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Supreme Court of India
The State Of Haryana vs Shalimar Estates Pvt. Ltd on 16 November, 2021Author: V. Ramasubramanian
Bench: Hemant Gupta, V. Ramasubramanian
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6901 OF 2021
(Arising out of SLP (C) No. 23096 of 2017)
THE STATE OF HARYANA & ORS. … APPELLANT(S)
Versus
SHALIMAR ESTATES PVT. LTD. & ORS. … RESPONDENT(S)
JUDGMENT
V. Ramasubramanian, J.
1. The State of Haryana and the Town Planning Authorities have
come up with the present appeal against the judgment of the Division
Bench of the High Court of Punjab and Haryana at Chandigarh setting
aside two notifications, one dated 11.07.2002 issued under the Punjab
Scheduled Roads and Controlled Areas Restriction of Unregulated
Development Act, 1963 (hereinafter referred to as the ‘Controlled Areas
Act’), and the other dated 31.12.2002, issued under the Haryana
Development and Regulation of Urban Areas Act, 1975 (hereinafter
referred to as the ‘Urban Development Act) and also setting aside all
Signature Not Verified
Digitally signed by
Jayant Kumar Arora
Date: 2021.11.22
16:50:04 IST
consequential actions.
Reason:
2. We have heard Mr. Gurinder Singh Gill, learned senior counsel
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appearing for the State, shri Abhinav Agnihotri, learned counsel
appearing for the 1st Respondent and Mr. Ghashyam Das Sharma,
learned counsel appearing for newly impleaded parties.
3. The 1st Respondent herein filed a writ petition in W.P.No.2437 of
2003, on the file of the High Court of Punjab and Haryana at
Chandigarh contending interalia,
(i) that with a view to set up a residential colony in the villages
of Naggal and Alipur, District Panchkula, they entered into two
agreements, one dated 28.08.2001 for the purchase of 211 kanals and
10 marlas of land and another dated 16.10.2001 for the purchase of
another 72 kanals and 5 marlas of land;
(ii) that pursuant to the aforesaid agreements the land owners
also registered three sale deeds in their favour, one dated 16.05.2002
selling and conveying land of an extent of 194 kanals and 18 marlas,
the second dated 16.05.2002 selling and conveying land of an extent
of 16 kanals and 12 marlas and the third dated 30.05.2002 selling
and conveying land measuring 112 kanals and 4 marlas;
(iii) that even before the execution of the sale deeds but after the
agreements of sale, they got the layout plan prepared, carved out
roads, laid sewerage and water supply lines, erected electricity poles
and demarcated the plots for sale;
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(iv) that the booking of plots by the allottees started on
24.10.2001 and closed on 24.12.2001;
(v) that during the said period they received about 565
applications from prospective buyers along with the prescribed earnest
money through the Allahabad Bank;
(vi) that after the scrutiny of the applications, more than 500
plots were allotted up to March 2002;
(vii) that one of the allottees of a plot even submitted an
application to the Director of Town and Country Planning, for the
issue of a No Objection Certificate, for raising construction;
(viii) that the District Town Planner, Panchkula, issued a reply
to the said allottee on 06.05.2002 informing the allottee that the plot
was outside the controlled area;
(ix) that after they started the process of development of the
colony, the land use and its character completely changed;
(x) that after seeing that the colony was gaining popularity,
attracting a huge rush of people wanting to buy plots, the Government
issued a notification with ulterior motive under Section 4 of the
Controlled Areas Act, declaring the area to be a controlled area;
(xi) that thereafter they received a show cause notice dated
26.07.2002 alleging contravention of the provisions of Section 7 of the
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Controlled Areas Act;
(xii) that though they submitted a reply to the show cause notice
on 02.08.2002, an order overruling the objections was passed on
08.08.2002;
(xiii) that on 18.08.2002, the officials from the Office of the
District Town Planner came to the site and caused damage to the
roads, sewerage pipes and electricity poles;
(xiv) that therefore they filed a statutory appeal under Section
12C(3) of the Controlled Areas Act before the Tribunal;
(xv) that by an order dated 28.01.2003, the Tribunal dismissed
the appeal;
(xvi) that when the appeal before the Tribunal was pending, the
Government issued another notification dated 31.12.2002 under
Section 2(o) of the Urban Development Act;
(xvii) that the said notification was published in Government
Gazette on 07.01.2003; and
(xviii) that therefore left with no alternative they had to
approach the High Court for quashing the notifications under both the
enactments and also for quashing the order of the Tribunal.
