Holding

The Supreme Court held that the State’s orders to drop the acquisition were a fraud on power, void, and that a deemed award as of 26 August 2007 must be treated as having been made, with the land vesting in HUDA/HSIDC and full restitution and compensation directed.

Summary

The Haryana Government issued a notification under the Land Acquisition Act, 1894 to acquire land for an industrial township, after which many landholders sold their land to private builders at inflated prices. The State later dropped the acquisition on 24 August 2007 and again on 29 January 2010, allegedly to benefit the builders, leading the petitioners to claim fraud on power. The Supreme Court examined whether the State's withdrawal was mala fide, whether the subsequent transactions were void, and what relief was appropriate under the 1894 Act, the 2013 RAFT Act and related statutes. It held that the decisions to drop the acquisition were a fraud on power, set them aside, deemed an award to have been passed on 26 August 2007, and ordered the land to vest in HUDA/HSIDC with compensation to landholders and restitution from builders. The Court also directed investigation into the alleged “middle‑men” and provided detailed relief for third‑party purchasers.

Issues considered

The State's decision to drop the acquisition was a fraud on power or mala fide exercise of statutory authority.
Whether the sale deeds between landholders and private builders are voidable as a consequence of the fraudulent withdrawal.
What is the appropriate relief: restoration of land, deemed award, compensation, and restitution under the Land Acquisition Act, 1894 and the RAFT Act, 2013.
Whether the builders and other parties are liable for unjust enrichment.
Whether the landholders are pari delicto and can claim relief.

Legislation cited

Haryana Development and Regulation of Urban Areas Act, 1975
Indian Contract Acts. 17
Indian Trusts Act, 1882s. 88
Land Acquisition Act, 1894s. 11, s. 18, s. 24(2), s. 4, s. 48, s. 5A, s. 6, s. 9
National Capital Regional Planning Board Act, 1985
Right of Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013s. 24(1)(b)
Transfer of Property Acts. 17(2), s. 17(5), s. 19, s. 55(5), s. 55(6), s. 65

Subjects

land acquisitionfraud on powerpublic purposeunjust enrichmentcompensationrestorationindustrial townshipHaryanaNCRlicencecolonisationpolicyCBI investigationdeemed awardrestitution

Judgment

[2018] 5 S.C.R. 205 205

RAMESHWAR & OTHERS A
v.
STATE OF HARYANA & OTHERS
(Civil Appeal No. 8788 of 2015)
MARCH 12, 2018 B
[ADARSH KUMAR GOEL AND UDAY UMESH LALIT, JJ.]
Land Acquisition:
Notification u/s. 4 of Land Acquisition Act, 1894 – For setting
up of Industrial Township – Objections u/s. 5A filed – Soon after C
initiation of acquisition proceedings various sale deed executed by
land-holders in favour of certain builders/private entities – After
Notification u/s. 6 also builders/private entities continued
approaching the land-holders showing other awards passed in
respect of adjoining land for the same purpose wherein
D
compensation was granted @ 12.5 lakhs and offered higher
purchase prizes – After notices u/s. 9 for pronouncement of awards,
the builders/private entities started enhancing the price and bought
the land from the land-holders at a price around Rs.80 lakhs per
acre – Thereafter the State by order dated 24.8.2007 dropped the
acquisition proceedings stating that fresh Notification would be E
issued – Pending writ petitions by land-holders challenging the
acquisition proceedings were disposed of as infructuous – Building
Plans of Group Housing Societies and schemes of the builders/
private entities (purchasers) were approved by the State – By order
dated 29.1.2001 decision was taken by the State Government in
F
view of the recommendation of Inter Departmental Committee –
Farmers, having come to know that the lands under acquisition
were utilized by the builders/colonizers, started agitation – Request
was also made for registration of FIR in respect of fraud played by
the officials in connivance with the builders – Writ petition by land-
holders taking the plea that initiation of acquisition proceedings G
and thereafter dropping of acquisition proceeding was deliberate
and fraught with malice – High Court dismissed the writ petition
holding that challenge to the dropping of proceeding since initiated
4½ years later, hence was belated – On appeal, Supreme Court
directed CBI (to whom investigation in the matter had been entrusted
H
205
206 SUPREME COURT REPORTS [2018] 5 S.C.R.

A by the State) to place its report before Supreme Court – Held:
Decisions dated 24.8.2007 and 29.1.2010 were inconsistent with
the relevant policy of the State – They were also not consistent with
Regional Plan under NCR Act and the Final Development Plan for
Gurgaon-Manesar – Public interest was not the underlying objective
behind the decisions – The decisions were taken to confer
B
advantages to builders/private entities – There was unholy nexus
between Government machinery and the builders/private entities in
devising a modality to deprive the gullible land-holders of their
holdings – Thus, the decisions were result of a fraud on power and
were not bona fide exercise of power – The facts of the case show
C that there was nothing wrong with the initiation of acquisition
proceedings, but during the process it was hijacked by vested
interests – Therefore, mere invalidation of the transaction would
not be appropriate relief – Real and substantial relief would be in
restoring the situation where process of acquisition is made free
from such supervening vested interest and is enabled to achieve the
D
objective that the acquisition was intended to sub-serve – When
there is fraud on power, duty of the Court is not only to set aside
such exercise of power, but to see that there is no unjust enrichment
and there is full and substantial restoration – Unjust retention of
benefit would be against the fundamental principles of justice, equity
E and good conscience – In the present case, as there was a completed
acquisition, the award is deemed to have been passed on the date
when it was supposed to be pronounced – The greater victim in the
present case was public interest – The land-holders who had sold
their lands to the builders/private entities had received
considerations greater than the amount awarded in other cases,
F
hence they cannot be given benefit of annulment of transactions
and restorations of their holdings – The land-holders who had not
transferred their holdings and the purchasers of individual
apartments from builder, cannot be subjected to any prejudice –
Appropriate directions issued – Land Acquisition Act, 1894 – ss.
G 4,6, 9 and 11 – The Right of Fair Compensation and Transparency
in Land Acquisition, Rehabilitation and Resettlement Act, 2013 –
s.24(1(b) – Haryana Development and Regulation of Urban Areas
Act, 1975 – National Capital Regional Planning Board Act, 1985.

H
RAMESHWAR v. STATE OF HARYANA 207

Relief: A
Grant of relief – Held: Grant of relief must depend upon who
the real victim is and to what extent solace can be granted to such
real victim.
Allowing the appeals, the Court
B
HELD: 1.1 In the present case, notification under Section
4 of the Land Acquisition Act, 1894 was issued on 27.08.2004.
After considering various objections made under Section 5A of
the 1894 Act, the requirement of 688 Acres of land was assessed
and declaration under Section 6 to that effect was issued on
25.08.2005. All the lands purchased were after the issuance of C
notification under Section 4. Similarly para 18 of the interim report
submitted by CBI shows that over 444 Acres of land was
purchased by various builders/private entities after the
notification under Section 4. Going by the relevant policies
holding the field and the law laid down by this Court in *Uddar D
Gagan case, such purchases did not entitle the concerned
builders/private entities to prefer any application for licence, nor
could pendency of applications for licence be taken as a relevant
factor while arriving at a decision whether acquisition initiated
pursuant to notification dated 27.08.2004 be proceeded further
or not. However, the record indicates that such purchases and E
the pendency of applications for licence under the Haryana Act,
was a factor which did weigh while decisions dated 24.08.2007
and 29.01.2010 were taken. A factor which ought to have been
discarded in terms of the declared policy statements, became
the fulcrum for said decisions. Therefore, said decisions are F
inconsistent with and opposed to relevant policy statements.
These decisions were not consistent with the Regional Plan under
the NCR Act and the Final Development Plan for Gurgaon-
Manesar. [Para 22][261-G-H; 262-A-D]
1.2 The decisions dated 24.08.2007 and 29.01.2010 were G
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.
H
208 SUPREME COURT REPORTS [2018] 5 S.C.R.

A 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
B
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
C objective behind the 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
D
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. [Para
31][277-D-H; 278-A]
E 1.3 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
F 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. The initiation of class action and filing of Writ Petition in
the present matter was perfectly justified. [Para 31][278-B-C]
Collector (DM) v. Raja Ram Jaiswal (1985) 3 SCC 1:
G [1985] 3 SCR 995; Royal Orchid Hotels Limited and
Another v. G. Jayarama Reddy and Others (2011) 10
SCC 608 : [2011] 11 SCR 701; Greater Noida Industrial
Development Authority v. Devender Kumar and Others
(2011) 12 SCC 375; State of Punjab v. Gurdial Singh
(1980) 2 SCC 471: [1980] 1 SCR 1071; S. Pratap
H Singh v. The State of Punjab (1964) 4 SCR 733; Express
RAMESHWAR v. STATE OF HARYANA 209

Newspapers Pvt. Ltd. and others v. Union of India and A
others (1986) 1 SCC 133 : [1985] 3 Suppl. SCR 382;
Shrisht Dhawan (Smt) v. Shaw Bros. (1992) 1 SCC 534:
[1991] 3 Suppl. SCR 446; Indian Council for Enviro-
Legal Action v. Union of India (2011) 8 SCC 161 :
[2011] 9 SCR 146; Uddar Gagan v. Sant Singh &
B
Others (2016) 11 SCC 378 – relied on.
2.1 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 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 C
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. It is nobody’s
case that public interest was adequately achieved and therefore
the acquisition was required to be dropped. The fact that other D
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. The Court,
therefore, cannot grant mere declaration invalidating the
transaction and grant relief of restoring status ante. The real E
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 sub-serve. [Para 33][278-G-H; 279-
A-D] F
2.2 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. unjust
retention of benefit would be completely against the fundamental G
principles of justice, equity and good conscience. 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, it is duty of the Court to grant full restitution. The H
210 SUPREME COURT REPORTS [2018] 5 S.C.R.

A restoration in real and substantial terms has to ensure that the
public purpose, the acquisition was intended to achieve, stands
sub-served. In the present case 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.[Para 36][281-
D-E]
B
2.3 The Land Acquisition Act, 1894 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 2013 Act, where an award had been
made under Section 11 of the Act, the proceedings under the
C provisions of the 1894 Act would continue as if the 1894 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 1894 Act would still continue to operate in respect of such
acquisition in question. [Para 37][281-G-H; 282-A]
D 2.4 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
E 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. [Para 38][282-F-G]
F
2.5 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 show
that no person who directly or indirectly was a party to the fraud
G 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, they are not
held 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
H
RAMESHWAR v. STATE OF HARYANA 211

victim in the matter was the public interest. The land-holders in A
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 it is proposed to take the matter to its logical end and
say that there was a deemed award, those who had not sold away
B
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. Therefore,
that body of land-holders who had not transferred their holdings,
so also the purchasers of individual apartments have to be
excluded from the width of the directions of the Court. Though C
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
D
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. [Para 38][282-H; 283-
A-E]
Bhimandas Ambwani (Dead) through LRs. v. Delhi
Power Company Limited (2013) 14 SCC 195 : [2013] 1 E
SCR 996; K.B. Ramachandra Raje LRs. (Dead) by L.Rs.
v. State of Karnataka and Others (2016) 3 SCC 422 :
[2015] 11 SCR 974 – relied on.
3. The Court issued following directions:
(a) The decisions dated 24.08.2007 and 29.01.2010 are set F
aside as being brought about by mala fide exercise of power.
(b) An Award is deemed to have been passed on 26.08.2007
in respect of lands (i) which were covered by declaration
under Section 6 in the present case and (ii) which were
transferred by the landholders during the period 27.08.2004 G
till 29.01.2010. The lands which were not transferred by
the landholders during the period from 27.08.2004 till
29.01.2010 are not governed by these directions.
(c) Subject to the directions issued hereafter, the lands
covered under aforementioned direction (b), shall vest in
the HUDA/HSIDC. H
212 SUPREME COURT REPORTS [2018] 5 S.C.R.

A (d) The period between 24.08.2007 and upto the date of
this judgment shall not be counted for the purposes of
Section 24(2) of the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and
Resettlement Act, 2013.
B (e) All transactions entered into during the period from
24.08.2007 till 29.01.2010, pursuant to which the original
landholders transferred their holdings in favour of builders/
private entities or third parties shall be subject to and the
interest of the respective parties shall be governed by the
directions issued hereafter.
C
(f) The sale consideration paid by the b u i l d e r s / p r i v a t e
entities to the landholders shall be treated towards
compensation under the award and the landholders will not
be required to refund any amount to such builders/private
entities. The landholders will be at liberty to prefer
D Reference under Section 18 of the Act. If the Reference
Court were to enhance the compensation, the amounts
received by the landholders by way of consideration from
the builders/private entities shall be appropriated towards
such sum awarded by the Reference Court.
E (g) The builders/private entities will be entitled to refund/
reimbursement of any payment made to the landholders or
the amounts that had been spent on development of the
land, such payments shall be made by HUDA or HSIDC on
being satisfied about the extent of actual expenditure not
F exceeding HUDA or HSIDC norms on the subject as the
case may be. Refund will however be in respect of amount
at which the landholders sold the land and not of subsequent
sales. The subsequent purchasers will have remedies
against their respective vendors.

G (h) The third parties from whom money had been collected
by the builder/private entities will either be entitled to
refund of the amount from and out of and to the extent of
the amount payable to the builder/private entities in terms
of above direction, available with the State, on their claims
being verified or will be allotted the plots or apartments at
H the agreed price or prevalent price, whichever is higher.
RAMESHWAR v. STATE OF HARYANA 213

In cases where, constructions have been erected and the A
entire project is complete or is nearing completion, upon
acceptance of the claim, the plots or apartments shall be
made over to the respective claimants on the same terms
and conditions. Except for such verified and accepted
claims, the remaining area or apartments will be completely
B
at the disposal of HUDA or HSIDC.
(i) As substantial sums were made over to “middle men”.
In the pending investigation, the CBI may do well to unravel
the truth. In any case, such hefty sums which were made
over to “middle men” cannot be said to be rightfully earned
by and belonging to them. In fact, this actually represents C
the return for being able to garner the lands in question
and getting requisite licences under the provisions of the
Haryana Act and a benefit derived out of fraud on power.
This money rightfully belongs to the State and none other.
The authorities of the State as well as the Central D
Government to reach the depths of such transactions and
recover every single pie and make it over to the State
Government. A complete investigation in the transactions
including unearthing unnatural gains received by “middle
men” shall be undertaken by the CBI.
E
(j) If CBI has filed charge-sheet before the concerned Court,
the same may be dealt with as per law.
(k) The State shall give benefit of “Rehabilitation and
Resettlement of Land Acquisition Oustees” policy of the
State/HUDA/HSIDC to the landholders. F
(l) The State may revisit its policy of change of land use and
giving colonization licence in respect of land which is subject
matter of acquisition.
(m) In respect of pending writ petition in the High Court
of Punjab and Haryana wherein appointment of Commission G
of Enquiry to enquire into certain facts concerning
acquisitions in respect of lands in Gurgaon-Manesar Urban
Complex was challenged, the High Court is requested to
deal with and dispose of the matter as early as possible.
[Para 39][283-F-H; 284-A-G; 285-B-C, D-F, H; 286-A-E]
H
214 SUPREME COURT REPORTS [2018] 5 S.C.R.

