RAMESHWAR AND ORS. VERSUS STATE OF HARYANA & ORS.

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE/ INHERENT JURISDICTION

MISCELLANEOUS APPLICATION NO. 50 of 2019

CIVIL APPEAL NO. 8788 OF 2015

RAMESHWAR AND ORS. ...APPELLANT(S)

VERSUS

STATE OF HARYANA & ORS. ...RESPONDENT(S)

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

J U D G M E N T

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

(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:

(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) 102-104

(b) Paramveer Distributors Pvt. Ltd…………………………………para(s) 105-106

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 after the 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, 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.

1 Rameshwar & Ors. v. State of Haryana & Ors., (2018) 6 SCC 215.

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.

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

26-8-2007 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 24-8-2007 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 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 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.

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.

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.

(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.

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.

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

3 Detailed facts, with documents are set out in I.A. 112515/2020 in M.A. 2150 of 2020.

I.A. No. 118401 of 2020 in M.A. No. 2150 of 2020.

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 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 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 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

5 No.PF-31/7/10/2012-2 TCP dated 14.06.2012.

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.

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. This agreement was followed up with a

supplementary agreement between Balbir Singh, Ram Pyari, and Earl under

which further amounts were given to the owners as consideration.

20. On 11.12.2006, Frontier applied to the DTCP for a license enclosing the

collaboration agreement and related documents. Along with this, a sum of ₹1.17

crores was also paid for the license. On 07.05.2008, License No. 88 of 2008 was

issued in the name of Frontier, Balbir Singh, Ram Pyari and Earl in respect of the

entire composite area of 13.743 acres (Lot 1 + Lot 2). After the final decision of

the State to drop the acquisition on 29.01.2010, on 24.06.2010, the four licensees

transferred their rights to develop all 13.743 acres to Godrej Properties Ltd.

(hereinafter, “Godrej”).

21. In this agreement, Balbir Singh and Ram Pyari were to receive 55,328.60

sq. ft. of built-up area. The agreement (by clause 2.11) showed exact areas -

including built up areas - which were to come up; what was allocable for

amenities, common facilities, etc. The consideration was that Frontier was to have

a 30% right in the gross share of revenue, and Godrej the remaining 70%. Godrej

paid Frontier an interest-free deposit equal to ₹ 16 crores of which ₹ 5.5 crores

was non-refundable; in addition, Frontier’s expenses till then were reimbursed.

The prior commitments of Frontier, including allotment of land to owners

(55,328.60 sq. ft.) and additional 1,00,000 sq. ft. for 50 residential flats in favor

of the Jammu & Kashmir All India Service Officers Society was also agreed to.

22. The materials on record show that a group housing colony styled as

“Godrej Frontier” was developed. The occupation certificate was granted by the

DTCP on 16.10.2014 for residential, EWS and commercial units, and on

19.06.2017 for community building. The group housing colony comprised of 567

units in total – 475 residential, 84 EWS and 8 commercial. Godrej disclosed in

its affidavit that it sold 357 residential units, 8 commercial shops and 83 EWS

units from its share and a negligible number of units remained unsold, i.e., 4

residential units; 1 EWS unit and a nursery school. Of the group housing units

developed by Godrej Frontier, 199 units were registered in favour of third-party

buyers.

23. It was argued, on behalf of Godrej, by learned Senior Advocates Mr. Pinaki

Misra and Mr. Randeep Singh Rai that the original landowners in question were

not aggrieved. They were neither parties before any forum, nor did they allege

any fraud, influence nor were they distressed. Landowners in the present case

transacted voluntarily with the colonizers / developers. There was no allegation

of fraud or illegality against Godrej. It was emphasized that the original

landowners retained their respective titles in the project land. It was urged that

this Court’s main judgment only applied to cases involving forceful and

fraudulent sale of lands at throwaway prices after the issuance of notification

under Section 4 and declaration under Section 6. The basis of the main judgment

was against the illegal monetary gains by the builders on purchasing land at

throwaway prices from farmers by threatening them with effects of the

acquisition. In the present case, the ownership of the land was intact and no illegal

monetary gain was made. Moreover, no middle men were involved. Therefore,

the present land was not covered by the purview of directions given in the main

judgment.

24. Counsels highlighted the following portions of the main judgment:

“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”.

25. In the present case, Balbir Singh and Ram Pyari owned Lot 2 much before

the notification under Section 4, and these landowners continued to hold title of

the land as on the date of filing their affidavits before this Court. The only

difference was that the flats developed on the land had been sold to bona fide

consumers and conveyance deeds had been executed in their favour by the

landowners and the colonizers / developers. Out of the entire flats developed on

the said land, some had been allocated to respective stakeholders including the

landowners. The original landowner in the case of Lot 1 was always Frontier,

which had also purchased the lands before the notification under Section 4. In

these circumstances, the project should not be covered by the deemed award as

stipulated in the main judgment.

26. It was urged that entering into collaboration agreements, applying for

licenses and issuing licenses could not be construed as ‘transfers’, or a burden on

the title. It was submitted that these were legitimate activities that landowners

with valid title could perform. It was also urged that Godrej in fact took over

development five months after the lands were released from the cloud of

acquisition (the collaboration agreement was dated 24.06.2010, whereas the

decision of the State to drop the acquisition proceedings was taken on

29.01.2010). Godrej therefore could not be accused of any wrongdoing, because

it entered into agreement with bona fide land owners after any kind of impediment

on collaboration had ceased. Furthermore, it developed the property by beginning

construction only in 2011, after obtaining all permissions.

27. It was lastly urged that in case the interpretation of the main judgment were

so as to include the present lands within the ambit of the deemed award, then the

purpose of carving out an exception in para 42.2 would be defeated. Moreover,

the main judgment was meant to protect the interests of farmers, and in this case,

any alternate interpretation would end up harming their interests. Likewise, the

genuine interests of bona fide third-party consumers would be jeopardized.

d. Analysis and conclusion of I (a) (b) and (c):

28. To discern the content and nature of the transactions whereby landowners

conferred rights upon colonizers / developers, it would be necessary to notice

some relevant conditions in the collaboration agreements placed on record by the

parties:

Collaboration Agreement between Balbir Singh and Earl Infotech

(dated 24.08.2006)

“7. That the Owners shall execute General Power of Attorney (GPA)

and Special Power of Attorney and/or any other document or papers in

favour of the Developer or it’s nominee to enable the Developer to apply

for all regulatory approvals, licenses, sanctions and no objections for

development of the said land and to raise constructions thereon as

agreed hereto. However, in the event, any other/further document in

respect of said land the Owners have to sign the same to enable to

Developer to obtain the necessary license/permission and complete the

development of the colony on the said. Land. The Owners shall sign the

same without raising any objection in any manner whatsoever and

within the stipulated period.

****

9. That the Owners further undertakes that he/she/they shall not

deal with the said land in any manner whatsoever and shall henceforth

keep the said land free from any change, lien, litigation, claim etc. And

shall not create any obstruction or impediment in the development of

the said land of the ‘Development’.

****

12. That Owners will hand over the actual physical possession of the

said land to the developer for purpose of developing for the purpose of

the residential/commercial Group Housing/industrial/Special

Economic Zone complex agreed to be developed at the time of signing

of this agreement and to enable the developer to discharge its part of

obligations.

****

18. That the developer shall commence and complete the

development of the said residential/Commercial/Group

Housing/Industrial Complex by providing the entire finance, equipment,

inputs material infrastructure and expertise necessary to develop the

Special Economic Zone/ residential/Commercial/ Industrial Complex in

accordance with the sanctioned plans and any modifications thereof as

may become necessary or agreed to during the progress of the work.

That the Developer is fully empowered and entitled to assign this

agreement in favour of any Third Party at its absolute discretion without

any recourse to the Owners and the Owners shall have no objection for

such assignment.

xxxxxx xxxxxx xxxxxx

21. The Owners shall not interfere with or obstruct in any manner

with the execution and completion of the work of development the said

residential/ commercial/Group Housing /Industrial complex and/or

booking and sale of developer’s share of development, built or unbuilt

areas of the project. However, if any defect is pointed out in the

development while the work is in the progress by the Owners, the same

will be removed and rectified by the developer.

22. It is agreed between the parties that the possession of the said land

once delivered/handed over to the developer for the purpose of the

aforementioned project shall not be disturbed nor any interference

caused by the Owners till the project is complete. 1t is clarified that the

ownership in the said land shall continue to vest exclusively in the

Owners and developer shall not be entitled to claim any right, title or

interest in the said portion of the said land or any part thereof before

successful completion of the project complex as provided herein after

which the Ownership in the property shall be of both the parties as per

their respective shares.

****

24. That the Qwners shall be entitled to retain or let out or sell the

area their respective share to any party either in whole or in parts, but

subject to Para No. 16 hereinabove. If in case the Owners are desirous

of sale of their residential plots areas forming part of their allocation,

they shall first offer the same for purchase to the Developer. It is

however, made clear that the Developer shall be afforded a period of

two weeks from the date of receipt of written intimation from the owners

along with offer in writing, to communicate its decision pertaining to

purchase of the allocation of the owner, in case Developers is in a

position to match the highest offer available with the Owners for sale

of their property referred to above, it shall be entitled to pay the sale

consideration amount within a period of 90 days from the date of receipt

of intimation from the owners and to purchase the property being

alienated by the Owners. In case Developers fails to respond within the

period of two weeks referred to above calculated from the date of receipt

of written intimation by the Developers from the Owners, the Owners

shall be at liberty to sell their area to third party. The developer shall

be entitled to enter into any agreement to sell/lease/rent or to dispose of

its share in any manner to receive the payments and to execute the

necessary documents in favor of such purchaser. The Owners shall also

join hands in executing the documents in favour of such purchaser and

shall also do all other acts, deeds and things which may be required to

be done in order to confer legal and perfect title in favour of such

purchaser and all receipt shall be issued for an on behalf of the owners

and developer conclusively thereby binding both the parties for the

transaction.”

(emphasis supplied)

Collaboration Agreement between Balbir Singh, Ram Pyari, Earl

and Godrej (dated 24.06.2010)

“2.9 The Power of Attorney shall be irrevocable (except in

accordance with the terms of this agreement) and the Developer shall

be entitled to appoint one or more substitutes under the said Power of

Attorney for the exercise of any or all of the powers and authorities

thereunder in favour of its Affiliates.”

****

4.2 Marketing

It is agreed between the parties hereto that the Developer shall have the

exclusive marketing rights of the Project. It shall also be the obligation

of the Developer to sell and market the area reserved for Frontier

commitments.

****

6.7 Developer shall have exclusive possession of the said property

and shall allow reasonable access to Frontier as may be required.

Developer also agrees to provide for inspection of all Project related

information on a quarterly basis to Frontier.

****

6.8 The original title documents pertaining to Land B are in the

possession of Land B Owners. Earl and Frontier shall procure from

Land B Owners to deposit the same with the Developer prior to the

formation of a society of prospective purchaser of flats in the Project, in

conformity with the Applicable law.”

(emphasis supplied)

In light of the above extracts of the documents, it would now be necessary to

examine the true nature of the collaboration agreements whereby the owner (title

holder) parted with possession to the colonizer / developer for payment of

valuable consideration and allocation of a certain number of constructed units or

percentage of built-up area.

29. The common refrain of the colonizers / developers was that while the

collaboration agreements were entered into during the suspect period, the title to

the lands had never passed onto them. Further, (in some cases) licenses were

obtained only after the time for announcing the award had expired.