4. The reliefs sought by the 1 st respondent herein in their writ
petition W.P.No.2437 of 2003 before the High Court were,
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(i) to quash the notification dated 11.07.2012 issued under
section 4 of the Controlled Areas Act;
(ii) to quash the notification dated 31.12.2002 issued under
section 2(o) of the Urban Development Act and published in the
Government Gazette on 07.01.2003;
(iii) to quash the show cause notice dated 26.07.2002 and the
order passed thereon dated 08.08.2002 for the demolition of the
constructions already raised;
(iv) to quash order of the Tribunal dated 28.01.2003; and
(v) to declare Section 4 of the Controlled Areas Act and Section
2(o) of the Urban Development Act as illegal and ultravires the
Constitution.
5. Though one of the reliefs sought in the writ petition was to
declare the provisions of Section 4 of the Controlled Areas Act and
Section 2(o) of the Urban Development Act as illegal, the 1 st
Respondent (writ petitioner) did not lay any legal basis in their writ
petition justifying the said relief. Therefore, the High Court did not and
rightly so in our opinion, go into the question of vires of the statutory
provisions. But the High Court, after extracting the provisions of
Sections 3, 4, 6 and 7 of the Controlled Areas Act, and the definition of
certain expressions in the Urban Development Act, brought on record
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the broad scheme of both the acts. Thereafter, the High Court went
into the facts of the case and recorded certain factual findings, all of
which may not be necessary to be brought on record. Suffice it to say
that the High court found:
(i) that the layout plan prepared by the writ petitioner provided
for common areas such as green parks, primary school, community
centre, library, dispensary, shopping areas, public health, religious
place and club house;
(ii) that the writ petitioner issued advertisements, received 565
applications along with earnest money through banking channels and
made allotment to 500 persons through draw of lots and also got sale
deeds registered in favour of the allottees;
(iii) that the residential township proposed by the writ petitioner
was to cater to the needs of common man, as the size of the plots
varied from 4 marlas to 10 marlas;
(iv) that the notification dated 11.07.2002, issued under Section
4 of the Controlled Areas Act was followed by a spot inspection on
25.07.2002 and a show cause notice dated 26.07.2002;
(v) that though a reply dated 02.08.2002 was given, an order
was passed on 08.08.2002 in a printed form and the appeal filed by
the writ petitioner on 12.08.2002 was dismissed by the Tribunal on
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28.01.2003, ignoring the development activities undertaken by the
writ petitioner, the sales made and the construction in progress;
(vi) that the definition of the word “colony” would include the
areas proposed to be developed and hence the inference is that the
area was used as a colony even before it was declared as a controlled
area.
(vii) that the speed with which action was taken to issue the
notification under the Urban Development Act, after the issue of
notification under the Controlled Areas Act, shows that there was an
attempt to please the powers that be;
(viii) that the word “colony” under the relevant Rules cannot be
understood to mean fully developed colony but should be taken to
include even the proposed colony;
(ix) that 3rd party rights have already been created and some of
the allottees had even gone to the consumer fora seeking
compensation; and
(x) that as the area in question was already a colony at the time
of issue of the notification under Section 4 of the Controlled Areas Act,
the same fate will follow even at the stage when the notification under
Urban Development Act was issued and that therefore the impugned
notifications and the consequential orders were liable to be set aside.
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6. A careful reading of the impugned judgment shows that the High
Court was persuaded to set aside the notifications under both the
enactments on the ground inter alia, (i) that even before the date of
issue of the notification under Section 4 of the Controlled Areas Act,
1963 much water had flown, with the preparation of a lay out plan,
division of the land into plots, allotment of plots after a draw of lots,
sale of those plots to third parties and the construction of amenities;
(ii) that the definition of the word “colony” would take within its fold
even a proposed colony; and (iii) that the jet speed with which the
notification under the Urban Development Act was issued, shows lack
of bonafides.
7. Interestingly, despite commenting upon the speed with which the
file for the issue of the notification under Section 2(o) of the Urban
Development Act was moved and despite recording a finding that
things were done to satisfy the then Chief Minister, the High Court did
not choose to go the wholehog and declare the actions of the
authority as vitiated by malafides. In other words no clear finding of
malafides was recorded though the findings were suggestive of the
same.
