such purchases and the pendency of applications for licence underCthe Haryana Act, was factor which did weigh while decisions dated24.08.2007 and 29.01.2010 were taken. factor which ought to havebeen discarded in terms of the declared policy statements, became thefulcrum for said decisions. We have therefore, no hesitation in holdingthat said decisions are inconsistent with and opposed to relevant policystatements. We also reject the submission advanced on behalf of builders/Dprivate entities that these decisions were consistent with the RegionalPlan under the NCR Act and the Final Development Plan for Gurgaon-Manesar.23. But the issues raised in the present case go way beyond mereinvalidity or illegality of those decisions dated 24.08.2007 and 29.01.2010.EWhat is being projected is that those decisions dated 24.08.2007 and29.01.2010 were part of well devised and designed attempt to deprivethe landholders and enrich builders/private entities, which would broadlydepend upon answers to the following questions:-

a] Whether the transactions entered into between the landholdersFand the concerned builders/private entities in the present case could besaid to be voluntary and free from any influence.

b] Whether the decisions on part of the state machinery arrivedat on 24.08.2007 and 29.01.2010 could be said to be guided byconsiderations other than those for which the power was conferred; orGin other words: was there fraud on power.

24. Before we deal with the aforesaid issues, certain crystalizedfacets of the matter as evident from facts as narrated above and thestatutory framework, need to be noted:-

(a) The concerned lands fall in National Capital Region to whichthe provisions of Regional Plan, 2021 prepared under the NCRAct and Final Development Plan for Gurgaon-Manesar UrbanComplex prepared by Government of Haryana do apply. TheExplanatory Note set out in Annexure to said Final DevelopmentPlan brings out the potential of the lands in Gurgaon-Manesar andacknowledges its proximity with Delhi, locational advantages andimportance of said lands.

(b) Though Regional Plan, 2021 and Final Development Plan forGurgaon-Manesar Region Complex were notified on 19.09.2005and 05.02.2007 respectively, it can well be assumed that stagesanterior to preparation and notification of said plans coincidedwith the initiation of acquisition in the present case. In any case,the potential of said lands was not something which arose out ofthe blue for the first time in 2007 and it can safely be inferred thatsuch 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 theinitiation of acquisition on 27.08.2004. As disclosed in the materialplaced on record by Mr. Vikas Singh, learned Senior Advocate,his client alone had purchased more than 235 acres of land whileas per interim report of CBI, an extent of 444 acres of land waspurchased by builders/private entities after the initiation ofacquisition. Thus, substantial portion of land out of 688 acres ofland as specified in declaration under Section 6 of the Act waspurchased by builders/private entities.(d) Around the time when those purchases were made by builders/private respondents, Awards were declared on 09.03.2006 and24.02.2007 in respect of lands from adjoining Villages where theacquisition was also initiated for the same public purpose. Thecompensation awarded was at the rate Rs.12.5 lakhs per acre.

(e) Although the relevant policies did not permit anyone whopurchased the concerned lands after initiation of acquisition toprefer an application for licence, the builders/private entities merrilywent about purchasing the interest of concerned landholders aftersuch initiation. Most of these companies were incorporated afterthe acquisition was initiated and had no experience in colonization.

Yet substantial and sizeable holding was purchased by them. Thisis reflective of the intent to cash in on an opportunity made availableand garner as much holding as possible. The subsequenttransactions of sale by them are also indicative of the attempts toprofiteer in the matter rather than any bona fide attempt to developand colonize the property.

(f) Faced with impending acquisition initiated on 27.08.2004, thelandholders were persuaded to enter into transactions with builders/private respondents. The Tabular Chart as set out by way ofexample in paragraph 8 hereinabove shows that the average pricewas initially in the region of Rs.25 lakhs per acre which rose toRs.40 lakhs per acre or above after the issuance of declarationunder Section 6 of the Act. The price so received was greaterthan the rate awarded in Awards dated 09.03.2006 and 24.02.2007.

(g) Notices under Section 9 of the Act were issued by theAuthorities on 02.08.2007 calling upon the landholders to appearfor pronouncement of award on 26.08.2007. The record indicatesthat the price paid by the builders/private entities just before24.08.2007 was in the region of Rs.80 lakhs per acre. This furtherdiscloses, as rightly submitted by Mr. Dhruv Mehta, learned SeniorAdvocate that builders/private entities were aware that the awardwould not be declared but the land acquisition proceedings wouldbe dropped.

(h) At least 60 sale deeds were executed between the issuanceof Notifications under Sections 4 and 6 of the Act, four sale deedswere executed on the day the declaration under Section 6 wasissued and 50 sale deeds were executed after the issuance ofNotification under Section 6 and prior to the dropping of acquisitionon 24.08.2007. Thus about 114 sale deeds were executed afterthe initiation of acquisition and prior to the dropping of acquisitionvide decision dated 24.08.2007.

(i) The sale deeds in favour of the builders/private entities do noteven mention the factum about the issuance of any Notificationunder Section 4 of the Act, nor any urgency or necessity for thefamily to dispose of its holdings find any specific clear mention.The sales in question were effected only because of impendingacquisition.

