# RAMESHWAR AND ORS v. STATE OF HARYANA & ORS

- **Citation:** [2022] 13 S.C.R. 711
- **Court:** Supreme Court of India
- **Decided:** 2022-07-21
- **Case number:** Civil Appeal No. 8788 of 2015
- **Bench:** Uday Umesh Lalit, S. Ravindra Bhat, Pamidighantam Sri Narasimha
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/rameshwar-and-ors-v-state-of-haryana-ors-35402
- **Pages:** 65

## Headnote

Land Acquisition Act, 1894: ss. 4, 6 and 23 - Term 'transfer'
in context of *Rameshwar & Ors vs State of Haryana's case -
Meaning and nature of - Exclusion of the land from the deemed
award or forms part of the deemed award - On facts, issuance of
Notification u/s.4 on 27.08.2004, followed by the declaration u/s.6
and the receipt of objections from the landowners as also the matter
posted for publication of the award on 26.08.2007 - However, on
29.01.2010 the State decided to withdraw from the acquisition - In
the interim period, land owners induced to sell or transfer their
land to colonizers/developers at significantly lower rates of
compensation - Most of the colonizers/developers entered into
collaboration agreements after the notification u/s.4 - They sought
and were granted licenses by the Department of Town and Country
Planning - Challenged to, in the *Rameshwar's case - This Court
held that decision to withdraw from the acquisition was a fraud on
the power under the Land Acquisition Act and invalidated all
transfers effected from the date of publication to the date of
publication of State's decision to revoke the acquisition -
Applications by the Haryana State Industrial and Infrastructure
Development Corporation-HSIIDC and several others seeking
clarification of *Rameshwar's case - Held: Term 'transfer' used
in *Rameshwar's case is not confined to sale, lease or other
encrumbrance - It includes development and/or collaboration
agreements, as well as licenses issued during the suspect period,
whether or not in favour of the developer - Lands covered by
licenses issued to Paradise (ultimately transferred to Green Heights);
Karma (for which collaboration was entered into with Unitech);
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[2022] 13 S.C.R.
Ram Pyari, Balbir Singh, Earl and Frontier (ultimately used by
Godrej); Express Greens (DLF); Kalinga and Innovative amount to
transfer - With respect to Green Heights, a sum of 5 crores per
acre is payable by Green Heights to HSIIDC - With respect to
Godrej, a sum of 5 crores per acre is payable by Godrej to HSIIDC
- Upon full compliance thereof, the lands covered by Green Heights
and Godrej's projects would be excluded from the deemed award -
With respect to Karma, the 25.95 acres of land forms part of the
deemed award - Lands belonging to R.P. Estates and Subros,
excluded from the deemed award - With respect to Kalinga, the
HSIIDC to complete verification of all the relevant documents -
With respect to ABW, the HSIIDC to refund the amounts payable to
the allottees of the entire project - With respect to Legend Heights,
HSIIDC to hand over commercial units to allottees who were either
granted occupation, and /or in whose favour conveyance was
executed - Issuance of direction to the State to ensure that all
references pertaining to the acquisition are answered as expeditiously
as possible.
Disposing of the appeals, the Court
HELD: 1. It is clear that the collaboration agreements
formed the first element of a two-step process whereby the
colonizers / developers (who might have been also land owners)
having acquired lands, prior to the preliminary notification, went
ahead and entered into commitments by executing collaboration
agreements after the notification under Section 4, and even
declaration under Section 6, with full knowledge. The
consideration for parting with developmental rights was far higher
than the market value of the lands which they would have been
entitled to. These acts ultimately culminated with the decision
not to acquire the lands. The second step - and the important
one persuading the State not to acquire the lands - was the
application for, and the grant of, development licenses. Uniformly,
in all these cases, the applications were made prior to the
scheduled date of publication of the award (26.08.2007). This is a
significant and tell-tale factor because there was no way the
applicants would have ordinarily known that an award would not
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## Text

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 [2022] 13 S.C.R. 711
711
RAMESHWAR AND ORS.
v.
STATE OF HARYANA & ORS.
(Miscellaneous Application No. 50 of 2019)
In
(Civil Appeal No. 8788 of 2015)
JULY 21, 2022
[UDAY UMESH LALIT, S. RAVINDRA BHAT AND
PAMIDIGHANTAM SRI NARASIMHA, JJ.]
Land Acquisition Act, 1894: ss. 4, 6 and 23 - Term 'transfer'
in context of *Rameshwar & Ors vs State of Haryana's case -
Meaning and nature of - Exclusion of the land from the deemed
award or forms part of the deemed award - On facts, issuance of
Notification u/s.4 on 27.08.2004, followed by the declaration u/s.6
and the receipt of objections from the landowners as also the matter
posted for publication of the award on 26.08.2007 - However, on
29.01.2010 the State decided to withdraw from the acquisition - In
the interim period, land owners induced to sell or transfer their
land to colonizers/developers at significantly lower rates of
compensation - Most of the colonizers/developers entered into
collaboration agreements after the notification u/s.4 - They sought
and were granted licenses by the Department of Town and Country
Planning - Challenged to, in the *Rameshwar's case - This Court
held that decision to withdraw from the acquisition was a fraud on
the power under the Land Acquisition Act and invalidated all
transfers effected from the date of publication to the date of
publication of State's decision to revoke the acquisition -
Applications by the Haryana State Industrial and Infrastructure
Development Corporation-HSIIDC and several others seeking
clarification of *Rameshwar's case - Held: Term 'transfer' used
in *Rameshwar's case is not confined to sale, lease or other
encrumbrance - It includes development and/or collaboration
agreements, as well as licenses issued during the suspect period,
whether or not in favour of the developer - Lands covered by
licenses issued to Paradise (ultimately transferred to Green Heights);
Karma (for which collaboration was entered into with Unitech);
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[2022] 13 S.C.R.