8. The difficulty with the findings so recorded by the High Court is
that a halfhearted attempt is not sufficient to hold a statutory
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notification as vitiated by malafides. It was not even a case of malice
in law and hence one of the main grounds on which the High Court
was persuaded to set aside the notifications, is clearly unsustainable.
9. The definition of the word “colony” invoked by the High Court for
holding that the colony need not have been fully developed but that
even a proposed colony would come within its ambit, may have
relevance to the notification under the Urban Development Act, but
cannot have any relevance to the notification under the Controlled
Areas Act. Section 2(c) of the Haryana Development and Regulation of
Urban Area Act, 1975 reads as follows:
“(c) “colony” means an area of land divided or proposed to be
divided into [plots or flats] for residential, commercial or
industrial purposes, but an area of land divided or proposed to
be divided –
(i) for the purpose of agriculture; or
(ii) as a result of family partition, inheritance, succession or
partition of joint holding not with the motive of earning profit; or
(iii) in furtherance of any scheme sanctioned under any other
law; or
(iv) by the owner of a factory for setting up a housing colony for
the labourers or the employees working in the factory; provided
there is no profit motive; or
(v) when it does not exceed one thousand square metres, shall
not a colony;”
10. The Controlled Areas Act, 1963 does not deal with a colony or
coloniser. The notification under the Controlled Areas Act preceded
the notification under the Urban Development Act. Therefore, the
definition of the expression in the latter Act cannot be invoked to
nullify the notification under the former Act.
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11. As seen from the preamble, the object of the Controlled Areas Act
is “to prevent haphazard and substandard development along the
scheduled roads and in controlled areas in the State of Haryana”. The
expression “controlled areas” is defined in Section 2(5) to mean an
area declared under Section 4 to be a controlled area. Section 4 of the
Act reads as follows:
“4. (1) The Government may by notification declare the whole or
any part of any area adjacent to and within a distance of –
(a) eight kilometers on the outer sides of the boundary
of any town; or
(b) two kilometers on the outer sides of the boundary
of any industrial or housing estate, public institution
or an ancient and historical monument.
specified in such notification to be a controlled area for the
purposes of this Act.
(2) The Government shall also cause the contents of the
declaration made under subsection (1) to be published in at least
two newspapers printed in a language other than English.”
12. All that is required for the Government to issue a notification
under Section 4(1) of the Controlled Areas Act is to show either that
the area to be notified is located within a distance of 8 Kms. on the
outer sides of the boundary of any town or 2 Kms. on the outer sides
of the boundary of any industrial or housing estate, public institution
or an ancient and historical monument. It was not the case of the 1 st
respondent that none of these requirements was satisfied.
13. It is not as though the power under Section 4(1) is unbridled.
Section 5(1) mandates the Director to prepare plans within three
months of the notification under Section 4(1), showing the controlled
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area and signifying the nature of restrictions and conditions proposed
to be made. The Government is obliged to publish the plans approved
by it, by way of notification, inviting objections. The objections if any
received by the Government along with the recommendations of the
Director should be considered by the Government and the final plans
showing the controlled area should be prepared. In fact, the
Government has power under Section 7A in public interest, to relax
any restrictions or conditions in so far as they relate to land use
prescribed in the controlled area in exceptional circumstances.
14. Therefore, it was not as though the developer reached a point of
no return with the issue of the notification under Section 4 of the
Controlled Areas Act. In any case the Controlled Areas Act does not
take away any of the rights to property, except that the erection of
buildings along the scheduled roads is prohibited and the erection of
buildings in controlled areas is made subject to the restrictions and
conditions imposed by the Government under Section 5. Instead of
taking recourse to any of the remedies available under the Act, either
to seek permission or to seek relaxation, the first respondent chose to
assail the notification under Section 4 of the Controlled Areas Act, not
on any legally tenable grounds but on alibi. Therefore, the High Court
could not have sustained the challenge.
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15. Insofar as the notification under the Urban Development Act is
concerned, we do not know how the challenge to a notification under
Section 2(o) could have been sustained. For notifying an area as an
urban area, any of the prescriptions contained therein should have
been satisfied. They are (i) that the area of land falls within the limits
of a municipal area or a notified area or Faridabad complex or situate
within 5 kms. of the limits thereof or (ii) that it is any other area
where, in the opinion of the Government, there is a potential for
building activities. The formation of opinion required under Section
2(o) that there is potential for building activities is qua “any other
area”. In other words, urban area means: (i) any area of land within
the limits of a municipal area; (ii) any area of land within the limits of
a notified area; (iii) any area of land within the limits of the Faridabad
complex or; (iv) any area of land situate within 5 kms. of the limits
thereof or; (v) any other area where, in the opinion of the Government,
there is potential for building activities.
