IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P. No. 10611 of 2004 Date of Decision: January 21, 2008 Eros City Developers Private Ltd. …Petitioner Versus State of Haryana and others …Respondents CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE T.P.S. MANN Present: Mr. Harish Malhotra, Senior Advocate, with Mr. Ashu M. Punchhi, Advocate, and Mr. Anupam Bansal, Advocate, for the petitioner. Mr. M.L. Saggar, Additional AG, Haryana, for the respondents. M.M. KUMAR, J. This petition filed under Article 226 of the Constitution prays for quashing notifications dated 8.10.2003 (P-34) and 7.5.2004 (P-37), issued under Sections 4 and 6 of the Land Acquisition Act, 1894 (for brevity, ‘the Act’), acquiring the land belonging to the petitioner in village Lakarpur, Tehsil and District Faridabad, for a C.W.P. No. 10611 of 2004 public purpose, namely, for the expansion and systematic development of the Tourist Complex, Surajkund. FACTS The case of the petitioner is that it is a Company incorporated under the Companies Act, 1956, and carries on the business of development and colonisation of real estate in the State of Haryana. In early 1990’s, the petitioner-company purchased huge chunk of land in village Lakarpur, Tehsil and District Faridabad. The petitioner-company alongwith its other group of companies have been granted licence under Section 3 of the Haryana Development and Regulation of Urban Areas Act, 1975 (for brevity, ‘the 1975 Act’), to develop a residential colony, namely, ‘Lakewood City’, over an area of more than 125 acres, which they are developing. On 28.5.1993, the petitioner-company purchased 128 Kanals 14 Marlas (16.09 acres) of land in the vicinity of ‘Lakewood City’, comprised in Rectangle No. 32, Khasra Nos. 3, 4/2, 7, 8/1, 12, 13, 14, 17, 18, 19, 22, 23, 24 and Rectangle No. 40, Khasra Nos. 2, 3, 4, 7, 8, 9, 12, 13, 18/2, village Lakarpur, Tehsil and District Faridabad. It is appropriate to notice that the aforementioned land is in immediate proximity of Surajkund Complex, which is a Tourist Resort being run by the Tourism Department of State of Haryana. On 9.1.1992, a notification under Section 4 of the Act was issued for acquisition of part of the land belonging to the petitioner for the systematic development of the tourist place close to Surajkund (P- 1/A). The State Government also resorted to urgency provisions of 2 C.W.P. No. 10611 of 2004 sub-section (2) of Section 17 of the Act. However, no further steps were initiated by the Government to complete the acquisition proceedings in pursuance to notification dated 9.1.1992 since the petitioner-company showed its intention to develop the land for recreational, cultural and tourism purposes. On 2.5.1994, the petitioner-company applied for change of land use under the provisions of the Punjab Scheduled Roads and Controlled Areas (Restriction of Unregulated Development) Act, 1963 (for brevity, ‘the 1963 Act’) for developing the land into a recreational, cultural and Hotel Complex (P-2). On 30.5.1994, the petitioner-company submitted another application to the P.W.D. (B&R) Department, Faridabad, for issuance of No Objection Certificate, for construction of an approach road from the main road (P-3). On 22.6.1994, the petitioner-company made an application with the Director (Tourism), Government of Haryana, for grant of approval of Hotel Project, namely, ‘Royal Garden Resorts’ (P-4). On 23.6.1994, permission for change of land use in respect of land measuring 48206 Sq. Yards was accorded in principle by the Commissioner, Municipal Corporation, Faridabad, subject to fulfilment of certain conditions (P-5). On 31.8.1994, permission for construction of approach road was also accorded to the petitioner- company by the P.W.D. (B&R) Department, Faridabad (P-7). Similarly, approval for the Hotel Project was also granted in favour of the petitioner-company by the Director (Tourism), Haryana, in terms of the decision taken by the State Tourism Promotion Board in its 3 C.W.P. No. 10611 of 2004 meeting held on 26.9.1994, vide letter dated 14.11.1994 (P-8). Thereafter, on 21.11.1994 an agreement with regard to change of existing use of land measuring 79 Kanals 14 Marlas in the controlled area was entered into between the petitioner-company and the Municipal Corporation, Faridabad (P-9). On 21.11.1994, the petitioner-company deposited an amount of Rs. 96,412/- as conversion charges @ Rs. 2/- per Sq. Yard and on 23.11.1994 an amount of Rs. 48,206/- was deposited towards fee for Zoning Plans in respect of the Hotel Project (P-10). On 12.12.1994, Zoning Plan in respect of site of recreational, cultural and Hotel Complex of the petitioner-company was approved by the Commissioner, Municipal Corporation, Faridabad (P-11). After completion of all the formalities, on 27.1.1995 final permission for change of land use in respect of land measuring 48206 Sq. Yards was issued to the petitioner-company by the Commissioner, Municipal Corporation, Faridabad, subject to fulfilling of certain conditions. Besides