A Ramana Dayaram Shetty v. International Airport
Authority of India and Others (1979) 3 SCC 489 :
[1979] 3 SCR 1014; State of M.P. and Others v. Nandlal
Jaiswal and Others (1986) 4 SCC 566 : [1987] 1 SCR
1; Amita Banta & Another v. State of Haryana (2010) 1
RCR (Civil) 412 – referred to.
B
Case Law Reference
(2011) 12 SCC 375 relied on Para 5
(2016) 11 SCC 378 relied on Para 5
C [1979] 3 SCR 1014 referred to Para 14
[1987] 1 SCR 1 referred to Para 14
(2010) 1 RCR (Civil) 412 referred to Para 20
[1985] 3 SCR 995 relied on Para 28
D
[2011] 11 SCR 701 relied on Para 28
[1980] 1 SCR 1071 relied on Para 28
[1964] 4 SCR 733 relied on Para 29
E [1985] 3 Suppl. SCR 382 relied on Para 29
[1991] 3 Suppl. SCR 446 relied on Para 29
[2011] 9 SCR 146 relied on Para 29
[2013] 1 SCR 996 relied on Para 35
F
[2015] 11 SCR 974 relied on Para 35
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8788
of 2015.
From the Judgment and Order dated 15.12.2014 of the High Court
G
of Punjab & Haryana at Chandigarh in CWP No. 23769 of 2011.
WITH
C. A. Nos. 8794, 8791 and 8782 of 2015.

H
RAMESHWAR v. STATE OF HARYANA 215

Maninder Singh, ASG, Anil Grover, Alok Sangwan, AAGs, A
C. A. Sundaram (AC), Dhurv Mehta, Kapil Sibal, Dr. A.M. Singhvi,
Pinaki Misra, Vikas Singh, Rajesh Garg, Pallav Shishodia, Nidhesh Gupta,
R. S. Suri, Rajiv Dhawan, Ms. Indu Malhotra, V. Giri, Narendar Hooda,
Sidharth Luthra, Brijender Chahar, Sr. Advs, Ms. Rohini Musa, Abhishek
Gupta, Zafar Zwayat, Ms. Aakanksha Kaul, Apoorv P. Tripathi, Ranbir
B
Singh Yadav, Puran Mal Saini, Randeep Rai, Chetan Mittal,
R.N. Karanjawala, Ms. Ruby Singh Ahuja, Ms. Deepti Sarin,
Ms. Aakanksha Munjal, Milinda Sharma, Karan Dev Chopra, Nikhil
Rohatgi, Mohit Khubchandani, Shashank Khurana, Nakul Gandhi, Rajiv
Anand, Aanushkan Singhvi, Mrs. Manik Karanjawala, M/s. Karanjawala
& Co., Mahesh Agarwal, Ankur Saigal, Rishabh Parikh, Ms. Ishita C
Chakarbarty, Dinesh Kumar Dakoria, E.C. Agrawala,
R. Balasubramanian, Prabhas Bajaj, Akshay Amritanshu, Rohit Rathi,
Santosh Kumar, Pranav Kumar, Mukesh Kumar Maroria, Uday Gupta,
Ms. Shivani Lal, M. K. Tripathi, Mrs. Sarla Chandra, Arjun Sayal,
Abhishek Gupta, Satish Kumar, Manik Garg, Sanjay Kr. Visen, Hiren
D
Dasan, Harish Dasan, Karri Venkata Reddy, Chand Qureshi, Mrs Sarla
Chandra, Ms. Vidhi Goel, Umesh Kumar Khaitan, Rohit K. Aggarwal,
Avinash Kumar, L.S. Hasan, Ms. Nabita Hasan, Ms. Apoorva Bhumesh,
Vikas Mehta, Prashant Singh, Tanvir Nagar, Ms. Anushreee Menon,
Vikas Mehta, Shivendra Dwivedi, Aviral Dhirendra, Ms. Nida doon,
Ms. Shruti Sen, Somesh Arora, Anupam Prasad, Rameshwar Prasad E
Goyal, Varun Singh, Ms. Meenakshi Chauhan, Varun Khanna, Rakesh
Kumar, Praveen S., Rupesh Kumar S., Ms. Anubha Singh, Vinod Kapoor,
Ms. B. Vijayalakshmi Menon, Dr. Surender Singh Hooda, Avadh Bihari
Kaushik, R. C. Kaushik, Mrs. Shally Bhasin, Ms. Anzu K. Varkey,
Ms. Ranjeeta Rohatgi, Parijat Kishore, Advs. for the appearing parties.
F
Petitioner-in-person.
The Judgment of the Court was delivered by
UDAY UMESH LALIT, J. 1. These appeals by special leave
are directed against the common Judgment and Order dated 15.12.2014
passed by the High Court of Punjab and Haryana at Chandigarh dismissing G
Civil Writ Petition No.23769 of 2011 with other connected matters. Appeal
arising from Civil Writ Petition No.23769 of 2011 namely Civil Appeal
No.8788 of 2015, has been taken as the lead matter and the facts stated
therein are dealt with in detail.
H
216 SUPREME COURT REPORTS [2018] 5 S.C.R.

A 2. The aforesaid Civil Writ Petition No.23769 of 2011 was filed
by 117 landholders for the following principal relief:
“a) Issue writ direction or order, especially in the nature of certiorari
quashing the entire action of the respondents who invoked Sections
4 & 6 for the alleged public purpose but ultimately compelled the
B petitioners to be divested of their valuable and fertile land at
throwaway prices under the threat of acquisition to the private
persons and consequently after issuing Section 6 and at the stage
of final proceedings under Section 9, the acquisition was withdrawn
with fraudulent intentions after the land was purchased by the
private builders in active connivance with State functionaries and
C further the entire acquisition proceedings were initiated with mala
fide intention, illegally and in violation of the provisions of the
Land Acquisition Act. The same is vitiated by fraud and all
transactions including the sale deeds etc. are liable to be set aside
without invoking the provisions of Part VII of the Act and with a
D further prayer for an enquiry/investigation through an independent
agency in respect of the entire fraud played by the respondents
and their officials;….”
3. The relevant facts leading to the filing and disposal of the
aforesaid writ petition were:-
E (i) On 27.08.2004 Haryana Government, Industries Department
issued a Notification under Section 4 of the Land Acquisition Act, 1894
(“Act” for short) for acquiring lands admeasuring about 912 Acres from
three villages namely, Manesar, Lakhnoula and Naurangpur, Tehsil and
District Gurgaon for setting up Chaudhari Devi Lal Industrial Township,
F to be planned as an Integrated Complex for residential, recreational and
other public purposes. The notification was duly published in newspapers.
The landholders including some of the writ petitioners filed their objections
under Section 5A of the Act.
(ii) Soon after the initiation of acquisition, various sale deeds were
G executed by the landholders including some of the writ petitioners in
favour of certain builders/private entities. Some such builders/private
entities who had recently purchased the lands also preferred objections
under Section 5A of the Act.
(iii) On 26.02.2005, a report was prepared by Land Acquisition
Collector recommending to the State Government that land admeasuring
H
RAMESHWAR v. STATE OF HARYANA 217
[UDAY UMESH LALIT, J.]

224 acres be released from acquisition. Thereafter, appropriate notification A
under Section 6 of the Act was issued on 25.08.2005 in respect of rest
of the land admeasuring 688 acres.
(iv) This acquisition was subject matter of challenge in number of
Writ Petitions filed by the landholders and the subsequent purchasers
viz. builders/private entities. B
(v) Even after issuance of notification under Section 6 of the Act,
the builders/private entities continued approaching the landholders. It
was submitted that the landholders were being shown Award Nos.7, 8,
9, 10 and 12, all passed on 09.03.2006 in respect of adjoining villages for
the same purpose namely setting up of Chaudhary Devi Lal Industrial C
Township, where compensation was awarded @ Rs.12.5 lakhs per acre.
In all these cases, notifications under Section 4 were issued on 17.09.2004
while declarations under Section 6 were issued on 27.10.2004 and the
lands covered under Award Nos. 7, 8, 9, 10 and 12 were i) 114 Kanals
02 Marlas, ii) 68 Kanals 15 Marlas, iii) 43 Biswas, iv) 65 Kanals 08
Marlas and v) 3515 Kanals 01 Marlas respectively. It was submitted D
that the landholders were thus cornered with the prospect of impending
acquisition and the idea that the compensation would be awarded @
Rs.12.5 lakhs per acre and were persuaded to enter into transactions
with builders/private respondents transferring their holdings @ Rs.20-
25 lakhs per acre. E
(vi) On 02.08.2007 notices under Section 9 of the Act were issued
calling upon the landholders to appear on 26.08.2007 for pronouncement
of award. Soon after such notice, the builder/private entities started
enhancing the price and bought the lands from the landholders at a price
around Rs.80 lakhs per acre. F
(vii) On 24.08.2007, the State Government passed an order
dropping the acquisition and stating that a fresh notification would be
issued in place of the present proceedings. The reasons given in the
order dated 24.08.2007 were as under:
“In this connection, it is informed that State Government has notified G
that certain parcels of land have been released by Government
on the recommendation of Minister’s Committee separately. Some
of these parcels are acquired in the land acquisition proceedings
under consideration. Further, Town and Country Planning
Department has also informed that there are several cases wherein
H
218 SUPREME COURT REPORTS [2018] 5 S.C.R.

A builders applied for licence/CLU on the land which also form part
of the acquisition proceedings. Furthermore, in a number of cases
the courts have stayed dispossession of land. In the circumstances,
it is difficult at this stage to make up a view as what could be the
shape and size of the land eventually being acquired by
Government. It will not be appropriate to go ahead with these
B
proceedings in the present form. State Government has, therefore,
ordered that a fresh notification be issued in place of the present
proceedings indicating therein as to which are the lands that are
available for acquisition without any encumbrances.”
(viii) On 20.09.2007 Haryana State Industrial and Infrastructure
C Development Corporation (for short HSIIDC) submitted a proposal to
constitute an Inter Departmental Committee to survey the area and
submit its recommendations for initiating fresh acquisition proceedings.
On 09.10.2007 pending Writ Petitions filed by the landholders and the
subsequent purchasers were disposed of by the High Court as having
D become infructuous in view of the dropping of the acquisition on
24.08.2007 and subsequent decision to constitute an Inter Departmental
Committee.
(ix) On 27.12.2007 licence Nos.283 and 284 were issued by the
State Government for setting up a housing society.
E (x) On 26.03.2008 the Inter Departmental Committee submitted
a report recommending complete withdrawal of acquisition. It was stated
in the report that 12 applications for grant of licence along with requisite
fees were submitted by various colonizers in respect of an area of about
362 acres.
F (xi) Around 22.09.2009, approvals of building plans of group housing
societies and schemes of private builders came to be granted.
(xii) Having come to know that the lands under acquisition were
now being utilized for private gain by various builders/colonizers, the
farmers started agitation against the process adopted by the Governmental
G machinery.
(xiii) On 29.01.2010 a decision was taken by the State Government
in Industries and Commerce Department to close the acquisition
proceedings in view of the recommendations of the Inter Departmental
Committee dated 26.03.2008 which in turn had been accepted by the
H HSIIDC.
RAMESHWAR v. STATE OF HARYANA 219
[UDAY UMESH LALIT, J.]

(xiv) The farmers’ agitation against the decision of the State A
Government favouring the builders was widely reported in newspapers
on 01.03.2011. The agitation continued beyond August and September,
2011. On 20.09.2011 a request was made by sending communications to
various functionaries for registration of FIR in respect of fraud played
by the officials of the Land Acquisition Department as well as the Director,
B
Town Planning in active connivance with the builders.
(xv) On 19.12.2011 the aforesaid Writ Petition No.23769 of 2011
was filed in the High Court of Punjab and Haryana at Chandigarh by
117 landholders. It was submitted that the entire action of initiating the
acquisition and thereby compelling writ petitioners/landholders to divest
their valuable and fertile land at throwaway prices under the threat of C
acquisition to certain private builders and then dropping the acquisition
just two days before the date fixed for declaration of award was deliberate
and was fraught with malice.
(xvi) In the written statement filed by Respondent No.3 – ABW
Infrastructure Limited, it was submitted that the answering respondent D
had obtained requisite licences for its residential as also commercial/
group housing project namely ABW Niketan and had raised loans to the
tune of Rs.170,00,00,000/-.
(xvii) In their written statements, Respondent Nos.4 and 5 namely
Metropolis Realtors Pvt. Ltd. and Flair Realtors Pvt. Ltd. submitted that E
both these Companies were incorporated on 03.02.2006; that the prices
of lands in and around Gurgaon were increasing as Gurgaon city was
developing fast and another factor causing rise in prices was that Master
Plan for the area – i.e. Gurgaon Development Plan was notified on
05.02.2007. F
(xviii) The written statement submitted by Respondent No.6 –
Metropolis Infrastructure Pvt. Ltd. stated that said Company was
incorporated on 19.04.2006. Rest of the submissions were on lines similar
to that of Respondent Nos.4 and 5.
(xix) On 06.12.2012 written statement was filed by State of G
Haryana justifying its action of withdrawal of acquisition. It was
submitted that the writ petitioners had approached the Court more than
4½ years after the decision of the State Government of dropping the
acquisition proceedings. It was denied that there was any nexus between
H
220 SUPREME COURT REPORTS [2018] 5 S.C.R.

A the builders and the State officials or that the exercise of acquisition was
in any manner mala fide or fraudulent.
(xx) In their replications filed on 15.01.2013, it was submitted by
the writ petitioners that most of the lands were purchased by the builders
or their substitute companies after the issuance of the Notification under
B Section 4 of the Act and yet, the sale deeds executed between the parties
made no mention of factum of such notification. Further, the escalation
of prices in last 20 days namely after the issuance of the notices under
Section 9 showed that the builders were not only aware but were also
sure that the acquisition would be dropped by the State Government.
The hike in price was essentially to lure the landholders as after dropping
C of the acquisition there would be no threat to the landholders.
(xxi) On 24.02.2014 the High Court directed the State of Haryana
to give details about various acquisitions initiated around the time in
question for the same public purpose namely, setting up of Chaudhary
Devi Lal Industrial Township.
D
(xxii) Accordingly, on or about 21.03.2014 an additional affidavit
was filed on behalf of State of Haryana giving relevant details in a tabular
chart. These details appear to be in addition to the lands covered under
Awards 7, 8, 9, 10 and 12 of 09.03.2006. The relevant tabular chart was
as under:-
E

F

G

H
RAMESHWAR v. STATE OF HARYANA 221
[UDAY UMESH LALIT, J.]

A

B

C

D

E

F

G

H
222 SUPREME COURT REPORTS [2018] 5 S.C.R.

A

B

C

D

E

F

(xxiii) Thus, in addition to lands covered by said Awards dated
09.03.2006, about 1315 acres of land stood acquired whereas 688 acres
of land covered by Declaration under Section 6 of the Act in the present
G case was dropped from acquisition. It is relevant to note that in relation
to acquisition referred to in Column No.5 vide award dated 24.02.2007
(annexed at page-307 in the Paper book) compensation was assessed at
the rate of Rs.12.5 lakhs per acre; identical to one assessed in Awards
dated 09.03.2006.
H
RAMESHWAR v. STATE OF HARYANA 223
[UDAY UMESH LALIT, J.]

