# RAMESHWAR & OTHERS v. STATE OF HARYANA & OTHERS

- **Citation:** [2018] 5 S.C.R. 205
- **Court:** Supreme Court of India
- **Decided:** 2018-03-12
- **Case number:** Civil Appeal No. 8788 of 2015
- **Bench:** Adarsh Kumar Goel, Uday Umesh Lalit
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/rameshwar-others-v-state-of-haryana-others-32903
- **Pages:** 82

## Headnote

Land Acquisition:
Notification u/s. 4 of Land Acquisition Act, 1894 - For setting
up of Industrial Township - Objections u/s. 5A filed - Soon after
initiation of acquisition proceedings various sale deed executed by
land-holders in favour of certain builders/private entities - After
Notification u/s. 6 also builders/private entities continued
approaching the land-holders showing other awards passed in
respect of adjoining land for the same purpose wherein
compensation was granted @ 12.5 lakhs and offered higher
purchase prizes - After notices u/s. 9 for pronouncement of awards,
the builders/private entities started enhancing the price and bought
the land from the land-holders at a price around Rs.80 lakhs per
acre - Thereafter the State by order dated 24.8.2007 dropped the
acquisition proceedings stating that fresh Notification would be
issued - Pending writ petitions by land-holders challenging the
acquisition proceedings were disposed of as infructuous - Building
Plans of Group Housing Societies and schemes of the builders/
private entities (purchasers) were approved by the State - By order
dated 29.1.2001 decision was taken by the State Government in
view of the recommendation of Inter Departmental Committee -
Farmers, having come to know that the lands under acquisition
were utilized by the builders/colonizers, started agitation - Request
was also made for registration of FIR in respect of fraud played by
the officials in connivance with the builders - Writ petition by landholders taking the plea that initiation of acquisition proceedings
and thereafter dropping of acquisition proceeding was deliberate
and fraught with malice - High Court dismissed the writ petition
holding that challenge to the dropping of proceeding since initiated
41⁄2 years later, hence was belated - On appeal, Supreme Court
directed CBI (to whom investigation in the matter had been entrusted
[2018] 5 S.C.R. 205
205
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[2018] 5 S.C.R.
by the State) to place its report before Supreme Court - Held:
Decisions dated 24.8.2007 and 29.1.2010 were inconsistent with
the relevant policy of the State - They were also not consistent with
Regional Plan under NCR Act and the Final Development Plan for
Gurgaon-Manesar - Public interest was not the underlying objective
behind the decisions - The decisions were taken to confer
advantages to builders/private entities - There was unholy nexus
between Government machinery and the builders/private entities in
devising a modality to deprive the gullible land-holders of their
holdings - Thus, the decisions were result of a fraud on power and
were not bona fide exercise of power - The facts of the case show
that there was nothing wrong with the initiation of acquisition
proceedings, but during the process it was hijacked by vested
interests - Therefore, mere invalidation of the transaction would
not be appropriate relief - Real and substantial relief would be in
restoring the situation where process of acquisition is made free
from such supervening vested interest and is enabled to achieve the
objective that the acquisition was intended to sub-serve - When
there is fraud on power, duty of the Court is not only to set aside
such exercise of power, but to see that there is no unjust enrichment
and there is full and substantial restoration - Unjust retention of
benefit would be against the fundamental principles of justice, equity
and good conscience - In the present case, as there was a completed
acquisition, the award is deemed to have been passed on the date
when it was supposed to be pronounced - The greater victim in the
present case was public interest - The land-holders who had sold
their lands to the builders/private entities had received
considerations greater than the amount awarded in other cases,
hence they cannot be given benefit of annulment of transactions
and restorations of their holdings - The land-holders who had not
transferred their holdings and the purchasers of i

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RAMESHWAR & OTHERS
v.
