Case: State of Uttar Pradesh and Others Vs. Anghalia Housing Private Limited and Others

The said land belonged to and was in possession of one Lala Joti Prasad. On March 30, 1949 Joti Prasad entered into an agreement with the Delhi Land and Finance Ltd., for the development of the land under a housing scheme. The said company was given possession of the land, which as per the agreement, was to be sold to it. The company took some steps for the furtherance of the housing scheme. A layout plan was prepared and some plots were booked by some intending purchasers. A major portion of the land was covered by forest which, because of certain restrictions under the Forest Act, could not be cut. Hence no substantial progress was made in the execution of the housing scheme by the Delhi Land and Finance Ltd. This company transferred its rights to another company known as the Delhi Land Finance Housing and Construction (P) Ltd. Most of the events which will be narrated hereinafter happened when this company was in possession of the land. Respondent No. 1 Anghalia Housing (P) Ltd. was incorporated on January 22, 1970 and the land was transferred to this company on March 22, 1970. Hereinafter in this judgment by the company would be meant the company which was in possession of the land at the relevant time.2. The U. P. Zamindari Abolition and Land Reforms Act, 1950hereinafter called the Actcame into force on July 1, 1951. Under the scheme of the Act on the issuance of a notification under Section 4 all estates of the intermediaries and the land comprised therein vested in the State of Uttar Pradesh. But because of certain exceptions and exemptions provided in the Act, the land in question remained outside its operation.Although under the explanation aforesaid the land would have been deemed to be held for a public utility, a specific declaration was also made by the State Government in exercise of its power under(2) of Section 2 declaring that the areas of land held on July 7, 1949 for the purpose of a housing scheme by a limited liability company were exempted as areas held and acquired for public purpose or works of public utility within the meaning of clause (c) of(1) of Section 2 of the Act. Since the area in question was not specifically including in the declaration made on July 1, 1952 under Section 2(1) the company applied to the Government to make a specific declaration in respect of this area, i.e. 951 acres. Eventually it was found by the Collector, Dehra Dun that this was an area to which the provisions of the Act were not applicable. As already stated a large part of the land constituted a reserve forest under Section 4 of the U. P. Private Forest Act, 1949, and therefore, could not be cleared without the specific permission of the authority concerned.4. A phased plan for the implementation of the housing scheme within a period of six years was mentioned in the Governments letter dated July 9, 1956 written to the Collector, Dehra Dun. But since nothing substantial towards the implementation of the housing scheme was done by the company, anotice was issued on November 29, 1958 asking it to show cause as to why the exemption of the land from the operation of the Act be not withdrawn. The company showed cause and nothing happened. Eventually an agreement was entered into between the company and the Government on September 28, 1964 under which the restrictions of clearing the forests under the Forest Act were to be withdrawn so that the housing scheme could be fully implemented. As a matter of fact such a restriction was withdrawn on January 18, 1966 and a licence was issued to the company on May 21, 1966 for felling the trees. The licence was valid for a period of two years but the time was extended by another two years. The company cleared the jungle well within the extended time under the licence, yet a notification under Section 1(3) read with Section 2(1) of the Act was issued by the Government on September 1, 1969 withdrawing the exemption granted earlier in the year 1952 and applying the provisions of the Act to all areas in respect of which the exemption had been granted except a few described in the said notification. The Collector of Dehra Dun held by his order dated March 26, 1970 that the land in question was not such as was exempted from the operation of the Act and that it was covered by the notification dated September 1, 1969 under which the provisions of the Act were made applicable. The respondents filed a writ application in the High Court to challenge the said order.5. Substantially only two points were urged before the High Court :(1) That the company had taken several steps in execution of the housing scheme and hence the land was not covered by the notification dated September 1, 1969 and subjected to the operation of the Act.(2) That in view of the agreement dated September 28, 1964 and several other representations on the part of the Government it was estopped from withdrawing the exemption of the operation of the Act in relation to the land in question and the action of the Government or the Collector was bad, on the principle of promissory estoppel.6. There was a difference of opinion on both the points between the two learned Judges of the High Court constituting the Division Bench which heard the writ petition. One of them rejected both the points and directed the dismissal of the writ petition while both found favour with the other. The case was referred to a third learned Judge who in agreement with one of the judges, allowed the writ application accepting both the contentions put forward on behalf of the respondents. Hence this appeal by the State.

Court's reasoning:
Facts mentioned in items (i), (ii) and (iii) above were the steps taken by the company long before the agreement dated September 28, 1964. Perhaps the construction of roads, if any, was also done before. But facts in items (iv) and (v) were the steps taken pursuant to the agreement aforesaid. One major step taken after removal of the ban under the Forest Act was the felling of trees and the clearing of the jungle well within the extended time allowed under the licence. The point for consideration is whether by the acts aforesaid the land had been actually utilized in execution of the housing scheme. If the answer be in the affirmative then the land remained outside the operation of the Act and was not covered by the notification dated September 1, 1969. On the other hand, if the answer be in the negative then the land was soour opinion the contentions put forward on behalf of the respondents isand must be accepted as correct.12. Until the ban in the way of the clearing of the forest was removed and the land was made free from it, no further development such as laying out plan, carving out plots etc. etc. was possible to be done. It seems that the company had not undertaken the construction of any building or house. The business of the company was to make the land fit for building purposes, carve out plots, construct roads, sell the plots to various allottees or intending purchasers who were to build their own houses on the plots. The questions of taking sanction under the U. P. Act of 1958 arose only after the clearing of the jungle. The act of clearing the forest by felling the tree from the land and some other acts done by the company before September 1, 1969 were the only acts which were possible to be done in order to make the land useful for the purpose of the housing scheme. In out opinion, therefore, the land had been actually utilized in execution of a housing scheme. According to Shorter Oxford English Dictionary, 3rd edition, the word utilize means "to make useful". Viewed in the light of the said meaning it is clear to us that the land was made useful in execution of the housing scheme, that is to say in the process of the execution of the housing scheme. The question of further development of the land arose only after clearance of the forest. The Collector of Dehra Dun by the impugned order held that the provisions of the Act were applicable to the land. The company could not, therefore take permission under the U. P. Act of 1958 from the prescribed authority nor could any further act for fully implementing the housing scheme be done. The felling of the trees was complete within the time allowed and, therefore, actual utilization of the land in the process of the housing scheme was made, in the sense of utilizing the land to the extent it was possible to utilize it. In our judgment the High Court was right in holding that the land in question is not covered by the notification dated September 1, 1969 and in quashing the order of the Collector dated March 22, 1970. We may, however observe that of the housing scheme is not fully implemented within a reasonable time for today and actual utilization of the land by full and complete implementation of the housing scheme is unnecessarily delayed then it will be open to the Government to take further steps for the application of provisions of the Act to the land in question or any portion thereof in accordance with law.We do not propose to enter into the question of estoppel in this case, as in our opinion, the judgment of the High Court is sustainable on the first ground alone.