Ram Pyari, Balbir Singh, Earl and Frontier (ultimately used by
Godrej); Express Greens (DLF); Kalinga and Innovative amount to
transfer - With respect to Green Heights, a sum of 5 crores per
acre is payable by Green Heights to HSIIDC - With respect to
Godrej, a sum of 5 crores per acre is payable by Godrej to HSIIDC
- Upon full compliance thereof, the lands covered by Green Heights
and Godrej's projects would be excluded from the deemed award -
With respect to Karma, the 25.95 acres of land forms part of the
deemed award - Lands belonging to R.P. Estates and Subros,
excluded from the deemed award - With respect to Kalinga, the
HSIIDC to complete verification of all the relevant documents -
With respect to ABW, the HSIIDC to refund the amounts payable to
the allottees of the entire project - With respect to Legend Heights,
HSIIDC to hand over commercial units to allottees who were either
granted occupation, and /or in whose favour conveyance was
executed - Issuance of direction to the State to ensure that all
references pertaining to the acquisition are answered as expeditiously
as possible.
Disposing of the appeals, the Court
HELD: 1. It is clear that the collaboration agreements
formed the first element of a two-step process whereby the
colonizers / developers (who might have been also land owners)
having acquired lands, prior to the preliminary notification, went
ahead and entered into commitments by executing collaboration
agreements after the notification under Section 4, and even
declaration under Section 6, with full knowledge. The
consideration for parting with developmental rights was far higher
than the market value of the lands which they would have been
entitled to. These acts ultimately culminated with the decision
not to acquire the lands. The second step - and the important
one persuading the State not to acquire the lands - was the
application for, and the grant of, development licenses. Uniformly,
in all these cases, the applications were made prior to the
scheduled date of publication of the award (26.08.2007). This is a
significant and tell-tale factor because there was no way the
applicants would have ordinarily known that an award would not
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be pronounced on the concerned date. In fact, the application
clearly indicates foreknowledge that their lands would not be
ultimately acquired. This is what may be characterized as the
proverbial 'smoking gun' which establishes the complicity of
these individuals and entities. [Para 39][745-D-G]
2. Land ownership typically carries with it a bundle of rights.
A landowner has the right to possess, sell, lease, develop, sublet, occupy, etc. On an overall analysis of the common features of
all the collaboration agreements, it is evident that except for the
empty husk of a title, the land owner parted with predominant
and substantial rights over the property, including possession.
In almost all the cases, these rights were parted for consideration
which was far above the notified acquisition rates. This observation
applies in the case of the two companies - Frontier and Karma,
who continued to be the land owners of the land. Such 'emptying
out' of all important attributes that constitute rights and interest
over the property cannot but be viewed as a 'transfer'. To hold
otherwise would mean that after receiving substantial amounts -
equal to many times over the existing market rates (that could
ordinarily have been claimed by the landowner in respect of their
holding in acquisition proceedings) - and entitling the developer
to create third-party rights in respect of not a few but hundreds
of people, nevertheless, the landowner could still hold out and
claim their right to not part with the title. Such a conclusion would
defy reason and commonsense and cannot be countenanced. In
the circumstances, it is held that the collaboration agreements in
all these cases which ultimately culminated in the grant of licenses
would fall within the mischief of the term 'transfer' as envisioned
in the main judgment, as it foreclosed the enjoyment and
possession by the landowner, who willingly parted with such
rights, for valuable consideration and acquiesced to irreversible
changes on it. [Para 40][746-A-E]
3. The findings are summarized as follows:
a. The expression 'transfer' used in the main judgment,
Rameshwar v State of haryana (2018) 6 SCC 215 is not confined
RAMESHWAR AND ORS. v. STATE OF HARYANA & ORS.
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to sale, lease or other encumbrance. It includes development
and/or collaboration agreements, as well as licenses issued (for
development) during the suspect period, whether or not in favour
of the developer.
b. As a corollary to the above, the lands covered by licenses
issued to Paradise (ultimately transferred to Green Heights);
Karma (for which collaboration was entered into with Unitech);
Ram Pyari, Balbir Singh, Earl and Frontier (ultimately used by
Godrej); Express Greens (DLF); Kalinga and Innovative amount
to transfer.
c. With respect to Green Heights, a sum of 5 crores per
acre is payable by Green Heights to HSIIDC. With respect to
Godrej, a sum of 5 crores per acre is payable by Godrej to
HSIIDC. Upon full compliance with directions above, the lands
covered by Green Heights and Godrej's projects shall be
excluded from the deemed award.
d. With respect to Karma, the 25.95 acres of land subject
of License No. 206 of 2008 forms part of the deemed award.
