Case: Rameshwar &amp; Others Vs. State of Haryana &amp; Others

Enviro-Legal Action (Supra) unjust retention of benefit would be completely against the fundamental principles of justice, equity and good conscience. It was observed therein that so long as the deprivation of a party has not been fully compensated for, injustice to that extent continues. Having found that there was a clear case of fraud on power as a result of which unnatural and unreasonable gains have been derived by certain builders/private entities, we consider it our duty to grant full restitution. The restoration in real and substantial terms has to ensure that the public purpose, the acquisition was intended to achieve, stands sub-served. In our considered view, this is an appropriate case where this Court has to declare that there was a completed acquisition and the award deemed to have been passed on the date when it was supposed to be pronounced i.e. on 26.08.2007. The suggested relief by the learned Amicus Curiae is also on similar lines. 37. There are certain other elements which need attention at this stage. The Act now stands replaced by "The Right of Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013". In terms of Section 24(1)(b) of said 2013 Act, where an award had been made under Section 11 of the Act, the proceedings under the provisions of the Act would continue as if the Act had not been repealed. Thus, even if a direction is passed that an award be deemed to have been made on 26.08.2007, the provisions of the Act would still continue to operate in respect of such acquisition in question. There is however, one point which may pose some difficulty. Out of 688 acres of land which was covered by Declaration under Section 6 of the Act in the present matter, majority of the lands were taken over by builders/private entities and as such presently the concerned landholders are not in possession of their holdings. However, in case of certain other lands where no transactions were entered into, as a result of dropping of the acquisition, those land holders are presently in occupation without there being any cloud of acquisition. If we restore status ante where the entirety of 688 acres of land continues to be under acquisition, the interest of such landholders is bound to be put to some prejudice. Those landholders are not parties to this litigation, nor their interest in any manner, is represented in the proceedings. They would now be visited with the prospect of losing their holdings. Those who sold away their holdings to the builders/private entities after the acquisition was initiated, naturally would not be prejudiced at all nor can the builders/private entities who purchased the land after the land was initiated can put up a plea of prejudice. However those who had never sold the holdings and continued to face the prospect of acquisition will certainly be put to prejudice. It is possible that some such landholders may have sold away their holdings or may have applied and secured licences for construction. In cases, where third party interests have thus intervened, there would be some more concern. 38. The relief to be granted in the matter has therefore to take care of all the aforesaid aspects. On one hand, the real and substantial relief to be granted in the matter would be not just restoring the status ante and invalidating of the transactions but the relief ought to be that the process of acquisition is taken to its logical end and the objective that said acquisition was to achieve must be sub-served. On the other hand, even while passing appropriate directions in the nature that there was a deemed Award, the interest of those landholders who had not parted with their holdings and had faced the acquisition and had not participated in the proceedings ought to be secured. Further, the interest of purchasers of individual apartments is also required to be protected. It is axiomatic that wherever a superior Court finds that the exercise of power by the executive was mala fide or that there was fraud of power, the full and substantial relief must be granted. The principles of restitution and concept of unjust enrichment as explained in cases referred to hereinabove show that no person who directly or indirectly was a party to the fraud of power be allowed to reap or retain any unjust enrichment. Though, it is through the acts on part of the landholders that the builders/private entities were brought on the scene, we dont hold them to be pari delicto alongwith builders/private respondents. But at the same time they cannot be given benefit of annulment of transactions and restoration of their holdings. The greater victim in the matter was the public interest. The land holders in any case had received considerations which were greater than what was awarded in Awards dated 09.03.2006 and 24.02.2007, which were the most proximate awards in terms of time. However, even when we propose to take the matter to its logical end and say that there was a deemed award, those who had not sold away their holdings and had not in any manner either directly or indirectly, tried to jeopardize the process of acquisition, cannot at this length of time be subjected to any prejudice. We will therefore have to exclude that body of landholders who had not transferred their holdings unlike the writ petitioners and similarly situated landholders, so also the purchasers of individual apartments from the width of our directions. Though fraud vitiates every resultant action and on that principle every beneficiary/ purchaser in subsequent transaction must restore such benefit, an exception has to be made in favour of individual purchasers of flats or apartments who are being left undisturbed while moulding the relief. Any payments made by them can be adjusted towards the amounts payable to the colonizer and their possession can be regularized by HUDA/HSIDC on suitable conditions by making allotment to them. This aspect will stand covered by directions issued hereafter.