(xxiv) The aforesaid petition as well as connected matters were A
dismissed by the High Court vide its judgment under appeal. It was
observed that the landholders had taken no action after their writ petitions
were dismissed as infructuous by order dated 09.10.2007 and the present
action initiated more than 4½ years after such dropping of acquisition
was wholly belated. It was observed:
B
“It is the case of the petitioners, that they were forced to sell
their property under the threat of acquisition to the private
respondents and thus the sale deeds so executed by them in their
favour, deserved to set-aside. However we are unable to agree
with the said contention raised by the Ld. Counsel for the petitioners
as at no stage did the petitioners ever raised hue and cry viz. the C
said acquisition proceedings. Even when the writ petitions were
filed by them in the year 2005 impugning the said acquisition
proceedings, then also no grievance was raised by them in this
regard and in fact during the pendency of these writ petitions,
they even sold off their land to the private respondents for D
consideration and even got sale deeds executed in their favour.
Even when the said writ petitions were dismissed as infructuous
vide order dated 09.10.2007, then also no such distress or grievance
was raised by them before this Court. Until the filing of the present
writ petition, no action much less coercive action was taken by
the petitioners against the respondents viz. setting aside of the E
sale deeds on the ground of fraud which thus apparently shows
that not only did they acquiesced to the dropping of the said
acquisition proceedings by the State Government but also waived
off their right to challenge the same as well as the sale deeds
executed by them in favour of the private respondents in view of F
Article 59 of the Limitation Act and thus now at this stage they
have no vested or accrued right to challenge the said sale deeds
voluntarily executed by them in favour of the private respondents
and that too after a long yawning gap of 10 years in view of
Section 31 of the Specific Relief Act, for which the present writ
petitions being hit by delay and latches cannot be entertained for G
initiating such an action.”
4. The Landholders being aggrieved by the decision of the High
Court dated 15.12.2014 filed petitions for special leave to appeal in this
Court. After hearing both sides this Court granted special leave on
H
224 SUPREME COURT REPORTS [2018] 5 S.C.R.

A 06.10.2015 and continued the interim order granted earlier which was to
injunct any further construction on the lands in question. This Court also
recorded the submission of the Counsel for the State that investigation
was entrusted to CBI and directed CBI to place its report before this
Court, as and when the investigation was over. An interim report was
filed by CBI in March, 2017. On 30.01.2017 Mr. C.A. Sundaram, learned
B
Senior Advocate was appointed Amicus Curiae to assist the Court. The
subsequent order dated 21.03.2017 records that the CBI had filed its
interim report, a copy of which was directed to be given to the learned
Amicus Curiae. The matters were thereafter taken up for hearing.
5. Appearing for the appellants in the lead matter, Mr. Dhruv Mehta,
C learned Senior Advocate submitted:
(a) The licences granted by the State Government to the private
builders for development, in the face of the fact that the lands
were notified for acquisition, were nothing but an abuse of power
and such exercise was directly in breach of the relevant policy.
D In his submission, the policy dated 19.12.2006 issued by the State
Government provided that the licences could be granted where
the applicants/land owners had applied for licences before the
issuance of Notification under Section 4 of the Act and the release
could be considered on individual merits of each case. He further
E submitted that as accepted by the State Government, out of 15
licences granted by the State Government, 8 were granted between
the date of issuance of Notification under Section 6 and the date
when the acquisition was dropped i.e. on 24.08.2007 and other 7
licences were granted after 24.08.2007. Thus all the licences, as
a matter of fact, were granted after the issuance of Notification
F under Section 6 of the Act.
(b) He submitted that the purchases made by the builders in the
present case were after the lands were notified under Section 4
of the Act on 27.08.2004. At least sixty sale deeds were executed
between the issuance of Notifications under Sections 4 and 6 of
G the Act while four sale deeds were executed on the date of
declaration under Section 6 i.e. on 25.08.2005 and fifty sale deeds
were executed after the issuance of Notification under Section 6
and prior to the dropping of acquisition vide decision dated
24.08.2007. The fact that the builders had enhanced the price
H
RAMESHWAR v. STATE OF HARYANA 225
[UDAY UMESH LALIT, J.]

and sold the lands at a price of Rs.80 lakhs and above per acre A
after the issuance of notice under Section 9, clearly indicated that
they were aware that the land acquisition proceedings would be
dropped.
(c) Though the declared intent while initiating acquisition was to
sub-serve public interest, the State Government kept on granting B
licences in respect of lands covered under acquisition in the teeth
of its relevant policy. A colourable exercise of power was evident
and substantiated by the Report dated 26.03.2008 which indicated
that 12 licence applications were pending in respect of area
aggregating approx. 362 acres and that was taken to be good
reason to withdraw the lands from acquisition finally. C

(d) This entire mechanism was deliberately employed so that
valuable lands belonging to the landholders could be cornered by
a set of builders/private entities and after having seen that the
desired result was obtained, the acquisition was dropped and later
completely withdrawn. D

(e) Since the entire decision making process was nothing but an
abuse of and fraud on power, the landholders were justified in
seeking annulment of all the transactions. In his submission, though
annulment of transactions can normally be in an action between
the vendor and vendee, since the transactions were directly as a E
result of abuse of and fraud on power, a Writ Court could certainly
deal with such issues and while granting relief against such fraud
on power, incidental and consequential directions could also be
passed annulling such transactions. Reliance was placed on the
decisions of this Court in Greater Noida Industrial Development F
Authority v. Devender Kumar and Others1 and in Uddar Gagan
v. Sant Singh & Others2.
Learned counsel appearing for other appellants in connected
matters adopted the submissions of Mr. Dhruv Mehta, learned Senior
Advocate. G
6. Learned Amicus Curiae initially filed a memo at which stage
the interim report of CBI was not filed in Court. After said copy was
made available to him pursuant to the Order dated 21.03.2017 he filed
1
2011 (12) SCC 375
2
2016 (11) SCC 378
H
226 SUPREME COURT REPORTS [2018] 5 S.C.R.

A three more memos. In his memo dated 28.03.2017 after referring to
certain factual aspects as emerging from the interim report of CBI, he
submitted :-
“6. From all the above, it appears that lands were purchased by
Builders during acquisition proceedings and also after acquisition
B proceedings were dropped on the basis that fresh acquisition
proceedings would be initiated. It further appears that the builders
in the meantime were working to have the acquisition proceedings
dropped and their applications for building licenses were also being
processed and the issuance of such licenses themselves became
a reason for dropping all proceedings. It does not appear anywhere
C from the record that the sellers of the lands were aware that the
acquisition proceedings would be dropped but it has been alleged
by them in the writ petition that they were informed of such
acquisition proceedings and were therefore, asked to sell their
interests. It would appear that rather than running the risk of
D what the award would amount to and having to contest the matter
for the grant of the award, the purchasers transferred their interest
to the builders, who on their part, as based on the CBI Report,
appear to have used every effort to ensure that the acquisition
proceedings were themselves dropped.
E 7. xxx xxx xxx
8. In these circumstances, should this Hon’ble Court find that the
case of the Petitioners/landholders is made out, and that they were
in fact fraudulently enticed to sell their lands and there appears to
be very suspicious circumstances in which the acquisition
F proceedings itself was dropped, the following could be considered:-
a. Insofar as the areas where no construction has been made
and no third party interests through registered instruments
to ultimate purchasers (not other builders) have been
created, that the said sales be declared void and the lands
G restored to the original landholders who be directed to return
the monies received by them;
b. Where third party interests have been created, the builders
be directed to disgorge their profit/part of their profits on
such sales, to be then distributed amongst the original
landholders. To arrive at such profit the difference between
H
RAMESHWAR v. STATE OF HARYANA 227
[UDAY UMESH LALIT, J.]

the purchase price and the sale price less actual cost of A
construction could be applied. Insofar as plots are
concerned, the difference between the buying and selling
price could be determined;
c. The aforesaid directions could be passed based on the
application of Sections 55(5) of the Transfer of Property B
Act and in particular, Sections 55(5)(a) and 55(6) of the
said Act. Such orders could also be passed based on
Sections 17(5) read with Section 17(2) and Sections 19 and
65 of the Contract Act;(Refer:- Coaks versus Boswell
reported as (1886) IA 232/Summers versus Griffiths
reported as (1865) 35 Beavan 27/Mulla on Transfer of C
Property, 8th Edition, Page 376-381 and 407-409)
d. Apart from these, such reparation could also be made by
application of the rule of Unjust Enrichment, which has been
recognized as being applicable to cases in the field of equity,
contract or tort (Refer:- Black’s Law Dictionary, 9 th D
Edition / Indian Council for Enviro – Legal Action
versus Union of India and Others reported as 2011 (8)
SCC 161)
e. The Interim Report of the CBI discloses complicity on the
part of Government officials in the entire process. In such E
event, not only would transactions within this entire
conspiracy be fraudulent, if they are traced to mala fide
exercise of the State’s power, they would also be against
public policy.
f. In view of the inordinate increase in the price of land it F
would not be practical to require the State Government to
pay the present consideration or be called upon to acquire
these lands and as that would be a drain on the public
exchequer. It would perhaps be best to restore status ante
insofar as practicable i.e., lands on which constructions have G
not been made or which have not been plotted and
transferred to third party individuals (not builders). In the
case of constructions at a nascent stage, it can be
determined whether bona fide third party interests have been
created and in the absence thereof, status ante could be
restored. In the remaining cases, payment of compensation H
228 SUPREME COURT REPORTS [2018] 5 S.C.R.

A could be directed through payment of consideration to the
original landholders as per (b) above.
g. The manner in which the amounts could be returned could
be in the manner as held by this Hon’ble Court in the case
of Uddar Gagan Properties Ltd. v. Sant Singh reported
B as 2016 (11) SCC 378.
h. So far as the conduct of the acquisition proceedings and
culpability of persons, government officials and builders in
this regard, the CBI may continue its investigation and
decide if any action is warranted, and take such action as is
C found to be necessary.”
7. In his memo dated 05.04.2017 it was submitted :-
“1. Should this Hon’ble Court conclude that there was a fraud in
the entire proceedings, it should result in just restitution depending
on the Parties involved in the fraud (in pari delicto) and the
D parties not so involved.
2. Should this Hon’ble Court hold that the land owners were not
in pari delicto the reliefs as suggested in Memo No. 2 dated
28.03.2017 may be considered.
3. Should this Hon’ble Court hold that the land owners were also
E
in pari delicto, the following may be considered:-
a. There were 4 Parties involved in the entire net of transactions:-
i. The landowners;
ii. The Builders;
F
iii. The Officers of the State; and
iv. The State itself (as paterfamilias of the public)
4. If builders and officers of the State were involved in the fraud
and the land owners were in pari delicto, the actual party
G deceived would be the State and therefore, the beneficiary of any
profits arising out of the fraudulent transactions, ought to go to the
State to be utilized for a public purpose.”
5. The manner in which this could be achieved could be:-

H
RAMESHWAR v. STATE OF HARYANA 229
[UDAY UMESH LALIT, J.]

a. The recommendation of the HPC dated 26.03.2008 to close A
the acquisition proceedings and the decision/Notification
dated 29.01.2010 dropping the acquisition proceedings for
the subject properties could be quashed;
b. Upon quashing of the said Notifications/Recommendations,
the acquisition proceedings already initiated would resume B
proprio vigore from the stage where it stood and to that
extent would continue to be an acquisition under the Land
Acquisition Act, 1894;
c. The period during which the acquisition proceedings stood
withdrawn, i.e., 24.08.2007 till the date of this Hon’ble C
Court’s order would be excluded for the purpose of passing
of an award and inasmuch as an award was to be declared
on 24.08.2007, an award now passed for the said land (in a
time bound manner) would be deemed to have been passed
on 24.08.2007;
D
d. The compensation payable under the said award would be
based on the market value of the land in the same manner
as if the award was passed on 24.08.2007.
e. The said amounts would be deposited and the landholders
would be entitled to withdraw the amount representing the E
difference between what they actually received from the
builders and what they were actually awarded.
f. The land would thereupon vest in the State;
g. The transferee builders who are the current owners of the
land would have a right to seek allotment of the same from F
the State, consideration for which would be determined at
the present days’ market value or market value as on such
other date as this Hon’ble Court may deem fit. Credit would
be given to the builders for the amounts that they had paid
to the original landholders and which is adjusted in (e) above;
G
h. In the event that the builders do not wish to purchase the
land at such rate, the land may be auctioned by the State;
and
i. Out of the price secured in the auction the amount paid for
the acquisition would be deducted. The actual construction H
230 SUPREME COURT REPORTS [2018] 5 S.C.R.

A costs of any construction made on the lands would also be
adjusted and the balance would be retained by the State for
use for a public purpose of the area, providing of housing,
rehabilitation, etc. by applying the principles of Section 88
of the Indian Trusts Act, 1882.”
B 8. Mr. Vikas Singh, learned Senior Advocate appearing on behalf
of respondent No.3 - ABW Infrastructure Limited filed an extensive list
of dates and relevant material detailing various transactions under which
his client came to purchase the lands in question. The transactions
referred to in the list of dates and accompanying documents, put in tabular
chart by us are as under:
C

D

E

F

G

H
RAMESHWAR v. STATE OF HARYANA 231
[UDAY UMESH LALIT, J.]

A

B

C

D

E

F

G

H
232 SUPREME COURT REPORTS [2018] 5 S.C.R.

A

B

C

D

The aforesaid chart discloses that the average price paid was
initially in the region of Rs.25 lakhs per acre. Soon after the issuance of
E Section 6 declaration, the price rose to Rs.40 lakhs or above. But just
before 24.08.2007 i.e. the date when the State Government decided to
drop the acquisition, the price was in the region of Rs.80 lakhs per acre.
The price paid after the decision to drop the proceedings was above
Rs.1.2 crores per acre. The documents placed by Mr. Vikas Singh,
learned Senior Advocate do indicate the names of vendors as well.
F
However, for facility we have not included the names of vendors but
have given the other details in the chart. The documents further indicate
that all these lands purchased by the first purchasers as indicated in the
tabular chart were then taken over by the respondent No.3; one of the
ways being-where the controlling interest in the first purchaser Companies
G was transferred to Respondent No.3 and one Mr. Atul Bansal was
appointed as Director of said companies.
9. The documents placed on record by Mr. Vikas Singh, learned
Senior Advocate, further indicate that soon after the aforementioned
purchases, applications for grant of licences were made as under:-
H
RAMESHWAR v. STATE OF HARYANA 233
[UDAY UMESH LALIT, J.]

A. Aditya Buildwell Pvt. Ltd. and its associate companies namely; A
Frost Falcon Industries Ltd., Iceberg Industries Ltd., Mount Valley
Estate Pvt. Ltd., Yorks Hotel Pvt. Ltd., Miraj Overseas Pvt. Ltd.,
Galaxy Colonires Pvt. Ltd., Dough Man Engineers Pvt. Ltd.,
Jassum Infrastructure Pvt. Ltd., Sheel Buildcon Pvt. Ltd.,
Progressive Buildcon Pvt. Ltd., Eco Tech Buildcon Pvt. Ltd., Indo
B
Asian Construction Co. Ltd., Beeta Promoters Pvt. Ltd., Divya
Jyoti Enterprises Pvt. Ltd., NCR Properties Pvt. Ltd., applied for
licence to set up a Township alongwith Demand Draft for Rs.85
lakhs towards Scrutiny and Licence fees. The area was stated to
be 190 Acres. Paras 5 and 7 to 9 of the application were:-
"5. Whether applicant is i ncom e YES C
tax p layer, if so, the amoun t of PAN : AAECA – 5 466H
income tax paid during each of NIL – i n l ast th ree years
the last th ree years because of construction
work in progress
7. Whether the applicant had NO
ever been granted permis sion D
to set a co lony und er any o ther
law, if so , det ail s t hereof.
8. Whether the app licant had NO
ever establish ed a colony or is
estab lishi ng a colony and if s o,
the d etai ls thereof. E
9. Any oth er information the The Aditya Bu ildwell
applicants li ke t o furnis h. Private Limited, the main
applicant compan y, is in
proces s of co nverting into
a Public Limi ted C ompany
shortly b y name ‘AB W F
Infrastructure Lim ited.
The ABW group of
companies are already
developing num ber of
shop ping cum

com mercials Mal ls and in G
proces s of developing the
Townshi p in Mo hali,
Chand igarh the t otal
projects more than wo rth
Rs.1000.00 crores are in
development in progress.” H
234 SUPREME COURT REPORTS [2018] 5 S.C.R.