(j) The material placed on record by Mr. Vikas Singh, learnedSenior Advocate discloses disturbing feature. The lands whichwere purchased for price ranging from Rs.25 lakhs per acresoon after the initiation of acquisition which price rose to Rs.80lakhs per acre just before dropping of the acquisition, were finallypurchased by DLF Home Developers Ltd. at the rate of Rs.4½crores per acre. Further, the fact that settlement money at therate of Rs.3½ crores per acre was made over to entities whichapparently had done nothing in the matter is quite shocking. Neitherhad these entities procured the lands from the original landholdersnor were they ultimate developers who wanted to develop theproperty. Such entities can certainly be termed as “middle men”who walked away with tremendous amount of money or benefitat the rate of Rs.3½ crores per acre. Was that mere bonanza ora deal denoting quid pro quo?(k) It is true that the price of Rs. 4½ crores per acre was paid inrespect of land as well as the licences and well after the droppingof the acquisition and withdrawal of writ petitions pending in theHigh Court. However this price or the rate shows the tremendousdifference between the return received by the original landholdersand the actual potential of the land.

(l) In terms of paragraph VIII of Annexure to the FinalDevelopment Plan for Gurgaon-Manesar Urban Complex theextent of private participation was extremely limited and in termsof relevant policy under the Haryana Act no licence could beissued in case any purchase of land was made after the initiationof the acquisition. Yet the concerned Authorities not onlyentertained such applications for licence but pendency of suchapplications was taken as factor for withdrawal from acquisition.Something which ought to have been rejected and discardedoutright became the foundation for decision in favour of builders/private entities.

(m) The interim report of CBI in para 21 indicates that objectionwas taken by HSIIDC and it was prayed that application for licencebe rejected. Going by aforesaid paragraph VIII of Annexure Band the relevant policy, such application could never have beenentertained but it was so done favourably.

A25. In cases where the power conferred under the provisions ofthe Act was utilized to favour private person or entity, this Court hasalways come down heavily. In Uddar Gagan (supra) which was reliedupon by Mr. Dhruv Mehta, learned Senior Advocate and the learnedAmicus Curie, the question which arose for consideration inter alia,was whether the power of the State to withdraw from acquisition underBSection 48 of the Act after the award had been passed, was utilized tofacilitate transfer of title of the land of original owners to private builderto advance the business interest of the builder. In that case, the builderhad purchased the interest of the original landholders after the acquisitionwas initiated like in the present case and at his instance the lands wereCreleased from acquisition at which stage the original landholders hadinvoked writ jurisdiction and challenged the entire action. The High Courtset aside the release orders, quashed the acquisition and went on todirect that the lands be restored to the original land-owners. Whileconsidering the matter in an appeal at the instance of the builder, thisCourt dealt with the observations of the High Court in Paragraph 5.DParagraphs 70 and 80 of the High Court judgment which were interalia quoted by this Court were as under:-

“70. To say that the landowners entered into varied contractswith Respondent 11 voluntarily, willingly or without undue pressureis too farcical to be believed. There is natural and conventionalEbondage between the land and its tiller. farmer seldom sells theland save for the compelling reasons. Agriculture being their onlysource of survival, the loss of land is terrible nightmare for anyfarmer. The Land Acquisition Collectors never assess thecompensation as per actual market value of the land and the onlyFyardstick to be followed is the Collector’s rate fixed for the purposeof registration charges. The farmer cannot sell the land in openmarket as on issuance of Section 4 notification all sale transactionsare invariably banned. These moments of fear and anxiety musthave prompted Respondent 11 to indulge in the best bargain. Forthe farmers the offer was like “better you give the wool than theGwhole sheep”. There was no free trade for the farmers. Theirchoice was limited: to accept the State compensation at theCollector’s rate or better offer given by State-sponsored privatebuilder. There was inequality of bargaining power. Thedetermination 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 willbe released. They accepted the unreasonable and unfair unilateralterms and lost their land.

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

26. This Court affirmed the view taken by the High Court asregards quashing of release orders but upheld the acquisition and awards.It further directed that the lands in question vested in State free from allencumbrances. In the context of the present case, the followingobservations of this Court in Uddar Gagan (supra) in paragraphs 18,19, 22 and 23 are quite crucial:-

“18. …. entertaining an application for releasing of land in favourof the builder who comes into picture after acquisition notificationand release of land to such builder tantamounts to acquisition fora private purpose. It amounts to transfer of resources of poor forthe benefit of the rich. It amounts to permitting profiteering at thecost of livelihood and existence of farmer. This is against thephilosophy of the Constitution and in violation of guaranteedfundamental 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 enterthe field after initiation of acquisition to seek colonisation on theland covered by acquisition. In the absence of the State’s action,it was not possible for the builder to enter into the transactions inquestion which was followed by withdrawal from acquisition.

22. ….. When the land sought to be acquired for public purposeis allowed to be transferred to private persons, any administrativeaction or private transaction could be held to be vitiated by fraud.

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

27. For the present purposes, contents of paragraphs 29 and 30 ofthe decision in Uddar Gagan (supra) and the directions issued inBparagraph 33 are extracted:-