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 setting
up of Industrial Township - Objections u/s. 5A filed - Soon after
initiation of acquisition proceedings various sale deed executed by
land-holders in favour of certain builders/private entities - After
Notification u/s. 6 also builders/private entities continued
approaching the land-holders showing other awards passed in
respect of adjoining land for the same purpose wherein
compensation was granted @ 12.5 lakhs and offered higher
purchase prizes - After notices u/s. 9 for pronouncement of awards,
the builders/private entities started enhancing the price and bought
the land from the land-holders at a price around Rs.80 lakhs per
acre - Thereafter the State by order dated 24.8.2007 dropped the
acquisition proceedings stating that fresh Notification would be
issued - Pending writ petitions by land-holders challenging the
acquisition proceedings were disposed of as infructuous - Building
Plans of Group Housing Societies and schemes of the builders/
private entities (purchasers) were approved by the State - By order
dated 29.1.2001 decision was taken by the State Government in
view of the recommendation of Inter Departmental Committee -
Farmers, having come to know that the lands under acquisition
were utilized by the builders/colonizers, started agitation - Request
was also made for registration of FIR in respect of fraud played by
the officials in connivance with the builders - Writ petition by landholders taking the plea that initiation of acquisition proceedings
and thereafter dropping of acquisition proceeding was deliberate
and fraught with malice - High Court dismissed the writ petition
holding that challenge to the dropping of proceeding since initiated
41⁄2 years later, hence was belated - On appeal, Supreme Court
directed CBI (to whom investigation in the matter had been entrusted
[2018] 5 S.C.R. 205
205
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by the State) to place its report before Supreme Court - Held:
Decisions dated 24.8.2007 and 29.1.2010 were inconsistent with
the relevant policy of the State - They were also not consistent with
Regional Plan under NCR Act and the Final Development Plan for
Gurgaon-Manesar - Public interest was not the underlying objective
behind the decisions - The decisions were taken to confer
advantages to builders/private entities - There was unholy nexus
between Government machinery and the builders/private entities in
devising a modality to deprive the gullible land-holders of their
holdings - Thus, the decisions were result of a fraud on power and
were not bona fide exercise of power - The facts of the case show
that there was nothing wrong with the initiation of acquisition
proceedings, but during the process it was hijacked by vested
interests - Therefore, mere invalidation of the transaction would
not be appropriate relief - Real and substantial relief would be in
restoring the situation where process of acquisition is made free
from such supervening vested interest and is enabled to achieve the
objective that the acquisition was intended to sub-serve - When
there is fraud on power, duty of the Court is not only to set aside
such exercise of power, but to see that there is no unjust enrichment
and there is full and substantial restoration - Unjust retention of
benefit would be against the fundamental principles of justice, equity
and good conscience - In the present case, as there was a completed
acquisition, the award is deemed to have been passed on the date
when it was supposed to be pronounced - The greater victim in the
present case was public interest - The land-holders who had sold
their lands to the builders/private entities had received
considerations greater than the amount awarded in other cases,
hence they cannot be given benefit of annulment of transactions
and restorations of their holdings - The land-holders who had not
transferred their holdings and the purchasers of individual
apartments from builder, cannot be subjected to any prejudice -
Appropriate directions issued - Land Acquisition Act, 1894 - ss.
4,6, 9 and 11 - The Right of Fair Compensation and Transparency
in Land Acquisition, Rehabilitation and Resettlement Act, 2013 -
s.24(1(b) - Haryana Development and Regulation of Urban Areas
Act, 1975 - National Capital Regional Planning Board Act, 1985.
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Relief:
Grant of relief - Held: Grant of relief must depend upon who
the real victim is and to what extent solace can be granted to such
real victim.
Allowing the appeals, the Court
HELD: 1.1 In the present case, notification under Section
4 of the Land Acquisition Act, 1894 was issued on 27.08.2004.
After considering various objections made under Section 5A of
the 1894 Act, the requirement of 688 Acres of land was assessed
and declaration under Section 6 to that effect was issued on
25.08.2005. All the lands purchased were after the issuance of
notification under Section 4. Similarly para 18 of the interim report
submitted by CBI shows that over 444 Acres of land was
purchased by various builders/private entities after the
notification under Section 4. Going by the relevant policies
holding the field and the law laid down by this Court in *Uddar
Gagan case, such purchases did not entitle the concerned
builders/private entities to prefer any application for licence, nor
could pendency of applications for licence be taken as a relevant
factor while arriving at a decision whether acquisition initiated
pursuant to notification dated 27.08.2004 be proceeded further
or not. However, the record indicates that such purchases and
the pendency of applications for licence under the Haryana Act,
was a factor which did weigh while decisions dated 24.08.2007
and 29.01.2010 were taken. A factor which ought to have been
discarded in terms of the declared policy statements, became
the fulcrum for said decisions. Therefore, said decisions are
inconsistent with and opposed to relevant policy statements.