A B. ABW Infrastructure Ltd. and its group companies namely;
Progressive Buildtech Pvt. Ltd., Sheel Buildcon Pvt. Ltd., Divya
Jyoti Enterprises Pvt. Ltd., Beeta Promoters Pvt. Ltd., Ecotech
Buildcon Pvt. Ltd. and Jassum Estates Pvt. Ltd., applied for licence
to set up a Group Housing Project of 15.35625 acres alongwith
Demand Drafts for Rs.20 lakhs towards Scrutiny and Licence
B
fees. Paras 5 and 7 to 9 of the application were:-
“5. Whether applicant is income YES
tax payer, if so, the amount of
income tax paid during each PAN : AAECA-5466H
of the last three years. Assessment Year: 2007-08
C Rs.77,49,859/-
NIL- 2005-06, 2006-07
Construction work in
progress.
7. Whether the applicant had NO
ever been granted permission
D to set a colony under any
other law, if so, details
thereof.
8. Whether the applicant had NO
ever establishes a colony or is
establishing a colony and if
E so, the details thereof.
9. Any other information the ‘ABW Infrastructure Limited’
applicants like to furnish. The ABW Group of
Companies are already
developing number of
shopping cum commercials
F Malls and in process of
developing the Township in
Mohali, Chandigarh the total
projects more than worth
Rs.1000.00 crores are in
development and in
G progress.”

In none of these two cases the applicants themselves had any
prior experience and between them, only one had paid Income tax and
that too only in one financial year. Both had given same PAN numbers.

H
RAMESHWAR v. STATE OF HARYANA 235
[UDAY UMESH LALIT, J.]

10. Since the documents also indicated that after having applied A
for issuance of licences, respondent No.3 had transferred licence Nos.283
and 284 and sold 33.55 acres of land covered by such licences to DLF
Homes Developers Pvt. Ltd., this Court directed respondent No.3 to file
statement of profit made by it in respect of such transactions and the
following statement was filed by Respondent No.3:
B
PROFIT MADE BY RESPONDENT NO.3 BY
TRANSFERRING LICENSE NO.283 & 284 AND SELLING
33.55 ACRES OF LAND TO DLF HOMES DEVELOPERS
6H PVT. LTD.
007-08
C
2006-07
ork in

D

E
e Limited’
roup of
already
ber of
mmercials
rocess of F
wnship in
h the total
an worth
are in
nd in
G

H
236 SUPREME COURT REPORTS [2018] 5 S.C.R.

A

B

The aforesaid statement indicates that various entities who had
C initially purchased the lands from the landholders, had sold the said lands
to Respondent No.3 and were paid sums reflected at Sl. Nos.2 and 5
above amounting to Rs.17.70 crores (approx.) for acquiring such interest
in said lands. Thereafter, amount of Rs.5.45 crores (approx.) was paid
by way of fees to the Government. However, more than Rs.150 crores
was received on transfer to DLF Homes Developers Pvt. Ltd. For an
D
applicant who reportedly paid income tax only once during last three
years, this by itself constitutes phenomenal earning. From and out of
such earnings an amount of Rs.119.695 crores was paid by Respondent
No.3 under Settlement-cum-Cancellation of Agreement of Sell as
indicated at Serial No.8.
E 11. On an inquiry by this Court regarding details of such amounts
paid by respondent No.3 as indicated at Serial No.8, those documents
were filed on record. The documents make an interesting reading. By
way of sample, documents pertaining to transactions between Beeta
Promoters P. Ltd. and the intending purchaser Arison Builders P. Ltd.
F are dealt with in some detail:
(a) By Agreement of Sale dated 09.10.2007 entered into between
M/s Beeta Promoters Pvt. Ltd. = Vendor and M/s Arison Builders
Pvt. Ltd. = Vendee, certain lands were agreed to be sold @
Rs.58.60 lakhs per acre and cheque for Rs 1 lakh and Rs.1 lakh
G in cash were paid as advance. The relevant portion of the
Agreement dated 09.10.2007 was as under:
“Whereas ‘the Seller’ is the sole and absolute owner and also
in possession of piece of land admeasuring 0.12 Acre land
forming part of Rect. No.54 Killa No.6/1 (3-16), 15/2/1 (2-16),
H
RAMESHWAR v. STATE OF HARYANA 237
[UDAY UMESH LALIT, J.]

the extent of their 7/48 share i.e. situated at village Manesar, A
Tehsil & District Gurgaon Haryana;
And whereas ‘the Seller’ has agreed to sell and ‘the Purchasers’
have agreed to purchase the piece of land already owned and
in the possession of the First Party as already mentioned above
at the rate of Rs.58,60,000/- (Rupees fifty eight lakhs and sixty B
thousand) per acre,
And whereas ‘the Seller’ has received a sum of Rs.1,00,000/
- in cash on 09.10.2007 and Rs.1,00,000/- (Rupees one lakh
only) vide Cheque No.579592 dated 25.10.2007 drawn on
Punjab National Bank, towards earnest money, the receipt of C
which is hereby acknowledged and confirmed by ‘the Seller’
and the balance agreed consideration amount, shall be payable
by ‘the Purchaser’ to ‘the Seller’ as per the following schedule:-

D

NOW THIS AGREEMENT OF SALE WITNESSETH AS E
UNDER:-
1. That the settled price of Rs.7,03,200/- (Rupees seven lakhs
three thousand two hundred only) for sale of 0.12 acres of
land in Village Manesar District Gurgaon Haryana by First
Party to Second Party, as mentioned in the preamble shall F
neither be reduced nor enhanced by either party.
2. That ‘the Seller’ shall be bound to execute the sale deed/
proper documents for the transfer of the land and get the
same registered in the name of the second party or their
nominees on receiving of the balance consideration as per G
schedule of payment given above.
3. That all the expenses of the execution and registration of
the documents shall be payable and borne by ‘the
purchasers’.
H
238 SUPREME COURT REPORTS [2018] 5 S.C.R.

A 4. That the actual physical and vacant possession of the above
said land shall be delivered by ‘the Seller’ to ‘the Purchasers’
at the time of registration of the land after receiving the full
and final payment.”
(b) By Settlement Agreement-cum-Cancellation of Agreement to
B Sell executed on 30.08.2008 between the aforesaid parties, the
earlier arrangement entered vide Agreement of Sale dated
09.10.2007 was cancelled. While cancelling that arrangement,
settlement amount of Rs.3.50 crores per acre was paid to the
vendee as full and final settlement between the parties and
discharge of all claims. The document narrates that though the
C cheque for Rs.1 lakh was given on the date when the agreement
to sell was executed on 09.10.2017, said cheque was never
encashed and was returned to the vendee. Thus, the land which
was agreed to be sold @ Rs.58 lakhs per acre was not sold at all
but by way of settlement Rs.3.5 crores per acre was made over
D to the vendee. Interestingly, nothing was received by the vendor
by way of advance/earnest through Bank channels as the cheque
was admittedly never encashed. The relevant portions from the
Settlement-cum-Cancellation of Agreement to Sell dated
30.08.2008 were as under:
E “And whereas ‘the parties’ has entered into agreement to sell
dated 9th October, 2007, as per the terms of agreements
described therein.
And whereas ‘the Seller’ has agreed to sell and ‘the Purchasers’
have agreed to purchase the piece of land already owned and
F in the possession of the First Party as already mentioned above
at the rate of Rs.58,60,000/- (Rupees fifty eight lakhs sixty
thousand only) per acre.
And where ‘the Seller’ has received a sum of Rs.1,00,000/-
(Rupees one lakh only) vide Cheque No.579592 drawn on
G Punjab National Bank and Rs.1,00,000/- (Rupees one lakh
only) in cash towards earnest money and the balance agreed
consideration amount, was payable by ‘the Purchasers’ to ‘the
Seller’ as per the following schedule:-

H
RAMESHWAR v. STATE OF HARYANA 239
[UDAY UMESH LALIT, J.]

A

B

And whereas the seller offered to buy back the said land and
has not encashed the Cheque No.579592 drawn on Punjab
National Bank, received towards earnest money, and also
C
offered to return the same to the purchaser and also agreed to
settle the transaction amicably.
NOW THIS AGREEMENT WITNESSETH AS UNDER:-
1. That this agreement shall be effective from the date of
signing and shall constitute full and final settlement between D
the parties of all the respective past and future rights and
obligation of parties under agreement to sell dated 9th October,
2007 for sale of 0.12 acres forming part of Rect. No.54 Killa
No. 6/1 (3-16), 15/2/1 (2.16), the extent of their 7/48 share i.e.
situated at village Manesar, Tehsil & District Gurgaon, Haryana.
E
2. That ‘the Seller’ shall pay the settlement amount of
Rs.3,50,00,000/- per acre to the purchaser towards full and
final settlement between the parties and discharge of all claims
against the land as acquired by the second party through
agreement to sell dated 9th October, 2007 for sale of 0.12 Acres
of land in Village Manesar, District Gurgaon, Haryana. F

3. That the said total settlement amount Rs.42,00,000/- (Forty
two lakhs only) shall be paid on or before 31.03.2009 as per
the schedule enclosed.
4. That on receipt of full and final settlement amount, the second G
party hereby completely and expressly waives, releases,
relinquish and forever discharges all claims against the land as
acquired by the second party through agreement to sell dated
9th October, 2007 for sale of 0.12 acres of land in Village
Manesar, District Gurgaon, Haryana.”
H
240 SUPREME COURT REPORTS [2018] 5 S.C.R.

A Identical agreements for sale followed by Settlement Agreements-
cum-Cancellation of Agreements to sell were entered into by all the
concerned, as set out hereafter.
12. The details of the relevant agreements to sale and Settlement-
cum-Cancellation agreements to sell as filed by respondent No.3 are put
B in a tabular chart by us. Except in the case at Serial No.1 where part of
earnest money was deposited in cash, in all other cases, earnest was
paid by cheques. However, in none of the cases any cheque which was
issued as advance-cum-earnest money was encashed. The relevant
recitals in these agreements are identical to those extracted hereinabove.
The compensation paid to the vendee in every case is on or about
C 30.08.2008 and at a consistent rate of Rs.3.50 crores per acre. The said
chart is as under:

D

E

F

G

H
RAMESHWAR v. STATE OF HARYANA 241
[UDAY UMESH LALIT, J.]

A

B

C

D

E

F

G

H
242 SUPREME COURT REPORTS [2018] 5 S.C.R.

A

B

C

D

E

F

G

H
RAMESHWAR v. STATE OF HARYANA 243
[UDAY UMESH LALIT, J.]

13. Mr. Vikas Singh, learned Senior Advocate also invited our A
attention to the provisions of the Haryana Development and Regulation
of Urban Areas Act, 1975 (hereinafter referred to as the “Haryana Act”)
and submitted that the Haryana Act provided for colonization encouraging
private participation wherein builders or colonizers become partners with
State in ensuring planned development. It was submitted that the writ
B
petition in the present case was bereft of any material particulars and
suffered from non-disclosure of collaboration agreements entered into
between the builders and the writ petitioners whereunder certain additional
benefits were given to the landholders. In his submission, the High Court
was justified in dismissing the petition and exemplary costs ought to be
imposed on the writ petitioners for embarking on what he termed as C
adventurous litigation. Ms. Indu Malhotra, learned Senior Advocate
appearing for respondent Nos. 4 – M/s Metropolis Realtors Pvt. Ltd.
and 6 – M/s Metro Infrastructure Pvt. Ltd. submitted that after National
Capital Region Plan was notified on 17.09.2005, Draft Master Plan for
Gurgaon Manesar was notified on 11.07.2006, followed by Final
D
Development Plan which was notified on 05.02.2007. The act on the
part of the State in dropping the acquisition on 24.08.2007 was completely
consistent with the Final Development Plan notified on 05.02.2007. Mr.
V. Giri, learned Senior Advocate appearing for respondent No.5 – Flair
Realtors Pvt. Ltd. submitted that each writ petitioner had a separate
cause of action and therefore must come out and place his individual E
case and the facts relevant thereto. In his submission in a matter such
as the present one, no public law remedy could be invoked and there
could be no class action. He further submitted that there was total
dearth of pleadings and nothing was alleged or proved as regards element
of fraud or mala fides so as to vitiate the transactions in entirety.
F
14. Dr. A. M. Singhvi, learned Senior Advocate appearing for
DLF Home Developers Pvt. Ltd. submitted that his client had purchased
33 acres of land not directly from any of the land owners but from
respondent No.3 alongwith requisite licences. According to him, his
client purchased the land and the licences when the writ petitions were
withdrawn and there was no fetter at all; that his client had paid market G
price at the rate of Rs.4.5 crores per acre and was bona fide transferee
in good faith and that there was no averment either in the High Court or
in this Court suggesting that his client was involved in any act of fraud or
illegality. He further submitted that his client has already transferred the
H
244 SUPREME COURT REPORTS [2018] 5 S.C.R.