30. The question then revolves around the true nature of these development

rights, and whether the directions issued in the main judgment were applicable to

their ‘transfer’. In these cases, undoubtedly transfer of such rights was done after

the lands were notified under Section 4 (except in the case of Karma where apart

from the original development agreement dated 16.02.2004, a supplementary

agreement was entered later into on 24.12.2006). Additionally, soon after the

collaboration agreements were executed, licenses were applied for and issued

(License Nos. 88 of 2008, 59 of 2009 and 206 of 2008) after the declaration under

Section 6 but before the State’s final decision to not acquire the lands on

29.01.2010.

31. The following are the features common to all the collaboration agreements:

i. Possession was handed over to the colonizer / developer;

ii. Full rights of development – the nature, the kind of colony or group

housing units to be constructed as well as their numbers were at the

absolute discretion of the colonizer / developer;

iii. Substantial amounts were paid to the land owner (and in the case of

Frontier, in addition to the original landowners, the intervening

developer as well, such as Earl);

iv. Wherever intervening rights existed (such as those of Frontier which

had already committed to allot a certain number of developed or

constructed units to third parties) the ultimate developer (such as

Godrej) took over such liability;

v. The landowners, and wherever applicable, the intervening developer,

were in addition, entitled to a share in the proceeds and to a certain

number of units of constructed or developed lands defined specifically

in the agreement;

vi. Power of attorney documents were executed in favour of the colonizer

/ developer, to facilitate the latter’s intent to develop the lands;

vii. The consideration paid to landowners in all these cases far exceeded the

market value of the lands, prevailing at the time of the notification under

Section 4;

viii. The landowner – and wherever applicable, the intervening colonizer /

developer – executed registered power of attorneys to the final

developer, and in all cases agreed to execute registered sale deeds to the

allottees of the colonizer / developer as and when called upon to do so;

and

ix. In some cases, on the strength of these collaboration agreements,

licenses were applied for by the landowner or by the intervening

developer.

32. The nature of collaboration agreements has been discussed by this Court in

Faqir Chand Gulati vs Uppal Agencies Pvt. Ltd. & Anr.

In this case, the parties

had entered into a collaboration agreement for the construction of a residential

building. The usual conditions, such as handing over possession, non-interference

in the project, handing over title documents to enable sale of constructed units to

third parties, etc. were agreed to. Holding that the Consumer Protection Act, 1986

was applicable to the collaboration agreement, and that the parties could not be

viewed as constituting a ‘joint venture’ given the power inequality between them,

this Court held as follows:

6 Faqir Chand Gulati vs Uppal Agencies Pvt. Ltd. & Anr., (2008) 10 SCC 345.

“27. What then is the nature of the agreement between the appellant and

the first respondent? The appellant is the owner of the land. He wants a

new house, but is not able to construct a new house for himself either on

account of paucity of funds or lack of expertise or resources. He,

therefore, enters into an agreement with the builder. He asks the builder

to construct a house and give it to him. He says that as he does not have

the money to pay for the construction and will, therefore, permit the

builder to construct and own additional floor(s) as consideration. He

also agrees to transfer an undivided share in the land corresponding to

the additional floor(s) which falls to the share of the builder. As a result,

instead of being the full owner of the land with an old building, he

becomes a co-owner of the land with a one-third share in the land and

absolute owner of the ground floor of the newly constructed building

and agrees that the builder will become the owner of the upper floors

with corresponding two-third share in the land. As the cost of the

undivided two-third share in the land which the landowner agrees to

transfer to the builder, is more than the cost of construction of the

ground floor by the builder for the landowner, it is also mutually agreed

that the builder will pay the landowner an additional cash consideration

of Rs 8 lakhs.

28. The basic underlying purpose of the agreement is the construction

of a house or an apartment (ground floor) in accordance with the

specifications, by the builder for the owner, the consideration for such

construction being the transfer of undivided share in land to the builder

and grant of permission to the builder to construct two floors. Such

agreement whether called as a “collaboration agreement” or a “joint

venture agreement”, is not, however, a “joint venture”. There is a

contract for construction of an apartment or house for the appellant, in

accordance with the specifications and in terms of the contract. There

is a consideration for such construction, flowing from the landowner to

the builder (in the form of sale of an undivided share in the land and

permission to construct and own the upper floors). To adjust the value

of the extent of land to be transferred, there is also payment of cash

consideration by the builder. But the important aspect is the availment

of services of the builder by the landowner for a house construction

(construction of the owner’s share of the building) for a consideration.

To that extent, the landowner is a consumer, the builder is a service

provider and if there is deficiency in service in regard to construction,

the dispute raised by the landowner will be a consumer dispute. We may

mention that it makes no difference for this purpose whether the

collaboration agreement is for construction and delivery of one

apartment or one floor to the owner or whether it is for construction and

delivery of multiple apartments or more than one floor to the owner. The

principle would be the same and the contract will be considered as one

for house construction for consideration. The deciding factor is not the

number of apartments deliverable to the landowner, but whether the

agreement is in the nature of a joint venture or whether the agreement

is basically for construction of certain area for the landowner.”

(emphasis supplied)

33. The above judgment, while clarifying the purpose of collaboration

agreements, falls short of delving into the legal effects of the transfer of such

development rights. Parting with rights which are fundamental to ownership, for

valuable consideration (in cash or by handing over constructed units), leaving

only the nominal ‘title’ with the landowner, is a common feature of such

collaboration agreements. Given the evolution in complexity of real estate

contracts, and the absence of the definition of collaboration agreements in

legislation, their interpretation by various High Courts assumes significance. In a

question pertaining to the applicability of the Specific Relief Act, 1963 to such

contracts, a Full Bench of the Calcutta High Court in Ashok Kumar Jaiswal v.

Ashim Kumar Kar7 while addressing the nature of development agreements, also

answered the question in affirmative:

“45. This leads to the unavoidable discussion as to what may be

regarded as a Development Agreement as referred to in the questions

framed for the reference and the Judgments of this Court cited by the

parties. Without intending the discussion to be an exhaustive treatise on

Development Agreements of all hues, it may be recognized there can be

several Agreements, which can be loosely described as Development

Agreements in the sense that such expression has been used in the

judgments cited in course of the present proceedings. An owner without

any funds or the independent resources to construct a new building on

such owner’s land may engage another for such purpose with the

consideration for the construction being paid by allocation of a part of

the constructed area. There could be several variants of the same basic

structure of a Development Agreement with the Agreement either

providing for the owner being entitled to a sum of money in addition to

a specified share in the constructed area or with a Developer being

required to rid the land of its encumbrances, whether monetary or

otherwise, prior to the construction being taken up. There may be other

similar Agreements under which the Developer is required to

7 Ashok Kumar Jaiswal v. Ashim Kumar Kar, AIR 2014 Cal 92.

temporarily relocate an existing tenant or occupant and ultimately

provide the tenant or occupant a part of the constructed area. In the

context in which certain Agreements pertaining to the construction of

new buildings contemplate the construction to be undertaken or

orchestrated by a person other than the owner of the land, whether upon

the demolition of the existing structure or otherwise, with such person

other than the owner having a share in the constructed area, such

Agreements have now come to be regarded as Development Agreements.

Whether or not such Agreements are in the nature of collaboration or

joint venture, they are loosely referred to as Development Agreements

in several Judgments. Such Agreements are not merely for the

construction of any building or for the mere execution of any other work

on the land. The Developer is not merely a Contractor engaged to

undertake the construction; the Developer is, under the Agreement with

the owner, promised a part of the constructed premises as owner thereof

together with the proportionate area of the land. In the context in which

certain Agreements are referred to as Development Agreements and the

non-owner party to such an Agreement is regarded as the

Developer qua the nature of the work envisaged under the Agreement,

the Developer always has a share in the building or the area proposed

to be constructed – which implies a proportionate share of the piece of

earth – and such Agreement envisages the Developer to have a share of,

and interest in, the final product which is the outcome of the Agreement.

46. In such sense, a Development Agreement which envisages the party

thereto other than the owner being responsible for ensuring the

construction of a building on the subject land and having a share

therein, there is an inescapable contract to transfer immovable

property. In form, a Development Agreement which envisages the

Developer to have a share in the building proposed to be constructed in

terms of the Agreement, the Agreement may appear to be somewhat not

resembling an Agreement for transfer of an immovable property; and,

indeed, it is not an Agreement simpliciter for sale of an immovable

property. In law, however, a Development Agreement of the kind

described herein entails the transfer of immovable property in the sense

that the Developer or an assignee of the Developer, at the instance of

the Developer, would be entitled not only to a part of the constructed

area but the proportionate share of the land on which the construction

is made.”

(emphasis supplied)

34. Thus, collaboration agreements which enable the colonizer / developer to

retain a significant portion of the constructed area as consideration, are not in the

nature of pure construction contracts. An analysis of these agreements depicts the

transfer of crucial rights and interests in the property, which otherwise are

enjoyed only by the landowner, falling short only in respect of the ‘title’.

35. In Sushil Kumar Agarwal v Meenakshi Sadhu & Ors.,

this Court stressed

on the necessity to analyze the terms of the collaboration agreement in order to

determine if any ‘charge’ or ‘interest’ had been created in the land. If so, such

agreements could attract the application of the Specific Relief Act, 1963:

“17. The expression “development agreement” has not been defined

statutorily. In a sense, it is a catch-all nomenclature which is used to be

describe a wide range of agreements which an owner of a property may

enter into for development of immovable property. As real estate

transactions have grown in complexity, the nature of these agreements

has become increasingly intricate. Broadly speaking, (without intending

to be exhaustive), development agreements may be of various kinds:

17.1. An agreement may envisage that the owner of the immovable

property engages someone to carry out the work of construction on the

property for monetary consideration. This is a pure construction

contract;

17.2. An agreement by which the owner or a person holding other rights

in an immovable property grants rights to a third party to carry on

development for a monetary consideration payable by the developer to

the other. In such a situation, the owner or right holder may in effect

create an interest in the property in favour of the developer for a

monetary consideration;

17.3. An agreement where the owner or a person holding any other

rights in an immovable property grants rights to another person to carry

out development. In consideration, the developer has to hand over a part

of the constructed area to the owner. The developer is entitled to deal

with the balance of the constructed area. In some situations, a society

or similar other association is formed and the land is conveyed or leased

to the society or association;

17.4. A development agreement may be entered into in a situation where

the immovable property is occupied by tenants or other right holders. In

some cases, the property may be encroached upon. The developer may

8 Sushil Kumar Agarwal v Meenakshi Sadhu & Ors., (2019) 2 SCC 241.

take on the entire responsibility to settle with the occupants and to

thereafter carry out construction; and

17.5. An owner may negotiate with a developer to develop a plot of land

which is occupied by slum dwellers and which has been declared as a

slum. Alternately, there may be old and dilapidated buildings which are

occupied by a number of occupants or tenants. The developer may

undertake to rehabilitate the occupants or, as the case may be, the slum

dwellers and thereafter share the saleable constructed area with the

owner.

18. When a pure construction contract is entered into, the contractor

has no interest in either the land or the construction which is carried

out. But in various other categories of development agreements, the

developer may have acquired a valuable right either in the property or

in the constructed area. The terms of the agreement are crucial in

determining whether any interest has been created in the land or in

respect of rights in the land in favour of the developer and if so, the

nature and extent of the rights.