These decisions were not consistent with the Regional Plan under
the NCR Act and the Final Development Plan for GurgaonManesar. [Para 22][261-G-H; 262-A-D]
1.2 The decisions dated 24.08.2007 and 29.01.2010 were
taken to confer advantages and benefits upon the builders/private
entities rather than to carry out or effectuate public purpose. The
record indicates that various entities including certain
"middlemen" cornered unnatural gains and walked away with
huge profits taking the entire process of acquisition for a ride.
RAMESHWAR v. STATE OF HARYANA
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Substantial sums have exchanged hands in the form of settlement
money. All the steps and stages show that the builders/private
entities were well aware that the acquisition would not go through
but the landholders were confronted with the smoke screen of
acquisition and were cornered and persuaded in entering into
transactions with the builders/private entities. The transactions
so entered into between the landholders and the concerned
builders/private entities could not be said to be voluntary and
free from any influence. The unnatural and unreasonable bargain
was forced upon the landholders by creating façade of impending
acquisition. Public Interest was not the underlying concern or
objective behind the decisions dated 24.08.2007 and 29.01.2010
but the motive was to confer undue advantage on the builders/
private entities. It is clear that considerations other than those
which were required to be bestowed, guided the exercise of power
in arriving at decisions dated 24.08.2007 and 29.01.2010. The
inescapable conclusion, therefore, is that there was an unholy
nexus between the governmental machinery and the builders/
private entities in devising a modality to deprive the innocent
and gullible landholders of their holdings and jeopardize public
interest which the acquisition was intended to achieve. [Para
31][277-D-H; 278-A]
1.3 The entire mechanism was deliberately employed so
that gullible landholders could be deprived of their holdings by a
set of builders/private entities and after having seen that the
desired result was achieved, the acquisition was dropped and
later completely withdrawn. The decisions on the part of the
State arrived at on 24.08.2007 and 29.01.2010 were clearly a result
of fraud on power and cannot be said to be bona fide exercise of
power. The initiation of class action and filing of Writ Petition in
the present matter was perfectly justified. [Para 31][278-B-C]
Collector (DM) v. Raja Ram Jaiswal (1985) 3 SCC 1:
[1985] 3 SCR 995; Royal Orchid Hotels Limited and
Another v. G. Jayarama Reddy and Others (2011) 10
SCC 608 : [2011] 11 SCR 701; Greater Noida Industrial
Development 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. Pratap
Singh v. The State of Punjab (1964) 4 SCR 733; Express
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Newspapers Pvt. Ltd. and others v. Union of India and
others (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 EnviroLegal 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 the
real victim is and to what extent solace can be granted to such
real victim. If the result of forcing land holders to enter into
unnatural and unreasonable bargain was achieved by wrongful
utilization of the power conferred under the Act, in its writ
jurisdiction a superior court would be justified in granting the
relief of invalidating such transaction as a consequential relief,
while holding the State action to be bad and invalid. It is nobody's
case that public interest was adequately achieved and therefore
the acquisition was required to be dropped. The fact that other
acquisitions have been completed and have attained the required
objective is a pointer in the direction that there was nothing wrong
with the initiation but somewhere along while the process was
on, it was completely hijacked by vested interests. The Court,
therefore, cannot grant mere declaration invalidating the
transaction and grant relief of restoring status ante. The real
and substantial relief would be in restoring the situation where
the process of acquisition is made free from such supervening
vested interests and is enabled to achieve the objective that the
acquisition was intended to sub-serve. [Para 33][278-G-H; 279A-D]
2.2 Wherever there has been fraud on power, the duty of
the Court is not only to set aside such exercise of power but to
see that there is no unjust enrichment directly or indirectly as a
result thereof and there is full and substantial restoration. unjust
retention of benefit would be completely against the fundamental
principles of justice, equity and good conscience. So long as the
deprivation of a party has not been fully compensated for, injustice
to that extent continues. Having found that there was a clear
case of fraud on power as a result of which unnatural and
unreasonable gains have been derived by certain builders/private
entities, it is duty of the Court to grant full restitution. The
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restoration in real and substantial terms has to ensure that the
public purpose, the acquisition was intended to achieve, stands
sub-served. In the present case there was a completed acquisition
and the award deemed to have been passed on the date when it
was supposed to be pronounced i.e. on 26.08.2007.[Para 36][281D-E]
2.3 The Land Acquisition Act, 1894 now stands replaced
by "The Right of Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013". In
terms of Section 24(1)(b) of 2013 Act, where an award had been
made under Section 11 of the Act, the proceedings under the
provisions of the 1894 Act would continue as if the 1894 Act had
not been repealed. Thus, even if a direction is passed that an
award be deemed to have been made on 26.08.2007, the provisions
of the 1894 Act would still continue to operate in respect of such
acquisition in question. [Para 37][281-G-H; 282-A]
2.4 On one hand, the real and substantial relief to be granted
in the matter would be not just restoring the status ante and
invalidating of the transactions but the relief ought to be that the
process of acquisition is taken to its logical end and the objective
that said acquisition was to achieve must be sub-served. On the
other hand, even while passing appropriate directions in the
nature that there was a deemed Award, the interest of those
landholders who had not parted with their holdings and had faced
the acquisition and had not participated in the proceedings ought
to be secured. Further, the interest of purchasers of individual
apartments is also required to be protected. [Para 38][282-F-G]
2.5 Wherever a superior Court finds that the exercise of
power by the executive was mala fide or that there was fraud of
power, the full and substantial relief must be granted. The
principles of restitution and concept of unjust enrichment show
that no person who directly or indirectly was a party to the fraud
of power be allowed to reap or retain any unjust enrichment.