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]If we consider the established or crystallized facets of the matter as stated above, in the light of the principles emerging from the decisions rendered by this Court, in our considered view the decisions dated 24.08.2007 and 29.01.2010 were taken to confer advantages and benefits upon the builders/private entities rather than to carry out or effectuate public purpose. The record indicates that various entities including certain "middlemen" cornered unnatural gains and walked away with huge profits taking the entire process of acquisition for a ride. Substantial sums have exchanged hands in the form of settlement money. All the steps and stages show that the builders/private entities were well aware that the acquisition would not go through but the landholders were confronted with the smoke screen of acquisition and were cornered and persuaded in entering into transactions with the builders/private entities. The transactions so entered into between the landholders and the concerned builders/private entities could not be said to be voluntary and free from any influence. The unnatural and unreasonable bargain was forced upon the landholders by creating façade of impending acquisition. Public Interest was not the underlying concern or objective behind those decisions dated 24.08.2007 and 29.01.2010 but the motive was to confer undue advantage on the builders/private entities. It is clear that considerations other than those which were required to be bestowed, guided the exercise of power in arriving at decisions dated 24.08.2007 and 29.01.2010. The inescapable conclusion, therefore, is that there was an unholy nexus between the governmental machinery and the builders/private entities in devising a modality to deprive the innocent and gullible landholders of their holdings and jeopardize public interest which the acquisition was intended to achieve. Mr. Dhruv Mehta, learned Senior Advocate is right in his submission that the entire mechanism was deliberately employed so that gullible landholders could be deprived of their holdings by a set of builders/private entities and after having seen that the desired result was achieved, the acquisition was dropped and later completely withdrawn. The decisions on the part of the State arrived at on 24.08.2007 and 29.01.2010 were clearly a result of fraud on power and cannot be said to be bona fide exercise of power. In our view, the initiation of class action and filing of Writ Petition in the present matter was perfectly justified and we reject all the submissions made by the learned Counsel appearing for various builders/private entities.32. We thus holdThe transactions entered into between the landholders and the concerned builders/private entities in the present case were not voluntary and were brought about by fraudulent influence. Certain `middlemen and builders enriched themselves at the expense of the landholders and public interest which was to be achieved by acquisition.b] The decisions dated 24.08.2007 and 29.01.2010 as well as entertaining of applications for grant of licence from those who had bought the lands after the acquisition was initiated, were not bona fide exercise of power by the State machinery. The exercise of power under the Act was guided by considerations extraneous to the provisions of the Act and as a matter of fact, was designed to enrich the builders/private entities. These decisions were nothing but fraud on power.Having so found that the exercise of power in arriving at decisions dated 24.08.2007 and 29.01.2010 as well as entertaining of applications for licence from those who had bought the lands after the acquisition was initiated, to be fraud on power; we now have to consider what relief be granted in the present matter. The relief to be granted must depend upon who the real victim is and to what extent solace can be granted to such real victim. If the landholders are considered to be the real victim, Mr. Dhruv Mehta, learned Senior Advocate is absolutely right in his submissions. If the result of forcing land holders to enter into unnatural and unreasonable bargain was achieved by wrongful utilization of the power conferred under the Act, in its writ jurisdiction a superior court would be justified in granting the relief of invalidating such transaction as a consequential relief, while holding the State action to be bad and invalid. The law laid down by this Court is quite clear and the objection that instead of a class action in the realm of public law, each individual land holder must make good his submissions on individual facts and seek relief of annulment of transaction entered into by him has to be rejected. To the extent the unnatural and unreasonable bargain was forced upon the landholders, there would be