19. In a construction contract, the contractor has no interest in either

the land or the construction carried out on the land. But, in other species

of development agreements, the developer may have acquired a valuable

right either in the property or the constructed area. There are various

incidents of ownership in respect of an immovable property. Primarily,

ownership imports the right of exclusive possession and the enjoyment

of the thing owned. The owner in possession of the thing has the right to

exclude all others from its possession and enjoyment. The right to

ownership of a property carries with it the right to its enjoyment, right

to its access and to other beneficial enjoyments incidental to it. (B.

Gangadhar v. B.G. Rajalingam [B. Gangadhar v. B.G. Rajalingam,

(1995) 5 SCC 238, para 6] .) Ownership denotes the relationship

between a person and an object forming the subject-matter of the

ownership. It consists of a complex of rights, all of which are rights in

rem, being good against the world and not merely against specific

persons. There are various rights or incidents of ownership all of which

need not necessarily be present in every case. They may include a right

to possess, use and enjoy the thing owned; and a right to consume,

destroy or alienate it. (Swadesh Ranjan Sinha v. Haradeb

Banerjee [Swadesh Ranjan Sinha v. Haradeb Banerjee, (1991) 4 SCC

572] .) An essential incident of ownership of land is the right to exploit

the development, potential to construct and to deal with the constructed

area. In some situations, under a development agreement, an owner may

part with such rights to a developer. This in essence is a parting of some

of the incidents of ownership of the immovable property. There could be

situations where pursuant to the grant of such rights, the developer has

incurred a substantial investment, altered the state of the property and

even created third-party rights in the property or the construction to be

carried out. There could be situations where it is the developer who by

his efforts has rendered a property developable by taking steps in law.

In development agreements of this nature, where an interest is created

in the land or in the development in favour of the developer, it may be

difficult to hold that the agreement is not capable of being specifically

performed. For example, the developer may have evicted or settled with

occupants, got land which was agricultural converted into nonagricultural use, carried out a partial development of the property and

pursuant to the rights conferred under the agreement, created thirdparty rights in favour of flat purchasers in the proposed building. In

such a situation, if for no fault of the developer, the owner seeks to resile

from the agreement and terminates the development agreement, it may

be difficult to hold that the developer is not entitled to enforce his rights.

This of course is dependent on the terms of the agreement in each case.

There cannot be a uniform formula for determining whether an

agreement granting development rights can be specifically enforced and

it would depend on the nature of the agreement in each case and the

rights created under it.”

(emphasis supplied)

36. The recognition of transfer of valuable rights by collaboration agreements

was also commented upon in Unitech Ltd. v. Union of India,

9 wherein this Court

was concerned with whether a collaboration agreement constituted ‘transfer’ of

property under Chapter XX-C of the Income Tax Act, 1961. Vidarbha

Engineering Industries entered into a collaboration agreement with Unitech on

17.03.1994 for development and construction of a commercial project at

Dahipura and Untkhana in Nagpur. Unitech was to retain 78% of the total

constructed area, transferring the rest 22% to Vidarbha. It is imperative to note

that Vidarbha itself had leased said land from Nagpur Improvement Trust for a

period of thirty years, and could not transfer title to any third party such as

Unitech. The Court interpreted Section 269-UA of the Income Tax Act, 1961

9 Unitech Ltd. v. Union of India, (2016) 2 SCC 569.

which included transfer of any ‘right’ or enabling enjoyment of immovable

property, as follows:

“6. It is clear from the agreement that the transfer of rights of Vidarbha

Engineering in its land does not amount to any sale, exchange or lease

of such land, since, only possessory rights have been granted to Unitech

to construct the building on the land. Nor is there any clause in the

agreement expressly transferring 22% of the building to Vidarbha after

it is constructed by Unitech. Clause 4.6 only mentions that as a

consideration for Unitech agreeing to develop the property it shall

retain 78% and the share of Vidarbha Engineering will be 22%. In fact

Parliament has defined “transfer”, deliberately wide enough to include

within its scope such agreements or arrangements which have the effect

of transferring all the important rights in land for future considerations

such as part acquisition of shares in buildings to be constructed, vide

sub-clause (ii) of clause (f) of sub-section (2) of Section 269-UA. There

is no doubt that the collaboration agreement can be construed as an

agreement and in any case an arrangement which has the effect of

transferring and in any case enabling the enjoyment, of such property.

Undoubtedly, the collaboration agreement enables Unitech to enjoy the

property of Vidarbha Engineering for the purpose of construction. There

is also no doubt that an agreement is an arrangement. It must, therefore,

be held that the collaboration agreement effectuates a transfer of the

subject land from Vidarbha Engineering to Unitech within the meaning

of the term in Section 269-UA of the Act. It appears to be the intention

of parliament to cover all such transactions by which valuable rights in

property are in fact transferred by one party to another for

consideration, under the word “transfer”, for fulfilling the purpose of

pre-emptive purchase i.e. prevention of tax evasion. A judgment of the

Patna High Court in Ashis Mukerji v. Union of India [Ashis

Mukerji v. Union of India, (1996) 222 ITR 168 (Pat)] cited before us

takes the view that a development agreement is covered by the definition

of “transfer” in Section 269-UA. We note the same with approval.”

(emphasis supplied)

Thus, for the purposes of the Income Tax Act, the collaboration agreement was

considered as a ‘transfer’, even though no title vested with Vidarbha in order to

pass the same to Unitech.

37. The features set out earlier in this judgment demonstrate that the landowner

in all the cases were aware that the notification was issued under Section 4 on

27.08.2004. No doubt, such landowners did not acquire the land after such

notification. However, during the subsistence of the notification, which

constituted the manifest intention of the State to acquire the lands, the third

parties’ rights were consciously created for substantial consideration. In the case

of Paradise, the initial sum paid was ₹ 75 lakhs, and in the subsequent agreement

with Green Heights, the sum paid was ₹ 28 crores for parting with development

rights relating to 2.681 acres. Similarly, in the case of Balbir Singh and Ram

Pyari, the initial agreement with Frontier entitled the landowners to 1000 sq. yds

out of each developed acre plus ₹ 52 lakhs, and in the subsequent agreement with

Godrej, the landowners were entitled to 55,328.60 sq. ft. of built up units, and

Frontier was entitled to 30% share of the receipts in the project. In the case of

Karma, the developer Unitech paid ₹ 15 crores and was entitled to a share of

receipts of developed units sold.

38. The main judgment of this Court has carefully considered and gone into

great lengths to examine the file notings which led to the final decision of the

State not to acquire such lands. In the case of Frontier, the records clearly

demonstrate that a noting was approved by the State Government at the highest

level that All India Service Officers of the Jammu & Kashmir cadre had requested

for lands for their residential housing society. This request was the main basis for

the decision not to acquire Frontier’s lands which was the subject matter of

License No. 88 of 2008. After said decision, Frontier parted with all its rights to

Godrej, as did the owners of other parcels of land, i.e., Balbir Singh and Ram

Pyari. These facts clearly demonstrate how the entire state machinery was

subverted. The collaboration agreement with Godrej shows that 50 residential

units were committed to the Jammu & Kashmir cadre of All India Service

Officers (just above 10% of the total number of flats ultimately constructed).

Likewise, in the case of Paradise, Frontier and Karma too, entering into

collaboration agreements and the seeking grant of licenses formed the basis for

the State’s final decision not to go ahead with the acquisition even though a

declaration under Section 6 had been published.

39. 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

lands10

- was the application for, and the grant of, development licenses.

10 In the case of Frontier Developers (earlier known as Conway), the request for de-notification was made, by a

letter dated 17.08.2007, to the state of Haryana - a fact noted in the status report filed by the Enforcement

Directorate (hereinafter, “ED”) before the Court.

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 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.

40. Land ownership typically carries with it a bundle of rights. A landowner

has the right to possess, sell, lease, develop, sub-let, occupy, etc. On an overall

analysis of the common features of all the collaboration agreements as carried out

in an earlier part of the judgment, 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.

41. The above observations are dispositive of the issue. However, this Court

cannot be oblivious to the existing state of affairs. The collaboration agreement

entered into between Paradise and Green Heights and Frontier and Balbir Singh

and Ram Pyari with Godrej have led to construction of units. This Court has been

shown materials which establish that in the case of Green Heights, the number of

constructed units is 438 (of which 371 have been sold) and in the case of Godrej,

the constructed units is 567. It is also on record that Green Heights has received

₹ 70.92 crores as against sale value of agreements. Likewise, there is no denial of

the fact that Godrej has also received substantial amounts in the range of ₹ 300

crores towards its residential units sold. In these circumstances, the Court would

have to strike a proper balance and protect the interests of such third-party

consumers to ensure that they do not suffer on account of the past sins of the

colonizers / developers or land owners, as the case may be.

42. The main judgment recorded that in another transaction, one of the

colonizers / developers had paid ₹ 4.5 crores per acre at the relevant time (in

2009). During the hearing, learned counsel for the State mentioned that the

current value of these contiguous land is to the tune of ₹ 5.3 crores. Keeping these

facts in mind, this Court is of the opinion that to balance the equities and in the

overall interest of the home buyers, for 2.681 acres which is the subject matter of

the collaboration agreement between Paradise and Green Heights, and for 13.743

acres, which is the subject matter of collaboration agreement between Frontier,

Earl, Balbir Singh, Ram Pyari and Godrej, the following sums should be paid to

HSIIDC:

i. A sum of ₹ 5 crores per acre payable in respect of 2.681 acres.

Therefore, final amount payable would be 2.681 acres x ₹ 5 crores=

₹ 13,40,50,000-/ (rupees thirteen crores, forty lakhs, and fifty

thousand only). This amount will be paid by Green Heights which

will be entitled to recover from Paradise such proportionate sums it

may be entitled to claim having regard to the terms of their

agreement.

ii. A sum of ₹ 5 crores per acre payable in respect of 13.743 acres.

Therefore, final amount payable would be 13.743 x ₹ 5 crores = ₹

67, 36, 30,000/- (rupees sixty-seven crores, thirty-six lakhs and

thirty thousand only). This amount will be paid by Godrej, which

shall be entitled to claim such proportionate sums as it may be

entitled to in terms of its agreement with Frontier, Earl, Balbir Singh

and Ram Pyari in accordance with law.

These amounts shall be deposited with HSIIDC within six months, from

the date of this judgment, failing which interest at the rate of 6% per annum

shall be levied from the date of default. The lands covered by these projects

shall, subject to such payments be excluded from the deemed award.

43. As far as Karma’s lands are concerned, the materials on record disclose

that no development has taken place, and there is no allotment in respect of their

lands. Karma had in fact entered into a collaboration agreement with M/s Unitech

Ltd., and based on that, it applied for license on 15.01.2007. The license was

ultimately granted before the date of the decision of the State not to acquire its

land. In these circumstances, this Court holds that the collaboration agreement –

especially the supplementary agreement which was entered into after even the

declaration under Section 6 was published – the application for license and the

grant of license constituted an irreversible clog in the ownership of the lands.

Karma received substantial amounts to the tune of ₹ 15 crores, and in terms of

the agreement placed on record, was entitled to far more substantial amounts had

the development in fact been completed. In these circumstances, it is held that the

collaboration agreement and the grant of license amounted to ‘transfer’ within the

meaning of the expression in para 42.6 of the main judgment. Such land will

therefore, form part of the deemed award. The State shall take appropriate steps

and issue the supplementary award in respect of these lands within six months

from the date of this judgment.