Though, it is through the acts on part of the landholders that the
builders/private entities were brought on the scene, they are not
held to be pari delicto alongwith builders/private respondents.
But at the same time they cannot be given benefit of annulment
of transactions and restoration of their holdings. The greater
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victim in the matter was the public interest. The land-holders in
any case had received considerations which were greater than
what was awarded in Awards dated 09.03.2006 and 24.02.2007,
which were the most proximate awards in terms of time. However,
even when it is proposed to take the matter to its logical end and
say that there was a deemed award, those who had not sold away
their holdings and had not in any manner either directly or
indirectly, tried to jeopardize the process of acquisition, cannot
at this length of time be subjected to any prejudice. Therefore,
that body of land-holders who had not transferred their holdings,
so also the purchasers of individual apartments have to be
excluded from the width of the directions of the Court. Though
fraud vitiates every resultant action and on that principle every
beneficiary/purchaser in subsequent transaction must restore
such benefit, an exception has to be made in favour of individual
purchasers of flats or apartments who are being left undisturbed
while moulding the relief. Any payments made by them can be
adjusted towards the amounts payable to the colonizer and their
possession can be regularized by HUDA/HSIDC on suitable
conditions by making allotment to them. [Para 38][282-H; 283A-E]
Bhimandas Ambwani (Dead) through LRs. v. Delhi
Power Company Limited (2013) 14 SCC 195 : [2013] 1
SCR 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 set
aside as being brought about by mala fide exercise of power.
(b) An Award is deemed to have been passed on 26.08.2007
in respect of lands (i) which were covered by declaration
under Section 6 in the present case and (ii) which were
transferred by the landholders during the period 27.08.2004
till 29.01.2010. The lands which were not transferred by
the landholders during the period from 27.08.2004 till
29.01.2010 are not governed by these directions.
(c) Subject to the directions issued hereafter, the lands
covered under aforementioned direction (b), shall vest in
the HUDA/HSIDC.
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(d) The period between 24.08.2007 and upto the date of
this judgment shall not be counted for the purposes of
Section 24(2) of the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and
Resettlement Act, 2013.
(e) All transactions entered into during the period from
24.08.2007 till 29.01.2010, pursuant to which the original
landholders transferred their holdings in favour of builders/
private entities or third parties shall be subject to and the
interest of the respective parties shall be governed by the
directions issued hereafter.
(f) 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. 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.
(g) The builders/private entities will be entitled to refund/
reimbursement of any payment made to the landholders or
the amounts that had been spent on development of the
land, such payments shall be made by HUDA or HSIDC on
being satisfied about the extent of actual expenditure not
exceeding HUDA or HSIDC norms on the subject as the
case may be. Refund will however be in respect of amount
at which the landholders sold the land and not of subsequent
sales. The subsequent purchasers will have remedies
against their respective vendors.
(h) The third parties from whom money had been collected
by the builder/private entities will either be entitled to
refund of the amount from and out of and to the extent of
the amount payable to the builder/private entities in terms
of above direction, available with the State, on their claims
being verified or will be allotted the plots or apartments at
the agreed price or prevalent price, whichever is higher.
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In cases where, constructions have been erected and the
entire project is complete or is nearing completion, upon
acceptance of the claim, the plots or apartments shall be
made over to the respective claimants on the same terms
and conditions. Except for such verified and accepted
claims, the remaining area or apartments will be completely
at the disposal of HUDA or HSIDC.