“29. Once release of land under acquisition is found to be malafide or arbitrary exercise of power, acquisition of released landstands revived. The operative direction of the High Court to quashthe acquisition to the extent it has neither been challenged norconcerns the land transferred to private builder by abusing thepower of acquisition or on account of any extraneousconsiderations does not appear to be justified. Similarly the directionof permitting the builder to retain the land of those landownerswho are not able to refund the sale consideration received bythem may permit the builder to illegally retain the land. Moreover,it may not be practicable in the present fact situation to restorethe land to the landowners but they can be duly compensatedwhile restoring the land to the State to use it for notified publicpurpose. Person whose land is taken for houses for others cannotbe rendered homeless and unemployed. This will be sheerexploitation. In view of the conduct of the builder, agreeing withthe view of the High Court, we do not propose to allow any interestto the builder while permitting refund/reimbursement to it. From

the impugned judgment there is nothing to show that thedevelopments which are now relied upon had taken place on thedate of filing of the writ petition. It has been specifically held inpara 89 of the impugned judgment that no development had takenplace till the judgment of the High Court. Any subsequenttransactions or development are of no consequence for rights ofparties. Any subsequent transactions entered into by the buildercannot be taken into account and are hit by the principle of lispendens. In any case it was for the builder to inform the thirdparties to whom the plots have been sold, that the land was underlitigation. If the third parties have purchased the land knowingfully about the litigation, they have clearly taken risk and theirremedy will be only against the builder. If pendency of litigationwas suppressed, the third parties can take their remedies against

the builder. Without prejudice to their said private remedies, thecourt may try to balance equities to the extent possible. We arealso of the view that if the authorities have proceeded to entertainapplications for licence to give undue benefit to the builder byway of helping him to take over land under the cloud of acquisition,it may call for action against those who have misused their powerand to find out the considerations for such misuse.

30. Land is scarce natural resource. Owner of land has guaranteeagainst being deprived of his rights except under valid law forcompelling needs of the society and not otherwise. The commercialuse of land can certainly be rewarding to an individual. Initiationof acquisition for public purpose may deprive the owner of valuableland but it cannot permit another person who may be able to getpermission to develop colony to take over the said land. If the lawallows the State to take land for housing needs, the State itselfhas to keep the title or dispose of land consistent with Article 14after completion of acquisition. If after initiation of acquisition,process is not to be completed, land must revert back to owner onthe date of Section 4 notification and not to anyone else directlyor indirectly. This is not what has happened.

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

33.1. Notifications dated 11-4-2002, 8-4-2003 and awards dated6-4-2005 are upheld. The land covered thereby vests in HUDAfree from all encumbrances. HUDA may forthwith takepossession thereof.

33.2. All release orders in favour of the builder in respect of landcovered by the award in exercise of powers under Section 48 arequashed.

33.3. Consequently, all licences granted in respect of the landcovered by acquisition will stand transferred to HUDA.

33.4. Sale deeds/other agreements in favour of the builder inrespect of the said land are quashed. The builder will not be entitledto recover the consideration paid to the owners but will be entitledto 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 landownerswill be treated as compensation under the award. The landownerswill not be required to refund any amount. The landowners whohave not received compensation will be at liberty to receive thesame. The landowners will also be at liberty to prefer referenceunder Section 18 of the 1894 Act within period of three months,if such reference has not been earlier preferred.

33.6. The builder will be entitled to refund/reimbursement of anypayments made to the State, to the landowners or the amountspent on development of the land, from HUDA on being satisfiedabout the extent of actual expenditure not exceeding HUDA normson the subject. Claim of the builder will be taken up after settlingclaim 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 bythe builder will be entitled to either the refund of the amount, outof and to the extent of the amount payable to the builder under theabove direction, available with the State, on their claims beingverified or will be allotted the plots at the price paid or priceprevalent, whatever is higher. No interest will be payable on thesaid amount.

33.8. The State shall give benefit of “Rehabilitation andResettlement of Land Acquisition Oustees” policy of the State/HUDA to the landowners. Area so required shall be reserved outof the acquired land itself.

33.9. The State Government may enquire into the legality andbona fides of the action of the persons responsible for illegallyentertaining the applications of the builder and releasing the landto it, when it had no title to the land on the date of the notificationunder Section 4 of the 1894 Act and proceed against them inaccordance with law.

33.10. This judgment be complied with within one year.

33.11. Quarterly progress report of the action taken in pursuanceof this judgment be filed by the State in this Court and final reportof compliance may be filed within one month after expiry of one

year from today for such further direction as may becomenecessary.”

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 Jaiswal[8], it was observed bythis Court:-

“26. Where power is conferred to achieve purpose it has beenrepeatedly reiterated that the power must be exercised reasonablyand in good faith to effectuate the purpose. And in this context ‘ingood faith’ means ‘for legitimate reasons’! Where power isexercised for extraneous or irrelevant considerations or reasons,it is unquestionably colourable exercise of power or fraud onpower and the exercise of power is vitiated. If the power to acquireland is to be exercised, it must be exercised bona fide for thestatutory purpose and for none other. If it is exercised for anextraneous, irrelevant or non-germane consideration, the acquiringauthority can be charged with legal mala fides. In such situationthere is no question of any personal ill-will or motive. In MunicipalCouncil of Sydney v. Campbell[9] it was observed that irrelevantconsiderations on which power to acquire land is exercised, wouldvitiate compulsory purchase orders or scheme depending onthem…….”

b] In Royal Orchid Hotels Limited and Another v. G. JayaramaReddy and Others[10], this Court was called upon to consider questionwhether land acquired by the State Government for specified purposenamely Golf-cum-Hotel Resort could be transferred to privateindividual. The observations in paragraph 38 are relevant for the presentpurposes:-

“38. The courts have repeatedly held that in exercise of its powerof eminent domain, the State can compulsorily acquire land of theprivate persons but this proposition cannot be overstretched tolegitimize patently illegal and fraudulent exercise undertakenfor depriving the landowners of their constitutional right to propertywith view to favour private persons. It needs no emphasis that