A constructed areas or apartments to various purchasers. Relying on the
decisions of this Court in Ramana Dayaram Shetty v. International
Airport Authority of India and Others3 where five months delay in
preferring writ petition was found to be fatal especially when third party
rights had intervened and in State of M.P. and Others v. Nandlal Jaiswal
and Others4 where eight months delay was found to be fatal where
B
again third party rights had intervened, it was submitted that no case
was made out and the view taken by the High Court ought to be affirmed.
Similar submissions were made by Mr. Kapil Sibal, learned Senior
Advocate for the same client in a different matter. In his submission, if
at all any disgorgement as suggested by the learned Amicus Curiae is to
C be made, it ought to be by respondent No.3 i.e. the client of Mr. Vikas
Singh, learned Senior Advocate and not by DLF Home Developers Pvt.
Limited which had paid market value for the land it purchased. Mr. Suri,
learned Senior Advocate appearing for flat purchasers from DLF Home
Developers Pvt. Ltd. submitted that his clients, coming from middle class,
had put in all their savings in purchase of flats. Out of 1348 flats
D
constructed in the complex, 1237 flats were sold and more than 500
apartments were already registered in the names of apartment
purchasers.
15. Mr. Nidhesh Gupta, learned Senior Advocate appearing for
Earl Infotech Pvt. Ltd. and for Frontier Infrastructure Developers Pvt.
E Ltd. made similar submissions. He submitted that the case in hand was
completely different from the fact situation considered by this Court in
Uddar Gagan (supra) in as much as neither was there any distress sale
by the land owners nor was there any award made under the provisions
of the Act. He further submitted that the entire case set up by the writ
F petitioners was based on assumptions as to the existence of unjust
enrichment and fraud. Mr. Pallav Shishodiya, learned Senior Advocate
appearing for Akme Projects Ltd. submitted on similar lines.
16. Dr. Rajeev Dhawan, learned Senior Advocate appearing for
PP Realtors Pvt. Ltd. submitted that in an individual case a sale could be
G invalidated if fraud stood proved on grounds available under the Contract
Act, while if sales were sought to be invalidated as a class action then it
could only be done on grounds of mala fides in public law. It was
submitted that fraud in terms of section 17 of the Contract Act had to be
3
(1979) 3 SCC 489
4
(1986) 4 SCC 566
H
RAMESHWAR v. STATE OF HARYANA 245
[UDAY UMESH LALIT, J.]

transaction based and strictly established. He further submitted that the A
reason given for dropping of the acquisition was that licences in respect
of about 360 acres of land were under consideration while disputes were
raised in respect of rest of the land. At no stage after the disposal of the
petitions by the High Court any grievance was raised by the land owners
and they must be deemed to have waived their rights. In his submission,
B
land owners were looking for windfall gains when they were asking for
setting aside of all the transactions as a class action and that the writ
petition was nothing but an abuse of the process of law.
17. Mr. Narender Hooda, leaned Senior Advocate appearing for
an individual namely Shri Arvind Walia who had purchased 11 acres of
land, submitted that one Mamraj had sold said land in February, 2005. C
Along with his written submissions, Mr. Hooda placed on record and
relied upon Minutes of the Meeting regarding policy issues held on
07.08.1991. Mr. Sidharth Luthra, learned Senior Advocate appearing
for Paradise Systems Pvt. Ltd., submitted on lines similar to those adopted
by the other leaned Senior Counsel. Mr. B. S. Chahar, learned Senior D
Advocate appearing in I.A. No.20 in Civil Appeal No.8788 of 2015
submitted that his clients had bought plots, shops and flats only after
December, 2009 i.e. after the State had dropped the acquisition and
after the pending writ petitions were disposed of by the High Court.
18. The learned Counsel appearing for State of Haryana adopted E
the submissions of the learned Amicus Curiae and submitted that if this
Court were to come to the conclusion that the exercise of power by the
functionaries of the State in the present case was colourable and such
exercise was fraud on power, then not only should the guilty be booked
on criminal side, but on the civil side the mechanism suggested by the
learned Amicus Curiae be adopted. F

19. Though copies of the interim report of CBI were not given to
the parties, some factual aspects dealt with in the report, namely the
allegations in the FIR and certain bare minimum facts as found from the
record, need to be adverted to. Paras 2 and 18 to 21of the Report were
as under:- G
“2. It is alleged in the FIR that the Government of Haryana had
issued notification u/S 4 of the Land Acquisition Act, 1894 on
27.08.2004 and u/S 6 on 25.08.2005 of Land Acquisition Act, 1894
for acquisition of land measuring about 912 acres for setting up
H
246 SUPREME COURT REPORTS [2018] 5 S.C.R.

A an Industrial Model Township in Villages Manesar, Naurangpur
and Lakhnoula in Distt. Gurgaon. A large number of land owners,
in haste, had sold out about 350 acres of land at throw away rates
of Rs.20 to 25 lakhs per acre. It is further alleged that when
some land was not sold by the farmers, the Government issued
notification u/S 9 of Land Acquisition Act and, thereafter, the
B
private builders had purchased remaining 50 acres of land at the
rate of even Rs.1.50 crores per acre. It is further alleged that
when all the land had been grabbed from the land owners by land
mafia under the threat of acquisition at meager rates, an order
was passed by the competent authority i.e. the Director of
C Industries on 24.08.2007 releasing this land from the acquisition
process and the land was released in violation of the government
policy, in favour of the builders, their companies and agents, instead
of the original land owners. In the above manner, land measuring
about 400 acres whose market value at that time was above Rs.4
crores per acre, totaling about Rs.1600 crores, was purchased by
D
the above mentioned criminal conspirators from the innocent land
owners for only about Rs.100 crores. Thus, some politicians who
were also important functionaries of the State Government,
Government Officers and their agents caused a wrongful loss of
Rs.1500 crores to the land owners of Village Manesar, Naurangpur
E and Lakhnoula of District, Gurgaon and corresponding wrongful
gain to themselves.
18. That about 444 acres 2 kanal 10 marla of land notified u/S 4
of Land Acquisition Act, 1894 was purchased by the private
builders/companies after the date of notification. The details of
F land purchased by the builders/companies after issue of notification
u/Ss 4 & 6 of Land Acquisition Act, is as under:

G

H
RAMESHWAR v. STATE OF HARYANA 247
[UDAY UMESH LALIT, J.]

A

B

C

D

E

F

G

H
248 SUPREME COURT REPORTS [2018] 5 S.C.R.

A

B

C

D

E

F

G

H
RAMESHWAR v. STATE OF HARYANA 249
[UDAY UMESH LALIT, J.]

A

B

C

D
19. That investigation further revealed that out of the above land
purchased by the private builders/companies, one company namely
M/s Aditya Buildwell Pvt. Ltd. (now known an ABW Infrastructure
Ltd.) and its associates companies had purchased maximum land
measuring around 248 acres 5kanal 17maral. Shri Atul Bansal is
the Director of M/s Aditya Buildwell Pvt. Ltd. His company M/s E
Aditya Buildwell Pvt. Ltd. and associate companies namely M/s
Jassum Towers Pvt. Ltd. and M/s Jassum Infrastructure Pvt.
Ltd. had purchased total land measuring around 44 acres 7 kanal
13.5 marla. That Sh. Atul Bansal had also taken over the following
companies along with their lands measuring about 204 acres during F
this period, which were purchased by the different builders/directors
of these companies:--

G

H
250 SUPREME COURT REPORTS [2018] 5 S.C.R.

A

B

C

D

E

20. That investigation has revealed that Shri Atul Bansal, Director
of M/s Aditya Buildwell Pvt. Ltd. and its below mentioned groups
F and associate companies had applied for grant of license to set up
a township including group housing in an area of 190 acres in
Sector-1A, IMT, Manesar, Gurgaon to the Director, Town and
Country Planning, Haryana, Chandigarh on 28.12.2006:-
(i) Frost Falcon Industries Ltd. Sonepat
G
(ii) Iceberg Industries Ltd.
(iii) Mount Valley Estate Pvt. Ltd.
(iv) Yorks Hotel Pvt. Ltd.
(v) Miraj Overseas Pvt. Ltd.
H
RAMESHWAR v. STATE OF HARYANA 251
[UDAY UMESH LALIT, J.]

(vi) Galaxy Colonizers Pvt. Ltd. A
(vii) Dough Man Engineers Pvt. Ltd.
(viii) Jassum Infrastructure Pvt. Ltd.
(ix) Sheel Buildcon Pvt. Ltd.
(x) Progressive Buildcon Pvt. Ltd. B
(xi) Eco Tech Buildcon Pvt. Ltd.
(xii) Indo Asian Construction Co. Ltd.
(xiii) Beeta Promoters Pvt. Ltd.
C
(xiv) Divya Jyoti Enterprises Pvt. Ltd.
(xv) NCR Properties Pvt. Ltd.
21. That investigation further revealed that the above case of
grant of license to M/s Aditya Buildwell Pvt. Ltd. was examined
in the department of Town and Country Planning, Haryana. The D
Department of Town and Country Planning obtained the report
from the HSIIDC regarding status of acquisition of land. The
HSIIDC vide letter No. 2206 dated 19.01.2007 intimated that the
land in question had been notified u/S 6 of LAA, 1894 by the
department of Industries for providing dedicated labour housing
to the plot – holders/industrial workers in IMT Manesar and E
requested that the application should be rejected. Despite the
above report of HSIIDC, the Town & Country Planning
Department vide letter dated 25.01.2007 asked the applicant to
deposit the deficit amount of license fee of Rs.15,11,00,696/-.
However, the applicant instead of depositing the deficit amount of F
license fee had submitted request vide letter dated 14.03.2007
that the area applied for grant of license (total 190 acres) may be
segregated as under:-
Commercial 3 acres
Group housing 25.39 acres G
Group Housing 13.94 acres
IT Park 11.28 acres
IT Park 13.72 acres
Residential Plotted 122.67 acres” H
252 SUPREME COURT REPORTS [2018] 5 S.C.R.

A Rest of the portions of the interim report being in the nature of
deduction or conclusion from facts, are not considered by us.
20. Since the basic reason which weighed with the State
Government in arriving at decisions dated 24.08.2007 and 29.01.2010
was the fact that several applications were preferred by builders for
B licence/CLU in respect of lands forming part of the acquisition
proceedings, we deal with relevant statutory framework at the outset.
A] Appropriate resolutions in terms of Article 252 of the
Constitution having been passed by the Houses of Legislatures of
the States of Haryana, Rajasthan and Utter Pradesh, the National
C Capital Region Planning Board Act, 1985 (hereinafter referred to
as the “NCR Act”) was enacted to provide for the constitution of
Planning Board for preparation of a plan for the development of
the National Capital Region. Reading of Section 2(f) with Schedule
to the Act shows that the tehsils of Gurgaon, Nuh and Firojpur-
Jhirka of district Gurgaon form part of National Capital Region.
D Chapter IV of the NCR Act deals with constitution and
incorporation of the National Capital Region Planning Board.
Chapter IV of the NCR Act deals with “the Regional Plan” which
in terms of Section 10 “shall be a written statement and shall be
accompanied by such maps, diagrams, illustrations and descriptive
E matters” and “shall indicate the manner in which the land in the
National Capital Region shall be used, whether by carrying out
development thereon or by conservation or otherwise”. Section
29 of the NCR Act states, “on and from the coming into operation
of the finally published Regional Plan, no development shall be
made in the region which is inconsistent with the Regional Plan as
F finally published”. According to Section 40, acquisition or
determination of any right or interest in the land to give effect to
any Regional Plan shall be made by the concerned State.
B] The Regional Plan 2001 prepared under the NCR Act was
superseded by the Regional Plan 2021, notified on 19.09.2005.
G Para 17.5 of this Regional Plan 2021 deals with “Zoning
Regulations” under which four zones are contemplated namely i)
17.5.1: Controlled/Development/Regulated Zone, ii) 17.5.2:
Highway Corridor Zone, iii) 17.5.3: Natural Conservation Zone
and iv) 17.5.4: Agriculture (Rural) Zone outside Controlled/
H Development/Regulated Areas. Para 17.5 stipulates, “…The
RAMESHWAR v. STATE OF HARYANA 253
[UDAY UMESH LALIT, J.]

elaboration of the land use details and zoning regulations would A
be incorporated in the Sub-regional Plans and Master/Development
Plans by the respective State Governments.”
Para 17.5.1 further clarifies as under:-
“The local authority according to the prescribed uses in the
Master/Development Plans will govern detailed land uses within B
the urbanisable area. The Master/Development Plans of all
the towns will be prepared within the framework of the Regional
Plan-2021 and Sub-regional Plans. In case any amendment is
required in the acts to implement the policies of Regional Plan
2021 that be done by the respective State Governments C
appropriately.”
The Master/ Development Plans in respect of all towns, in terms
of Para 17.5.1, were thus required to be prepared within the
framework of the Regional Plan 2021.
C] Final Development Plan for Gurgaon Manesar Urban Complex D
was published by Government of Haryana, Town and Country
Planning Department vide notification dated 05.02.2007. Annexure
A to this notification titled as “Explanatory Note on the Final
Development Plan 2021 AD for the controlled area of Gurgaon-
Manesar Urban Complex” stated as under:- E
“The Gurgaon-Manesar Urban Complex which is known for
Automobile Industries, Modern Commercial Malls, Towers of
Cyber Parks and Software Development is situated on prime
location on National Highway No. 8, only at a distance of 4
kilometers from the Indira-Gandhi International Air Port and is F
well linked with all capitals of the world through airways. The
name of this town emerged on the world map in 1972, when
world famed Maruti Industry was set up in Gurgaon with the
collaboration of Suzuki Company of Japan. Now with the
coming up of multinational companies like Hero Honda Motor,
Honda Motors Ltd, Denso etc. in automobile sector and G
Microsoft, I.B.M. Nokia, Canon, Dupont, Sapient, British
Airways, American Express, ABN Amro Bank, Alcatel, Nestle,
Convergys, Hewitt, Vertex, Fidelity Investment, E.Vallue, Keine
World India, Becton Dickinson India Private Limited in software
development sector; the Gurgaon-Manesar Urban Complex
H
254 SUPREME COURT REPORTS [2018] 5 S.C.R.

A has become abode of International Companies. With the result,
the biggest cyber city of India spreading in an area of about 90
acres in addition to numerous cyber parks are being developed
in Gurgaon itself within a radius of 15 kilometers from the
International airport in private sector to accommodate the needs
of software development units of multinational companies.
B
The availability of high level infrastructure of Airways,
Railways, Highways, International Embassies and world famed
medical and educational institutions in its close proximity at
National Capital of Delhi have become the main factors of
attraction for international companies for setting up their
C business at Gurgaon. In order to meet the demand of foreign
investors and also to set up high-tech non polluting industrial
units, the Haryana Government initially with the collaboration
of Japanese entrepreneurs started setting up Industrial Model
Township at Manesar in 1992 through Haryana State Industrial
D Development Corporation. The said Corporation has developed
about 700 hectares land at Manesar and now the developed
land is being made available to all entrepreneurs of the world
including India.
The Haryana Urban Development Authority in public sector
E and licenced colonizers in private sector through Town and
Country Planning Department have also played prime role in
achieving planned development in Gurgaon-Manesar Urban
Complex. The Haryana Urban Development Authority and the
licenced colonizers collectively have developed about 8000
hectares land for residential, commercial, institutional and
F industrial purposes to meet the increasing demand of the public.
The areas of Gurgaon-Manesar Urban Complex which have
so far been developed in public and private sector including
existing town and village abadies would accommodate 22 lakhs
population. In order to cater the future demand of Gurgaon-
G Manesar Urban Complex an additional area of 21733 hectares
has been added in the form of urbanisable area for the said
complex to accommodate 15 lacs additional population. Thus,
the total urbanisable area of Gurgaon-Manesar Urban Complex
would accommodate 37 lakhs population by 2021 AD.”
H
RAMESHWAR v. STATE OF HARYANA 255
[UDAY UMESH LALIT, J.]

This Explanatory Note brings out the potential and importance of A
Gurgaon-Manesar Urban Complex. It shows that 8000 Hectares
of land was already put to residential, commercial, institutional
and industrial purposes and additional 21733 Acres of land was to
be added to meet the ever increasing demand.
D] Zoning Regulations were set out in Annexure B to the B
Notification dated 05.02.2007. Paragraph VII of said Annexure
B dealt with the extent of private participation and role of
Government or Public Authorities in such development. Said
Paragraph VII was as under:-
“VII. Sectors to be developed exclusively through Government C
Enterprises:
(1) Change of land use and development in sectors which are
reserved for the public and semi-public zone shall be taken
only and exclusively through the Government or a Government
undertaking or a public authority approved by the Government D
in this behalf and no permission shall be given for development
of any colony within these sectors.
(2) For the development of sectors reserved for commercial
use, private developers shall be permitted to develop to the
extent of 50% of the sector area as per the layout plan approved E
by competent authority, after obtaining license under Act No.
8 of 1975. Balance 50% area shall be developed exclusively
by the Government or a Government undertaking or by a public
authority approved by the Government.
(3) Notwithstanding the provision of clause (1) and (2) above, F
the Government may reserve at any time, any other sector for
development exclusively by it or by its agencies indicated
above.”
E] The Haryana Act was enacted in the year 1975 to regulate the
use of land in order to prevent ill-planned and haphazard
G
urbanization in and around towns and for development of
infrastructure sector and infrastructure projects for the benefit of
the State of Haryana and for matters connected therewith.
Sections 2(c), 2(d) and 2(k) of the Haryana Act define “colony”,
“colonizer” and “owner” respectively. Section 3 of the Haryana
Act deals with “Application for licence” and entitles an owner H
256 SUPREME COURT REPORTS [2018] 5 S.C.R.