other conditions, the petitioner-company was required to deposit a sum of Rs. 44,82,000/- towards external development charges out of which Rs. 11,20,500/- had already been paid by the petitioner-company and the remaining amount of Rs. 33,61,500/- was to be paid in 6 half yearly instalments starting from 16.5.1995 upto 16.11.1995 along with interest @ 15% per annum w.e.f. 15.11.1994 (P-12). On 18.10.1995, the petitioner- company submitted its building plans for the proposed Hotel Royale Garden Resort alongwith an amount of Rs. 82,856/- as security fee 4 C.W.P. No. 10611 of 2004 and an amount of Rs. 50,000/- for approval of building plans (P-13). The building plans were approved on 12.12.1995, under Section 254 of the Haryana Municipal Corporation Act, 1995 (P-14). On 10.5.1996, the petitioner-company deposited the entire balance outstanding external development charges of Rs. 24,09,075/- for the proposed Hotel Complex (P-15). It is claimed that the petitioner-company had mobilized resources for construction of Hotel Complex. However, before the construction could be commenced, Hon’ble the Supreme Court in the case of M.C. Mehta v. Union of India (I.A. No. 29 in Writ Petition (Civil) No. 4677 of 1985), passed an order dated 10.5.1996, imposing a ban on construction of any type within 5 Kms. radius of Badhkhal Lake and Surajkund. It was also ordered that all open areas should be converted into green belts (P-16). After passing of the order dated 10.5.1996 by Hon’ble the Supreme Court, there was exchange of correspondence between the petitioner-company and the concerned authorities as to whether the aforementioned order has any effect on the Hotel Project of the petitioner-company. Ultimately, the petitioner-company moved an application before Hon’ble the Supreme Court for clarification. On 13.5.1998, Hon’ble the Supreme Court passed the following order (P-24): “ A modified plan has been placed on record. The area meant to be left for Surajkund and around has been earmarked on the said plan by a zig-zag line. In the 5 C.W.P. No. 10611 of 2004 fact of these altered boundaries from previous maps, certain areas have come out from the one Kilometre belt as originally proposed. Whatever areas have fallen out and whatever are adjacent thereto, urbanisation thereof will take place in accordance with the laws, rules and regulations, applicable to those areas as provided by the Faridabad Municipal Corporation. Certain private areas (marked as ‘ABCD’), in which construction is proposed would have to be viewed again. We have desired of the learned Counsel for the State of Haryana to render assistance in that regard so that in the areas adjoining the Surajkund Complex only single storey hutments get permitted to be constructed and not tall buildings as originally conceived. Small areas as shown red on the plan would require to be acquired for the complex. This means that the State will have to pay compensation on acquisition. But Mr. Salve, learned Senior Counsel, who appears for some of the land-owners says that those land-owners who are owing those two small read (red?) patches, which are within the encirclement would surrender the same to the State without compensation. This Order shall be in modification or substitution of all earlier orders in that behalf.” 6 C.W.P. No. 10611 of 2004 On 24.7.1998, the Commissioner, Municipal Corporation, Faridabad, withheld the permission/sanction of zoning/building plans granted in favour of the petitioner-company in view of the orders dated 13.5.1998, passed by Hon’ble the Supreme Court. The petitioner-company was directed to submit its fresh building plans as per the orders of Hon’ble the Supreme Court (P-25). Thereafter, the petitioner-company requested the Municipal Corporation, Faridabad, for preparation of fresh zoning plan so that it could furnish its building plans (P-26). However, no action was taken as the matter was still sub judice. In the meanwhile, the petitioner-company carried out extensive development works like levelling of land, filling of pits etc. over an area of 120 acres for development of residential colony in accordance with the license granted to it under the provisions of the 1975 Act. It is claimed that development in the residential colony, namely, ‘Lakewood City’ in an area measuring 125 acres has already been completed and the area has come up as a potential paradise for residential purposes. On 21.10.2003, a notification dated 8.10.2003, issued under Section 4 of the Act was published in the Haryana Government Gazette for acquiring the land of the petitioner for the public purpose, namely, for the expansion and systematic development of the Tourist Complex, Surajkund (P-34). On 4.11.2003, the petitioner-company filed detailed objections under Section 5-A of the Act against the proposed acquisition (P-35). Subsequently, the petitioner-company 7 C.W.P. No. 10611 of 2004 filed C.W.P. No. 6263 of 2004, challenging notification dated 8.10.2003 and the same was disposed of vide order dated 