44. It is also clarified that Karma would be entitled to compensation in

accordance with the Acquisition Act as on the date of the notification under

Section 4. The compensation in such case shall be determined within the same

time-frame as indicated in the award. Karma shall be entitled to statutory benefits

such as interest, solatium etc. on such determined compensation. In the event

Karma is aggrieved, it is open to it to seek such recourse or redress in law as is

available.

45. I.A No. 112515/2020; I.A. No. 117025/2020; I.A. No. 118401/2020; and

I.A. No.116268/2020 of M.A. No. 2150/2020 are disposed of in terms of the

above findings and directions. I.A. No. 82000/2020 is dismissed as withdrawn as

prayed for in I.A. No. 112682/2020 of M.A. 1175/2019.

II. M/s. R.P. Estates Pvt. Ltd and M/s. Subros Ltd.

46. M/s. R.P. Estates Pvt. Ltd. (hereinafter, “R.P. Estates”) owned 2.9875 acres

of land, and M/s. Subros Ltd. (hereinafter, “Subros”) owned 10.881 acres. The

lands of both these concerns were included in the notification under Section 4 as

well as the declaration under Section 6. The State decided to release these lands,

as indicated by its letter to Subros dated 22.08.2007. This stand was reiterated

by the State in these proceedings, where it was submitted that as there were no

sale transactions with respect to these lands, it was decided not to include them

in the deemed award. It was also stated that no developmental rights were parted

by them.

47. Learned counsel appearing for both the entities reiterated the State’s

submissions, that the lands were vested in these two concerns and continued to

be so vested. In the circumstances, R.P. Estates and Subros had to be treated as

bona fide land owners, since they did not enter into any transactions during the

suspect period.

48. In three applications (i.e., I.A. Nos. 111557 of 2020, 111562 of 2020 and

111563 of 2020) in M.A. No. 2067 of 2020, R.P. Estates further submitted that it

applied for license from the DTCP much after the date of the deemed award and

was granted License No. 82 of 2009 on 08.12.2009. It also disclosed that

developmental rights were thereafter transferred to another enterprise called M/s.

Elan Ltd. in 2013-14. The application and pleadings show that the project was

completed on 14.01.2020 and the application for grant of occupation certificate

was thereafter made, with 305 units allotted to third parties out of a total of 362.

49. Subros had initially challenged the acquisition by filing a writ petition

before the Punjab & Haryana High Court.11 However, after it received a letter

from the DTCP, communicating recommendation for withdrawal from

11 M/s Subros Ltd. v State of Haryana, W.P. (C) No. 2787/2006 (dismissed on 20.09.2007).

acquisition, Subros withdrew its petition. Thereafter, it applied for license, and

was granted the same on 13.06.2008. Subros did not enter into any collaboration

agreement or sell its rights during the suspect period - it sold the lands to one

Akme Projects Ltd. much later on 23.01.2012.

50. Having regard to the overall circumstances, this Court is of the opinion that

the lands owned by both R.P. Estates and Subros should be excluded from the

deemed award. The judgment of the Court dated 12.03.2018 is therefore clarified

to the above extent. I.A. No. 111557/ 2020; I.A. No. 111562/2020; and I.A. No.

111563/ 2020 of M.A. No. 2067/2020; I.A. No. 116120/2021; I.A. No.

116128/2021 and I.A. No. 123690/2021 of M.A. No. 50/2019 are disposed off

accordingly.

III. Express Greens / DLF Home Developer Ltd.

51. Express Greens was a project of DLF Home Developers Ltd. (hereinafter,

“DLF”). The main judgment of this Court had dealt with the manner in which

the land for this project was acquired from the original landowners in the village

Manesar by a group of companies and entities owned or wholly controlled by

ABW Infrastructure Ltd. (hereinafter, “ABW”). These lands, in aggregate,

measured 33.536 acres. ABW and its group of companies obtained License No.

283 and 284 for their development. These lands were part of the 235 acres which

ABW had purchased during the subsistence of the acquisition proceedings.

Eventually, before the final decision to drop the acquisition was taken by the State

on 29.01.2010, the lands and licenses were transferred to DLF for a consideration

of ₹150.95 crores.

52. Several home buyers filed applications (I.A. No. 110995/ 2019; I.A. No.

91793/ 2020 and I.A. No. 113206/ 2020 (in M.A. (D) No. 26552/ 2019), I.A. No.

36484-85/2020; I.A. No. 36487/2020 and I.A. No. 89570/2020 in M.A. (D) No.

7888 of 2020; I.A. No. 49986-87/2021 in M.A. (D) No. 9505/2021 and I.A. No.

49990/2021 and I.A. No. 31079-81/2022 in M.A. (D) No. 6705/ 2020). The

submission on behalf of these applicants, who sought impleadment and

directions, was that in terms of this Courts’ main judgment, they were entitled to

clear title over the residential units of flats constructed and allotted by DLF. It

was submitted that a substantial number of flats had been handed for occupation

to the allottees. However, with respect to many such allottees, sale deeds had not

been executed and registered. Furthermore, it was submitted that several flats

had not been completed though their allottees were entitled to the units. In

addition, during arguments it was submitted that certain common amenities such

as lifts had not been installed, and community centres, club houses, etc. had not

been completed or were not in usable condition.

53. It was urged on behalf of Express Green Home Owners Association by Mr.

A. N. Nadkarni, learned Senior Advocate, that in cases where the flats were

handed over to the home buyers, not only would they be entitled to clear title,

which necessitated clear directions from this Court, but also that it would be in

the overall interest of the home buyers that the maintenance of common areas as

well as the completion of unbuilt units should be made over to DLF.

54. This was seconded by Mr. Gopal Shankarnarayanan, learned Senior

Advocate appearing for some home buyers, who urged that such buyers invested

their hard-earned savings and in some cases even obtained bank advances, on the

strength of the reputation and name of DLF. If the entire project were to be made

over to HSIIDC, the value of the residential units under their occupation and

ownership would considerably reduce. Therefore, it was urged that DLF be

directed to complete the project, and maintain the colony, according to the high

standards it was known to keep.

55. In its reply (MA (D) 2665/ 2019), and during hearings, DLF represented

by learned Senior Advocate Mr. Pinaki Misra submitted that the company was

willing to undertake the balance finishing work such as repair and renovation of

common areas, strengthening of compound walls, construction of club house etc.

and bear all associated expenses. However, this was on the condition that DLF

be handed over with the entire project including the entitlement to the balance

sale consideration based upon the existing executed agreements with allottees in

respect of units allotted to them. DLF also urged in para 18 of its reply12 that it

should be allowed to utilize FAR of approximately three lakh sq. ft. in the manner

12 M.A. (D.) No. 26552 of 2021 dated 24.08.2020.

it chose. In lieu of this, it was contended that DLF would give up its claim

towards ₹ 372.83 crores in accordance with the main judgment of this Court. In

these circumstances, it was urged that this Court should exclude the area of

33.536 acres, i.e., the subject matter of License No. 283 and 284, from the deemed

award to enable further development.

56. The State and HSIIDC resisted these contentions. It was pointed out that

a detailed analysis was made in the main judgment which disclosed the trail of

suspect transactions. ABW had acquired more than 235 acres after the

notification under Section 4 was issued, by threats to the land owners. Not only

was land purchased, even licenses were applied for and obtained – these in fact

formed the backbone for the demand to the state of withdrawal from acquisition.

It was during the pendency of these proceedings that DLF chose to transact and

purchase the lands that it ultimately did as well as acquire all rights under the two

licenses for development of 33.536 acres which ultimately led to the Express

Greens project.

57. It was highlighted that DLF paid over ₹ 150 crores to acquire these rights.

The clear intention of this Court in this regard is to be found in para 42.8 of the

main judgment where it clarified that third party purchasers/allottees would be

entitled to the units allotted to them and would thereafter enjoy perfect title, and

in respect of all unallotted lands, residential or constructed units, rights, title and

interest would devolve absolutely upon HSIIDC. It was submitted that the sale

deeds executed by DLF would be validated by HSIIDC and wherever sale deeds

had not been executed, they would be so executed by HSIIDC after due

verification in a time-bound manner. It was submitted that likewise with respect

to any unfinished work, the rights, title and interests in the colony would be that

of HSIIDC and not of DLF.

58. It is evident on a reading of various parts of the main judgments that ABW

was in the eye of the storm. This Court’s main judgment is explicit about the fact

that DLF chose to dip its hands in murky waters by acquiring rights to the 33.536

acres as well all rights under the licenses for ₹ 150 crores from ABW.13

In these

circumstances, there can be no question of seriously deliberating upon the

application for release of these 33.536 acres of land from the deemed award.

There is absolutely no merit in the submissions on behalf of DLF that the title to

lands continued with the original owners. The entire exercise of ABW was to

acquire these lands and then transfer them to those capable of developing the

lands, such as DLF. Those contentions are accordingly rejected. However, the

rejection of DLF’s claim does not in any way impinge on the rights, title and

interest of the allottees, who were handed over possession of their flats, upon

payment of full consideration, or those allottees entitled to it, after payment of the

balance sums. The HSIIDC shall complete the process of validating their title,

13 The status report of ED reveals that on 13.04.2008, a request for transfer of license in favour of DLF was made

to the DTCP. DLF also continued to engage in correspondence in this regard (on 26.09.2008, 14.01.2010,

29.09.2010, etc.)

including the title to the undivided and proportionate land share, within six

months from the date of this judgment.

59. So far as the complaints of the home buyers are concerned, this Court had

directed for the latest status report to be placed before it, which was furnished by

way of an additional affidavit dated 28.04.2020, by DLF. This affidavit enclosed

the details of the project. A total of 1348 units were constructed, of which 1223

were sold, and 510 sale deeds were registered. Possession was granted to 882

allottees. It is evident therefore that 441 allottees are yet to be handed over

possession; furthermore 713 sale deeds are yet to be executed and registered. The

HSIIDC is therefore directed to ensure that the balance allottees are notified about

the execution of sale deed and the process of execution and registration of sale

deed is completed in their case within six months from the date of this judgment.

HSIIDC shall ensure that a designated nodal officer is deployed to scrutinize the

relevant documents and facilitate the execution of such sale deeds.

60. The affidavit also discloses that a total of 116 townhouses/independent

floors were constructed. 77 townhouses/independent floors were sold and the

structure of 25 of them was complete. The affidavit further stated that 39

houses/independent floors are unsold and construction of 11 townhouses are

complete. Thus, all rights, title and interest in respect of unsold 39 townhouses

in the independent floors vest with the HSIIDC, which shall deal with them in

accordance with its policies and applicable laws. Likewise, in case of unsold

apartments, all rights, title and interest shall vest with HSIIDC.

61. According to the affidavit, 96 apartments on the 15th tower have been

completed but no occupation certificate has yet been issued. In case the

application is pending, the DTCP shall ensure due inspection and decision on the

occupation certificate. If any deficiency has to be rectified the same shall be

completed by the HSIIDC.

62. As far as the complaint with respect to lifts etc. is concerned, the affidavit

discloses that all lifts have been installed; the certificates by the concerned State

authorities have been placed on the record. With respect to club houses in sector

M-1, the club house has not been constructed – only basement structure is

complete and for sector M-1(A) the club houses have not yet been issued

completion certificate. With respect to the boundary wall the additional affidavit

states that 218 meters in tower M-1 and 434 meters in tower M-1(A) has been

damaged. The HSIIDC is directed to take up work immediately and complete the

same with eighteen months from the date of this judgment, as it is in the interest

of safety and security of the residents.