A desiring to convert his land into a colony to make an application to
the Director for the grant of licence to develop a colony. Sub-
Section (2) of said Section 3 stipulates that on receipt of such
application by the owner, the Director shall among other things
enquire into the “capacity to develop a colony”. Section 3 lays
down parameters and guidelines for grant of such licence which
B
include inter alia furnishing to the Director a bank guarantee equal
to 25 per centum of the estimated cost of development works and
a bank guarantee equal to 37½ per centum of the estimated cost
of the development works in case of cyber city or cyber park.
Unlike sub-Section (1) which uses the expression “owner”, the
C expressions “applicant” and “colonizer” are used in sub-Section
(3) onwards. Section 3AA deals with “Establishment and
constitution of Board” while the “Functions and Powers of Board”
are dealt with in Section 3AC. In terms of sub-Section (2) of
Section 3AC, the Board is to act as a Nodal Agency to coordinate
all efforts of the Government regarding the development and
D
implementation of infrastructure sectors and infrastructure projects
for the benefit of State, involving private participation and funding
from sources other than those provided by the State budget. Sub-
clauses (f) and (g) of said sub-Section(2) deal with functions such
as formulating clear and transparent policies and identifying
E sectoral concessions to attract private participation. Section
3AE empowers the Government to issue such directions to the
Board on matters concerning the infrastructure sectors and the
infrastructure projects in the State and states that the Boards shall
be bound by such directions.
F F] The directions were issued by the Government from time to
time, in exercise of the power so vested. The minutes of the
meeting regarding policy issues “concerning Urban Development
in Haryana” held on 07.08.19915 under the Chairmanship of the
Chief Minister show that the issues concerning urban development
were discussed in detail. Paras 2 to 5 of the minutes were as
G under:-
“2. COMPETENT AUTHORITY TO GRANT LICENSES:
The opinion of LR was considered and it was accordingly
decided that DTCP should be the competent authority to grant
5
H Relied upon by Mr. Narender Hooda, Senior Advocate
RAMESHWAR v. STATE OF HARYANA 257
[UDAY UMESH LALIT, J.]

licence under the Act. On a suggestion from DTCP, however, A
it was felt that the grant of licence may have wider implications
for State Government. It was, therefore, decided that such
licences may be granted with prior internal concurrence of the
State Government at Minster’s level. The State Government
will however, exercise appellate powers under the Act in
B
accordance with the opinion of the LR.
3. CONFORMITY OF THE SITE TO THE
DEVELOPMENT PLAN/SECTOR PLAN:
The LR’s opinion on the matter was discussed and it
was clarified by the LR that legally the colony to be licensed C
has to conform to the Development Plan and not to sector
demarcation. It was pointed out that the land under application
may not always be in a regular shape or in one sector. No
minimum limit on proportion of the total area to the area of the
sector could, therefore, be stipulated.
D
4. SIZE OF THE COLONY:
It was decided that except for additional licences for
contiguous area/pockets, the minimum area required for the
grant of licence shall be 100 acres for an applicant company/
group of companies as heretofore. E
5. LAND ACQUISITION AND LICENCING:
It was pointed out that in urbanisable areas of
Development Plan, both HUDA and private sector take steps
to acquire land for development. In a number of cases
individuals may acquire land and before they are able to apply/ F
get a license, the area may be notified for acquisition of HUDA.
It was, therefore, decided that in the interest of equity in cases
where applicants have applied for licence or have acquired
land but could not apply for licence before the issue of acquisition
notification, release of land could be considered on individual
G
merits of each case.”
G] On 19.12.2006 “Policy for grant of licences and change of
land use cases6” was issued in the form of a Memo from the
7
Relied upon by Mr. Dhruv Mehra, Senior Advocate
H
258 SUPREME COURT REPORTS [2018] 5 S.C.R.

A office of Financial Commissioner and Principal Secretary to
Government of Haryana, Town and Country Planning Department.
Paragraph 5 of this Memo dated 19.12.2006 was:-
“5) Land Acquisition and Licensing:- Where applicants/land
owners have applied for licence before the issue of acquisition
B notification under section 4 of the Land Acquisition Act, 1894,
release of land could be considered on individual merits of each
case.”
This Policy was given effect from 07.06.2005.
H] There were similar Policy statements between 07.08.1991 and
C 19.12.2006 and even after 19.12.2006 as dealt with and discussed
by the High Court of Punjab and Haryana in its Judgment in Amita
Banta & Another v. State of Haryana7. Relevant portion of
para 11 of said decision is as under:-
“…………………….
D
Policy dated 6.1.2000
Memorandum
Minister-in-Charge Town and Country
Planning Minister
E
Administrative Secretary Commissioner and
Secretary to Govt.
Haryana, Town and Country Planning Department

F Sub: Release of land from acquisition where Developers/
colonizers have purchased land before the issue of notification
under Section 4 of the Land Acquisition Act but submitted
application for licence for commercial colonies thereof
afterwards.
xx xxx xxx xxxx
G
It has been felt that apart from providing accommodation for
locating commercial officers, a licence for a commercial colony
results into receipt of handsome amount to the State Treasury/
Haryana Urban Development Authority and it will be in public
7
(2010) 1 RCR (Civil) 412
H
RAMESHWAR v. STATE OF HARYANA 259
[UDAY UMESH LALIT, J.]

interest to encourage establishment of such colonies. Earlier a A
decision was taken by the CMM (copy of memorandum and
decision is placed at Annexure B and C) to release the land
from acquisition where developers/colonizers have purchased
land before the issue of notification under Section 4 of the
Land Acquisition Act, but submitted applications for grant of
B
licence for setting up of residential colony afterwards. But it
is a general decision and it is felt that in view of the reasons
explained above, the licences for commercial colonies should
be treated differently.
It is therefore, proposed that if the department intends to issue
licence for commercial colony with the internal concurrence C
of the Government over a land where the owner had purchased
it before the notification under Section 4 of the Land Acquisition
Act was issued, the release of such land may be allowed before
issue of letter of intent.
Policy dated 06.03.2000 D

It has also been observed that the resources of HUDA have
reduced in the recent past, and acquisition activity and
development of residential sectors has become costly and time
consuming affair due to litigation and, therefore, it would be
appropriate to assign a greater role to private sector. But as E
per decision taken by the CMM in their meeting held on 30.07.98
even if the department finds that the application for grant of
licence for residential colony fulfils policy/technical parameters,
the land is to be released from acquisition only on the
recommendations of the Chief Administrator, HUDA. This F
results into procedural delay. Since the department of Town
and Country Planning, Haryana is responsible for integrated
development of urban areas, therefore with a view to avoid
procedural delays, it is proposed that on the analogy of decision
taken by the CMM on 06.01.2000, the land purchased by the
colonizer before issuance of notification under Section 4 of the G
Land Acquisition Act, 1894 where the Director Town and
Country Planning, Haryana decides to issue licence for
residential colony and obtained the concurrence of the
Government for the same, may be released from acquisition.
H
260 SUPREME COURT REPORTS [2018] 5 S.C.R.

A Policy dated 26.10.2007
5. Any land in respect of which an application under Section 3
of the Haryana Development and Regulation of Urban Areas
Act, 1975 has been made by the owners prior to the award for
converting the land into a colony, may also be considered for
B release subject to the condition that the ownership of the land
should be prior to the notification under Section 4 of the Act.
6. That the Government may also consider release of land in
the interest of integrated and planned development for the lands
where the owners have approached the Hon’ble Courts and
C have obtained stay dispossession.
Provided that the Government may release any land on the
grounds other than stated above under Section 48(1) of the
Act under exceptionally justifiable circumstances for the reasons
to be recorded in writing.
D ………………..”
21. From consideration of afore-stated statutory framework, it is
clear:-
A. The Regional Plan of 2021, notified on 19.09.2005 contemplated
that Master/Development Plans in respect of towns were required to be
E
prepared within the framework of said Regional Plan. Accordingly, Final
Development Plan for Gurgaon Manesar Urban Complex was published
on 05.02.2007. The Explanatory Note, as set out hereinabove brings out
potential of the lands situate in said Urban Complex. According to the
zonal requirements as set out in Annexure-B of said Notification dated
F 05.02.2007, the extent of private participation was restricted to 50% for
development of sectors reserved for commercial use and rest could be
developed only by the Government or Government undertaking or by a
public authority approved by the Government.
B. In terms of provisions of the Haryana Act and more particularly
G Section 3(2), “Capacity to develop a colony” would be a factor relevant
for consideration whenever an application for licence was preferred by
any owner. Though the provisions of Haryana Act do contemplate
coordination of all efforts with regard to development and implementation
of infrastructure, sectors and projects with involvement of private
participation, the directions issued by the Government have laid down, in
H
RAMESHWAR v. STATE OF HARYANA 261
[UDAY UMESH LALIT, J.]

clear terms, the extent and scope of such private participation. A
C. In accordance with Section 40 of the NCR Act, the concerned
States are expected to give effect to any Regional Plan by taking resort
to power of acquisition. The inter-play between exercise of such power
of acquisition and private participation by permitting licences to owners/
colonizers was a matter dealt with by Policy Guidelines issued by the B
Government from time to time. In terms of policy statements dated
07.08.1991, 06.01.2000 and 06.03.2000 where applicants had applied
for licence or had acquired land but could not apply for licence before
the issue of acquisition notification, release of land could still be considered
on individual merits of each case. The scope got further restricted by
policy statement of 19.12.2006, in terms of para 5 whereof, if the C
applicants/landholders had applied for licence before the issue of
acquisition notification under Section 4 of the LA Act, release of land
could be considered on individual merits of each case. As this policy
was given effect from 07.06.2005, it could possibly be stated that the
earlier policies ought to apply to cases before 07.06.2005. But in any D
case, for said policies dated 07.08.1991, 06.01.2000 and 06.03.2000 to
apply, the purchase by applicants had to be before the issue of acquisition
notification. Same thought was expressed in the Policy dated 26.10.2007,
“….that the ownership of the land should be prior to the notification
under Section 4 of the Act.” Further, the extent of such participation
ought to be in terms of zonal requirements set out in Annexure B to the E
Final Development Plan dated 05.02.2007.
22. It must be noted at the outset that the aforementioned Policy
dated 06.03.2000 was considered by this Court in Uddar Gagan (supra)
and in paragraph 21 of its judgment, this Court had observed, “… the
policy is applicable only to release of such land from acquisition as is F
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”. In
the present case, notification under Section 4 of the Act was issued on G
27.08.2004. After considering various objections made under Section
5A of the Act, the requirement of 688 Acres of land was assessed and
declaration under Section 6 to that effect was issued on 25.08.2005.
The material placed on record by Mr. Vikas Singh, learned Senior
Advocate shows that all lands purchased by his client were after the
H
262 SUPREME COURT REPORTS [2018] 5 S.C.R.

A issuance of notification under Section 4 of the Act. Similarly para 18 of
the interim report submitted by CBI shows that over 444 Acres of land
was purchased by various builders/private entities after such notification
under Section 4 of the Act. Going by the relevant policies holding the
field and the law laid down by this Court in para 21 of its judgment in
Uddar Gagan (Supra), such purchases did not entitle the concerned
B
builders/private entities to prefer any application for licence, nor could
pendency of such applications be taken as a relevant factor while arriving
at a decision whether acquisition initiated pursuant to notification dated
27.08.2004 be proceeded further or not. However, the record indicates
that such purchases and the pendency of applications for licence under
C the Haryana Act, was a factor which did weigh while decisions dated
24.08.2007 and 29.01.2010 were taken. A factor which ought to have
been discarded in terms of the declared policy statements, became the
fulcrum for said decisions. We have therefore, no hesitation in holding
that said decisions are inconsistent with and opposed to relevant policy
statements. We also reject the submission advanced on behalf of builders/
D
private entities that these decisions were consistent with the Regional
Plan under the NCR Act and the Final Development Plan for Gurgaon-
Manesar.
23. But the issues raised in the present case go way beyond mere
invalidity or illegality of those decisions dated 24.08.2007 and 29.01.2010.
E What is being projected is that those decisions dated 24.08.2007 and
29.01.2010 were part of a well devised and designed attempt to deprive
the landholders and enrich builders/private entities, which would broadly
depend upon answers to the following questions:-
a] Whether the transactions entered into between the landholders
F and the concerned builders/private entities in the present case could be
said to be voluntary and free from any influence.
b] Whether the decisions on part of the state machinery arrived
at on 24.08.2007 and 29.01.2010 could be said to be guided by
considerations other than those for which the power was conferred; or
G in other words: was there a fraud on power.
24. Before we deal with the aforesaid issues, certain crystalized
facets of the matter as evident from facts as narrated above and the
statutory framework, need to be noted:-

H
RAMESHWAR v. STATE OF HARYANA 263
[UDAY UMESH LALIT, J.]

(a) The concerned lands fall in National Capital Region to which A
the provisions of Regional Plan, 2021 prepared under the NCR
Act and Final Development Plan for Gurgaon-Manesar Urban
Complex prepared by Government of Haryana do apply. The
Explanatory Note set out in Annexure A to said Final Development
Plan brings out the potential of the lands in Gurgaon-Manesar and
B
acknowledges its proximity with Delhi, locational advantages and
importance of said lands.
(b) Though Regional Plan, 2021 and Final Development Plan for
Gurgaon-Manesar Region Complex were notified on 19.09.2005
and 05.02.2007 respectively, it can well be assumed that stages
anterior to preparation and notification of said plans coincided C
with the initiation of acquisition in the present case. In any case,
the potential of said lands was not something which arose out of
the blue for the first time in 2007 and it can safely be inferred that
such potential was to the knowledge of everybody concerned.
(c) All the transactions in the present case under which the builders/ D
private entities purchased the lands, were entered into after the
initiation of acquisition on 27.08.2004. As disclosed in the material
placed on record by Mr. Vikas Singh, learned Senior Advocate,
his client alone had purchased more than 235 acres of land while
as per interim report of CBI, an extent of 444 acres of land was E
purchased by builders/private entities after the initiation of
acquisition. Thus, substantial portion of land out of 688 acres of
land as specified in declaration under Section 6 of the Act was
purchased by builders/private entities.
(d) Around the time when those purchases were made by builders/ F
private respondents, Awards were declared on 09.03.2006 and
24.02.2007 in respect of lands from adjoining Villages where the
acquisition was also initiated for the same public purpose. The
compensation awarded was at the rate Rs.12.5 lakhs per acre.
(e) Although the relevant policies did not permit anyone who G
purchased the concerned lands after initiation of acquisition to
prefer an application for licence, the builders/private entities merrily
went about purchasing the interest of concerned landholders after
such initiation. Most of these companies were incorporated after
the acquisition was initiated and had no experience in colonization.
H
264 SUPREME COURT REPORTS [2018] 5 S.C.R.