(i) As substantial sums were made over to "middle men".
In the pending investigation, the CBI may do well to unravel
the truth. In any case, such hefty sums which were made
over to "middle men" cannot be said to be rightfully earned
by and belonging to them. In fact, this actually represents
the return for being able to garner the lands in question
and getting requisite licences under the provisions of the
Haryana Act and a benefit derived out of fraud on power.
This money rightfully belongs to the State and none other.
The authorities of the State as well as the Central
Government to reach the depths of such transactions and
recover every single pie and make it over to the State
Government. A complete investigation in the transactions
including unearthing unnatural gains received by "middle
men" shall be undertaken by the CBI.
(j) If CBI has filed charge-sheet before the concerned Court,
the same may be dealt with as per law.
(k) The State shall give benefit of "Rehabilitation and
Resettlement of Land Acquisition Oustees" policy of the
State/HUDA/HSIDC to the landholders.
(l) The State may revisit its policy of change of land use and
giving colonization licence in respect of land which is subject
matter of acquisition.
(m) In respect of pending writ petition in the High Court
of Punjab and Haryana wherein appointment of Commission
of Enquiry to enquire into certain facts concerning
acquisitions in respect of lands in Gurgaon-Manesar Urban
Complex was challenged, the High Court is requested to
deal 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]
RAMESHWAR v. STATE OF HARYANA
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Ramana Dayaram Shetty v. International Airport
Authority of India and Others (1979) 3 SCC 489 :
[1979] 3 SCR 1014; State of M.P. and Others v. Nandlal
Jaiswal and Others (1986) 4 SCC 566 : [1987] 1 SCR
1; Amita Banta & Another v. State of Haryana (2010) 1
RCR (Civil) 412 - referred to.
Case Law Reference
(2011) 12 SCC 375
relied on
Para 5
(2016) 11 SCC 378
relied on
Para 5
[1979] 3 SCR 1014
referred to
Para 14
[1987] 1 SCR 1
referred to
Para 14
(2010) 1 RCR (Civil) 412
referred to
Para 20
[1985] 3 SCR 995
relied on
Para 28
[2011] 11 SCR 701
relied on
Para 28
[1980] 1 SCR 1071
relied on
Para 28
[1964] 4 SCR 733
relied on
Para 29
[1985] 3 Suppl. SCR 382
relied on
Para 29
[1991] 3 Suppl. SCR 446
relied on
Para 29
[2011] 9 SCR 146
relied on
Para 29
[2013] 1 SCR 996
relied on
Para 35
[2015] 11 SCR 974
relied on
Para 35
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8788
of 2015.
From the Judgment and Order dated 15.12.2014 of the High Court
of Punjab & Haryana at Chandigarh in CWP No. 23769 of 2011.
WITH
C. A. Nos. 8794, 8791 and 8782 of 2015.
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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, Abhishek
Gupta, Zafar Zwayat, Ms. Aakanksha Kaul, Apoorv P. Tripathi, Ranbir
Singh 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, Nikhil
Rohatgi, Mohit Khubchandani, Shashank Khurana, Nakul Gandhi, Rajiv
Anand, Aanushkan Singhvi, Mrs. Manik Karanjawala, M/s. Karanjawala
& Co., Mahesh Agarwal, Ankur Saigal, Rishabh Parikh, Ms. Ishita
Chakarbarty,
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, Hiren
Dasan, Harish Dasan, Karri Venkata Reddy, Chand Qureshi, Mrs Sarla
Chandra, 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 Prasad
Goyal, Varun Singh, Ms. Meenakshi Chauhan, Varun Khanna, Rakesh
Kumar, Praveen S., Rupesh Kumar S., Ms. Anubha Singh, Vinod Kapoor,
Ms. B. Vijayalakshmi Menon, Dr. Surender Singh Hooda, Avadh Bihari
Kaushik, 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 leave
are directed against the common Judgment and Order dated 15.12.2014
passed by the High Court of Punjab and Haryana at Chandigarh dismissing
Civil Writ Petition No.23769 of 2011 with other connected matters. Appeal
arising from Civil Writ Petition No.23769 of 2011 namely Civil Appeal
No.8788 of 2015, has been taken as the lead matter and the facts stated
therein are dealt with in detail.