8 (1985) 3 SCC 1

9 1925 AC 338 at p. 375

10 (2011) 10 SCC 608

CDE

Aif land is to be acquired for company, the State Government andthe company is bound to comply with the mandate of the provisionscontained in Part VII of the Act. Therefore, the Corporation didnot have the jurisdiction to transfer the land acquired for publicpurpose to the companies and thereby allow them to bypass theprovisions of Part VII. The diversification of the purpose for whichBland was acquired under Section 4(1) read with Section 6 clearlyamounted to fraud on the power of eminent domain. This isprecisely what the High Court has held in the judgment underappeal and we do not find any valid ground to interfere with thesame……”

c] In Greater Noida Industrial Development Authority v.Devendra Kumar and Others[11], validity of acquisition of about 156hectares of land and subsequent transfer of acquired land to the buildersand whether such transfer was colourable exercise of power came upfor consideration of this Court. In paragraph 43 this Court quoted theDobservations of Krishna Iyer J in State of Punjab v. Gurdial Singh[12]and later made following observations in paragraph 49:-

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

“9. … Legal malice is gibberish unless juristic clarity keeps itseparate from the popular concept of personal vice. PithilyFput, bad faith which invalidates the exercise of power—sometimes called colourable exercise or fraud on powerand oftentimes overlaps motives, passions andsatisfactions—is the attainment of ends beyond thesanctioned purposes of power by simulation or pretensionof gaining legitimate goal. If the use of the power is forGthe fulfilment of legitimate object the actuation or catalysationby malice is not legicidal. The action is bad where the trueobject is to reach an end different from the one for whichthe power is entrusted, goaded by extraneous

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

considerations, good or bad, but irrelevant to theentrustment. When the custodian of power is influenced inits exercise by considerations outside those for promotionof which the power is vested the court calls it colourableexercise and is undeceived by illusion. In broad, blurredsense, Benjamin Disraeli was not off the mark even in lawwhen he stated:

‘I repeat … that all power is trust—that we are accountable forits 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 forthe end designed. Fraud in this context is not equal to moralturpitude and embraces all cases in which the action impugned isto effect some object which is beyond the purpose and intent ofthe power, whether this be malice-laden or even benign. If thepurpose is corrupt the resultant act is bad. If considerations, foreignto the scope of the power or extraneous to the statute, enter theverdict or impel the action, mala fides or fraud on power vitiatesthe acquisition or other official act.”

49. Before concluding, we consider it necessary to reiterate thatthe acquisition of land is serious matter and before initiating theproceedings under the 1894 Act and other similar legislations, theGovernment concerned must seriously ponder over theconsequences of depriving the tenure-holder of his property. Itmust be remembered that the land is just like mother of the peopleliving in the rural areas of the country. It is the only source ofsustenance and livelihood for the landowner and his family. If theland is acquired, not only the present but the future generations ofthe landowner are deprived of their livelihood and the only socialsecurity. They are made landless and are forced to live in slums inthe urban areas because there is no mechanism for ensuringalternative source of livelihood to them. Mindless acquisition offertile and cultivable land may also lead to serious food crisis inthe country.”

29. The decisions referred in the preceding paragraphs weredelivered in the context of exercise of power under the provisions of the

AAct. In addition, there are few other decisions which were rendered inother fields but considered the issues regarding “fraud on power”; notableamongst them being: S. Pratap Singh v. The State of Punjab[13], ExpressNewspapers Pvt. Ltd. and others v. Union of India and others[14]andobservations by R.M. Sahai J in Shrisht Dhawan (Smt) v. ShawBros.[15] The issue concerning unjust enrichment was dealt with by thisBCourt very succinctly in Indian Council for Enviro-Legal Action v.Union of India[16]as under :

“151. Unjust enrichment has been defined as:

“Unjust enrichment.—A benefit obtained from another, notCintended as gift and not legally justifiable, for which thebeneficiary must make restitution or recompense.”

See Black’s Law Dictionary, 8th Edn. (Bryan A. Garner) at p.1573. claim for unjust enrichment arises where there has beenan “unjust retention of benefit to the loss of another, or theDretention of money or property of another against the fundamentalprinciples of justice or equity and good conscience”.

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

153. Unjust enrichment is “the unjust retention of benefit to theFloss of another, or the retention of money or property of anotheragainst the fundamental principles of justice or equity and goodconscience”. defendant may be liable “even when the defendantretaining the benefit is not wrongdoer” and “even though hemay have received [it] honestly in the first instance”. (Schock v.GNash[17], 2d, 232-33.)

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

17 732 2d 2017 (Delaware 1999)H

154. Unjust enrichment occurs when the defendant wrongfullysecures benefit or passively receives benefit which would beunconscionable to retain. In the leading case of Fibrosa SpolkaAkcyjna v. Fairbairn Lawson Combe Barbour Ltd.[18], LordWright stated the principle thus: (AC p. 61)

“… Any civilised system of law is bound to provide remediesfor cases of what has been called unjust enrichment or unjustbenefit that is to prevent man from retaining the money of orsome benefit derived from another which it is againstconscience that he should keep. Such remedies in English laware generically different from remedies in contract or in tort,and are now recognised to fall within third category of thecommon law which has been called quasi-contract orrestitution.”

155. Lord Denning also stated in Nelson v. Larholt[19 ]as under:(KB p. 343)

“… It is no longer appropriate, however, to draw distinctionbetween law and equity. Principles have now to be stated inthe light of their combined effect. Nor is it necessary to canvassthe niceties of the old forms of action. Remedies now dependon the substance of the right, not on whether they can be fittedinto particular framework. The right here is not peculiar toequity or contract or tort, but falls naturally within the importantcategory of cases where the court orders restitution, if thejustice of the case so requires.”

