2016 (5) TMI 1493 - SC - Indian Laws

Whether the power of the State to acquire land for a public purpose has been used in the present case to facilitate transfer of title of the land of original owners to a private builder to advance the business interest of the said builder which is not legally permissible? Held that - There is no reason whatsoever to disagree with the finding recorded by the High Court that present case is a gross abuse of law on account of unholy nexus of the concerned authorities and the builder to enable the builder to profiteer. The land could either be taken by State for a compelling public purpose or returned to the land owners and not to the builder - There could be no objection to acquisition of land for a compelling public purpose nor to regulated development of colonies, but entertaining an application for releasing of land in favour of the builder who comes into picture after acquisition notification and release of land to such builder tantamounts to acquisition for a private purpose. It amounts to transfer of resources of poor for the benefit of the rich. It amounts to permitting profiteering at the cost of livelihood and existence of a farmer. This is against the philosophy of the Constitution and in violation of guaranteed fundamental rights of equality and right to property and to life. What cannot be done directly cannot be done indirectly also. The policy is applicable only to release of such land from acquisition as is owned/ purchased by the developers before the issue of notification under Section 4 of the Land Acquisition Act, 1894. This condition was required to be strictly complied with and no person other than original owners prior to acquisition could directly or indirectly avail of the said policy. Even a bona fide error could not justify a patent illegality. In the present case, it is undisputed case of the builder itself that it did not have even an inch of land before the notification in question. It is well settled that use of power for a purpose different from the one for which power is conferred is colourable exercise of power. Statutory and public power is trust and the authority on whom such power is conferred is accountable for its exercise. There is no ground to interfere with the finding recorded by the High Court that there was an abuse of power in releasing the land in favor of the builder. Once it is found that action of the State and the builder resulting in transfer of land from land owners to the builder was without any authority of law and by colourable exercise of power, none of the contentions raised by the builder could accepted. Notifications dated 11th April, 2002, 8th April, 2003 and awards dated 6th April, 2005 are upheld. The land covered thereby vests in HUDA free from all encumbrances. HUDA may forthwith take possession thereof - All release orders in favour of the builder in respect of land covered by the Award in exercise of powers under Section 48 are quashed.

Summary

Issues Involved:
1. Whether the acquisition of land for public purpose was used to benefit a private builder.
2. Whether the power of eminent domain was exercised in violation of Articles 14, 21, and 300-A of the Constitution.
3. Legality of entering into agreements to sell or collaboration agreements for land under acquisition.
4. Competence of a writ court to annul sale transactions executed in violation of the statute.
5. Validity of orders granting licenses or releasing acquired land in favor of the builder.
6. Locus standi of petitioners to challenge licenses or orders of release of acquired land.
7. Whether writ petitions suffer from inordinate delay and latches.

Detailed Analysis:

1. Acquisition for Public Purpose or Private Benefit:
The Supreme Court examined whether the land acquisition for public purposes was actually a facade to benefit a private builder. The court found that the acquisition notifications were initially for a bona fide public purpose but were later manipulated to favor the builder. The builder entered into collaboration agreements with landowners and applied for licenses to develop the land, which was eventually released from acquisition and sold to the builder. The court concluded that the acquisition was misused to transfer land to the builder, defeating the notified public purpose.

2. Violation of Constitutional Articles:
The court held that the exercise of eminent domain power in this case violated Articles 14, 21, and 300-A of the Constitution. The landowners were coerced into selling their land due to the threat of acquisition, resulting in an unconscionable bargain. The court emphasized that the State's actions created inequality and deprived the landowners of their property without fair compensation, violating their constitutional rights.

3. Legality of Agreements to Sell:
The court found that the agreements to sell and collaboration agreements executed by the landowners under duress were invalid. The builder's actions, supported by the State's misuse of power, led to the landowners being forced into these agreements. The court declared these transactions null and void as they were executed under undue influence and fraud.

4. Competence of Writ Court:
The court affirmed that a writ court has the authority to annul sale transactions executed in violation of the statute. The High Court's decision to set aside the sale deeds was upheld as it was incidental and consequential to the finding of illegal exercise of power by the State and the builder.

5. Validity of Licenses and Release Orders:
The court quashed the licenses granted to the builder and the release orders for the acquired land. It was found that the builder did not own any land before the acquisition notification and the licenses were fraudulently obtained. The court held that the issuance of licenses to the builder was a fraud on the policy behind the 1975 Act.

6. Locus Standi of Petitioners:
The court recognized the petitioners' locus standi to challenge the licenses and release orders. The landowners were directly affected by the acquisition and subsequent release of land to the builder, giving them the right to seek judicial redress.

7. Delay and Latches:
The court rejected the objection of delay and latches raised against the petitioners. It was noted that the process of granting licenses and releasing land continued until 2011, and no development had occurred on the land. The court held that the petitioners' challenge was timely and justified.

Relief and Operative Order:
The Supreme Court modified the High Court's relief, upholding the acquisition notifications and awards but quashing the release orders and licenses granted to the builder. The sale deeds executed in favor of the builder were declared null and void. The court directed that the land should vest in HUDA, and the builder was entitled to reimbursement for actual expenditures without interest. The landowners were not required to refund any amount received as compensation or sale consideration. The State was directed to provide benefits under the "Rehabilitation and Resettlement of Land Acquisition Oustees" policy to the landowners. The court also ordered an inquiry into the actions of officials who facilitated the illegal release of land to the builder.

Conclusion:
The Supreme Court's judgment addressed the misuse of land acquisition powers to benefit a private builder, upheld the constitutional rights of landowners, and provided comprehensive relief to rectify the illegal actions. The judgment emphasized the principles of equality, transparency, and the rule of law in the exercise of public power.