A Yet substantial and sizeable holding was purchased by them. This
is reflective of the intent to cash in on an opportunity made available
and garner as much holding as possible. The subsequent
transactions of sale by them are also indicative of the attempts to
profiteer in the matter rather than any bona fide attempt to develop
and colonize the property.
B
(f) Faced with impending acquisition initiated on 27.08.2004, the
landholders were persuaded to enter into transactions with builders/
private respondents. The Tabular Chart as set out by way of
example in paragraph 8 hereinabove shows that the average price
was initially in the region of Rs.25 lakhs per acre which rose to
C Rs.40 lakhs per acre or above after the issuance of declaration
under Section 6 of the Act. The price so received was greater
than the rate awarded in Awards dated 09.03.2006 and 24.02.2007.
(g) Notices under Section 9 of the Act were issued by the
Authorities on 02.08.2007 calling upon the landholders to appear
D for pronouncement of award on 26.08.2007. The record indicates
that the price paid by the builders/private entities just before
24.08.2007 was in the region of Rs.80 lakhs per acre. This further
discloses, as rightly submitted by Mr. Dhruv Mehta, learned Senior
Advocate that builders/private entities were aware that the award
E would not be declared but the land acquisition proceedings would
be dropped.
(h) At least 60 sale deeds were executed between the issuance
of Notifications under Sections 4 and 6 of the Act, four sale deeds
were executed on the day the declaration under Section 6 was
F issued and 50 sale deeds were executed after the issuance of
Notification under Section 6 and prior to the dropping of acquisition
on 24.08.2007. Thus about 114 sale deeds were executed after
the initiation of acquisition and prior to the dropping of acquisition
vide decision dated 24.08.2007.

G (i) The sale deeds in favour of the builders/private entities do not
even mention the factum about the issuance of any Notification
under Section 4 of the Act, nor any urgency or necessity for the
family to dispose of its holdings find any specific clear mention.
The sales in question were effected only because of impending
acquisition.
H
RAMESHWAR v. STATE OF HARYANA 265
[UDAY UMESH LALIT, J.]

(j) The material placed on record by Mr. Vikas Singh, learned A
Senior Advocate discloses a disturbing feature. The lands which
were purchased for a price ranging from Rs.25 lakhs per acre
soon after the initiation of acquisition which price rose to Rs.80
lakhs per acre just before dropping of the acquisition, were finally
purchased by DLF Home Developers Ltd. at the rate of Rs.4½
B
crores per acre. Further, the fact that settlement money at the
rate of Rs.3½ crores per acre was made over to entities which
apparently had done nothing in the matter is quite shocking. Neither
had these entities procured the lands from the original landholders
nor were they ultimate developers who wanted to develop the
property. Such entities can certainly be termed as “middle men” C
who walked away with tremendous amount of money or benefit
at the rate of Rs.3½ crores per acre. Was that a mere bonanza or
a deal denoting quid pro quo?
(k) It is true that the price of Rs. 4½ crores per acre was paid in
respect of land as well as the licences and well after the dropping D
of the acquisition and withdrawal of writ petitions pending in the
High Court. However this price or the rate shows the tremendous
difference between the return received by the original landholders
and the actual potential of the land.
(l) In terms of paragraph VIII of Annexure B to the Final E
Development Plan for Gurgaon-Manesar Urban Complex the
extent of private participation was extremely limited and in terms
of relevant policy under the Haryana Act no licence could be
issued in case any purchase of land was made after the initiation
of the acquisition. Yet the concerned Authorities not only
entertained such applications for licence but pendency of such F
applications was taken as a factor for withdrawal from acquisition.
Something which ought to have been rejected and discarded
outright became the foundation for decision in favour of builders/
private entities.
(m) The interim report of CBI in para 21 indicates that objection G
was taken by HSIIDC and it was prayed that application for licence
be rejected. Going by aforesaid paragraph VIII of Annexure B
and the relevant policy, such application could never have been
entertained but it was so done favourably.
H
266 SUPREME COURT REPORTS [2018] 5 S.C.R.

A 25. In cases where the power conferred under the provisions of
the Act was utilized to favour a private person or entity, this Court has
always come down heavily. In Uddar Gagan (supra) which was relied
upon by Mr. Dhruv Mehta, learned Senior Advocate and the learned
Amicus Curie, the question which arose for consideration inter alia,
was whether the power of the State to withdraw from acquisition under
B
Section 48 of the Act after the award had been passed, was utilized to
facilitate transfer of title of the land of original owners to a private builder
to advance the business interest of the builder. In that case, the builder
had purchased the interest of the original landholders after the acquisition
was initiated like in the present case and at his instance the lands were
C released from acquisition at which stage the original landholders had
invoked writ jurisdiction and challenged the entire action. The High Court
set aside the release orders, quashed the acquisition and went on to
direct that the lands be restored to the original land-owners. While
considering the matter in an appeal at the instance of the builder, this
Court dealt with the observations of the High Court in Paragraph 5.
D
Paragraphs 70 and 80 of the High Court judgment which were inter
alia quoted by this Court were as under:-
“70. To say that the landowners entered into varied contracts
with Respondent 11 voluntarily, willingly or without undue pressure
is too farcical to be believed. There is a natural and conventional
E bondage between the land and its tiller. A farmer seldom sells the
land save for the compelling reasons. Agriculture being their only
source of survival, the loss of land is a terrible nightmare for any
farmer. The Land Acquisition Collectors never assess the
compensation as per actual market value of the land and the only
F yardstick to be followed is the Collector’s rate fixed for the purpose
of registration charges. The farmer cannot sell the land in open
market as on issuance of Section 4 notification all sale transactions
are invariably banned. These moments of fear and anxiety must
have prompted Respondent 11 to indulge in the best bargain. For
the farmers the offer was like “better you give the wool than the
G 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.
H
RAMESHWAR v. STATE OF HARYANA 267
[UDAY UMESH LALIT, J.]

They were groping in the dark. They had no clue that the land will A
be released. They accepted the unreasonable and unfair unilateral
terms and lost their land.
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. B
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 C
private object behind an acquisition carried out in disregard to the
mandate of Articles 14 and 300-A of the Constitution.”
26. This Court affirmed the view taken by the High Court as
regards quashing of release orders but upheld the acquisition and awards.
It further directed that the lands in question vested in State free from all D
encumbrances. In the context of the present case, the following
observations of this Court in Uddar Gagan (supra) in paragraphs 18,
19, 22 and 23 are quite crucial:-
“18. …. entertaining an application for releasing of land in favour
of the builder who comes into picture after acquisition notification E
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 F
fundamental rights of equality and right to property and to life.
What cannot be done directly cannot be done indirectly also.
19. ….. It is patent that the State has enabled the builder to enter
the field after initiation of acquisition to seek colonisation on the
land covered by acquisition. In the absence of the State’s action, G
it was not possible for the builder to enter into the transactions in
question which was followed by withdrawal from acquisition.
22. ….. When the land sought to be acquired for a public purpose
is allowed to be transferred to private persons, any administrative
action or private transaction could be held to be vitiated by fraud.
H
268 SUPREME COURT REPORTS [2018] 5 S.C.R.

A 23. …. Fraud on power voids the action of the authority. Mala
fides can be inferred from undisputed facts even without naming
a particular officer and even without positive evidence.”
27. For the present purposes, contents of paragraphs 29 and 30 of
the decision in Uddar Gagan (supra) and the directions issued in
B paragraph 33 are extracted:-
“29. Once release of land under acquisition is found to be mala
fide or arbitrary exercise of power, acquisition of released land
stands revived. The operative direction of the High Court to quash
the acquisition to the extent it has neither been challenged nor
C concerns the land transferred to a private builder by abusing the
power of acquisition or on account of any extraneous
considerations does not appear to be justified. Similarly the direction
of permitting the builder to retain the land of those landowners
who are not able to refund the sale consideration received by
them may permit the builder to illegally retain the land. Moreover,
D it may not be practicable in the present fact situation to restore
the land to the landowners but they can be duly compensated
while restoring the land to the State to use it for notified public
purpose. Person whose land is taken for houses for others cannot
be rendered homeless and unemployed. This will be sheer
E exploitation. In view of the conduct of the builder, agreeing with
the view of the High Court, we do not propose to allow any interest
to the builder while permitting refund/reimbursement to it. From
the impugned judgment there is nothing to show that the
developments which are now relied upon had taken place on the
date of filing of the writ petition. It has been specifically held in
F para 89 of the impugned judgment that no development had taken
place till the judgment of the High Court. Any subsequent
transactions or development are of no consequence for rights of
parties. Any subsequent transactions entered into by the builder
cannot be taken into account and are hit by the principle of lis
G pendens. In any case it was for the builder to inform the third
parties to whom the plots have been sold, that the land was under
litigation. If the third parties have purchased the land knowing
fully about the litigation, they have clearly taken risk and their
remedy will be only against the builder. If pendency of litigation
was suppressed, the third parties can take their remedies against
H
RAMESHWAR v. STATE OF HARYANA 269
[UDAY UMESH LALIT, J.]

the builder. Without prejudice to their said private remedies, the A
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
B
and to find out the considerations for such misuse.
30. 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 C
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, D
process is not to be completed, land must revert back to owner on
the date of Section 4 notification and not to anyone else directly
or indirectly. This is not what has happened.
………..
33. Keeping the above in mind, we are of the view that ends of E
justice will be served by moulding the relief as follows:
33.1. Notifications dated 11-4-2002, 8-4-2003 and awards dated
6-4-2005 are upheld. The land covered thereby vests in HUDA
free from all encumbrances. HUDA may forthwith take
possession thereof. F
33.2. 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.
33.3. Consequently, all licences granted in respect of the land
G
covered by acquisition will stand transferred to HUDA.
33.4. Sale deeds/other agreements in favour of the builder in
respect of the said land are quashed. The builder will not be entitled
to recover the consideration paid to the owners but will be entitled
to reimbursement as indicated hereinafter. Creation of any third-
H
270 SUPREME COURT REPORTS [2018] 5 S.C.R.

A party rights by the builder also stands quashed.
33.5. The sale consideration paid by the builder to the landowners
will be treated as compensation under the award. The landowners
will not be required to refund any amount. The landowners who
have not received compensation will be at liberty to receive the
B same. The landowners will also be at liberty to prefer reference
under Section 18 of the 1894 Act within a period of three months,
if such reference has not been earlier preferred.
33.6. The builder will be entitled to refund/reimbursement of any
payments made to the State, to the landowners or the amount
C spent on development of the land, from HUDA on being satisfied
about the extent of actual expenditure not exceeding HUDA norms
on the subject. Claim of the builder will be taken up after settling
claim of third parties from whom the builder has collected money.
No interest will be payable on the said amount.
D 33.7. 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
E said amount.
33.8. The State shall give benefit of “Rehabilitation and
Resettlement of Land Acquisition Oustees” policy of the State/
HUDA to the landowners. Area so required shall be reserved out
of the acquired land itself.
F
33.9. 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
G accordance with law.
33.10. This judgment be complied with within one year.
33.11. 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 one month after expiry of one
H
RAMESHWAR v. STATE OF HARYANA 271
[UDAY UMESH LALIT, J.]

year from today for such further direction as may become A
necessary.”
28. Apart from the decisions of this Court in Uddar Gagan (supra)
following decisions of this Court are noteworthy:
a] In Collector (DM) v. Raja Ram Jaiswal8, it was observed by
this Court:- B

“26. Where power is conferred to achieve a purpose it has been
repeatedly reiterated that the power must be exercised reasonably
and in good faith to effectuate the purpose. And in this context ‘in
good faith’ means ‘for legitimate reasons’! Where power is
exercised for extraneous or irrelevant considerations or reasons, C
it is unquestionably a colourable exercise of power or fraud on
power and the exercise of power is vitiated. If the power to acquire
land is to be exercised, it must be exercised bona fide for the
statutory purpose and for none other. If it is exercised for an
extraneous, irrelevant or non-germane consideration, the acquiring D
authority can be charged with legal mala fides. In such a situation
there is no question of any personal ill-will or motive. In Municipal
Council of Sydney v. Campbell9 it was observed that irrelevant
considerations on which power to acquire land is exercised, would
vitiate compulsory purchase orders or scheme depending on
them…….” E

b] In Royal Orchid Hotels Limited and Another v. G. Jayarama
Reddy and Others10, this Court was called upon to consider question
whether land acquired by the State Government for specified purpose
namely Golf-cum-Hotel Resort could be transferred to a private
individual. The observations in paragraph 38 are relevant for the present F
purposes:-
“38. The courts have repeatedly held that in exercise of its power
of eminent domain, the State can compulsorily acquire land of the
private persons but this proposition cannot be overstretched to
legitimize a patently illegal and fraudulent exercise undertaken G
for depriving the landowners of their constitutional right to property
with a view to favour private persons. It needs no emphasis that
8
(1985) 3 SCC 1
9
1925 AC 338 at p. 375
10
(2011) 10 SCC 608 H
272 SUPREME COURT REPORTS [2018] 5 S.C.R.

A if land is to be acquired for a company, the State Government and
the company is bound to comply with the mandate of the provisions
contained in Part VII of the Act. Therefore, the Corporation did
not have the jurisdiction to transfer the land acquired for a public
purpose to the companies and thereby allow them to bypass the
provisions of Part VII. The diversification of the purpose for which
B
land was acquired under Section 4(1) read with Section 6 clearly
amounted to a fraud on the power of eminent domain. This is
precisely what the High Court has held in the judgment under
appeal and we do not find any valid ground to interfere with the
same……”
C c] In Greater Noida Industrial Development Authority v.
Devendra Kumar and Others11, validity of acquisition of about 156
hectares of land and subsequent transfer of acquired land to the builders
and whether such transfer was colourable exercise of power came up
for consideration of this Court. In paragraph 43 this Court quoted the
D observations of Krishna Iyer J in State of Punjab v. Gurdial Singh12
and later made following observations in paragraph 49:-
“43. In this context, it will be useful to notice the observations
made in State of Punjab v. Gurdial Singh. In that case, while
pronouncing upon the correctness of the order passed by the
E Punjab and Haryana High Court which had quashed the acquisition
of the respondents’ land on the ground of mala fide exercise of
power, this Court observed: (SCC p. 475, para 9)
“9. … Legal malice is gibberish unless juristic clarity keeps it
separate from the popular concept of personal vice. Pithily
F put, bad faith which invalidates the exercise of power—
sometimes called colourable exercise or fraud on power
and oftentimes overlaps motives, passions and
satisfactions—is the attainment of ends beyond the
sanctioned purposes of power by simulation or pretension
of gaining a legitimate goal. If the use of the power is for
G the fulfilment of a legitimate object the actuation or catalysation
by malice is not legicidal. The action is bad where the true
object is to reach an end different from the one for which
the power is entrusted, goaded by extraneous
11
(2011) 2 SCC 375
12
H (1980) 2 SCC 471
RAMESHWAR v. STATE OF HARYANA 273
[UDAY UMESH LALIT, J.]

considerations, good or bad, but irrelevant to the A
entrustment. When the custodian of power is influenced in
its exercise by considerations outside those for promotion
of which the power is vested the court calls it a colourable
exercise and is undeceived by illusion. In a broad, blurred
sense, Benjamin Disraeli was not off the mark even in law
B
when he stated:
‘I repeat … that all power is a trust—that we are accountable for
its exercise—that, from the people, and for the people, all springs,
and all must exist.’
Fraud on power voids the order if it is not exercised bona fide for C
the end designed. Fraud in this context is not equal to moral
turpitude and embraces all cases in which the action impugned is
to effect some object which is beyond the purpose and intent of
the power, whether this be malice-laden or even benign. If the
purpose is corrupt the resultant act is bad. If considerations, foreign
to the scope of the power or extraneous to the statute, enter the D
verdict or impel the action, mala fides or fraud on power vitiates
the acquisition or other official act.”
………
49. Before concluding, we consider it necessary to reiterate that E
the acquisition of land is a serious matter and before initiating the
proceedings under the 1894 Act and other similar legislations, the
Government concerned must seriously ponder over the
consequences of depriving the tenure-holder of his property. It
must be remembered that the land is just like mother of the people
living in the rural areas of the country. It is the only source of F
sustenance and livelihood for the landowner and his family. If the
land is acquired, not only the present but the future generations of
the landowner are deprived of their livelihood and the only social
security. They are made landless and are forced to live in slums in
the urban areas because there is no mechanism for ensuring G
alternative source of livelihood to them. Mindless acquisition of
fertile and cultivable land may also lead to serious food crisis in
the country.”
29. The decisions referred in the preceding paragraphs were
delivered in the context of exercise of power under the provisions of the
H
274 SUPREME COURT REPORTS [2018] 5 S.C.R.