RAMESHWAR v. STATE OF HARYANA
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2. The aforesaid Civil Writ Petition No.23769 of 2011 was filed
by 117 landholders for the following principal relief:
"a) Issue writ direction or order, especially in the nature of certiorari
quashing the entire action of the respondents who invoked Sections
4 & 6 for the alleged public purpose but ultimately compelled the
petitioners to be divested of their valuable and fertile land at
throwaway prices under the threat of acquisition to the private
persons and consequently after issuing Section 6 and at the stage
of final proceedings under Section 9, the acquisition was withdrawn
with fraudulent intentions after the land was purchased by the
private builders in active connivance with State functionaries and
further the entire acquisition proceedings were initiated with mala
fide intention, illegally and in violation of the provisions of the
Land Acquisition Act. The same is vitiated by fraud and all
transactions including the sale deeds etc. are liable to be set aside
without invoking the provisions of Part VII of the Act and with a
further prayer for an enquiry/investigation through an independent
agency in respect of the entire fraud played by the respondents
and their officials;...."
3. The relevant facts leading to the filing and disposal of the
aforesaid writ petition were:-
(i) On 27.08.2004 Haryana Government, Industries Department
issued a Notification under Section 4 of the Land Acquisition Act, 1894
("Act" for short) for acquiring lands admeasuring about 912 Acres from
three villages namely, Manesar, Lakhnoula and Naurangpur, Tehsil and
District Gurgaon for setting up Chaudhari Devi Lal Industrial Township,
to be planned as an Integrated Complex for residential, recreational and
other public purposes. The notification was duly published in newspapers.
The landholders including some of the writ petitioners filed their objections
under Section 5A of the Act.
(ii) Soon after the initiation of acquisition, various sale deeds were
executed by the landholders including some of the writ petitioners in
favour of certain builders/private entities. Some such builders/private
entities who had recently purchased the lands also preferred objections
under Section 5A of the Act.
(iii) On 26.02.2005, a report was prepared by Land Acquisition
Collector recommending to the State Government that land admeasuring
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224 acres be released from acquisition. Thereafter, appropriate notification
under Section 6 of the Act was issued on 25.08.2005 in respect of rest
of the land admeasuring 688 acres.
(iv) This acquisition was subject matter of challenge in number of
Writ Petitions filed by the landholders and the subsequent purchasers
viz. builders/private entities.
(v) Even after issuance of notification under Section 6 of the Act,
the builders/private entities continued approaching the landholders. It
was submitted that the landholders were being shown Award Nos.7, 8,
9, 10 and 12, all passed on 09.03.2006 in respect of adjoining villages for
the same purpose namely setting up of Chaudhary Devi Lal Industrial
Township, where compensation was awarded @ Rs.12.5 lakhs per acre.
In all these cases, notifications under Section 4 were issued on 17.09.2004
while declarations under Section 6 were issued on 27.10.2004 and the
lands covered under Award Nos. 7, 8, 9, 10 and 12 were i) 114 Kanals
02 Marlas, ii) 68 Kanals 15 Marlas, iii) 43 Biswas, iv) 65 Kanals 08
Marlas and v) 3515 Kanals 01 Marlas respectively. It was submitted
that the landholders were thus cornered with the prospect of impending
acquisition and the idea that the compensation would be awarded @
Rs.12.5 lakhs per acre and were persuaded to enter into transactions
with builders/private respondents transferring their holdings @ Rs.2025 lakhs per acre.
(vi) On 02.08.2007 notices under Section 9 of the Act were issued
calling upon the landholders to appear on 26.08.2007 for pronouncement
of award. Soon after such notice, the builder/private entities started
enhancing the price and bought the lands from the landholders at a price
around Rs.80 lakhs per acre.
(vii) On 24.08.2007, the State Government passed an order
dropping the acquisition and stating that a fresh notification would be
issued in place of the present proceedings. The reasons given in the
order dated 24.08.2007 were as under:
"In this connection, it is informed that State Government has notified
that certain parcels of land have been released by Government
on the recommendation of Minister's Committee separately. Some
of these parcels are acquired in the land acquisition proceedings
under consideration. Further, Town and Country Planning
Department has also informed that there are several cases wherein
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builders applied for licence/CLU on the land which also form part
of the acquisition proceedings. Furthermore, in a number of cases
the courts have stayed dispossession of land. In the circumstances,
it is difficult at this stage to make up a view as what could be the
shape and size of the land eventually being acquired by
Government. It will not be appropriate to go ahead with these
proceedings in the present form. State Government has, therefore,
ordered that a fresh notification be issued in place of the present
proceedings indicating therein as to which are the lands that are
available for acquisition without any encumbrances."