e. Lands measuring 2.9875 acres and 10.881 acres
respectively belonging to R.P. Estates and Subros, are excluded
from the deemed award.
f. With respect to Express Greens (DLF), contentions to
exclude the project from the deemed award are rejected.
g. With respect to Kalinga, it is directed that HSIIDC shall
complete verification of all the relevant documents furnished by
Kalinga.
h. With respect to ABW, it is directed that HSIIDC to refund
the amounts payable to the allottees of the entire project.
i. With respect to Speed Town, the contentions to exclude
the land from the deemed award are rejected. It is held that Speed
Town shall be entitled to the compensation to be decided, in
respect of the land, on the same basis as in the case of all others
entitled to it.
j. With respect Paramveer, the contentions to exclude the
hotel block from the deemed award are rejected. All rights, title
and interest in those portions of Innovative's properties shall
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vest in HSIIDC and be part of the deemed award. Innovative
shall be entitled to amounts like in the case of all other developers/
owners in accordance with the main judgment.
k. With respect to Legend Heights, HSIIDC is directed to
Hand over commercial units to allottees who were either granted
occupation, and /or in whose favour conveyance was executed.
l. With respect to Dharamveer and other petitioners, as
well as similarly placed individuals the rights and title in respect
of lands under their occupation is vested with HSIIDC.
m. The State is directed to ensure that all references
pertaining to the acquisition are answered as expeditiously as
possible. The concerned reference courts are hereby directed
to conclude all the proceedings in 185 references received for
365 acres of land and pronounce the award in accordance with
law within the stipulated period.
n. It is clarified that wherever the allottees have not paid
the full amounts (payable in terms of the agreements) HSIIDC
shall be entitled to the same rights in law as in the case of the
original builder/developer, which include, but are not limited to,
insisting full payment before handing over possession to the
allottees. [Para 121][770-A-D; F,H; 771-A, C; 772-E; 773-C-D,
F, G; 774-C, F-H]
*Rameshwar v State of haryana (2018) 6 SCC 215 -
Clarified.
Faqir Chand Gulati vs Uppal Agencies Pvt. Ltd. & Anr.
(2008) 10 SCC 345 : [2008] 10 SCR 697; Ashok Kumar
Jaiswal v. Ashim Kumar Kar AIR 2014 Cal 92; Sushil
Kumar Agarwal v Meenakshi Sadhu & Ors. (2019) 2
SCC 241 : [2018] 12 SCR 756; Unitech Ltd. v. Union
of India (2016) 2 SCC 569 : [2015] 12 SCR 992;
Dharamvir v State of Haryana SLP (C) No. 5490 of
2021 - referred to.
Case Law Reference
[2008] 10 SCR 697
referred to
Para 32
[2018] 12 SCR 756
referred to
Para 35
[2015] 12 SCR 992
referred to
Para 36
RAMESHWAR AND ORS. v. STATE OF HARYANA & ORS.
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CIVIL APPELLATE/INHERENT JURISDICTION
:
Miscellaneous Application No.50 of 2019 In Civil Appeal No.8788 of
2015.
From the Judgment and Order dated 12.03.2018 in C.A. No.8788
of 2015 passed by the Supreme Court of India.
With
Diary No(s). 26552/2019, MA 2150/2020 in C.A. No. 8788/2015,
MA 2149/2020 in C.A. No. 8788/2015, CONMT. PET.(C) No. 2226/
2018 in C.A. No. 8788/2015, MA 1175/2019 in C.A. No. 8788/2015,
Diary No(s). 24553/2019, Diary No(s). 45026/2019, SLP(C) No. 5490/
2021, Diary No(s). 7888/2020, CONMT. PET. (C) No. 513/2020 in C.A.
No. 8788/2015, MA 1521/2020 in C.A. No. 8788/2015, MA 2067/2020
in C.A. No. 8788/2015, MA 2228/2020 in C.A. No. 8788/2015, SLP(C)
No. 2147/2021, Diary No(s). 5699/2021, Diary No(s). 7775/2021, Diary
No(s). 9505/2021, Diary No(s). 6705/2022, Diary No(s). 9002/2022, M.A.
No. 864/2019, Diary No. 45009/2019. AND CONMT. PET. (C) No.
716/2021 in MA 50/2019 in C.A. No. 8788/2015.
Tushar Mehta, SG, K.M. Nataraj, Ms. Aishwarya Bhati, ASGs,
Anil Grover, Alok Sangwan, Sr. AAGs, Brijender Chahar, Gopal Shankar
Narayan, P.S. Patvalia, Sanjib Sen, Ranjit Kumar, Gopal Shankaranayan,
Ms. Sonia Mathur, Pinaki Mishra, Randeep Roy, Nikhil Nayyar, R. S.