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

159. Unjust enrichment is basic to the subject of restitution, andis indeed approached as fundamental principle thereof. Theyare usually linked together, and restitution is frequently based uponthe theory of unjust enrichment. However, although unjustenrichment is often referred to or regarded as ground forrestitution, it is perhaps more accurate to regard it as prerequisite,for usually there can be no restitution without unjust enrichment.

18 1943 AC 32

19 (1948) 1 KB 339

AIt is defined as the unjust retention of benefit to the loss ofanother or the retention of money or property of another againstthe fundamental principles of justice or equity and good conscience.A person is enriched if he has received benefit, and he is unjustlyenriched if retention of the benefit would be unjust. Unjustenrichment of person occurs when he has and retains money orBbenefits which in justice and equity belong to another.

160. While the term “restitution” was considered by the SupremeCourt in South Eastern Coalfields Ltd. v. State of M.P.[20] andother cases excerpted later, the term “unjust enrichment” cameto be considered in Sahakari Khand Udyog Mandal Ltd. v.CCCE & Customs[21]. This Court said: (Sahakari Khand case,SCC p. 748, para 31)

“31. … ‘unjust enrichment’ means retention of benefit by aperson that is unjust or inequitable. ‘Unjust enrichment’ occurswhen person retains money or benefits which in justice, equityDand good conscience, belong to someone else.”

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

30. As held in State of Punjab v. Gurdial Singh (Supra) when aFcustodian of power is influenced in its exercise by considerations outsidethose for promotion of which the power is vested, such exercise is nothingbut colourable exercise of power and that the power of the State toacquire lands of private persons compulsorily cannot be overstretchedto legitimize patently illegal and fraudulent exercise undertaken to favourGcertain private persons. This principle has been followed consistently.While dealing with fact situation arising in the context of exercise ofpower under the provisions of the Act and its interplay with the powerunder the provisions of the Haryana Act and the concerned policies, the

20 (2003) 8 SCC 648 21 (2005) 3 SCC 738H

observations of this Court in the decision in Uddar Gagan (supra) arecrucial. They cull out principles that entertaining an application forreleasing of land in favour of builder who came into picture afteracquisition had been initiated amounts to transfer of resources of poorfor the benefit of the rich and that no legitimacy can be conferred to anabuse of power to advance such purpose. Further, mala fides could beinferred from undisputed facts even without naming particular officer.But the salutary principle discernable from Uddar Gagan (supra) liesin the relief granted by this Court in paragraph 33. This Court agreedwith the High Court that there was fraud on power but did not sustainthe relief of return of lands to the landholders. The real victim of abuseof power or fraud on power was “public interest”; for furtherance ofwhich the acquisition was sustained and appropriate directions werepassed. This Court therefore severed that part which was found to bebad but sustained acquisition to sub-serve “public interest”.

31. If we consider the established or crystallized facets of thematter as stated above, in the light of the principles emerging from thedecisions rendered by this Court, in our considered view the decisionsdated 24.08.2007 and 29.01.2010 were taken to confer advantages andbenefits upon the builders/private entities rather than to carry out oreffectuate public purpose. The record indicates that various entitiesincluding certain “middlemen” cornered unnatural gains and walked awaywith huge profits taking the entire process of acquisition for ride.Substantial sums have exchanged hands in the form of settlement money.All the steps and stages show that the builders/private entities were wellaware that the acquisition would not go through but the landholders wereconfronted with the smoke screen of acquisition and were cornered andpersuaded in entering into transactions with the builders/private entities.The transactions so entered into between the landholders and theconcerned builders/private entities could not be said to be voluntary andfree from any influence. The unnatural and unreasonable bargain wasforced upon the landholders by creating façade of impending acquisition.Public Interest was not the underlying concern or objective behind thosedecisions dated 24.08.2007 and 29.01.2010 but the motive was to conferundue advantage on the builders/private entities. It is clear thatconsiderations other than those which were required to be bestowed,guided the exercise of power in arriving at decisions dated 24.08.2007and 29.01.2010. The inescapable conclusion, therefore, is that there was

Aan unholy nexus between the governmental machinery and the builders/private entities in devising modality to deprive the innocent and gulliblelandholders of their holdings and jeopardize public interest which theacquisition was intended to achieve. Mr. Dhruv Mehta, learned SeniorAdvocate is right in his submission that the entire mechanism wasdeliberately employed so that gullible landholders could be deprived ofBtheir holdings by set of builders/private entities and after having seenthat the desired result was achieved, the acquisition was dropped andlater completely withdrawn. The decisions on the part of the State arrivedat on 24.08.2007 and 29.01.2010 were clearly result of fraud on powerand cannot be said to be bona fide exercise of power. In our view, theCinitiation of class action and filing of Writ Petition in the present matterwas perfectly justified and we reject all the submissions made by thelearned Counsel appearing for various builders/private entities.

32. We thus hold that:-

a] The transactions entered into between the landholders andDthe concerned builders/private entities in the present case were notvoluntary and were brought about by fraudulent influence. Certain‘middlemen’ and builders enriched themselves at the expense of thelandholders and public interest which was to be achieved by acquisition.

b] The decisions dated 24.08.2007 and 29.01.2010 as well asEentertaining of applications for grant of licence from those who hadbought the lands after the acquisition was initiated, were not bona fideexercise of power by the State machinery. The exercise of power underthe Act was guided by considerations extraneous to the provisions of theAct and as matter of fact, was designed to enrich the builders/privateFentities. These decisions were nothing but fraud on power.