63. Having regard to the above discussion, it is held that the request of the

Express Green Home Owners Association and DLF to exclude the project from

deemed award is not tenable. It is accordingly rejected. It is further declared that

all unconstructed and unallotted portions as well as construction rights (such as

FAR) in respect of unconstructed, unallotted plots etc., including two school sites,

shall vest absolutely with HSIIDC. HSIIDC shall be entitled to develop these

areas in accordance with its policies within the frame work of the applicable

Master Plan development laws. DLF is therefore, entitled to collect amounts, if

any, in terms of the main judgment of this Court. It shall hand over all records

relating to the allottees, and technical data, pertaining to the entire project to

HSIIDC within one month from the date of this judgment.

64. I.A. No. 110995/2019; I.A. No. 91793/2020 and I.A. No. 113206/ 2020 in

M.A. (D) No. 26552/ 2019; I.A. No. 36484-85/ 2020; I.A. No. 36487 and I.A.

No. 89570/ 2020 in M.A. (D) No. 7888/ 2020; I.A. No. 49986-87 of 2021; I.A.

No. 49990/2021 in M.A. (D) No. 9505/ 2021; I.A. No. 31079-81/2022 in M.A.

(D) No. 6705/ 2020 are disposed off in the above terms.

IV. M/s Kalinga Realtors Pvt. Ltd.

65. An application (MA No. 50/2019) was filed by Kalinga Realtors Pvt. Ltd.

the first applicant, a wholly-owned subsidiary of the second applicant, Anant Raj

Ltd. Both applicants are cumulatively referred to as “Kalinga”. The claim in this

application is for a direction for proper calculation of amounts payable by

HSIIDC to Kalinga, in terms of the main judgment. It is a matter of record, that

Kalinga sought NOC from DTCP to purchase the land in October 2009. The same

was granted in January, 2010 and sale deed executed shortly thereafter on

23.04.2010. ABW and its group of companies had acquired License No. 67 of

2009 dated 19.11.2009, which was transferred to Kalinga pursuant to the sale

deed on 12.07.2010. Thus, Kalinga’s attempt to purchase the land and rights

granted by the license clearly fell within the mischief of the main judgment of

this Court.

66. Kalinga submits that it furnished all details and particulars, in support of

its claim that it had incurred expenses to the tune of ₹ 308 crores14, for the

construction of the housing project called “Madelia”. It is submitted that Kalinga

expended the amounts and deployed resources for the development of the area

and construction of 13 towers, of which 10 are complete and in respect of which

claims have been received for 257 allottees.

67. Learned Senior Advocate, Mr. Sanjiv Sen, urged that this Court had sought

information from HSIIDC, which filed replies and further affidavits. Despite

these, a clear picture has not been given. Instead of verifying all the invoices and

materials, apparently HSIIDC has conducted a piece meal inquiry. It was pointed

out that HSIIDC had admitted that according to its valuation and verification, the

cost payable was ₹ 11.68 crores; even that has not crystallized into a concrete

assurance to pay.

68. Learned counsel pointed to an auction notice, issued by HSIIDC, in respect

of Kalinga’s project, inviting prospective bidders to submit offers for completion.

14 Detailed at pg. 40 of M.A. No. 50 of 2019.

It was urged that the reserve price, including price for the land (12.45 acres) and

the constructed towers (which were described in detail in the auction notice) were

grossly undervalued by HSIIDC, which has offered a pittance of ₹ 11.68 crores.

It was submitted on behalf of Kalinga that HSIIDC should be compelled to revise

the valuation, within a time bound manner, and this Court should appoint an

arbitrator.

69. Counsel for the State and HSIIDC urged that Kalinga cannot claim a

grievance, because it was a direct beneficiary of the transactions during the

suspect period. It chose to enter into the field, by entering into transactions with

ABW, intending fully to make substantial profits, on account of the depressed

cost of land. However, this Court’s main judgment resulted in its land being

included in the deemed award - it can be at best entitled to those amounts which

it actually expended. It was submitted that HSIIDC was prepared to verify all the

bills and invoices, provided they were genuine and arrive at the amounts payable.

Counsel also submitted that in the event of a dispute, HSIIDC was prepared to

submit the dispute to arbitration.

70. From the above discussion, it is evident that Kalinga’s grievance is

regarding the amounts it claims it is entitled to. The gap between its claim (₹308

crore) and what HSIIDC offered at one time (₹ 11.68 crores) is too excessive.

The materials placed on record show that HSIIDC in fact, did put up the entire

land, with the construction for auction15 on an ‘as is where is’ basis. The date of

e-auction was 21.09.2021, with a reserve price of ₹ 309 crores. The advertisement

also states that 12 towers were constructed with finishing remaining; other works

(EWS, community centre, etc.) were yet to be constructed. The advertisement

further states that the successful bidder was to step into Kalinga’s shoes and

complete the project.

71. It is apparent to this Court from the materials on record that the initial

valuation of ₹ 11.68 crores made by HSIIDC is inaccurate, particularly in view

of the reserve price indicated by it in the auction notice. However, in view of the

final order proposed, no final opinion or finding is recorded.

72. It is directed that HSIIDC shall complete verification of all the relevant

documents furnished by Kalinga. Any additional documents or invoices, or

relevant materials which Kalinga may wish to rely upon, shall be furnished to

HSIIDC within two weeks. Thereafter, HSIIDC shall conduct verification, and

based upon that exercise, and relevant inquiries (for which it may seek such

assistance of Kalinga as is necessary) indicate the final valuation within six

months from the date of this judgment. The amount in furtherance of that

valuation shall be released, within three months of completion of verification. In

case Kalinga disputes the figure, it is open to it to firstly accept the amount

offered, on a without prejudice basis, and secondly, indicate its unwillingness to

15 In its portal HTTPS://HSIIDC.BIDX.IN.

accept that offer towards final settlement. In such event, Kalinga and HSIIDC

shall jointly submit the dispute to arbitration, to a mutually agreed person. In the

event no agreement is possible, the arbitration shall be referred to the Delhi

International Arbitration Centre (hereinafter, “DIAC”). The Chairman of the

DIAC shall then nominate an arbitrator, who shall enter upon reference. It would

be advisable, in such event, that the arbitrator also seeks the assistance of a

technical person, versed in verification of construction related documents, as an

expert. The fee for the arbitration shall be borne equally by the parties; the

proceedings shall be conducted in accordance with the Arbitration and

Conciliation Act, 1996.

73. Some flat owners, who had booked units in the project have applied for

appropriate directions to HSIIDC, to refund the amounts deposited by them.

HSIIDC shall complete the verification of documents, in relation to all those who

claim refund as allottees of Kalinga, within six months. Such allottees or flat

owners, (who have not obtained possession) shall be disbursed the amounts they

are entitled to within six months thereafter.

74. In the event of any dispute, with respect to the entitlement or amounts

payable, it is open to the concerned allottee or flat buyer to take recourse to

appropriate proceedings in law, i.e., by filing civil suit, or complaints under the

Consumer Protection Act, 1986. It is clarified that no proceeding, application or

contempt petition in this regard, will be entertained by this court.

75. I.A. No. 46028/2020; IA No. 59743/2020; I.A. No. 118798/2020; IA No.

103292/2020 and I.A. No. 137407/2019 in M.A. No. 50/2019; I.A. No.

30807/2020; I.A. No. 3403/2020; I.A. No. 3406/2020; and I.A. No. 191983/2019

in M.A. (D) No. 45009/2019; I.A. No. 192027/2019 in M.A. (D) No. 45026/2019;

Contempt Petition No. 716/2021 and Contempt Petition (D) No. 21733/2021 are

disposed off in terms of the above directions.

V. ABW Infrastructure Ltd.

76. ABW was earlier known as M/s. Aditya Buildwell Pvt. Ltd. ABW and its

associated companies had purchased maximum land measuring over 235 acres.

‘ABW Aditya Niketen’ was floated by ABW in M-I, M-I(A) and M-I(C)

adjoining HSIIDC Residential Sector-1, Manesar, Gurgaon, Haryana. That

project was the subject matter of the proceedings throughout culminating in the

main judgment of this Court.

77. From 2009 onwards, 1993 allottees booked their flats, built floors, plots

shops, commercial space as the case was, with ABW. In ABW Aditya Niketan

and City Centre, a residential plotted colony, on 104.912 acres of land with 236

plots, 1488 of floors/flats and 269 shops and commercial places, was to be

developed and constructed, pursuant to License No. 66 of 2009 dated 09.11.2009

issued by DTCP.

78. The ABW Manesar Allottee Welfare Society, 118-C, Sector 30, Gurgaon,

Haryana (hereinafter, “Society”) was registered on 21.09.2012. The Society has

filed on behalf of its member allottees, several applications, seeking directions. It

has filed charts, and proof of payment, by way of copy of receipts issued by ABW,

to substantiate its claim of genuine allottees being its members. The Society has

sought impleadment before the High Court, in the original proceedings, out of

which the main judgment culminated, in this Court. The society was also

impleaded during proceedings in this Court.

79. The Society claims that in adherence to the directions contained in para

42.8 of this Court's main judgement, the allottees preferred their claims and

submitted all required information to HSIIDC primarily indicating description of

the plot/unit, exact measurement of the area, purchase price and the total payment

made to ABW including (a) basic sale price, (b) External and Internal

Development Charges, (c) service tax, etc. Along with the claim form, the

necessary documents were also enclosed, namely, provisional allotment letter,

payment receipts, ID proof and address proof. An attested affidavit duly

supporting the contents of the claim was also submitted.

80. The Society claims that as there was no indication of compliance with the

direction contained in para 42.8 of the main judgment, on 07.01.2019 it filed an

application under the Right to Information Act, 2007. The HSIIDC responded by

its reply dated 24.01.2019 stating that claims of 220 plot buyers, 1270 flat/floor

buyers and 157 commercial shop buyers had already been received by it. The

Society claims it has regularly and continuously impressed upon HSIIDC as to

the delay in adherence and compliance of the judgement, but with no effect. The

Society’s grievance is that despite diligence by its members, HSIIDC failed to

verify their claims within a period of two months and after deep slumber of nine

months, it moved an application (M.A. No.50 of 2019) for three months extension

of time and this Court’s order dated 18.01.2019 granted extension up to

22.04.2019.

81. It was submitted that even in the extended period the necessary compliance

was not made and once again I.A. No.68542 of 2019 (in M.A. 864 of 2019) was

moved by HSIIDC for yet another extension. It was therefore submitted that

although a comprehensive direction was passed by this Court specifically in

favour of the innocent allottees, HSIIDC’s inaction has resulted in nothing even

after a lapse of 15 months. The Society had moved a contempt proceeding,

Contempt Petition No.2226 of 2018 against HSIIDC as well. The Society is

therefore seeking urgent directions, to HSIIDC for completion of its

responsibilities.