16.4.2004 being premature. However, this Court directed the appropriate authority to consider the objections filed by the petitioner and dispose of the same by passing a speaking order (P-36). It is claimed that when the representative of the petitioner-company went to serve a copy of the order in the first week of May 2004 it was told that the objections were already considered and rejected. On 7.5.2004 declaration under Section 6 of the Act was issued (P-37). The aforementioned notifications dated 8.10.2003 and 7.5.2004 are subject matter of challenge in the instant petition. In the written statement filed on behalf of respondent No. 1 the stand taken is that the Surajkund Tourist Complex has become a place of international importance in Haryana. The land of the petitioner-company is adjacent to the existing tourist complex and in order to promote tourism in the State of Haryana and for systematic development of the tourist complex the land has rightly been acquired by following various provisions of the Act. In the written statement filed on behalf of the Municipal Corporation, Faridabad-respondent No. 2 it has been asserted that the site of the petitioner-company forms a part of the controlled area around municipal town of old Faridabad, declared vide Punjab Government Gazette Notification No. 3826-2TCP-63/35804, dated 19.12.1963, as published in Punjab Government Gazette, dated 17.1.1964 (R-2/1), which is governed as per provisions of Section 4 8 C.W.P. No. 10611 of 2004 of the 1963 Act read with Section 29 of the Faridabad Corporation Act, 1971 (?) and Section 346 of the Haryana Municipal Corporation Act, 1994 (for brevity, ‘the 1994 Act’). It has further been asserted that development plan for the controlled area was prepared vide notification dated 22.1.1966, which was revised vide notification dated 11.12.1991. As per provisions of Section 7 of the 1963 Act read with Section 348 of the 1994 Act (R-2/2) no land within the controlled area can be put to use without permission of the Director, Town and Country Planning for specified purpose as shown in the development plan. It has further been submitted that after examining the proposal of the petitioner-company permission for development of recreational, cultural and hotel complex was granted under Rule 26-E of the Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Rules, 1965 (for brevity, ‘the 1965 Rules’) which was valid for a period of two years in terms of Rule 26-F of the 1965 Rules. The petitioner-company was required to start construction of the proposed project within a period of six months from the date of grant of permission and the same was to be completed within stipulated period of two years. Zoning Plan and building plan for the site of the petitioner-company were issued on 12.12.1994 and 12.12.1995 respectively. However, the petitioner- company could not implement the project within sanctioned period and contravened condition No. 1(f) of CLU-II agreement dated 21.11.1994 (P-9). The factum of orders passed by Hon’ble the Supreme Court banning construction adjacent to the boundary of 9 C.W.P. No. 10611 of 2004 Surajkund Tourist Complex within radius of 5 Kilometers, subsequent clarification and request made by the petitioner-company for modification of zoning plan etc. has been admitted. However, it has been denied that the petitioner-company has ever submitted revised building plans for approval in accordance with the orders dated 13.5.1998 passed by Hon’ble the Supreme Court. The permission for change of land use, which was granted on 27.1.1995, has already expired in terms of provisions of Rule 26-F of the 1965 Rules. In the written statement filed on behalf of the Senior Town Planner-respondent No. 3 it has been pointed out that the petitioner-company was granted license under the 1975 Act for development of residential colony on land measuring 121.98 acres on 30.12.1995 and on 5.21 acres on 3.3.2000. It has, however, been asserted that grant of license to develop a residential colony has nothing to do with the present case relating to change of land use for construction of a recreational, cultural and hotel complex over land measuring 48206 Sq. Yards. It has been denied that large scale construction activity has commenced in the colony and the land in dispute has any concern with that of Lakewood City being developed by the petitioner-company. It has been asserted that the Government is competent to acquire any land for a public purpose and there is no malafide on the part of the Government. In the written statement filed on behalf of the Land Acquisition Collector-cum-District Revenue Officer, Faridabad- 10 C.W.P. No. 10611 of 2004 respondent No. 4 it has been claimed that declaration under Section 4 of the Act was issued in order to promote tourism in Haryana and for systematic development of Surajkund Tourist Complex. The objections filed by the petitioner-company under Section 5A of the Act were duly considered by the Land Acquisition Collector and after affording