33. Having so found that the exercise of power in arriving atdecisions dated 24.08.2007 and 29.01.2010 as well as entertaining ofapplications for licence from those who had bought the lands after theacquisition was initiated, to be fraud on power; we now have to considerGwhat relief be granted in the present matter. The relief to be grantedmust depend upon who the real victim is and to what extent solace canbe granted to such real victim. If the landholders are considered to bethe real victim, Mr. Dhruv Mehta, learned Senior Advocate is absolutelyright in his submissions. If the result of forcing land holders to enter intounnatural and unreasonable bargain was achieved by wrongful utilization

of the power conferred under the Act, in its writ jurisdiction superiorcourt would be justified in granting the relief of invalidating suchtransaction as consequential relief, while holding the State action to bebad and invalid. The law laid down by this Court is quite clear and theobjection that instead of class action in the realm of public law, eachindividual land holder must make good his submissions on individual factsand seek relief of annulment of transaction entered into by him has to berejected. To the extent the unnatural and unreasonable bargain wasforced upon the landholders, there would be justification in granting suchrelief. But in the circumstances, the public interest which the acquisitionwas intended to achieve will never be sub-served. It is nobody’s casethat public interest was adequately achieved and therefore the acquisitionwas required to be dropped. The fact that other acquisitions have beencompleted and have attained the required objective is pointer in thedirection that there was nothing wrong with the initiation but somewherealong while the process was on, it was completely hijacked by vestedinterests. We cannot, therefore, grant mere declaration invalidating thetransaction and grant relief of restoring status ante. The real andsubstantial relief would be in restoring the situation where the process ofacquisition is made free from such supervening vested interests and isenabled to achieve the objective that the acquisition was intended tosub-serve.34. At this stage an aspect needs elaboration and clarification. InUddar Gagan (supra) the proceedings for acquisition under the Acthad culminated in passing of an award. After the declaration of award,the lands were withdrawn from acquisition under the provisions of Section48 of the Act. In terms of the directions issued by this Court in paragraph33 in Uddar Gagan (supra) the withdrawal under Section 48 of the Actwas set aside and the acquisition and award were sustained by thisCourt. In essence therefore, the lands in question continued to be underacquisition and appropriate directions were thereafter passed by thisCourt adjusting the competing claims of the concerned parties. In thepresent case, unlike Uddar Gagan (supra) the acquisition was droppedjust two days before the day the award was to be pronounced. It is truethat the entire process right upto publishing the date for pronouncementof award was validly undertaken, every possible submission was placedon record and all contentions were taken by the persons or partiesinterested. It was not as if any person or any party was denied any

Achance of raising objections or making submissions. The acquisitionwas dropped for reasons, which in our considered view were not germaneat all and the entire exercise of dropping the acquisition was fraud onpower. If that fraud on power is to be invalidated, the real and substantialrestoration would be to ensure that the acquisition proceeds in the logicaldirection and the public purpose is sub-served. In way, the directionsBrequired in the present matter may go beyond what Uddar Gagan (supra)did.35. In certain cases this Court, considering typical fact situationhas passed directions to complete the process of acquisition, for instance:

(a) In Bhimandas Ambwani (Dead) through Lrs. V. DelhiCPower Company Limited[22]it was found, “there had been noproceedings regarding acquisition of the land in dispute”. However, asthe authorities had taken over possession of the land and developed thesame, this Court observed :

“In such fact situation, the only option left out to the respondentsDis to make the award treating Section 4 notification as, on thisdate i.e. 12.02.2013 and we direct the Land Acquisition Collectorto make the award after hearing the parties within period offour months from today.”

(b) In K.B. Ramachandra Raje Urs(Dead) by L.Rs. V. StateEof Karnataka and Others[23], having held that the acquisition andallotment of 55 acres of land to respondent No.28- Society to be contraryto law, it was noted that full-fledged campus had come up in an areaadmeasuring 40 acres of land out of said 55 acres. It was thereforeobserved:

“Insofar as the remaining 40 acres of land allotted to RespondentF28 is concerned, we direct that compensation, in respect thereof,to the person/persons entitled to receive such compensation underthe Land Acquisition Act, will follow the outcome of Writ AppealNo.1654 of 2008. The compensation under the Act will be paid bytaking the date of the order of the learned Single Judge of theGHigh Court i.e. 22-2-2001.”Thus, in cases where there was no valid acquisition but the landwas taken possession of and developed, restoration of land to thelandholders was not found to be the appropriate, adequate and complete

22 (2013) 14 SCC 195H 23 (2016) 3 SCC 422

relief and this Court directed that process of acquisition be initiatedtaking or treating certain date to be the relevant date for initiation of theacquisition. If the power can go to the extent of directing acquisition insuch manner, in case where an acquisition having been properly andvalidly initiated if the supervening circumstances show that there wascomplete fraud on power in dropping the acquisition, can the power ofthe superior court not extend to/not be extended for passing appropriatedirections to complete the acquisition and sub-serve the public interest.But for such fraud on power, the matter in the present case was ripe forpronouncement of award when the acquisition was dropped just twodays before the date of pronouncement. All the steps leading to thepublication of date for pronouncement of award having been validly andcorrectly undertaken, can direction not be passed that there was adeemed award and completed acquisition.

