2003 (2) TMI 435 - SC - Indian Laws

Whether clause (t) of the licence agreement can be read as a restriction of the right to transfer the community sites? Held that - Appeal allowed. The cap on profit, in our opinion, is irrelevant for the purpose of construction as regards the right of colonizer to transfer the land. Clause (t) of the Licence, in other words, cannot be construed to put in an implied limitation of the owner of the land to transfer its land. It is for the State of Haryana to invoke the said clause if and when any occasion arises therefor. Furthermore, having regard to the fact that the DLF had made its intention to transfer the lands known through advertisements in the widely circulated newspapers; offerees must be held to have exercised their due diligence at the time of acquisition of interest in the plots and in that view of the matter such interest cannot be put in jeopardy unless it is found out without any difficulty whatsoever that the colonizer had no right to transfer the said land and the effect of such transfer would lead to illegality. The fourth parties are bona fide transferees for value and thus their right of claiming interest cannot be jeopardized by reason of executive instructions or otherwise particularly in absence of any pleadings by the respondents No. 1 and 2 to the effect that fraud has been practised by the colonizer or the parties colluded with one another to achieve an illegal purpose.

Issues Involved:
1. Interpretation of Section 3(3)(a)(iv) of the Haryana Development and Regulation of Urban Areas Act, 1975.
2. Legality of transferring community sites without the permission of the competent authority.
3. Validity of the circulars dated 25.10.1994 and 13.2.1996 issued by the State of Haryana.
4. Right of the colonizer to transfer land and the implications of such transfers.

Issue-wise Detailed Analysis:

1. Interpretation of Section 3(3)(a)(iv) of the Haryana Development and Regulation of Urban Areas Act, 1975:
The Supreme Court examined the interpretation of Section 3(3)(a)(iv) of the said Act, which mandates that a colonizer must either construct schools, hospitals, community centers, and other community buildings on the land set apart for these purposes at their own cost or get them constructed by any other institution or individual at their cost. The Court concluded that the terms "at his own cost" and "at its cost" must be presumed to have different meanings, indicating that the legislature intended to allow the colonizer to transfer the responsibility of construction to other entities.

2. Legality of Transferring Community Sites Without the Permission of the Competent Authority:
The Court noted that the Act and the Rules do not expressly prohibit the transfer of land by the colonizer. It was observed that the right of transfer of land is incidental to the right of ownership and can only be curtailed by a statute. The Court held that Section 3(3)(a)(iv) does not impose any restriction on the transfer of land, and any prohibition inferred must be backed by statutory provision. The Court also emphasized that the consequence of violating such an undertaking is not specified in the statute, meaning that any transfer made in violation of the undertaking would not be illegal.

3. Validity of the Circulars Dated 25.10.1994 and 13.2.1996 Issued by the State of Haryana:
The Supreme Court scrutinized the circulars issued by the State of Haryana, which aimed to impose restrictions on the transfer of community sites. The Court found that these circulars were not backed by any statutory provision and thus could not curtail the right of the colonizer to transfer land. The Court held that the executive instructions issued in 1994 and 1996 could not have retrospective effect and operation from 7.8.1991, as the statutory bar did not exist prior to these dates.

4. Right of the Colonizer to Transfer Land and the Implications of Such Transfers:
The Court concluded that the colonizer's right to transfer land is inherent in the right of ownership and cannot be restricted without explicit statutory provision. The Court noted that the transfers made by DLF were recognized by the respondents prior to 1994, and the building plans submitted by the transferees were accepted and sanctioned. Therefore, the Court held that the respondents could not contend that there was a statutory bar on such transfers. The Court emphasized that the statutory obligations of the licensee would percolate down to its transferees, and the State could regulate the user of the land as per the statutory provisions.

Conclusion:
The Supreme Court set aside the impugned judgment of the Punjab and Haryana High Court, holding that the restrictions imposed by the State of Haryana through executive instructions were not backed by statutory provisions and thus could not curtail the colonizer's right to transfer land. The Court allowed the appeals, with no order as to costs, and observed that the prescribed authorities could take action against the colonizer or the transferees if they failed to discharge their obligations as per the Act, Rules, and conditions of the license.

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