(viii) On 20.09.2007 Haryana State Industrial and Infrastructure
Development Corporation (for short HSIIDC) submitted a proposal to
constitute an Inter Departmental Committee to survey the area and
submit its recommendations for initiating fresh acquisition proceedings.
On 09.10.2007 pending Writ Petitions filed by the landholders and the
subsequent purchasers were disposed of by the High Court as having
become infructuous in view of the dropping of the acquisition on
24.08.2007 and subsequent decision to constitute an Inter Departmental
Committee.
(ix) On 27.12.2007 licence Nos.283 and 284 were issued by the
State Government for setting up a housing society.
(x) On 26.03.2008 the Inter Departmental Committee submitted
a report recommending complete withdrawal of acquisition. It was stated
in the report that 12 applications for grant of licence along with requisite
fees were submitted by various colonizers in respect of an area of about
362 acres.
(xi) Around 22.09.2009, approvals of building plans of group housing
societies and schemes of private builders came to be granted.
(xii) Having come to know that the lands under acquisition were
now being utilized for private gain by various builders/colonizers, the
farmers started agitation against the process adopted by the Governmental
machinery.
(xiii) On 29.01.2010 a decision was taken by the State Government
in Industries and Commerce Department to close the acquisition
proceedings in view of the recommendations of the Inter Departmental
Committee dated 26.03.2008 which in turn had been accepted by the
HSIIDC.
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(xiv) The farmers' agitation against the decision of the State
Government favouring the builders was widely reported in newspapers
on 01.03.2011. The agitation continued beyond August and September,
2011. On 20.09.2011 a request was made by sending communications to
various functionaries for registration of FIR in respect of fraud played
by the officials of the Land Acquisition Department as well as the Director,
Town Planning in active connivance with the builders.
(xv) On 19.12.2011 the aforesaid Writ Petition No.23769 of 2011
was filed in the High Court of Punjab and Haryana at Chandigarh by
117 landholders. It was submitted that the entire action of initiating the
acquisition and thereby compelling writ petitioners/landholders to divest
their valuable and fertile land at throwaway prices under the threat of
acquisition to certain private builders and then dropping the acquisition
just two days before the date fixed for declaration of award was deliberate
and was fraught with malice.
 (xvi) In the written statement filed by Respondent No.3 - ABW
Infrastructure Limited, it was submitted that the answering respondent
had obtained requisite licences for its residential as also commercial/
group housing project namely ABW Niketan and had raised loans to the
tune of Rs.170,00,00,000/-.
(xvii) In their written statements, Respondent Nos.4 and 5 namely
Metropolis Realtors Pvt. Ltd. and Flair Realtors Pvt. Ltd. submitted that
both these Companies were incorporated on 03.02.2006; that the prices
of lands in and around Gurgaon were increasing as Gurgaon city was
developing fast and another factor causing rise in prices was that Master
Plan for the area - i.e. Gurgaon Development Plan was notified on
05.02.2007.
 (xviii) The written statement submitted by Respondent No.6 -
Metropolis Infrastructure Pvt. Ltd. stated that said Company was
incorporated on 19.04.2006. Rest of the submissions were on lines similar
to that of Respondent Nos.4 and 5.
(xix) On 06.12.2012 written statement was filed by State of
Haryana justifying its action of withdrawal of acquisition. It was
submitted that the writ petitioners had approached the Court more than
41⁄2 years after the decision of the State Government of dropping the
acquisition proceedings. It was denied that there was any nexus between
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the builders and the State officials or that the exercise of acquisition was
in any manner mala fide or fraudulent.
(xx) In their replications filed on 15.01.2013, it was submitted by
the writ petitioners that most of the lands were purchased by the builders
or their substitute companies after the issuance of the Notification under
Section 4 of the Act and yet, the sale deeds executed between the parties
made no mention of factum of such notification. Further, the escalation
of prices in last 20 days namely after the issuance of the notices under
Section 9 showed that the builders were not only aware but were also
sure that the acquisition would be dropped by the State Government.
The hike in price was essentially to lure the landholders as after dropping
of the acquisition there would be no threat to the landholders.
(xxi) On 24.02.2014 the High Court directed the State of Haryana
to give details about various acquisitions initiated around the time in
question for the same public purpose namely, setting up of Chaudhary
Devi Lal Industrial Township.