36. Wherever there has been fraud on power, the duty of theCourt is not only to set aside such exercise of power but to see thatthere is no unjust enrichment directly or indirectly as result thereof andthere is full and substantial restoration. Going by the principles laid downby this Court in Indian Council for Enviro-Legal Action (Supra) unjustretention of benefit would be completely against the fundamentalprinciples of justice, equity and good conscience. It was observed thereinthat so long as the deprivation of party has not been fully compensatedfor, injustice to that extent continues. Having found that there was aclear case of fraud on power as result of which unnatural andunreasonable gains have been derived by certain builders/private entities,we consider it our duty to grant full restitution. The restoration in realand substantial terms has to ensure that the public purpose, the acquisitionwas intended to achieve, stands sub-served. In our considered view,this is an appropriate case where this Court has to declare that therewas completed acquisition and the award deemed to have been passedon the date when it was supposed to be pronounced i.e. on 26.08.2007.The suggested relief by the learned Amicus Curiae is also on similarlines.

37. There are certain other elements which need attention at thisstage. The Act now stands replaced by “The Right of Fair Compensationand Transparency in Land Acquisition, Rehabilitation and ResettlementAct, 2013”. In terms of Section 24(1)(b) of said 2013 Act, where anaward had been made under Section 11 of the Act, the proceedingsunder the provisions of the Act would continue as if the Act had not

ABC

Abeen repealed. Thus, even if direction is passed that an award bedeemed to have been made on 26.08.2007, the provisions of the Actwould still continue to operate in respect of such acquisition in question.There is however, one point which may pose some difficulty. Out of 688acres of land which was covered by Declaration under Section 6 of theAct in the present matter, majority of the lands were taken over byBbuilders/private entities and as such presently the concerned landholdersare not in possession of their holdings. However, in case of certainother lands where no transactions were entered into, as result ofdropping of the acquisition, those land holders are presently in occupationwithout there being any cloud of acquisition. If we restore status anteCwhere 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 inany manner, is represented in the proceedings. They would now bevisited with the prospect of losing their holdings. Those who sold awaytheir holdings to the builders/private entities after the acquisition wasDinitiated, naturally would not be prejudiced at all nor can the builders/private entities who purchased the land after the land was initiated canput up plea of prejudice. However those who had never sold theholdings and continued to face the prospect of acquisition will certainlybe put to prejudice. It is possible that some such landholders may haveEsold away their holdings or may have applied and secured licences forconstruction. 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 takecare of all the aforesaid aspects. On one hand, the real and substantialFrelief to be granted in the matter would be not just restoring the statusante and invalidating of the transactions but the relief ought to be thatthe process of acquisition is taken to its logical end and the objective thatsaid acquisition was to achieve must be sub-served. On the other hand,even while passing appropriate directions in the nature that there was adeemed Award, the interest of those landholders who had not partedGwith their holdings and had faced the acquisition and had not participatedin the proceedings ought to be secured. Further, the interest of purchasersof individual apartments is also required to be protected. It is axiomaticthat wherever superior Court finds that the exercise of power by theexecutive was mala fide or that there was fraud of power, the full andsubstantial relief must be granted. The principles of restitution and conceptHof unjust enrichment as explained in cases referred to hereinabove showthat no person who directly or indirectly was party to the fraud ofpower be allowed to reap or retain any unjust enrichment. Though, it isthrough the acts on part of the landholders that the builders/private entitieswere brought on the scene, we don’t hold them to be pari delictoalongwith builders/private respondents. But at the same time they cannotbe given benefit of annulment of transactions and restoration of theirholdings. The greater victim in the matter was the public interest. Theland holders in any case had received considerations which were greaterthan 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 thatthere was deemed award, those who had not sold away their holdingsand had not in any manner either directly or indirectly, tried to jeopardizethe process of acquisition, cannot at this length of time be subjected toany prejudice. We will therefore have to exclude that body of landholderswho had not transferred their holdings unlike the writ petitioners andsimilarly situated landholders, so also the purchasers of individualapartments from the width of our directions. Though fraud vitiates everyresultant action and on that principle every beneficiary/purchaser insubsequent transaction must restore such benefit, an exception has tobe made in favour of individual purchasers of flats or apartments whoare being left undisturbed while moulding the relief. Any payments madeby them can be adjusted towards the amounts payable to the colonizerand their possession can be regularized by HUDA/HSIDC on suitableconditions by making allotment to them. This aspect will stand coveredby directions issued hereafter.

39. Having bestowed our attention to various competing elementsand issues we deem it appropriate to direct:

(a) The decisions dated 24.08.2007 and 29.01.2010 referred tohereinabove are set aside as being brought about by mala fide exerciseof power. In our considered view, those decisions were clear case offraud on power and as such are annulled.

(b) The decision dated 24.08.2007 was taken when the matterswere already posted for pronouncement of the award on 26.08.2007.Since all the antecedent stages and steps prior thereto were properlyand validly undertaken, and since the decision dated 24.08.2007 has beenheld by us to be an exercise of fraud on power, it is directed that anAward is deemed to have been passed on 26.08.2007 in respect of lands

A(i) which were covered by declaration under Section 6 in the presentcase and (ii) which were transferred by the landholders during the period27.08.2004 till 29.01.2010. The lands which were not transferred by thelandholders during the period from 27.08.2004 till 29.01.2010 are notgoverned by these directions.