opportunity of hearing to the petitioner-company and other land owners. Subsequently, notification under Section 7 of the Act was issued on 9.7.2004 and Award No. 12 was also passed on 5.5.2006. It has been pointed out that earlier acquisition proceedings in pursuance to notification dated 9.1.1992 were dropped due to some technical grounds, however, the land has been acquired subsequently after following the process of law in larger public interest and the petitioner-company have their own vested interest for profit making being private colonizers. Rebutting the averments made in the written statements filed by the respondents, separate replications have been filed by the petitioner-company. While reiterating the contents of the writ petition and controverting the contents of the written statements filed by the respondents it has been averred that it is because of the development activities being carried out by the petitioner-company, the area has assumed significance and the State Government is trying to take advantage of the same by acquiring the land belonging to the petitioner-company. It has been further submitted that the Municipal Corporation, Faridabad itself owns a huge chunk of land adjacent to the Surajkund Tourist Complex where the proposed expansion plans 11 C.W.P. No. 10611 of 2004 could be carried out as is shown by a site plan (P-38). In the other replication to the written statement filed on behalf of respondent No. 2 it has been asserted that the respondent Corporation never insisted for commencement of construction within six months or completion thereof within two years and delay was caused on account of directions issued by Hon’ble the Supreme Court. Alongwith the replication, orders dated 12.10.1998 and 30.11.1998 passed by Hon’ble the Supreme Court have been placed on record as Annexures P-39 and P-41 and a copy of the letter dated 25.11.1998, sent by the Director, Town & Country Planning, Haryana to the petitioner- company regarding renewal/revalidation of licence of Lakewood City in village Lakarpur, District Faridabad, has been placed on record as Annexure P-40. On 7.3.2007, an additional affidavit by Shri V.K. Sharma, District Revenue Officer-cum-Land Acquisition Collector, Faridabad, was filed to the effect that ample opportunity of hearing was afforded to the petitioner while deciding objections filed by it under Section 5A of the Act. It has been asserted that after issuance of declaration under Sections 4 on 8.10.2003 and publication thereof in the official Gazette and daily newspapers as also Munadi Mustari through the Chowkidar in the village, notice regarding hearing of objections was issued on 5.12.2003 for 15.12.2003 by the then Land Acquisition Collector. A representative of the petitioner-company appeared on 15.12.2003, whose statement was recorded and he affixed his signature on the statement. On a request made by the said 12 C.W.P. No. 10611 of 2004 representative, matter was adjourned to 22.12.2003 but nobody turned up on the adjourned date. Detailed report alongwith objections were sent to the Director, Tourism Department Haryana, on 1.1.2004 and it was only thereafter that declaration under Section 6 of the Act was issued. The award was passed on 5.5.2006. On 13.12.2007, another additional affidavit of Shri Satish Kumar Sharma, Under Secretary to Government Haryana, Tourism Department was filed highlighting that after 1998 there has been a change in the circumstances and ground realities in the area where the land in dispute is situated. It has been pointed out that Faridabad was developed as an Industrial Town and ideally situated for the purpose of industry, commercial activities as well as residential purposes being contiguously located near capital New Delhi. Development of Surajkund Complex for exhibition of Handloom and Handicrafts has enhanced its importance. It has a vast potential use for the purpose of trade, providing facilities for business discussions, sale of handicrafts & handloom as also for recreation facilities having open air theatre etc. It has further been mentioned that Surajkund Mela has become an annual feature being held from 1st to 15th February every year, which is an internationally acclaimed Mela (carnival/show) now. Not only the craftsmen from India but also from Asia and other countries of the world participate in the Mela. Alongwith the affidavit a number of photographs have been placed on record as Annexure R-2 (Colly) showing Hotel Rajhans constructed by the Tourism Department, Haryana as well as various 13 C.W.P. No. 10611 of 2004 sailent features of the Surajkund Complex. A site plan has also been placed on record as Annexure R-1. It has further been asserted that the Haryana Tourism has also invited tenders for appointment of event managers for organisation of cultural programmes on weekends, holidays, on various festivals viz. Holi, Teej, Lohri, holding exhibitions, food bazaars, craft bazaars etc. in the complex. One such notice has been placed on record as