Rai, Ms. Kiran Suri, Sanjiv Sen, Sr. Advs., Ms. Rashi Bansal, Amit
Sharma, Rajan Kr. Chourasia, Sachin Sharma, Ashok Panigrahi, Arvind
Kumar Sharma, Mrs. Jyoti Chahar, Karan Chahar, Ms. Pooja Chahar,
Shashi Bhushan, Vinay Garg, Naman Joshi, Guneet Sidhu, Yuvraj Francis,
Ms. Manisha Ambwani, Ankit Vijaywargiya, Aditya Verma, Prateek
Rathee, Sunny Choudhary, Piyush Singh, Aditya Parolia, Akshay
Srivastava, Rajesh Kumar, Gaurav Goel, Nithin Chandaran, Parijat
kishore, Abhay Singh, M. Saurabh tanwar, Anurag Ojha, Karan Aggarwal,
Mrs. Shubhangi Tuli, Devashish Bharuka, Ms. Sarvshree, Justimne
George, Ms. Shriya Chanda, Kapil Choudhary, Siddhant Buxy, M. L.
Lahoty, Paban K. Sharma, Anchit Sripat, Pranab Kumar Nayak,
Himanshu Shekhar, Nitin Bhardwaj, Ms. Anusha Magarajan, Mrs. Pragya
Baghel, Ms. Samten Doma, Sourabh Tandon, Siddharth Batra, Ms.
Shivani Chawla, Chinmay Dubey, Ankur Bansal, M.K. Maroria, Zoheb
Hussain, Rajat Nair, Ms. Ruchi Kohli, Sughosh Subramaniyam, Raghav
Sharma, Ms. Ameyavikrama Thanvi, Ms. Cleste Aggarwal, B. Krishna
Prasad, Ms. Noopur Singhal, Rahul Khurana, Satish Kumar, Sanjay
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Kumar Visen, Navin Gupta, Ms. Babita Mishra, Suresh Kumar Bhan,
Ms. Ruby Singh Ahuja, Pravin Bahadur, Ms. Kritika Sachdeva, Lakshya
Khanna, Jappanpreet Hore, M/S. Karanjawala & Co., Mahesh Agarwal,
Rishi Agrawala, Ankur Saigal, Himanshu Satija, Ms. Ayushi Amod, Kunal
Dawar, E. C. Agrawala, Pulkit Deora, Udit Gupta, Akshay Goel, Ms.
Mahima Dayani, Anup Jain, Arnav Vidhyarthi for Udit Kishan &
Associates, Ms. Sugandha Batra, Ramendra Mohan Patnaik, Ayush
Shrivastava, Ms. Rubina Virmani, Rituraj Singh, Shivendra Singh, Somesh
Arora, Aviral Kashyap, Vimal Sinha, Ms. Gunjan Sinha Jain, Ramkrishna
Veerendra, Chanchal Kumar Ganguli, Abhinav Agrawal, Rajiv K.
Virmani, Gaurav Jain, Atul Malhotra, Himanshu, Sourav Jindal, Abhishekh
Garg, Akshay Goyal, Shish Pal Laler, Hitesh Kumar, Atul Vedant Pradhan,
Aayush, Ravi Panwar, S. S. Jauhar, Ms. Swati Bhardwaj, Amit Pawan,
Rajat Kapoor, Rohit Rajershi, Avadh Bihari Kaushik, Ranbir Singh Yadav,
Amarjeet Singh, Umesh Kumar Khaitan, Mrs. Shally Bhasin, Ms.
Meenakshi Chauhan, Vikas Mehta, Ms. Ranjeeta Rohatgi, Rameshwar
Prasad Goyal, Advs. for the appearing parties.
The Judgment of the Court was delivered by
S. RAVINDRA BHAT, J.
INDEX
Background.......................................................para(s) 1-6
I. Applications filed by:
(a) M/s. Paradise Systems Pvt. Ltd.....................para(s) 7-10
(b) M/s. Karma Lakelands Pvt. Ltd....................para(s) 11-18
(c) Frontier Home Developers Pvt. Ltd..............para(s) 19-27
(d) Analysis and conclusion of I (a) (b) and (c)...para(s) 28-45
II. Applications filed by:
(a) M/s. R.P. Estates Pvt. Ltd and M/s. Subros
Ltd...................................................................para(s) 46-50
III. Applications filed by:
(a) Express Greens / DLF Home Developer Ltd...para(s) 51-64
IV. Applications filed by:
RAMESHWAR AND ORS. v. STATE OF HARYANA & ORS.
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(a) M/s Kalinga Realtors Pvt. Ltd.....................para(s) 65-75
V. ABW Infrastructure Ltd...............................para(s) 76-88
VI. Applications filed by:
(a) Speed Town Planners Pvt. Ltd..................para(s) 89-101
VII. Applications pertaining to Innovative Infradevelopers Pvt.
Ltd.:
(a) Legend Height Owners Welfare Association.....para(s) 102104
(b) Paramveer Distributors Pvt. Ltd...............para(s) 105-106
(c) Analysis of VII (a) and (b)........................para(s) 107-113
VIII. Applications filed by:
(a) Dharamvir & Ors....................................para(s) 114-118
IX. Other issues............................................para(s) 119-120
Conclusion..............................................para(s) 121(a)-(p)
Background
1. The present judgment will dispose of various applications filed
by the Haryana State Industrial and Infrastructure Development
Corporation (hereinafter, "HSIIDC") and others, by way of clarifications
sought on the judgment delivered by this Court in Rameshwar v. State
of Haryana1(hereinafter, "main judgment").