82. It was further urged that given that HSIIDC has demonstrably failed in

complying with the terms of this judgment, it would be in the interest of all

allottees that the land is handed over on an ‘as is where is basis’ to the respective

buyers of plots, flats or commercial units and a direction issued consequently to

HSIIDC to execute conveyance deeds. It is submitted that the Society and the

buyers themselves will undertake the work of completing the project having

regard to the fact that necessary approvals were granted in terms of License No.66

of 2009; the zoning plans have been approved and furthermore clearance was

granted by the concerned Forest and Environment Departments. In addition, to

facilitate development, previous deposits of EDC of ₹ 29.99 crores and IDC of ₹

14.08 crores was paid long back by the developer, i.e., ABW. No doubt, the

project land stands transferred to HSIIDC. Further, it was submitted that this

circumstance is not an impediment to permit the allottees joined together through

the Society and to complete the project.

83. On behalf of the State and HSIIDC, it was urged that the process of

verification has been delayed. It was further urged that of the total licensed land

measuring 104.682 acres, an extent of 2.306 acres were acquired for Haryana

Shehri Vikas Pradhikaran through an award dated 27.12.2016. Furthermore, a

sum of ₹ 8.31 crores was paid over to the erstwhile owner ABW. It was further

submitted that the records indicate total compensation paid to ABW for the land

which vested in the State under the deemed award was ₹ 12.51 crores, of which

₹ 3.32 crores has been paid by the LAC, with ₹ 9.91 crores still pending.

84. It was further argued that there has been no development on the land; that

no structure or construction or development was undertaken by ABW as on date.

A total of 1995 units were contemplated under the scheme - included 453 plots

and 221 commercial units. Furthermore, it was submitted -during the hearings

before this Court- that a total of 270 claims for refund had been made. In view of

the fact that it was submitted on affidavit by HSIIDC dated 12.04.2022 that it had

decided to settle 270 claims on pro rata basis for ₹ 20.486 crores. Other claims

on the lands of ABW measuring 104.282 acres, including buyers’ claims working

out to ₹ 128.38 crores and third-party claims working out to ₹ 172.15 crores. M/s.

Alchemist claimed ₹ 33.99 crores as an investor, for the credit facility provided

to ABW and its associates, which was rejected. Likewise, the claim of ₹ 1.28

crores to the land given to ABW and its group companies too was rejected. After

the hearings were concluded, the HSIIDC filed an affidavit indicating that the

figures indicated have now undergone a change, because more refund claims

were received, driving upwards the total amounts needed to be refunded.

85. After obtaining instructions, learned counsel appearing for HSIIDC

submitted that since there has been no development or construction, the question

of granting any compensation in respect of ABW’s allottees would not arise.

Therefore, the HSIIDC would refund all unverified claims on pro rata basis to

the allottees and those who had applied under the scheme together with 6%

interest per annum from the date of this Court’s judgment.

86. As found in the main judgment as well as the previous part of this

judgment, ABW was one of the prime movers behind the entire subversion and

abuse of the state machinery for acquisition of farmer’s lands. ABW obtained

licenses for 104.682 acres and floated schemes for plots with two-three storied

structures and residential as well as commercial units. Despite the fact that

licenses were granted way back, even as on the date of the judgment of this Court

(and even now), no development has taken place. All that was asserted on behalf

of the Society was that IDC and EDC amounts were paid. HSIIDC’s stand is that

these charges are in fact in arrears. Having regard to the totality of circumstances,

this court is of the opinion that the claim by the Society that the lands be made

over to it or the residents on an ‘as is where is' basis for development by them is

untenable.

87. The main judgment expressly stated that it is only in cases where

construction is completed or nearing completion that the interests of third party

allottees were protected. However, such is not the situation in the case of 104.682

acres of land that belonged to ABW. There is no denial that such lands have now

been vested in HSIIDC as a consequence of the main judgment of this Court and

are to be included as part of the deemed award. It is apparent that the when the

Court delivered the main judgment, it was unaware of the true nature of acts in

relation to each project, especially in relation to ABW, i.e., that no development

had taken place and that allottees had merely paid certain instalments to the

colonizer / developer. Furthermore, the materials on record disclose that a large

number of claims have been made for refund. Having regard to these facts and

being aware of the practical reality that were HSIIDC mandated to now proceed

with the project, it would not be reasonable to expect completion of such project

in the foreseeable future, at least for the next 5-7 years, it would be in the fitness

of things that HSIIDC refunds the amounts payable to the allottees of the entire

project, i.e., allottees of residential units/plots and commercial or shop space.

HSIIDC shall take up this process as expeditiously as possible and facilitate the

verification and payment of these amounts at the earliest, so that the process is

completed within the next twelve months from the date of this judgment. In case,

the HSIIDC is unable to refund the amounts, by that date, the sums shall carry

interest at 6% p.a.

88. I.A. No. 102358/2019; I.A. No. 189667/2019; I.A. No. 83251/2020; I.A.

No. 62216/2020 in M.A. (D) No. 24553/2019; I.A. No. 42263/2022 and I.A. No.

49262/2022 in M.A. (D) No. 9002/2022; I.A. No. 76605/2020 and I.A. No.

76602/2020 in M.A. No. 1521/2020; I.A. No. 75955/2020 in Contempt Petition

No. 513/2020; Contempt Petition No. 2226/2018; and Contempt Petition No.

716/2021 are disposed off in terms of the above directions.

VI. Speed Town Planners Pvt. Ltd.

89. Eleven applications were preferred in relation to lands that were inter alia,

subject of license No. 175 of 2008 dated 30.09.2008 pertaining to 2.443 acres of

land in village Naurangpur acquired by Girnar Infrastructure Pvt. Ltd. (hereafter

“Girnar”) and License No. 76 in favour of one Navin Rao to the extent of 11.519

acres). Girnar was a wholly owned subsidiary of Unitech, and Navin Rao too was

an affiliate of Unitech. Applications were preferred by Unitech, and one Speed

Town Planners Pvt. Ltd. (hereafter “Speed Town”) which claimed to be entitled

to rights to 19.56 acres.

90. In 2008, Girnar obtained license No. 175 of 2008 dated 30.09.2008 for

developing a commercial colony on 2.443 acres out of the 19.56 acres of land.

The license was granted by DTCP. Out of the 2.443 acres, an area of 1.5125

acres was notified under Section 4 of Acquisition Act, on 07.08.2013 and under

Section 6 on 31.07.2013. Finally, 1.5125 acres of land was acquired under Award

No. 13 dated 29.07.2016, for development and utilization of sectors roads (Sector

75 to 80) at Gurugram. Unitech urges that the acquisition of 1.5125 acres rendered

the balance area of 0.93 acres to be commercially non-viable for any

construction/development thereon as it was not be possible to consume the entire

permissible FAR of 2.443 acres on the residual parcel of land. It is contended that

an agreement to sell was executed on 14.03.2016 between Girnar as vendor and

Speed Town as vendee for the sale of a portion of land admeasuring 9.69 acres,

out of balance 17.116 (19.56 - 2.443 = 17.116 acres) at the rate of ₹ 4.40 crores

per acre, for a total sale consideration of ₹ 42.636 crores. Of that consideration, a

sum of ₹ 33.21 crores was received by Girnar from Speed Town for sale of 9.69

acres from 13.01.2016 to 18.06.2016 while an amount of ₹ 9.426 crores (₹ 42.636

- ₹ 33.21 = ₹ 9.426) is outstanding in the books of accounts.

91. In terms of the agreement, Speed Town was obliged to clear the balance

outstanding amount of ₹ 9.426 crores upon submission of the sale deed for

registration.

92. Applications are preferred by Unitech and Speed Town. Speed Town

claims to have entered into collaboration agreement with Girnar, on 12.02.2016.

Subsequently, the agreement to sell was entered into by the parties, and the sum

of ₹33.21 crores was paid to Girnar. Speed Town seeks directions that the lands

in respect of which it entered into collaboration agreement (9.69 acres) ought to

be released from the deemed award directions of this Court in its main judgment.

In the alternative, it claims for a direction that Girnar should refund amounts paid

by it.

93. During the hearing, Mr. Joydeep Gupta, learned Senior Advocate

contended that Speed Town was a bona fide purchaser which had first entered

into collaboration agreement with Girnar, and later entered into agreement to sell.

It was urged that Girnar’s holding company Unitech was under a cloud and its

management has been replaced by virtue of orders of this Court.

94. It was urged that on the basis of the main judgement, the physical

possession of Girnar’s entire land parcels, measuring 19.56 acres, (comprising of

2.443 acres of licensed and 17.117 acres of unlicensed land), was taken over by

HSIIDC in furtherance of District Revenue Officer-cum-Land Acquisition

Collector’s letter No. 382/LAC dated 06.07.2018 and correspondingly reflected

in the revenue records.

95. Apparently, Speed Town sent a notice dated 24.04.2018 to Girnar to refund

the amount of ₹ 33.21 crores for the land along with interest at the rate of 18%

per annum from the date of payment till the date of actual refund. Speed Town

invoked the arbitration clause, and submitted the dispute for arbitration. This

culminated in an award in its favour.

96. It is argued that the site inspection carried out by Unitech’s land division

on 15.03.2021 noted that barring the licensed land of 2.443 acres and 2.08 acres

(out of the total unlicensed land parcel of 17.117 acres), the residual land was

under unauthorized cultivation since November 2020.

97. The applicants seek directions for exclusion of the lands from the deemed

award, urging that they were not purchased from any farmers but rather from one

Angelique International Ltd. (hereinafter, “Angelique”), a public limited

company, through a registered sale deed executed on 23.08.2007. The main

judgment was based on the premise that the land sellers were the farmers whose

only source of income was agriculture. The entire tenor of the main judgement

was therefore farmer-centric. In the case of Girnar, the position is entirely

different since the land was purchased from a public limited company which was

incorporated on 03.01.1996. It was submitted that the original owner, Angelique

was a project engineering and construction company and the other assumptions

based on which this Court delivered the main judgment, were inapplicable to it.

Furthermore, the land parcels purchased by Angelique were mutated in the name

of Girnar on 06.06.2006 and 23.08.2007 and, therefore, their ownership is prior

to the dates of mutation. Hence, the seller company was not in the business of

buying and selling land only for minting quick money by duping innocent

farmers.

98. It was argued that Girnar acquired ownership of 19.56 acres from

Angelique by registered sale deed dated 23.08.2007 whereas the cut-off date fixed

by this Court was 24.08.2007 till 29.01.2010, meaning thereby that all land

transactions of sale and purchase during the pendency of acquisition proceedings

from 24.08.2007 till 29.01.2010 were cancelled by the main judgment.

99. On behalf of the HSIIDC and the State, it was urged that neither Unitech,

nor Speed Town, were entitled to any relief. It was highlighted that the acquisition

of the land from Angelique, during the suspect period, was expressly noticed by

this court. The sale deed, in the present case, was executed just before the

scheduled pronouncement of the award. Furthermore, during the pendency of

proceedings, Girnar transferred its development rights to Speed Town, which

chose to acquire it, and did so at its own peril. Speed Town later entered into

agreement to sell. However, at the root of all these transactions, was the transfer

of ownership during the suspect period, i.e., after issuance of the notification

under Section 4. Counsel drew the notice of this Court to paras 34.2 and 35 of the

main judgment which clarified the issue beyond any doubt.

100. This Court’s main judgment, has noted in more than one place, from paras

26.1 to 26.9, and traced the sequence of events which led to the notification of

912 acres for acquisition, the resultant panic and scramble on the part of

landowners to get rid of their holdings, the purchase of these lands, and in many

places, their entering into agreements of sale or development agreements, by

builders, which made no mention of the impending acquisition, leading to a

demand to drop acquisition, which was ultimately done at two points of time, i.e.