Annexure R-3 alongwith the affidavit. It has, thus, been submitted that acquisition of the land in dispute is not only in public interest but the same is also required to maintain integral development of Surajkund Complex in a unified and planned manner; that after passing of award on 5.5.2006, a sum of Rs. 8,49,60,025/- has been deposited with the Land Acquisition Collector for payment to the petitioner-company as compensation. It is also apposite to mention here that the petitioner- company has filed a Civil Misc. Application 3903 of 2007 for placing on record additional affidavit on behalf of the petitioner so as to raise additional pleas in support of the prayers made in the writ petition. Alongwith the additional affidavit various documents have also been placed on record marked as Annexure P-43 to P-56. In sum and substance, the main thrust of the said application and additional affidavit is that the Government of Haryana has released huge chunks of land from acquisition in different districts in the State of Haryana at different stages and in certain cases even after completion of acquisition proceedings and pronouncement of award. Detailed 14 C.W.P. No. 10611 of 2004 parawise reply to the aforementioned application has been filed by respondent No. 2 justifying release of land in individual cases cited by the petitioner-company. ARGUMENTS Mr. Harish Malhotra, learned counsel for the petitioner has argued that the mandatory provisions of Section 5A of the Act has not been complied with. According to learned counsel before depriving a person of his immovable property compulsorily an obligation has been cast on the respondents to grant opportunity of hearing to him and then to pass a reasoned order. In support of his submission, learned counsel has placed reliance on a judgment of Hon’ble the Supreme Court in the case of Munshi Singh v. Union of India, (1973) 2 SCC 337. Referring to the facts of the present case, learned counsel has submitted that the Land Acquisition Collector- respondent No. 4 had invited objections and accordingly the petitioner filed its objections on 4.11.2003 (P-35), running into 24 pages. It has been emphasised that without dealing with any of the objections, the respondents have proceeded to issue declaration under Section 6 of the Act on 7.5.2004 (P-37). Citing the judgment of Hon’ble the Supreme Court in the case of Hindustan Petroleum Corporation Limited v. Darius Shapur Chennai, JT 2005 (8) SC 470, it has been submitted that the proceedings under Section 5A of the Act, are quasi-judicial in nature and akin to fundamental rights as envisaged by Article 300A. He has also placed reliance on paras 35 15 C.W.P. No. 10611 of 2004 and 36 of the judgment of Hon’ble the Supreme Court in the case of Union of India v. Mukesh Hans, (2004) 8 SCC 14. Mr. Malhotra further submitted that the petitioner was granted permission for change of land use vide order dated 23.6.1994 (P-5) and necessary permission for construction of approach road vide order dated 31.8.1994 (P-7). Thereafter the petitioner-company has deposited the requisite fee, as is evident from letter dated 23.11.1994 (P-10), and acquiring the land for the same purpose for which the petitioner is to raise construction is totally arbitrary, malafide and against the principles of fair play. He has emphasised that in similar circumstances a Division Bench of this Court in the case of Busching Schmitz Private Limited v. State of Haryana, 1997(1) PLR 183, has set aside the notifications issued under Sections 4 and 6 of the Act. Learned counsel has further submitted that the petitioner has incurred huge amount for levelling the land and for filling the pits as it was hilly area. He has, thus, submitted that principles of promissory estoppel would also come in play. According to learned counsel the acquisition in the present case would suffer from legal malice because the petitioner has prepared the land for raising construction and has also built another project known as ‘Lakewood City’, which is in the adjoining estate. To substantiate his submission, learned counsel has placed reliance on paras 25 and 26 of the judgment of Hon’ble the Supreme Court in the case of Collector v. Raja Ram Jaiswal, (1985) 3 SCC 1. Learned 16 C.W.P. No. 10611 of 2004 counsel has then submitted that once the purpose of acquisition is the same for which the permission has been granted to the petitioner then the acquisition under Sections 4 and 6 of the Act would be vitiated, as has been held by Hon’ble the Supreme Court in the case of Ghaziabad Sheromani Sahkari Avas Samiti Ltd. v. State of U.P., AIR 1990 SC 645, which has been duly followed by this Court in the case of National Fertilizers Employees Co-operative Housing Society Limited v. State of Haryana, 1998 (3) PLR 618. Learned counsel has then referred to the application, namely, C.M. No. 3105 of 2007 whereby award as published by the respondents on 5/8.5.2006 (Annexure ‘A’) has been brought on record and instances have been quoted in the other