16. The High Court did not record a finding that the area of the land
in question did not fall within any of those five categories. Even the
writ petitioner did not contend that the land did not fall within any of
those five areas. The definition of the expression ‘colony’ under Section
2(c) of the Urban Development Act has nothing to do with the
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parameters contained in Section 2(O) for the issue of notification.
17. As in the case of the Controlled Areas Act, even the Urban
Development Act merely regulates the manner in which a colony is to
be developed. Section 3(1) enables an owner desiring to convert his
land into a colony, to make an application to the Director for the grant
of a licence to develop a colony. After conducting an enquiry, the
Director may grant a license under Section 3(3), permitting the owner
to undertake development subject to payment of various charges. The
Director is also empowered under Section 9 to grant exemption to a
person from obtaining the license under certain circumstances.
18. Even the Urban Development Act contains a provision
empowering the Government to exempt any class of persons or areas
from all or any of the provisions of the Act. Section 23 reads as
follows:
“23. Power to exempt. If the Government is of the opinion that
the operation of any of the provisions of this Act causes undue
hardship or circumstances exist which render it expedient so to
do, it may, subject to such terms and conditions as it may impose,
by a general or special order, exempt any class of persons or
areas from all or any of the provisions of this Act.”
19. Instead of taking recourse to Section 3 or 23 of the Urban
Development Act, the first respondent chose to assail the notification
without any legal basis. The High Court did not see through this game
and granted relief without a strong legal basis.
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20. The High Court overlooked the fact that the first respondent was
only holding two agreements for the purchase of lands, dated
28.08.2001 and 16.10.2001. These agreements fructified into
registered Sale Deeds only on 16.05.2002 and 30.05.2002. But
according to the first respondent, applications were invited and
allotments of plots were made during the period 24.10.2001 to
24.12.2001. In other words, the first respondent started collecting
money from the alllotees even before they became the full fledged
owners.
21. In fact, one of the allottees, who according to the first respondent
made an application on 17.04.2002 for putting up a construction, was
informed by the Director by a letter dated 6.05.2002 that a proposal
for the issue of a notification under the Controlled Areas Act was
already in process. It is only thereafter that the first respondent got
the land conveyed to them under 3 sale deeds, two of them dated
16.05.2002 and one dated 30.05.2002.
22. Within a period of 11 months, namely, from 28.08.2001 (the date
of the first agreement of sale) to 11.07.2002 (the date of the
notification under the Controlled Areas Act), it is not possible for any
person (except Mayasura who built Lanka for Ravana and
Indraprastha for the Pandavas) to develop a colony. The argument that
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the word ‘colony’ would include a proposed colony under Section 2(c)
of the Urban Development Act cannot make the notification under the
Controlled Areas Act invalid. Therefore, the impugned order of the
High Court is clearly erroneous and is liable to be set aside.
23. The learned counsel for the intervenors who were allotted plots of
land in the colony proposed by the first respondent, pleaded that the
intervenors are gullible public whose hard earned money is now lost
and that this Court should take into account their plight. But the
above argument loses a sight of several remedies available even now,
both to the coloniser and to the allottees. It appears that some of the
allottees have already approached the consumer fora and secured
orders for the refund of money. In any case the developer/coloniser is
only required to apply for license/permission under the both these
enactments and prepare a fresh lay out in accordance with the terms
and conditions stipulated by the authorities and then develop the lay
out afresh and allot alternative plots to the original allottees. There are
also provisions in both the enactments such as Section 7A of the
Controlled Areas Act and Section 23 of the Urban Development Act,
which the parties have not even taken note of. Therefore, it is not as
though the allottees of plots are now left high and dry with no
redemption in sight.
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24. In view of the above, the appeal is allowed and the impugned
order of the High Court is set aside. It is open to the parties, both the
developer and the allottees to follow the route available under both the
enactments for the redressal of their grievances. And it is also open to
the allottees, if they so wish, to work out their remedies against the
first respondent. There will be no order as to costs.
…..…………………………..J.
(Hemant Gupta)
.…..………………………….J
(V. Ramasubramanian)
NOVEMBER 16, 2021
NEW DELHI
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