2. The main judgment of this Court had, after duly considering the
sequence of facts and developments which occurred after publication
of the notification under Section 4 of the (now repealed) Land Acquisition
Act, 1894 (hereinafter, "Acquisition Act") on 27.08.2004, read with the
final decision of the State of Haryana (hereinafter, "State") dated
29.01.2010 to not proceed with the said acquisition, declared as mala
fide and inoperative the decision dated 29.01.2010. The Court's reasoning
was that the State, in principle, had decided to withdraw from the
acquisition afterthe notification under Section 4, which was followed by
the declaration under Section 6 and the receipt of objections from the
concerned lands owners etc., even when the matter was posted for
publication of the award on 26.08.2007. In the interim period, land owners,
1 Rameshwar & Ors. v. State of Haryana & Ors., (2018) 6 SCC 215.
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alarmed by the prospect of losing their holdings, were induced to sell or
otherwise transfer their lands to colonizers / developers at significantly
lower rates of compensation. Most of such colonizers / developers had
entered into collaboration agreements after the notification under Section
4, sought (and were granted) licenses by the Department of Town and
Country Planning of the State of Haryana (hereinafter, "DTCP"). This
Court found that upon an overall consideration of the materials (which
included relevant official notings in government files, ministerial decisions
and notifications), the state machinery was used to further private ends.
The Court held that such a decision to withdraw from acquisition was a
fraud on power under the Acquisition Act. Therefore, the judgment
invalidated all transfers effected from the date of publication of the
notification under Section 4, to the date of publication of the State's
decision to revoke the acquisition i.e., from 27.08.2004 to 29.01.2010
(hereinafter, "suspect period").
3. Apart from invalidating the State's final decision, the judgment
also contained consequential directions on various aspects. Before moving
further, it would be useful to extract these directions:
"42. Having bestowed our attention to various competing
elements and issues we deem it appropriate to direct:
42.1. The decisions dated 24-8-2007 and 29-1-2010 referred
to hereinabove are set aside as being brought about by mala
fide exercise of power. In our considered view, those decisions
were clear case of fraud on power and as such are annulled.
42.2. The decision dated 24-8-2007 was taken when the
matters were already posted for pronouncement of the award
on 26-8-2007. Since all the antecedent stages and steps prior
thereto were properly and validly undertaken, and since the
decision dated 24-8-2007 has been held by us to be an exercise
of fraud on power, it is directed that an award is deemed to
have been passed on 26-8-2007 in respect of lands:
(i) which were covered by declaration under Section 6 in the
present case, and
(ii) which were transferred by the landholders during the
period 27-8-2004 till 29-1-2010.
The lands which were not transferred by the landholders
during the period from 27-8-2004 till 29-1-2010 are not
governed by these directions.
RAMESHWAR AND ORS. v. STATE OF HARYANA & ORS.
[S. RAVINDRA BHAT, J.]
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42.3. Subject to the directions issued hereafter, the lands
covered under aforementioned Direction 42.2 shall vest in
HUDA/HSIIDC, as may be directed by the State of Haryana,
free from all encumbrances. HUDA/HSIIDC may forthwith take
possession thereof. Consequently, all licences granted in
respect of lands covered by the deemed award dated 26-82007 will stand transferred to HUDA/HSIIDC.
42.4. Since the dropping of acquisition on 24-8-2007 and
subsequent decision dated 29-1-2010 have been set aside,
the period between 24-8-2007 and up to the date of this
judgment shall not be counted for the purposes of Section
24(2) of the Right to Fair Compensation and Transparency
in Land Acquisition, Rehabilitation and Resettlement Act,
2013.
42.5. All transactions entered into during the period from 248-2007 till 29-1-2010, pursuant to which the original
landholders transferred their holdings in favour of builders/
private entities or third parties shall be subject to and the
interest of the respective parties shall be governed by the
directions issued hereafter.
42.6. Consistent with the directions issued in para 33 of Uddar
Gagan [Uddar Gagan Properties Ltd. v. Sant Singh, (2016) 11
SCC 378: (2016) 4 SCC (Civ) 198], the builders/private entities
will not be entitled to recover the consideration paid by them
to the landholders. The sale consideration paid by the
builders/private entities to the landholders shall be treated
towards compensation under the award and the landholders
will not be required to refund any amount to such builders/
private entities. The landholders will be at liberty to prefer
Reference under Section 18 of the Act within a period of three
months from today. For the purposes of maintaining such
reference the reasoning that weighed while passing awards
dated 9-3-2006 and 24-2-2007 shall be the basis. If the
Reference Court were to enhance the compensation, the
amounts received by the landholders by way of consideration
from the builders/private entities shall be appropriated towards
such sum awarded by the Reference Court. If the landholders
are still entitled to something more than what they had received
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from the builders/private entities, the differential sum shall
be made over to them by the State of Haryana towards
acquisition of their interest in the lands in question. If,
however, what the landholders had received towards
consideration from the builders/private entities is found to be
in excess of what is awarded by the Reference Court, the
remainder shall not be recovered from them.
42.7. Consistent with the directions issued by this Court in
paras 33.6 and 33.7 in Uddar Gagan [Uddar Gagan Properties
Ltd. v. Sant Singh, (2016) 11 SCC 378 : (2016) 4 SCC (Civ) 198]
, the builders/private entities will be entitled to refund/
reimbursement of any payment made to the landholders or
the amounts that had been spent on development of the land,
such payments shall be made by HUDA or HSIIDC on being
satisfied about the extent of actual expenditure not exceeding
HUDA or HSIIDC norms on the subject, as the case may be.