(xxii) Accordingly, on or about 21.03.2014 an additional affidavit
was filed on behalf of State of Haryana giving relevant details in a tabular
chart. These details appear to be in addition to the lands covered under
Awards 7, 8, 9, 10 and 12 of 09.03.2006. The relevant tabular chart was
as under:-
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(xxiii) Thus, in addition to lands covered by said Awards dated
09.03.2006, about 1315 acres of land stood acquired whereas 688 acres
of land covered by Declaration under Section 6 of the Act in the present
case was dropped from acquisition. It is relevant to note that in relation
to acquisition referred to in Column No.5 vide award dated 24.02.2007
(annexed at page-307 in the Paper book) compensation was assessed at
the rate of Rs.12.5 lakhs per acre; identical to one assessed in Awards
dated 09.03.2006.
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(xxiv) The aforesaid petition as well as connected matters were
dismissed by the High Court vide its judgment under appeal. It was
observed that the landholders had taken no action after their writ petitions
were dismissed as infructuous by order dated 09.10.2007 and the present
action initiated more than 41⁄2 years after such dropping of acquisition
was wholly belated. It was observed:
 "It is the case of the petitioners, that they were forced to sell
their property under the threat of acquisition to the private
respondents and thus the sale deeds so executed by them in their
favour, deserved to set-aside. However we are unable to agree
with the said contention raised by the Ld. Counsel for the petitioners
as at no stage did the petitioners ever raised hue and cry viz. the
said acquisition proceedings. Even when the writ petitions were
filed by them in the year 2005 impugning the said acquisition
proceedings, then also no grievance was raised by them in this
regard and in fact during the pendency of these writ petitions,
they even sold off their land to the private respondents for
consideration and even got sale deeds executed in their favour.
Even when the said writ petitions were dismissed as infructuous
vide order dated 09.10.2007, then also no such distress or grievance
was raised by them before this Court. Until the filing of the present
writ petition, no action much less coercive action was taken by
the petitioners against the respondents viz. setting aside of the
sale deeds on the ground of fraud which thus apparently shows
that not only did they acquiesced to the dropping of the said
acquisition proceedings by the State Government but also waived
off their right to challenge the same as well as the sale deeds
executed by them in favour of the private respondents in view of
Article 59 of the Limitation Act and thus now at this stage they
have no vested or accrued right to challenge the said sale deeds
voluntarily executed by them in favour of the private respondents
and that too after a long yawning gap of 10 years in view of
Section 31 of the Specific Relief Act, for which the present writ
petitions being hit by delay and latches cannot be entertained for
initiating such an action."
4. The Landholders being aggrieved by the decision of the High
Court dated 15.12.2014 filed petitions for special leave to appeal in this
Court. After hearing both sides this Court granted special leave on
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06.10.2015 and continued the interim order granted earlier which was to
injunct any further construction on the lands in question. This Court also
recorded the submission of the Counsel for the State that investigation
was entrusted to CBI and directed CBI to place its report before this
Court, as and when the investigation was over. An interim report was
filed by CBI in March, 2017. On 30.01.2017 Mr. C.A. Sundaram, learned
Senior Advocate was appointed Amicus Curiae to assist the Court. The
subsequent order dated 21.03.2017 records that the CBI had filed its
interim report, a copy of which was directed to be given to the learned
Amicus Curiae. The matters were thereafter taken up for hearing.
5. Appearing for the appellants in the lead matter, Mr. Dhruv Mehta,
learned Senior Advocate submitted:
(a) The licences granted by the State Government to the private
builders for development, in the face of the fact that the lands
were notified for acquisition, were nothing but an abuse of power
and such exercise was directly in breach of the relevant policy.
In his submission, the policy dated 19.12.2006 issued by the State
Government provided that the licences could be granted where
the applicants/land owners had applied for licences before the
issuance of Notification under Section 4 of the Act and the release
could be considered on individual merits of each case. He further
submitted that as accepted by the State Government, out of 15
licences granted by the State Government, 8 were granted between
the date of issuance of Notification under Section 6 and the date
when the acquisition was dropped i.e. on 24.08.2007 and other 7
licences were granted after 24.08.2007. Thus all the licences, as
a matter of fact, were granted after the issuance of Notification
under Section 6 of the Act.
(b) He submitted that the purchases made by the builders in the
present case were after the lands were notified under Section 4
of the Act on 27.08.2004.