24.08.2007 and 29.01.2010. The transactions relating to lands owned by Girnar,

and Unitech’s associates, squarely fall within the suspect period. In these given

circumstances, Unitech’s plea, or that of Speed Town, that the collaboration

agreement with the latter- and the agreement to sell, - were executed after the

suspect period, are untenable. The taint that attaches with the initial transaction

(i.e., Girnar acquiring the lands during the acquisition process) attaches equally,

to Speed Town’s transaction, because the entire premise, which persuaded the

vendor to sell the lands, was that the acquisition proceedings would go through,

divesting their title. However, the vendee and its holding company appeared to

have full knowledge of the nature of future events, in which they probably had a

hand. Thus, the request for exclusion of these lands, from the deemed award, is

untenable and is accordingly rejected. 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.

101. I.A. No. 128802-03/2020; I.A. No. 128807/2020 and I.A. No. 53868/2022

in M.A. No. 2228/2020; I.A. No. 31185/2021; I.A. No. 31180/2021; I.A. No.

31182/2021; I.A. Nos. 128798-99/2021; and I.A. No. 128801/2021 in MA (D)

No. 5699/2021 are disposed off in the above terms.

VII. Innovative Infradevelopers Pvt. Ltd.

a. Legend Height Owners Welfare Association

102. 3.35 acres of agricultural land in Naurangpur was purchased by two

individuals, i.e., Shri Ashok Kumar Lakhotia and Shri Subhash Chand Goyal by

sale deeds dated 26.02.2004 and 08.03.2004. It was claimed that these two also

obtained possession. The lands became the subject matter of acquisition in the

notification under Section 4. The original owners sought for release of land and

thereafter objected under Section 5A of the Acquisition Act. Some lands were

released from acquisition, however, the major portion was included in the

declaration under Section 6. Request for release of these lands for acquisition

was made. This was followed up by an order dated 31.07.2007 releasing the land

from acquisition. M/s. Innovative Infradevelopers Pvt. Ltd. (hereinafter,

“Innovative”) thereafter entered the scene on 15.10.2007. Subsequently, they

sought for and were granted license to develop the lands on 20.06.2008 (License

No. 128 of 2008). Apparently, meanwhile on 19.12.2007, Innovative purchased

the two parcels of lands. Innovative claims that pursuant to the license granted by

DTCP, it developed the land and constructed commercial tower.

103. After the main judgment was delivered, the state while ensuring the

publication of the deemed award also included the lands which were the subject

matter of License No. 128 of 2008. Aggrieved, Innovative approached the Punjab

and Haryana High Court in writ proceedings.16

The writ petition however was

rejected by the High Court by an order which has been impugned in the present

case by special leave.

104. The construction put up by Innovative is a commercial building known as

“Legend Heights”. Several individuals and entities claimed to have purchased

spaces within it. They have approached this Court by filing an application - i.e.,

the Legend Height Owners Welfare Association (hereinafter, “Legend Heights

Association”). It claims to represent 35 individuals who allegedly paid

substantial amount ranging between ₹ 13 lakhs and ₹ 65 lakhs. The details of the

application filed by Legend Heights Association list the amounts paid to

Innovative and also describes the units allotted in the building to the individuals.

16 M/s Innovative Infradevelopers Pvt. Ltd. v State of Haryana, W.P. (C) No. 18336 of 2020 (dismissed on

03.11.2020).

17 M/s Innovative Infradevelopers Pvt. Ltd. v State of Haryana, SLP (C) No. 2147 of 2021.

b. Paramveer Distributors Pvt. Ltd.

105. Another set of applications has been preferred by Paramveer Distributors

Pvt. Ltd., (hereinafter, “Paramveer”) a non-banking financial institution. It

alleges having entered into an agreement with Innovative on 08.06.2017, whereby

an area measuring 96,216.03 sq. ft. was agreed to be purchased by it for a total

consideration of ₹ 16 crores. The areas sold was for a hotel block. The relevant

condition stipulated that out of ₹ 16 crores payable by the buyer, ₹ 8.05 crores,

by way of outstanding dues of one Ms. Saraswati Devi was agreed to be adjusted.

Another sum of ₹ 4.24 crores by way of outstanding dues of Paramveer, was

agreed to be adjusted. The balance amount was to be paid in the ratio of 55:45

respectively.

106. Paramveer therefore contends that it is entitled to the built-up space in

respect of the hotel block constructed by Innovative.

c. Analysis of VII (a) and (b)

107. HSIIDC in its response to the special leave petition and the applications

(by Legend Heights Association and Paramveer) submits that no construction has

been undertaken with respect to the hotel block. It is argued that this Court should

not take cognizance of submissions on behalf of Paramveer since no credible

material has been placed on record to establish the genuineness of the transactions

claimed by it. As far as the commercial complex of Legend Heights is concerned,

HSIIDC points out that since the land transactions for sale of lands, as well as the

license in respect of these lands, was issued during the suspect period, it has to be

included in the deemed award.

108. From the factual narrative it is evident that the original owners of lands

themselves purchased the lands in early February 2004. This Court cannot per se

attribute the foreknowledge about the acquisition. However, their subsequent

conduct in seeking for denotification which led to the ultimate withdrawal from

acquisition of those lands (even though they were included in the notification

under Section 6) is an established fact. Innovative concededly entered into

transactions for purchase of lands in 2007 and applied and obtained the requisite

license in 2008.

109. At the same time, this Court is cognizant of the fact that a number of

allottees appear to have invested substantial amounts (in respect of the

commercial building of Legend Heights, and not the hotel building of

Paramveer). Although HSIIDC is silent as to whether the occupation certificates

have been granted, there is some material on record (by way of averments in the

special leave petition as well as in the application by the Legend Heights

Association) that several sale deeds/conveyance were executed and registered.

110. The larger interest of justice would lie in ensuring that such of the allottees

who are either granted occupation, and /or in whose favour conveyance has been

executed, should be handed over the commercial units that they had originally

booked. As far as others are concerned, HSIIDC should first verify the claims of

all persons/entities who claim to have paid substantial amounts and have not been

allotted their spaces, and shall, depending on the stage and nature of construction

and the extent of amount paid (it is more than 75 per cent of the total

consideration) hand over possession of the units, after due completion.

111. In case any allottee seeks refund, HSIIDC should ensure that the amounts

are duly verified and repaid within six months of the date of this judgment. In the

case of default, HSIIDC shall pay 6% per annum as interest. In respect of all

unallotted units and areas which can be constructed upon, title shall vest

exclusively with HSIIDC.

112. So far as Paramveer is concerned, this Court is of the opinion that the

agreement entered into with Innovative records that certain amounts (over ₹ 12

crores) were due and payable to the allottees, which was subsequently adjusted

in the builder buyer agreement for the hotel. The details of those transactions have

nowhere been verified or placed on record. In addition, Innovative has stated that

construction of the hotel block has not taken place. In the circumstances, all

rights, title and interest in those portions of Innovatives’ properties shall vest in

HSIIDC and be part of the deemed award.

113. Needless to add, Innovative shall be entitled to amounts like in the case of

all other developers/owners in accordance with the main judgment. HSIIDC shall

verify its claims. In the event of any dispute in this regard, Innovative is at liberty

to press its claim in substantiative legal proceedings and not their miscellaneous

applications before this court. I.A. No. 41690/2021 in M.A. (D) No. 7775 of

2021; I.A. No. 84064-67/2020; I.A. No. 91091/2020; I.A. No. 84067 of 2020 in

M.A. No. 50/2019 and SLP No. 2147 of 2021 are disposed off in the above terms.

VIII. Dharamvir & Ors.

114. 105 individuals approached the Punjab & Haryana High Court, through a

common writ petition, claiming directions that they were residents of village

Manesar.18 The claim put forth by them was that they were bona fide and innocent

purchasers who had acquired the lands which were included in the notification

under Section 4. They acquired rights in respect of lands – presently under their

occupation during the suspect period, i.e., between 27.08.2004 and 29.01.2010.

It is alleged that assuming the transactions to be free from any cloud on the title,

these petitioners had even proceeded to construct upon lands. The claim made to

the Punjab & Haryana High Court was that their lands should be excluded from

the deemed award. The High Court declined the claim, reasoning that the

purchases were made by them during the suspect period and this court’s judgment

provided relief only to the original land owners who had not transferred, alienated

or in any manner sold or parted with rights in respect of the land. Since these

petitioners admittedly claimed to have purchased the land when they were facing

18 Dharamvir v State of Haryana, SLP (C) No. 5490 of 2021.

acquisition, no relief could be granted to them. It was argued on behalf of these

petitioners by Mr. Rathi that all the petitioners invested their hard-earned money

and had built houses in which they have been living all this while. It was urged

that many of those dwellers are ex-army personnel.

115. During the course of hearing, HSIIDC submitted that the land occupied by

such individuals are to the extent of 27 acres. HSIIDC expressed practical

difficulties in verifying the transactions claimed to be bona fide. It was pointed

out that these petitioners proceeded to complete the alleged transactions even

though the lands were facing imminent acquisition. This court has granted relief

only to those land owners who were coerced into selling lands to developers. Such

developers used the acquisition proceedings to make profit and ultimately ensure

that the acquisitions were dropped. These individuals, however, ran the risk of

acquisition being completed.

116. The entire tenor and reasoning of the main judgment is that proceedings

under the Land Acquisition Act were used as device, whereby through a web of

holding or shell companies, developers ultimately entered into transactions and

paid valuable amounts towards developmental rights – during pendency of

acquisition proceedings. Those rights in turn were exploited to persuade the state

machinery to withdraw from the acquisition. The prices of land had risen

astronomically by then. Taking all these facts into consideration, as well as the

fact that developers had proceeded to develop properties and construct buildings

in which units were sold or allotted, this Court allowed only one kind of

exception, i.e., that bona fide purchasers of such units, flats or shops etc. to be

vested with title. In respect of all unallotted, unconstructed land as well as

buildings and land forming part of each of such project, title was to vest in

HSIIDC.

117. Wherever development agreements were entered into and licenses issued,

and no activity took place in the form of construction or development, land was

to vest in HSIIDC. If the above thread of reasoning were to be considered, it is

apparent that third-party bona fide purchasers who secured allotment by paying

valuable considerations which is verifiable as a matter of fact (by independent

material) was protected. In the case of all other transactions, however, such

protection was not extended for the simple reason that there is no manner for

verifying whether in fact a bona fide transaction of the kind alleged took place.

For these reasons, this Court is of the opinion that there is no infirmity with the

judgment and order of the Punjab and Haryana High Court.

118. As a result of the above, the right and title in respect of lands under

occupation of these petitioners is vested with HSIIDC. It is up to the HSIIDC to

frame such scheme as is permissible in accordance with its parent enactment and

a non-discriminatory manner by a scheme, in regard to such land (i.e. the 27 acres

to which the petitioners and others like them may claim relief) as it may deem

appropriate. In case the HSIIDC chooses to do so, it shall be bound by all

provisions of the Master Plan and Zoning and such other rules and regulations as

are applicable, in the area and shall strictly enforce them.