Refund will however be in respect of amount at which the
landholders sold the land and not of subsequent sales. As
regards subsequent transactions, the subsequent purchasers
will have remedies against their respective vendors. Claims
of builders/private entities entitled to refund will be taken up
after settling claims of third parties from whom the builders/
private entities had collected monies. No interest will be
payable on such amounts.
42.8. The third parties from whom money had been collected
by the builder/private entities will either be entitled to refund
of the amount from and out of and to the extent of the amount
payable to the builder/private entities in terms of above
direction, available with the State, on their claims being
verified or will be allotted the plots or apartments at the agreed
price or prevalent price, whichever is higher. Every such claim
shall be verified by HUDA or HSIIDC. In cases where
constructions have been erected and the entire project is
complete or is nearing completion, upon acceptance of the
claim, the plots or apartments shall be made over to the
respective claimants on the same terms and conditions. Except
for such verified and accepted claims, the remaining area or
apartments will be completely at the disposal of HUDA
RAMESHWAR AND ORS. v. STATE OF HARYANA & ORS.
[S. RAVINDRA BHAT, J.]
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or HSIIDC, as the case may be, which shall be free and competent
to dispose of the same in accordance with the prevalent policy
and procedure. In order to facilitate such exercise all third
parties who had purchased or had been allotted the plots or
apartments shall prefer claims within one month from today,
which claim shall be verified within two months from today.
42.9. As found by us in the preceding paragraphs, substantial
sums were made over to "middlemen". In the pending
investigation, CBI may do well to unravel the truth. In any
case, such hefty sums which were made over to "middlemen"
cannot be said to be rightfully earned by and belonging to
them. In fact, this actually represents the return for being able
to garner the lands in question and getting requisite licences
under the provisions of the Haryana Act and a benefit derived
out of fraud on power. In our view, this money rightfully
belongs to the State and none other. We direct the authorities
of the State as well as the Central Government to reach the
depths of such transactions and recover every single pie and
make it over to the State Government. A complete investigation
in the transactions including unearthing unnatural gains
received by "middlemen" shall be undertaken by CBI."
4. The present applications have been preferred by HSIIDC and
several colonizers / developers, transferees, license holders as well as
associations of allottees of flats or commercial plots, consumers, etc.
The primary question which this Court has been called upon to answer
is as to the nature of the term 'transfer', adverted to in para 42 of the
main judgment.
5. The colonizers / developers and license holders on the one
hand submitted that so long as the lands were not 'transferred' by their
owners (who continued to hold title), mere grant of developmental rights
or other associated rights by instruments such as builder development
agreements, collaboration agreements, and other contracts would not
amount to 'transfer' within the meaning of the main judgment. The stand
of HSIIDC and the State (based upon the opinion of the learned Advocate
General of Haryana) on the other hand was that entering into such
development agreements or contracts was in fact a 'transfer' as it
impeded the enjoyment of title by the owners. It was further submitted
that such agreements led to issuance of licenses, which were the basis
for ultimately deciding not to acquire such lands.
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6. To appreciate the rival contentions, it would be necessary to
set out the facts in regard to the relevant transactions.
I.
 Applications filed by (a) M/s. Paradise Systems Pvt.
Ltd.; (b) M/s. Karma Lakelands Pvt. Ltd. and (c)
Frontier Home Developers Pvt. Ltd.
a.
M/s. Paradise Systems Pvt. Ltd. and Green Heights
Projects Pvt. Ltd.
7. Paradise Systems Pvt. Ltd., (hereinafter, "Paradise") purchased
2.681 acres of land in village Lakhnaula on 06 - 07.04.2004, by registered
sale deeds.2 On 09.09.2007, Paradise entered into a collaboration
agreement with M/s. Sunshine Telecom Services Pvt. Ltd. (hereinafter,
"Sunshine"). The consideration for that agreement was ` 75 lakhs -
received by Paradise. In addition, Paradise was entitled to 35% share in
the built-up commercial office space with proportionate land rights and
common area rights of the developed property. Paradise granted the
'absolute developmental right' of land for construction of commercial
office space. The agreement also recorded that the period for completion
of the project was to be sixty months.
8. Based on this collaboration agreement, an application was made
for grant of license to the DTCP, and License No. 59 of 2009 was
granted on 26.10.2009. Paradise alleged that Sunshine did not adhere to
the terms of the collaboration agreement. Paradise claims to have
refunded all amounts received by it and annulled that transaction by
deed dated 30.03.2013. Paradise thereafter entered into another
collaboration agreement with M/s. Green Heights Projects Pvt. Ltd.
(hereinafter, "Green Heights") for development of the same lands on
30.03.2013. This collaboration agreement referred to License No. 59 of
2009, which was valid up to 25.10.2013. Paradise parted with all rights
of development to Green Heights.3 In terms of this collaboration
agreement, Paradise received ` 28.40 crores as consideration. The
collaboration agreement also recorded the liability of Paradise to the
tune of ` 4.25 crores to the DTCP.