B(c) Subject to the directions issued hereafter, the lands coveredunder aforementioned direction (b) shall vest in the HUDA/HSIDC, asmay be directed by the State of Haryana, free from all encumbrances.HUDA/HSIDC may forthwith take possession thereof. Consequentlyall licences granted in respect of lands covered by the deemed Awarddated 26.08.2007 will stand transferred to HUDA/HSIDC.C

(d) Since the dropping of acquisition on 24.08.2007 and subsequentdecision dated 29.01.2010 have been set aside, the period between24.08.2007 and upto the date of this judgment shall not be counted forthe purposes of Section 24(2) of the Right to Fair Compensation andTransparency in Land Acquisition, Rehabilitation and Resettlement Act,D2013.

(e) All transactions entered into during the period from 24.08.2007till 29.01.2010, pursuant to which the original landholders transferredtheir holdings in favour of builders/private entities or third parties shallbe subject to and the interest of the respective parties shall be governedby the directions issued hereafter.E

(f) Consistent with directions issued in Para 33 of Uddar Gagan(Supra), the builders/private entities will not be entitled to recover theconsideration paid by them to the landholders. The sale considerationpaid by the builders/private entities to the landholders shall be treatedtowards compensation under the award and the landholders will not beFrequired to refund any amount to such builders/private entities. Thelandholders will be at liberty to prefer Reference under Section 18 of theAct within period of three months from today. For the purposes ofmaintaining such Reference the reasoning that weighed while passingAwards dated 09.03.2006 and 24.02.2007 shall be the basis. If theGReference Court were to enhance the compensation, the amountsreceived by the landholders by way of consideration from the builders/private entities shall be appropriated towards such sum awarded by theReference Court. If the landholders are still entitled to something morethan what they had received from the builders/private entities, thedifferential sum shall be made over to them by the State of HaryanaHtowards acquisition of their interest in the lands in question. If however,

what the landholders had received towards consideration from thebuilders/private entities is found to be in excess of what is awarded bythe Reference Court, the remainder shall not be recovered from them.

(g) Consistent with the directions issued by this Court in Paragraphs33.6 and 33.7 in Uddar Gagan (supra), the builders/private entities willbe entitled to refund/reimbursement of any payment made to thelandholders or the amounts that had been spent on development of theland, such payments shall be made by HUDA or HSIDC on being satisfiedabout the extent of actual expenditure not exceeding HUDA or HSIDCnorms on the subject as the case may be. Refund will however be inrespect of amount at which the landholders sold the land and not ofsubsequent sales. As regards subsequent transactions, the subsequentpurchasers will have remedies against their respective vendors. Claimsof builders/private entities entitled to refund will be taken up after settlingclaims of third parties from whom the builders/private entities had collectedmonies. No interest will be payable on such amounts.

(h) The third parties from whom money had been collected by thebuilder/private entities will either be entitled to refund of the amountfrom 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, ontheir claims being verified or will be allotted the plots or apartments atthe agreed price or prevalent price, whichever is higher. Every suchclaim shall be verified by HUDA or HSIDC. In cases where,constructions have been erected and the entire project is complete or isnearing completion, upon acceptance of the claim, the plots or apartmentsshall be made over to the respective claimants on the same terms andconditions. Except for such verified and accepted claims, the remainingarea 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 thesame in accordance with the prevalent policy and procedure.

In order to facilitate such exercise all third parties who hadpurchased or had been allotted the plots or apartments shall prefer claimswithin one month from today, which claim shall be verified within twomonths from today.

(i) As found by us in the preceding paragraphs, substantial sumswere made over to “middle men”. In the pending investigation, the CBImay do well to unravel the truth. In any case, such hefty sums whichwere made over to “middle men” cannot be said to be rightfully earnedby and belonging to them. In fact, this actually represents the return for

Abeing able to garner the lands in question and getting requisite licencesunder the provisions of the Haryana Act and benefit derived out offraud on power. In our view this money rightfully belongs to the Stateand none other. We direct the authorities of the State as well as theCentral Government to reach the depths of such transactions and recoverevery single pie and make it over to the State Government. completeBinvestigation in the transactions including unearthing unnatural gainsreceived by “middle men” shall be undertaken by the CBI.

(j) If CBI has filed charge sheet before the concerned Court, thesame may be dealt with as per law.

C(k) The State shall give benefit of “Rehabilitation and Resettlementof Land Acquisition Oustees” policy of the State/HUDA/HSIDC to thelandholders. Area so required shall be reserved out of the acquired landitself.

(l) The State may revisit its policy of change of land use andDgiving colonization licence in respect of land which is subject matter ofacquisition.

(m) We are given to understand that Commission of Enquirywas appointed by the State of Haryana to enquire into certain factsconcerning acquisitions in respect of lands in Gurgaon Manesar UrbanComplex and that the matter is presently subject matter of challenge inEa pending writ petition in the High Court of Punjab and Haryana onaccount of which further steps are held up. Without expressing anyopinion on the merits or demerits of such challenge, we request the HighCourt to deal with and dispose of the matter as early as possible andpreferably within two months from the date of receipt of copy of thisForder so that public interest may not suffer by delay in such decision.

40. Before we close, we must record our sincere appreciation forthe efforts put in and for the invaluable assistance rendered by the learnedAmicus Curiae. His analytical approach and suggestions have helped usimmensely in resolving the issues.

41. The appeals stand allowed in the aforesaid terms. There shallbe no order as to costs.

Kalpana K. Tripathy