justification in granting such relief. But in the circumstances, the public interest which the acquisition was intended to achieve will never be sub83 served. It is nobodys case that public interest was adequately achieved and therefore the acquisition was required to be dropped. The fact that other acquisitions have been completed and have attained the required objective is a pointer in the direction that there was nothing wrong with the initiation but somewhere along while the process was on, it was completely hijacked by vested interests. We cannot, therefore, grant mere declaration invalidating the transaction and grant relief of restoring status ante. The real and substantial relief would be in restoring the situation where the process of acquisition is made free from such supervening vested interests and is enabled to achieve the objective that the acquisition was intended to subserve.34. At this stage an aspect needs elaboration and clarification. In Uddar Gagan (supra) the proceedings for acquisition under the Act had culminated in passing of an award. After the declaration of award, the lands were withdrawn from acquisition under the provisions of Section 48 of the Act. In terms of the directions issued by this Court in paragraph 33 in Uddar Gagan (supra) the withdrawal under Section 48 of the Act was set aside and the acquisition and award were sustained by this Court. In essence therefore, the lands in question continued to be under acquisition and appropriate directions were thereafter passed by this Court adjusting the competing claims of the concerned parties. In the present case, unlike Uddar Gagan (supra) the acquisition was dropped just two days before the day the award was to be pronounced. It is true that the entire process right upto publishing the date for pronouncement of award was validly undertaken, every possible submission was placed on record and all contentions were taken by the persons or parties interested. It was not as if any person or any party was denied any chance of raising objections or making submissions. The acquisition was dropped for reasons, which in our considered view were not germane at all and the entire exercise of dropping the acquisition was fraud on power. If that fraud on power is to be invalidated, the real and substantial restoration would be to ensure that the acquisition proceeds in the logical direction and the public purpose isIn a way, the directions required in the present matter may go beyond what Uddar Gagan (supra) did.Wherever there has been fraud on power, the duty of the Court is not only to set aside such exercise of power but to see that there is no unjust enrichment directly or indirectly as a result thereof and there is full and substantial restoration. Going by the principles laid down by this Court in Indian Council forAction (Supra) unjust retention of benefit would be completely against the fundamental principles of justice, equity and good conscience. It was observed therein that so long as the deprivation of a party has not been fully compensated for, injustice to that extent continues. Having found that there was a clear case of fraud on power as a result of which unnatural and unreasonable gains have been derived by certain builders/private entities, we consider it our duty to grant full restitution. The restoration in real and substantial terms has to ensure that the public purpose, the acquisition was intended to achieve, standsIn our considered view, this is an appropriate case where this Court has to declare that there was a completed acquisition and the award deemed to have been passed on the date when it was supposed to be pronounced i.e. on 26.08.2007. The suggested relief by the learned Amicus Curiae is also on similarit is through the acts on part of the landholders that the builders/private entities were brought on the scene, we dont hold them to be pari delicto alongwith builders/private respondents. But at the same time they cannot be given benefit of annulment of transactions and restoration of their holdings. The greater victim in the matter was the public interest. The land holders in any case had received considerations which were greater than what was awarded in Awards dated 09.03.2006 and 24.02.2007, which were the most proximate awards in terms of time. However, even when we propose to take the matter to its logical end and say that there was a deemed award, those who had not sold away their holdings and had not in any manner either directly or indirectly, tried to jeopardize the process of acquisition, cannot at this length of time be subjected to any prejudice. We will therefore have to exclude that body of landholders who had not transferred their holdings unlike the writ petitioners and similarly situated landholders, so also the purchasers of individual apartments from the width of our directions. Though fraud vitiates every resultant action and on that principle every beneficiary/ purchaser in subsequent transaction must restore such benefit, an exception has to be made in favour of individual purchasers of flats or apartments who are being left undisturbed while moulding the relief. Any payments made by them can be adjusted towards the amounts payable to the colonizer and their possession can be regularized by HUDA/HSIDC on suitable conditions by making allotment to them. This aspect will stand covered by directions issued hereafter.