2 Referred to in the collaboration agreement between Paradise and Green Heights Projects
Pvt. Ltd. dated 30.03.2013. The collaboration agreement was executed on behalf of
Paradise by its then director, Mr. Lalit Modi and on behalf of Green Heights Projects
Pvt. Ltd. by its director, Mr. Virendra Kumar Bhatia.
3 Detailed facts, with documents are set out in I.A. 112515/2020 in M.A. 2150 of 2020.
RAMESHWAR AND ORS. v. STATE OF HARYANA & ORS.
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9. Both Paradise and Green Heights contend that no 'transfer'
took place in the suspect period. It was argued on their behalf by learned
Senior Advocates Mr. P.S. Patwalia and Ms. Kiran Suri that parties
were (and continued to be) the owners of the lands in question, which
were purchased prior to the notification under Section 4 dated 27.08.2004.
In these circumstances, Paradise was legitimately entitled to enter into
collaboration agreements, first with Sunshine Telecom, and later with
Green Heights. Paradise received valuable consideration in its agreement
with Green Heights. It was argued that Green Heights had invested `
144.91 crores in the project and constructed a total of 371 units. Counsels
further submitted that a sum of ` 139.78 crores had been received from
allottees who booked the properties. The amounts received and the
particulars of the allottees who had paid for respective allotted units
have been revealed to the Court by Green Heights4. It was therefore
urged that firstly, the transaction which Paradise entered into initially
with Sunshine and subsequently with Green Heights, did not fall within
the mischief of the proscribed transactions that were covered by the
main judgment. Secondly, the project was completed and the allottees
had paid almost the entire consideration which was utilized in the
construction of the building. The counsels submitted that the Court should
clarify that there was no 'transfer' in respect of the land covered by
License No. 59 of 2009.
10. HSIIDC and the State urged that though there was no 'transfer'
or conveyance of the title in the strict sense, what was apparent was
that in terms of the collaboration agreements, though the original
landowner held nominal title, effective control of the lands was parted to
the colonizer / developer. In the case of Sunshine, the consideration was
` 75 lakhs, which was in excess by more than twice the value of
compensation offered under the Acquisition Act in adjacent lands. In the
case of Green Heights, Paradise received ` 28.40 crores. It was
submitted that under the collaboration agreement, the colonizer / developer
was entitled to develop the lands, build upon it, and allot the residential or
commercial unit, as the case was, to those who entered into agreements
and paid valuable monies. Crucial rights such as possession, the right to
construct as per one's choice, and the right to sell, all devolved on the
colonizer / developer, who would be entitled to a share of the proceeds.
Therefore, it was urged that the real purpose behind the transactions
4 I.A. No. 118401 of 2020 in M.A. No. 2150 of 2020.
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ought to be viewed holistically, and not only one facet of it, i.e., retention
of the title by the landowners. HSIIDC and the State therefore, contended
that these lands clearly fell within the description of 'transfers' and should
be included in the award deemed to have been passed on 26.08.2007 by
the main judgment (hereinafter, "deemed award").
b. Karma Lakelands Pvt. Ltd. and Unitech Ltd.
11. Karma Lakelands Pvt. Ltd. (hereinafter, "Karma") had
purchased lands in villages Manesar, Naurangpur and Lakhnaula,
between 1996 and 2004. In respect of the total 207.11 acres it had
acquired, Karma was granted a conversion of land use (hereinafter,
"CLU") certificate by the State on 13.03.1996.
12. The notification issued under Section 4 had included these
207.11 acres, as well as another lot of 25.95 acres in villages Naurangpur
and Lakhnaula, owned by companies whose dominant shareholder (to
the extent of 90%) was also the majority shareholder in Karma. When
the declaration under Section 6 was published on 25.08.2005, Karma's
lands, which were the subject of the CLU (207.11 acres), were dropped
from acquisition. This was apparently in tune with the existing policy of
not acquiring lands whose use had been converted. There is no controversy
about those lands at present.
13. In these proceedings, it is the smaller parcel of 25.95 acres of
land, which is the subject matter of consideration. Unlike the lands for
which CLU had been obtained, these 25.95 acres were included in the
acquisition proceedings, in the declaration under Section 6. In respect of
these lands, Karma had entered into a collaboration agreement on
16.02.2004, and a supplementary agreement on 24.12.2006, after the
publication of the declaration under Section 6 i.e., after 25.08.2005. The
collaboration agreement envisaged development of these lands by M/s
Unitech Ltd. (hereinafter, "Unitech"). According to the arrangement, a
large number of golf villas were to be built and given out on long-lease
basis. During the proceedings before this Court, Unitech stated that it
had paid ` 15 crores to Karma as consideration for the same.
14. By the time the supplementary agreement was executed on
24.12.2006, the Delhi High Court approved a scheme of amalgamation
of the land-owing companies, merging them with Karma. Karma then
applied to the DTCP for a license to develop a group housing colony on
15.01.2007. Consequently, License No. 206 of 2008 was issued on
RAMESHWAR AND ORS. v. STATE OF HARYANA & ORS.
[S. RAVINDRA BHAT, J.]