IX. Other issues

119. During the hearing, it was submitted that out of the 688 acres finally

notified under Section 6, 420 acres were finally included as part of the deemed

award. Learned counsel urged that HSIIDC has sought to grant benefit to

developers who made colossal profits and have sought to wriggle out from the

impact of the judgment to various stratagem, including by filing applications for

extension/clarification etc. During the course of hearing, all these applications,

the submissions of all parties and that of HSIIDC (which has also preferred this

application for directions and clarifications) were considered. Out of the 912

acres originally notified under Section 4 of the deemed consideration of

objections under Section 5A, 688 acres were apparently notified under Section 6.

The entire acquisition was abandoned on 29.01.2010. This Court, in its main

judgment has, in many places - held, in the that the state’s decision to not to go

ahead with the acquisition was mala fide and amounting to a fraud under the

Acquisition Act. The HSIIDC through its applications sought clarifications about

whether the term ‘transfer’, includes only conveyance or formal transfer of lands

or would it include parting with valuable developmental rights. In an earlier

portion of this judgment, this aspect has been elaborately dealt with, and

concluded that the expression ‘transfer’ has to be interpreted widely and not in a

narrow or technical manner. Thus, in all cases where collaboration agreements

were entered into or developmental rights were parted for valuable consideration

or where licenses were applied for during the suspect period whether in favor of

the original land owner who might have entered into collaboration agreement and

received monies, the transactions would fall within the mischief of transfer.

Having regard to these conclusions, the applicants’ apprehensions are unfounded.

120. As far as other steps with respect to acquisition are concerned, during the

course of hearing, the Court was told that in respect of 365 acres of land, 185

references have been received. The State shall ensure that these are answered as

expeditiously as possible the concerned reference courts are hereby directed to

conclude all the proceedings in 185 references and pronounce the award in

accordance with law within a period of one year from the date of this judgment.

All rights and contentions of the parties are kept open. I.A. No. 118408/2020; I.A.

No. 118410/2020 and I.A. No. 126826/2020 in M.A. No. 2149/2020 are disposed

off in the above terms. The applications on behalf of the State and HSIIDC (I.A.

2254/2019 and I.A. 100745/2020 in M.A. No. 50/2019; and I.A. 93822/2019 in

M.A. No. 1175/2019) are also accordingly disposed off.

Conclusions and Directions:

121. In the light of the above discussion, this Court’s findings are summarized

as follows:

a. The expression ‘transfer’ used in the main judgment, especially in light of para

42.6, is not confined 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. Therefore, the final amount payable is 2.681 acres

x ₹ 5 crores = ₹ 13,40,50,000 /- (rupees thirteen crores, forty lakhs, and fifty

thousand only) within six months from the date of this judgment, failing which

interest at the rate of 6% per annum shall be levied from the date of default.

Green Heights is entitled to recover from Paradise such proportionate sums it

may be entitled to claim having regard to the terms of their agreement.

d. With respect to Godrej, a sum of ₹ 5 crores per acre is payable by Godrej to

HSIIDC. Therefore, final amount payable is 13.743 acres x ₹ 5 crores = ₹

67,36,30,000 /- (rupees sixty-seven crores, thirty-six lakhs and thirty thousand

only) within six months from the date of this judgment, failing which interest

at the rate of 6% per annum shall be levied from the date of default. Godrej is

entitled to claim such proportionate sums as it may be entitled to in terms of

its agreement with Frontier, Earl, Balbir Singh and Ram Pyari in accordance

with law.

e. Upon full compliance with directions above, the lands covered by Green

Heights and Godrej’s projects shall be excluded from the deemed award.

f. With respect to Karma, the 25.95 acres of land subject of License No. 206 of

2008 forms part of the deemed award. The State shall take appropriate steps

and issue the supplementary award in respect of these lands within six months

from the date of this judgment. Karma is entitled to compensation in

accordance with the Acquisition Act as on the date of the notification under

Section 4, and is entitled to statutory benefits such as interest, solatium etc. on

such determined compensation.

g. Lands measuring 2.9875 acres and 10.881 acres respectively belonging to R.P.

Estates and Subros, are excluded from the deemed award.

h. With respect to Express Greens (DLF), contentions to exclude the project from

the deemed award are rejected. It is directed that:

(i) HSIIDC shall complete the process of validating the title of allottees,

including the title to the undivided and proportionate land share,

within six months from the date of this judgment;

(ii) HSIIDC shall notify the balance allottees about the execution of sale

deed - the process of execution and registration of sale deed to be

completed within six months from the date of this judgment.

HSIIDC shall ensure that a designated nodal officer is deployed to

scrutinize the relevant documents and facilitate the execution of such

sale deeds; and

(iii) All rights, title and interest in respect of the unsold 39 townhouses

in the independent floors vests with the HSIIDC, which shall deal

with them in accordance with its policies and applicable laws.

Likewise, in case of unsold apartments, all rights, title and interest

shall vest with HSIIDC.

(iv) With respect to 96 apartments on the 15th tower which have been

completed but no occupation certificate has yet been issued, the

DTCP shall ensure due inspection and decision on the pending

occupation certificates. HSIIDC to complete any deficiency that has

to be rectified.

(v) With respect to club houses and boundary wall in sector M-1 and M1(A), the HSIIDC is directed to take up work immediately and

complete the same with eighteen months from the date of this

judgment.

(vi) All unconstructed and unallotted portions as well as construction

rights (such as FAR) in respect of unconstructed, unallotted plots

etc., including two school sites, shall vest absolutely with HSIIDC.

HSIIDC is entitled to develop these areas in accordance with its

policies within the frame work of the applicable Master Plan

development laws. DLF is entitled to collect amounts, if any, in

terms of the main judgment of this Court. It shall hand over all

records relating to the allottees, and technical data, pertaining to the

entire project to HSIIDC within one month from the date of this

judgment.

i. With respect to Kalinga, it is directed that

(i) HSIIDC shall complete verification of all the relevant documents

furnished by Kalinga. Any additional documents or invoices, or

relevant materials which Kalinga may wish to rely upon, shall be

furnished to HSIIDC within two weeks. Thereafter, HSIIDC shall

conduct verification, and based upon that exercise, and relevant

inquiries (for which it may seek such assistance of Kalinga as is

necessary) indicate the final valuation within six months from the date

of this judgment. The amount in furtherance of that valuation shall be

released, within three months of completion of verification.

(ii) HSIIDC shall complete the verification of documents, in relation to all

those who claim refund as allottees of Kalinga, within six months. Such

allottees or flat owners, (who have not obtained possession) shall be

disbursed the amounts they are entitled to within six months thereafter.

(iii) In the event of any dispute, with respect to the entitlement or amounts

payable, it is open to the concerned allottee or flat buyer to take recourse

to appropriate proceedings in law, i.e., by filing civil suit, or complaints

under the Consumer Protection Act, 1986. It is clarified that no

proceeding, application or contempt petition in this regard, will be

entertained by this Court.

j. With respect to ABW, it is directed that HSIIDC to refund the amounts

payable to the allottees of the entire project, i.e., allottees of residential

units/plots and commercial or shop space, within the next twelve months from

the date of this judgment, failing which interest at the rate of 6% per annum

shall be levied from date of default. The lands of ABW shall form part of the

deemed award.

k. 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.

l. 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 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. HSIIDC shall

verify its claims. In the event of any dispute in this regard, Innovative is at

liberty to press its claim in substantiative legal proceedings and not their

miscellaneous applications before this Court

m. With respect to Legend Heights, HSIIDC is directed to:

(i) Hand over commercial units to allottees who were either granted

occupation, and /or in whose favour conveyance was executed. As far

as others are concerned, HSIIDC to first verify the claims of all

persons/entities who claim to have paid substantial amounts and have

not been allotted their spaces, and shall, depending on the stage and

nature of construction and the extent of amount paid (it is more than 75

per cent of the total consideration) hand over possession of the units,

after due completion.

(ii) Duly verify and pay refunds sought by any allottee within six months

of the date of this judgment, failing which interest at the rate of 6% per

annum shall be levied from date of default.

(iii) In respect of all unallotted units and areas which can be constructed

upon, title shall vest exclusively with HSIIDC.

n. 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. It is up to the HSIIDC to frame such scheme as is

permissible in accordance with its parent enactment and a non-discriminatory

manner by a scheme, in regard to such land (i.e., the 27 acres to which the

petitioners and others like them may claim relief) as it may deem appropriate.

In case the HSIIDC chooses to do so, it shall be bound by all provisions of the

Master Plan and Zoning and such other rules and regulations as are applicable,

in the area and shall strictly enforce them.

o. 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 a

period of one year from the date of this judgment.

p. 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.

122. I.A. No. 112515/2020; I.A. No. 117025/2020; I.A. No. 118401/2020; I.A.

No.116268/2020; I.A. No. 111557/ 2020, I.A. No. 111562/2020; I.A. No.

111563/2020; I.A. No. 116120/2021; I.A. No. 116128/2021, I.A. No.

123690/2021; I.A. No. 110995/ 2019, I.A. No. 91793/ 2020; I.A. No. 113206/

2020; I.A. No. 36484-85/2020; I.A. No. 36487; I.A. No. 89570/ 2020; I.A. No.

31079-81/2022; I.A. No. 102358/2019; I.A. No. 189667/2019; I.A. No.

62216/2020; I.A. No. 42263/2022; I.A. No. 49262 of 2022; I.A. No. 75955/2020;

I.A. No. 83251/2020; I.A. No. 76605/2020; I.A. No. 76602/2020; I.A. No.

31185/2021; I.A. No. 31180/2021; I.A. No. 31182/2021; I.A. No. 128802-

03/2020; I.A. No. 128807/2020; I.A. No. 128798-99/2021; I.A. No. 53868/2022;

I.A. No. 128801/2021; I.A. No. 91091/2020; I.A. No. 41690/2021; I.A. No.

84064-65 of 2020; I.A. No. 84066 of 2020; I.A. No. 84067/2020; I.A. No.

118408/2020; I.A. No. 118410/2020; I.A. No. 126826/2020; I.A. 2254/2019; I.A.

93822/2019; I.A. 100745/2020; I.A. No. 46028/2020, I.A. No. 30807/2020; I.A.

No. 191983/2019; I.A. No. 192027/2019; I.A. No. 137407/2019; I.A. No.

3403/2020; I.A. No. 3406/2020; I.A. No. 59743/2020; I.A. No. 118798/2020; I.A.

No. 103292/2020; I.A. No.68542 of 2019; I.A. No. 49986-87 of 2021; I.A. No.

49990/2021 in MA No. 50/2019; M.A. No. 864/2019; MA (D) 24553/2019; MA

(D) 45009/2019; M.A. (D) No. 45026/2019; M.A. No. 1175/2019; M.A. (D) No.

26552/ 2019; M.A. (D) No. 7888/2020; M.A. No. 1521/2020; M.A. No. 2067 of

2020; M.A. 2150 of 2020; M.A. No. 2149/2020; M.A. No. 2228/2020; M.A. (D)

No. 5699/2021; M.A. (D) No. 7775 of 2021; M.A. (D) No. 9505/2021; M.A. (D)

No. 6705/2020; M.A. (D) No. 9002/2022 and Contempt Petition No. 2226/2018,

Contempt Petition No. 513/2020, Contempt Petition No. 716/2021, SLP (C) No.

2147/2021 and SLP (C) No. 5490/2021 are thus disposed off in the

aforementioned terms.

……………..............................................................J.

[UDAY UMESH LALIT]

.……...………........................................................J.

[S. RAVINDRA BHAT]

..................................................................................J.

[PAMIDIGHANTAM SRI NARASIMHA]

New Delhi,

July 21, 2022.

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