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TMI Blog2016 (5) TMI 1493X X X X Extracts X X X X X X X X Extracts X X X X ..... mounts 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of Urban Areas Act, 1975( the 1975 Act ). The Builder made applications on and around 21st March, 2005 to the Director, Town and Country Planning, Chandigarh, Haryana for grant of licence to develop a colony on land covering about 280 acres. The licences were granted on and around 12th June, 2006 and corresponding land was released from acquisition. The licences were addressed to the owners but remitted to the builder. This was followed by execution of sale deeds in favour of the builder through power of attorney holder of the land owners. 3. It was on these undisputed facts that the High Court was called upon to examine the questions on a group of petition/s by the land owners which are framed in the impugned judgment as follows :- [i] Whether the object behind the subject-acquisition was to achieve a bona- fide public purpose or to use it as a cloak for the private benefit of Builder-cum-Developer? [ii] Whether the power of 'eminent domain' has been exercised in violation of Articles 14, 21 and 300-A of the Constitution? [iii] Whether it is lawful to enter into 'Agreement to Sell' or 'Collaboration Agreement' in respect of the land under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the farmer owners of the acquired land. That very record, however, falsifies this facade. The application dated 21st March, 2005 [receipt No. 2461] is on the letter-head of respondent No. 11. It is signed by one of its Directors. Form 'LC-I', however, earlier thumb impressions of previous owners along with the attested copies of 'Power of Attorney' and 'Collaboration Agreements' executed by them in favour of respondent No. 11. The Application Forms refer to deposits of demand drafts of lacs of rupees. Who paid that requisite fee or statutory charges? Was it by the farmers whose land already stood acquired and who had not received even a single penny of compensation? OR was it deposited by respondent No. 11? The copies of Demand Drafts answer this query as every penny was deposited by respondent No. 11 only. The illiterate or semi-illiterate farmers had no knowledge except that their land was under acquisition and there was a Builder willing to pay them a price which was much more than the Government compensation. [63]. It is quite unfortunate and misleading that every relevant Government file recites, say for example, that Shri Surat Singh and other ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ou give the wool than the whole sheep'. There was no free trade for the farmers. Their choice was limited : to accept the State compensation at the Collector's rate or a better offer given by State sponsored private builder. There was inequality of bargaining power. The determination of land value was not at all in the control of farmers. They were gropping in the dark. They had no clue that the land will be released. They accepted the unreasonable and unfair unilateral terms and lost their land. [71]. The sale price of the land was determined by respondent No. 11 and not by the market forces. Given a choice between retaining their land or selling it to the Builder for the offered-price, not a single farmer would have agreed to sell it. The circumstances forced the landowners to accede to the offer made by 11th respondent made. It is a proven case of unconscionable bargain exerted through undue influence and fraud, both. The sample 'agreements' on record truly reveal that illiterate/semi-literate farmers were asked to sign the documents on dotted-lines forcing them to sell out most of their ancestral holdings. The en-mass 'Agreements' conclusively belie t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14451 of 2010 was filed by M/s Uddar Gagan Properties Private Limited respondent No. 11 along with some land-owners represented it, in the 2nd case also the said Builder-cum-Developer was one of the writ petitioner and the other farmers were also impleaded THROUGH THEIR POWER OF ATTORNEY HOLDER SHRI SANJAY JAIN... , namely, the authorised representative of respondent No. 11. All the three writ petitions were, thus, filed by respondent No. 11 only. It is interesting to note that the learned Single Judge in his order dated 06th December, 2010 has said that Two sets of replies have been filed by respondents no. 1 and 2. While admitting the entire factual averments made in the writ petitions regarding the ownership of the acquired land by the petitioners, their applications for grant of licence and release of the part of the land and grant of licence to the petitioners in CWP No.14452 of 2010 and 14451 of 2010, it is stated that possession of the land where the Rabi crop was standing could not be taken over by the Estate Officer, HUDA, Rohtak/Land Acquisition Collector, Hissar as the land owners were granted time upto 30.4.2005 at their request. Subsequently, the matter was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Power of Attorneys obtained from them in March, 2005? xxx xxx [79]. The Vendors and the Vendee both had full and informed knowledge of the fact that the transacted land had since been acquired and Award also passed. The Vendee was aware of the fact that the Vendors did not possess a clean title, yet the Sale Deeds were presented and got registered, after about two years of the passing of the Awards, on 06th April, 2005. Every such transaction in respect of the acquired land was indeed null and void having no existence in the eyes of law. [80]. Secondly, it is not a case of challenging the Sale Deeds for the breach of any bilateral terms and conditions or on the conventional grounds where a question of fact has to be proved. The incidental relief to declare the Sale Deeds as null and void is an offshoot of the broader issues raised by the petitioners including those hovering around the systematic colourable exercise of power by the State apparatus. A Constitutional Court while performing its solemn duty as a Trustee of the fundamental rights of the citizens shall thus be well within its right to lift the veil and unmask the private object behind an acquisition carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it into a colony..... . Section 2[k] defines the expression 'owner' to include a person in whose favour a lease of land in an urban area for not less than 99 years has been granted. Section 3[1] mandatorily requires that any owner desiring to convert his land into a colony can make an application for the grant of Licence. Sub-Section [2] obligates the Director to inquire into title to the land . Similarly, Rule 3 of the Haryana Development and Regulation of Urban Areas Rules, 1976 requires an owner of the land desirous of setting up a colony to apply along with requisite documents including copy or copies of all title deeds... . A mis- directed reliance has been placed on Rule 17 of these Rules which says that the Colonizer shall not transfer the licence granted to him under Rule 12 to any other person without the prior approval of the Director . It has already been dealt with in extenso that the true owners were left with no choice but to enter into the Collaboration Agreements with the Builder, who was so sure of obtaining the licences and getting the land released that he ousted the owners from the consequential benefits of the licences in 2005 itself by paying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is clear from the findings recorded by the High Court that the transfer of title of land, covered by the notification for acquisition, in favour of a builder, who sought release of land for setting up of a colony, was clearly to defeat the law and the notified purpose of acquisition. It was observed that on this undisputed factual position, the plea of alternative remedy of seeking annulment of sale deed by a suit could not be entertained. Relief of setting aside of sale transaction was incidental and consequential to the finding of illegal exercise of power to release the land covered by acquisition proceedings to the builder who was not the original owner. It became necessary to undo the illegality and systematic fraud. It was undisputed that the builder did not own an inch of land prior to acquisition and it was only the land acquisition proceedings coupled with the capacity of the builder to seek licences for colonization of land covered by acquisition which enabled it to acquire title. Contrary to the legal mandate of requirement of a colonizer owning of its own land, ownership of land could not be allowed to be acquired by the sword of acquisition on the head of the origin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st at the rate of 9% as prescribed under Section 28 of the Land Acquisition Act, 1894. The possession shall be restored in their favour within one week of refund of the compensation amount; [vii] Those landowners who have entered into Collaboration or Agreements to Sell with respondent No. 11, shall be given option to return the Sale Consideration received by them from respondent No. 11 along with simple interest @ 7% per annum within a period of three months from the date of receipt of certified copy of this order. If any one of them has received compensation from the State, he/she shall be required to refund the same in the manner as laid down for the landowners falling in direction No. [vi] above. On doing so, the possession of their acquired land shall be restored to them within one week; [viii] If any of the landowners falling in Category [vii] above fails to return the sale consideration to respondent No. 11 or the compensation amount to the State, title of his/her land to that extent, shall stand transferred in favour of respondent No.11; [ix] If the landowners fail to return the consideration amount to the private Builder as directed above and Respondent No. 11 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the State. The record has also been produced by the State. 11. The contentions on behalf of the appellants are that there is nothing wrong with the policy of the State to permit colonization by a private builder and the said policy is not under challenge. The policy is permitted by the 1975 Act and the High Court had issued a direction to consider the case of the appellant as per the said policy. In spite of the award, the possession continued with the land owners and the power under Section 48 of the 1894 Act was validly exercised for releasing the land. Irrespective of the merits, the petition was liable to be dismissed on the grounds of delay and latches and also on the principle of approbate and reprobate since the land owners had executed sale-deeds in favour of the builder and taken benefit of collaboration from the builder. It was also submitted that the operative direction in the impugned judgment giving options to the land owners to retain the land or to receive the compensation paid to them by the builder with interest or to refund the compensation collected to the State , will result in a truncated colony being set up which will be contrary to the concept of int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already received the compensation or the sale consideration. The alleged fraud and undue influence or coercion may render a contract voidable but not void and the civil court has to balance equities for setting aside such a sale. Learned counsel for the State submitted that the object of the policy to permit colonization by a private builder is to prevent haphazard constructions. The policy helped integrated fast development and enabled the State to impose restrictions for reserving houses for weaker sections. It was submitted that the roads have already been constructed and in case release of land in favour of the builder was to be quashed, the land should revert to the HUDA. 12. Opposing the above submissions, Shri K.K. Venugopal, learned senior counsel of the land owners submitted that the facts speak for themselves. The builder has emerged on the eve of making of the award to make huge profits by exploiting helplessness of land owners facing imminent threat of losing land under the notifications. The builder obtained power of attorney in favour of its nominee and the land owners signed documents finding no other way to save their land irrespective of illegality of the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lder to enter the field after initiation of acquisition to seek colonization on the land covered by acquisition. In absence of State s action, it was not possible for the builder to enter into the transactions in question which was followed by withdrawal from acquisition. But for assurance from some quarters, the builder could not have made investment nor land owners could have executed the transactions in question. Such fraudulent and clandestine exercise of power by the State is not permitted by law. This is in violation of Public Trust Doctrine laid down inter alia in Reliance Natural Resources Ltd. versus Reliance Industries Ltd.