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16.12.2008. Thereafter, when the award scheduled for 26.08.2007 was
not pronounced, and the decision of the State to not acquire lands was
taken on 29.01.2010, these 25.95 acres belonging to Karma were
excluded from acquisition.
15. Mr. Brijender Chahar, learned Senior Advocate for Karma,
argued that the State's attempt to include Karma's land in the deemed
award was untenable. He also urged that the landowning companies
which eventually merged with Karma had as a matter of fact purchased
these lands as early as the mid-1990s. Karma's bona fides was evident
from the fact that the largest portion of its acquired land, i.e., 207.11
acres, was left out of the acquisition on a proper application of the existing
policy, which the State consciously followed. By this policy, lands which
had CLU certificates were excluded. Therefore, the 207.11 acres
earmarked for the development of the golf course which was a subject
matter of the CLU obtained in 1996 was excluded; consequently, it did
not find place in the declaration under Section 6. It was submitted that
even though the non-CLU lands, i.e., 25.95 acres, did not fulfill the terms
of the policy, nevertheless, the justification for not letting the State proceed
with their acquisition was that neither Karma nor its predecessors had
attempted to influence the acquisition. Karma submitted that while these
lands were included in the notification under Section 6, they stood on the
same footing as the lands owned by other bona fide land owners, because
they were not the subject matter of any speculation. The lands had been
purchased at least ten years or so prior to the notification issued under
Section 4. In the circumstances, Karma was justified in seeking a license
after waiting for a reasonable period of time, even within the suspect
period. Mr. Chahar also pointed out that no malice or ulterior motive
could be attributed to Karma because its collaboration with Unitech was
entered into on 16.02.2004, which was prior to the notification under
Section 4.
16. Learned Senior Advocate further submitted that Karma's
applications, i.e., M.A. No. 1046/2019, and connected applications, were
for directions for release of a total area of 9.7 acres. It was submitted
that these were seven distinct units of land which Karma was forced to
purchase because they fall in pockets within the larger area of 207.11
acres, left out of the acquisition when the declaration under Section 6
was issued. It was submitted that being a contiguous land, it interfered
with the integrity of the golf course. Their inclusion in acquisition would
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ultimately disturb the peaceful enjoyment of land, which Karma was
legitimately entitled to. He also relied upon a policy of the State dated
14.06.2012 (issued under a letter5) which contained a comprehensive
policy in respect of leftover pockets of land. It was submitted that this
Court should grant liberty to the State to release the lands which were
the matter of acquisition in view of this policy. However, at the end of
the hearings, Mr. Chahar sought and was granted liberty to withdraw
the application (M.A. No. 1046 of 2019). The application was therefore
dismissed as withdrawn on 19.04.2022.
17. Learned counsel for HSIIDC Mr. Sanjay Kumar Visen argued
that even though Karma or its affiliates had purchased the lands earlier,
only 207.11 acres was covered by a previously issued CLU. Its exclusion
from acquisition was justifiable due to extant policy. However, with respect
to 25.95 acres, it was included in the declaration under Section 6, and
there was no justification for its non-inclusion in the deemed award. It
was urged that Karma's intensions were clear because even after the
declaration under Section 6 was issued, and much before the scheduled
date for the award, on an assumption that it still owned the land and
could develop it, an application was made on 15.01.2007 for license. It
was also submitted that Karma's submissions that the collaboration
agreement with Unitech was arrived at earlier, were of no avail given
that the supplementary agreement was also executed by the parties after
the declaration under Section 6. Clearly, these events were meant to
create an impediment in the acquisition and ultimately led to the decision
by which the proposed award was never announced in respect of these
lands and finally, the State decided to drop the acquisition in respect of
25.95 acres on 29.01.2010.
18. It was also urged by the State and HSIIDC that unlike in
other cases, there had been no development on the land. Further, interests
like those of third party allottees was not involved. In these circumstances,
the lands which were deliberately excluded from acquisition, after they
formed part of the final declaration, by non-publication of the award,
clearly fell within the mischief of what could be termed as 'transfer' in
the main judgment.
c.
Frontier Home Developers Pvt. Ltd., Balbir Singh, Ram
Pyari, M/s Earl Infotech Pvt. Ltd., and Godrej
Properties Ltd.
5 No.PF-31/7/10/2012-2 TCP dated 14.06.2012.
RAMESHWAR AND ORS. v. STATE OF HARYANA & ORS.
[S. RAVINDRA BHAT, J.]
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19. Frontier Home Developers Pvt. Ltd. (hereinafter, "Frontier")
had originally purchased 8.568 acres of land at village Naurangpur on
16.08.2004 under its erstwhile name Conway Developers Pvt. Ltd.
(hereinafter, "Lot 1"). The consideration paid was 5.62 crores. Another
parcel, i.e., 5.175 acres of land was jointly owned by one Balbir Singh
and Ram Pyari (hereinafter, "Lot 2"). Both lots were included in the
notification under Section 4, as well as the declaration under Section 6.
During this period, Balbir Singh and Ram Pyari entered into a collaboration
agreement with M/s Earl Infotech Pvt. Ltd. (hereinafter, "Earl") on
24.08.2006 for its development. Soon thereafter, Earl entered into a
development collaboration agreement with Frontier in respect of Lot 2
on 11.12.2006. Frontier agreed to jointly develop both lots.