[(2010) 7 SCC 1], Centre for Public Interest Litigation versus UOI[(2012) 3 SCC 1]; Special Reference 1 of 2012 U/A 143(1) of Constitution of India[(2012) 10 SCC 1] and Manohar Lal Sharma versus Principal Secretary[(2014) 9 SCC 516]. 16. Reliance on Policy dated 6th March, 2000 is misconceived. The subject of the said document is : Release of and from acquisition owned/ purchased by the developers before the issue of notification under Section 4 of the Land Acquisition Act, 1894 but submitted application for grant of permission for change of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercise of power. Statutory and public power is trust and the authority on whom such power is conferred is accountable for its exercise. Fraud on power voids the action of the authority[State of Punjab v. Gurdial Singh (1980) 2 SCC 417]-[Greater Noida Industrial Development Authority v. Devendra Kumar (2011) 12 SCC 375, para 39]. Mala fides can be inferred from undisputed facts even without naming a particular officer and even without positive evidence[State of Punjab v. Ramjilal (1970) 3 SCC 602, pr 9-10; Express Newspapers (P) Ltd. V. UOI xx(1986) 1 SCC 133, pr. 119-120]. In the present case, abuse of power in dealing with the matter by the functionaries of the State is more than clear as rightly found by the High Court. Challenge to acquisition may not be confined to those who have not accepted the amount of compensation or consideration. Once such order/transaction is vitiated there could be no estoppel on the ground that compensation/consideration has been received, as the land loser has little choice in the face of acquisition[(2011) 12 SCC 375, para 43]. 20. Acquisition of land is a serious matter. It may result in depriving a tenure holder not only of his property but als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the land acquired illegally. Undoing of such illegal actions would clearly be in the interests of justice. The wrong has to be remedied. 23. We find that the operative part of the order passed by the High Court needs modification. The entirety of the acquisition need not be quashed. What needs to be quashed is the abuse of power and illegal consequential actions which took place after the acquisition notifications. The High Court has rightly observed that the notified public purpose was valid but the subsequent events resulted in illegality. The High Court also rightly held that it will be inappropriate to release the land in favour of the builder by permitting the builder to take over the property and granting licence for colonization on the land covered by acquisition[Para 69 of the impugned judgment which has already been quoted]. Further, view of the High Court that doctrine of severability cannot be invoked and the entire acquisition was liable to be quashed needs modification in the facts of this case. 24. In view of the above, it is not necessary to refer to all the decisions cited on behalf of the appellant on the question that the court may not entertain a belated p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the court may try to balance equities to the extent possible. We are also of the view that if the authorities have proceeded to entertain applications for licence to give undue benefit to the builder by way of helping him to take over land under the cloud of acquisition, it may call for action against those who have misused their power and to find out the considerations for such misuse. 26. Land is scarce natural resource. Owner of land has guarantee against being deprived of his rights except under a valid law for compelling needs of the society and not otherwise. The commercial use of land can certainly be rewarding to an individual. Initiation of acquisition for public purpose may deprive the owner of valuable land but it cannot permit another person who may be able to get permission to develop colony to take over the said land. If the law allows the State to take land for housing needs, the State itself has to keep the title or dispose of land consistent with Article 14 after completion of acquisition. If after initiation of acquisition, process is not to be completed, land must revert back to owner on the date of Section 4 notification and not to any one else directly or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vii) The third parties from whom money has been collected by the builder will be entitled to either the refund of the amount, out of and to the extent of the amount payable to the builder under the above direction, available with the State, on their claims being verified or will be allotted the plots at the price paid or price prevalent whatever is higher. No interest will be payable on the said amount. viii) The State shall give benefit of Rehabilitation and Resettlement of Land Acquisition Oustees policy of the State/ HUDA to the land owners. Area so required shall be reserved out of the acquired land itself. ix) The State Government may enquire into the legality and bona fides of the action of the persons responsible for illegally entertaining the applications of the builder and releasing the land to it, when it had no title to the land on the date of the notification under Section 4 of the 1894 Act and proceed against them in accordance with law. x) This Judgment be complied with within one year. xi) Quarterly progress report of the action taken in pursuance of this judgment be filed by the State in this Court and final report of compliance may be filed within o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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