A Act. In addition, there are few other decisions which were rendered in
other fields but considered the issues regarding “fraud on power”; notable
amongst them being: S. Pratap Singh v. The State of Punjab13, Express
Newspapers Pvt. Ltd. and others v. Union of India and others14and
observations by R.M. Sahai J in Shrisht Dhawan (Smt) v. Shaw
Bros.15 The issue concerning unjust enrichment was dealt with by this
B
Court very succinctly in Indian Council for Enviro-Legal Action v.
Union of India16 as under :
“151. Unjust enrichment has been defined as:
“Unjust enrichment.—A benefit obtained from another, not
C intended as a gift and not legally justifiable, for which the
beneficiary must make restitution or recompense.”
See Black’s Law Dictionary, 8th Edn. (Bryan A. Garner) at p.
1573. A claim for unjust enrichment arises where there has been
an “unjust retention of a benefit to the loss of another, or the
D retention of money or property of another against the fundamental
principles of justice or equity and good conscience”.
152. “Unjust enrichment” has been defined by the court as the
unjust retention of a benefit to the loss of another, or the retention
of money or property of another against the fundamental principles
E of justice or equity and good conscience. A person is enriched if
he has received a benefit, and he is unjustly enriched if retention
of the benefit would be unjust. Unjust enrichment of a person
occurs when he has and retains money or benefits which in justice
and equity belong to another.

F 153. Unjust enrichment is “the unjust retention of a benefit to the
loss of another, or the retention of money or property of another
against the fundamental principles of justice or equity and good
conscience”. A defendant may be liable “even when the defendant
retaining the benefit is not a wrongdoer” and “even though he
may have received [it] honestly in the first instance”. (Schock v.
G Nash17, A 2d, 232-33.)
13
(1964) 4 SCR 733
14
(1986)1 SCC 133
15
(1992) 1 SCC 534, at page 553 :
16
(2011) 8 SCC 161, at page 234
17
732 A 2d 2017 (Delaware 1999)
H
RAMESHWAR v. STATE OF HARYANA 275
[UDAY UMESH LALIT, J.]

154. Unjust enrichment occurs when the defendant wrongfully A
secures a benefit or passively receives a benefit which would be
unconscionable to retain. In the leading case of Fibrosa Spolka
Akcyjna v. Fairbairn Lawson Combe Barbour Ltd.18, Lord
Wright stated the principle thus: (AC p. 61)
“… Any civilised system of law is bound to provide remedies B
for cases of what has been called unjust enrichment or unjust
benefit that is to prevent a man from retaining the money of or
some benefit derived from another which it is against
conscience that he should keep. Such remedies in English law
are generically different from remedies in contract or in tort,
and are now recognised to fall within a third category of the C
common law which has been called quasi-contract or
restitution.”
155. Lord Denning also stated in Nelson v. Larholt19 as under:
(KB p. 343)
D
“… It is no longer appropriate, however, to draw a distinction
between law and equity. Principles have now to be stated in
the light of their combined effect. Nor is it necessary to canvass
the niceties of the old forms of action. Remedies now depend
on the substance of the right, not on whether they can be fitted
into a particular framework. The right here is not peculiar to E
equity or contract or tort, but falls naturally within the important
category of cases where the court orders restitution, if the
justice of the case so requires.”
156. The above principle has been accepted in India. This Court
in several cases has applied the doctrine of unjust enrichment. F
…..…
159. Unjust enrichment is basic to the subject of restitution, and
is indeed approached as a fundamental principle thereof. They
are usually linked together, and restitution is frequently based upon
G
the theory of unjust enrichment. However, although unjust
enrichment is often referred to or regarded as a ground for
restitution, it is perhaps more accurate to regard it as a prerequisite,
for usually there can be no restitution without unjust enrichment.
18
1943 AC 32
19
(1948) 1 KB 339 H
276 SUPREME COURT REPORTS [2018] 5 S.C.R.

A It is defined as the unjust retention of a benefit to the loss of
another or the retention of money or property of another against
the fundamental principles of justice or equity and good conscience.
A person is enriched if he has received a benefit, and he is unjustly
enriched if retention of the benefit would be unjust. Unjust
enrichment of a person occurs when he has and retains money or
B
benefits which in justice and equity belong to another.
160. While the term “restitution” was considered by the Supreme
Court in South Eastern Coalfields Ltd. v. State of M.P.20 and
other cases excerpted later, the term “unjust enrichment” came
to be considered in Sahakari Khand Udyog Mandal Ltd. v.
C CCE & Customs21. This Court said: (Sahakari Khand case,
SCC p. 748, para 31)
“31. … ‘unjust enrichment’ means retention of a benefit by a
person that is unjust or inequitable. ‘Unjust enrichment’ occurs
when a person retains money or benefits which in justice, equity
D and good conscience, belong to someone else.”
161. The terms “unjust enrichment” and “restitution” are like the
two shades of green—one leaning towards yellow and the other
towards blue. With restitution, so long as the deprivation of the
other has not been fully compensated for, injustice to that extent
E remains. Which label is appropriate under which circumstances
would depend on the facts of the particular case before the court.
The courts have wide powers to grant restitution, and more so
where it relates to misuse or non-compliance with court orders.”
30. As held in State of Punjab v. Gurdial Singh (Supra) when a
F custodian of power is influenced in its exercise by considerations outside
those for promotion of which the power is vested, such exercise is nothing
but colourable exercise of power and that the power of the State to
acquire lands of private persons compulsorily cannot be overstretched
to legitimize a patently illegal and fraudulent exercise undertaken to favour
G certain private persons. This principle has been followed consistently.
While dealing with fact situation arising in the context of exercise of
power under the provisions of the Act and its interplay with the power
under the provisions of the Haryana Act and the concerned policies, the
20
(2003) 8 SCC 648
21
(2005) 3 SCC 738
H
RAMESHWAR v. STATE OF HARYANA 277
[UDAY UMESH LALIT, J.]

observations of this Court in the decision in Uddar Gagan (supra) are A
crucial. They cull out principles that entertaining an application for
releasing of land in favour of a builder who came into picture after
acquisition had been initiated amounts to transfer of resources of poor
for the benefit of the rich and that no legitimacy can be conferred to an
abuse of power to advance such purpose. Further, mala fides could be
B
inferred from undisputed facts even without naming a particular officer.
But the salutary principle discernable from Uddar Gagan (supra) lies
in the relief granted by this Court in paragraph 33. This Court agreed
with the High Court that there was fraud on power but did not sustain
the relief of return of lands to the landholders. The real victim of abuse
of power or fraud on power was “public interest”; for furtherance of C
which the acquisition was sustained and appropriate directions were
passed. This Court therefore severed that part which was found to be
bad but sustained acquisition to sub-serve “public interest”.
31. If we consider the established or crystallized facets of the
matter as stated above, in the light of the principles emerging from the D
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. E
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. F
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 G
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
H
278 SUPREME COURT REPORTS [2018] 5 S.C.R.

A 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
B
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
C 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 hold that:-
a] The transactions entered into between the landholders and
D 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
E 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
F entities. These decisions were nothing but fraud on power.
33. 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
G 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
H
RAMESHWAR v. STATE OF HARYANA 279
[UDAY UMESH LALIT, J.]

of the power conferred under the Act, in its writ jurisdiction a superior A
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
B
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 sub-served. It is nobody’s case
that public interest was adequately achieved and therefore the acquisition C
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
D
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
sub-serve.
34. At this stage an aspect needs elaboration and clarification. In E
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 F
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 G
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
H
280 SUPREME COURT REPORTS [2018] 5 S.C.R.

A 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 is sub-served. In a way, the directions
B
required in the present matter may go beyond what Uddar Gagan (supra)
did.
35. In certain cases this Court, considering typical fact situation
has passed directions to complete the process of acquisition, for instance:
(a) In Bhimandas Ambwani (Dead) through Lrs. V. Delhi
C Power Company Limited 22 it was found, “there had been no
proceedings regarding acquisition of the land in dispute”. However, as
the authorities had taken over possession of the land and developed the
same, this Court observed :
“In such a fact situation, the only option left out to the respondents
D is to make the award treating Section 4 notification as, on this
date i.e. 12.02.2013 and we direct the Land Acquisition Collector
to make the award after hearing the parties within a period of
four months from today.”
(b) In K.B. Ramachandra Raje Urs(Dead) by L.Rs. V. State
E of Karnataka and Others 23, having held that the acquisition and
allotment of 55 acres of land to respondent No.28- Society to be contrary
to law, it was noted that a full-fledged campus had come up in an area
admeasuring 40 acres of land out of said 55 acres. It was therefore
observed:
“Insofar as the remaining 40 acres of land allotted to Respondent
F
28 is concerned, we direct that compensation, in respect thereof,
to the person/persons entitled to receive such compensation under
the Land Acquisition Act, will follow the outcome of Writ Appeal
No.1654 of 2008. The compensation under the Act will be paid by
taking the date of the order of the learned Single Judge of the
G High Court i.e. 22-2-2001.”
Thus, in cases where there was no valid acquisition but the land
was taken possession of and developed, restoration of land to the
landholders was not found to be the appropriate, adequate and complete
22
(2013) 14 SCC 195
23
H (2016) 3 SCC 422
RAMESHWAR v. STATE OF HARYANA 281
[UDAY UMESH LALIT, J.]

relief and this Court directed that process of acquisition be initiated A
taking or treating certain date to be the relevant date for initiation of the
acquisition. If the power can go to the extent of directing acquisition in
such manner, in a case where an acquisition having been properly and
validly initiated if the supervening circumstances show that there was
complete fraud on power in dropping the acquisition, can the power of
B
the superior court not extend to/not be extended for passing appropriate
directions to complete the acquisition and sub-serve the public interest.
But for such fraud on power, the matter in the present case was ripe for
pronouncement of award when the acquisition was dropped just two
days before the date of pronouncement. All the steps leading to the
publication of date for pronouncement of award having been validly and C
correctly undertaken, can a direction not be passed that there was a
deemed award and completed acquisition.
36. 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 D
there is full and substantial restoration. Going by the principles laid down
by this Court in Indian Council for 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 E
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, F
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 G
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 H
282 SUPREME COURT REPORTS [2018] 5 S.C.R.

A 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
B
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
C 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
D
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
E 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
F 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
G 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
H
RAMESHWAR v. STATE OF HARYANA 283
[UDAY UMESH LALIT, J.]

of unjust enrichment as explained in cases referred to hereinabove show A
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 don’t hold them to be pari delicto
alongwith builders/private respondents. But at the same time they cannot
B
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 C
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
D
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 E
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.
39. Having bestowed our attention to various competing elements F
and issues we deem it appropriate to direct:
(a) The decisions dated 24.08.2007 and 29.01.2010 referred to
hereinabove are set aside as being brought about by mala fide exercise
of power. In our considered view, those decisions were clear case of
fraud on power and as such are annulled.
G
(b) The decision dated 24.08.2007 was taken when the matters
were already posted for pronouncement of the award on 26.08.2007.
Since all the antecedent stages and steps prior thereto were properly
and validly undertaken, and since the decision dated 24.08.2007 has been
held by us to be an exercise of fraud on power, it is directed that an
Award is deemed to have been passed on 26.08.2007 in respect of lands H
284 SUPREME COURT REPORTS [2018] 5 S.C.R.

A (i) which were covered by declaration under Section 6 in the present
case and (ii) which were transferred by the landholders during the period
27.08.2004 till 29.01.2010. The lands which were not transferred by the
landholders during the period from 27.08.2004 till 29.01.2010 are not
governed by these directions.
B (c) Subject to the directions issued hereafter, the lands covered
under aforementioned direction (b) shall vest in the HUDA/HSIDC, as
may be directed by the State of Haryana, free from all encumbrances.
HUDA/HSIDC may forthwith take possession thereof. Consequently
all licences granted in respect of lands covered by the deemed Award
dated 26.08.2007 will stand transferred to HUDA/HSIDC.
C (d) Since the dropping of acquisition on 24.08.2007 and subsequent
decision dated 29.01.2010 have been set aside, the period between
24.08.2007 and upto the date of this judgment shall not be counted for
the purposes of Section 24(2) of the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement Act,
D 2013.
(e) All transactions entered into during the period from 24.08.2007
till 29.01.2010, pursuant to which the original landholders transferred
their holdings in favour of builders/private entities or third parties shall
be subject to and the interest of the respective parties shall be governed
E by the directions issued hereafter.
(f) Consistent with directions issued in Para 33 of Uddar Gagan
(Supra), the builders/private entities will not be entitled to recover the
consideration paid by them to the landholders. The sale consideration
paid by the builders/private entities to the landholders shall be treated
towards compensation under the award and the landholders will not be
F required to refund any amount to such builders/private entities. The
landholders will be at liberty to prefer Reference under Section 18 of the
Act within a period of three months from today. For the purposes of
maintaining such Reference the reasoning that weighed while passing
Awards dated 09.03.2006 and 24.02.2007 shall be the basis. If the
G Reference Court were to enhance the compensation, the amounts
received by the landholders by way of consideration from the builders/
private entities shall be appropriated towards such sum awarded by the
Reference Court. If the landholders are still entitled to something more
than what they had received from the builders/private entities, the
differential sum shall be made over to them by the State of Haryana
H towards acquisition of their interest in the lands in question. If however,
RAMESHWAR v. STATE OF HARYANA 285
[UDAY UMESH LALIT, J.]

what the landholders had received towards consideration from the A
builders/private entities is found to be in excess of what is awarded by
the Reference Court, the remainder shall not be recovered from them.
(g) Consistent with the directions issued by this Court in Paragraphs
33.6 and 33.7 in Uddar Gagan (supra), the builders/private entities will
be entitled to refund/reimbursement of any payment made to the B
landholders or the amounts that had been spent on development of the
land, such payments shall be made by HUDA or HSIDC on being satisfied
about the extent of actual expenditure not exceeding HUDA or HSIDC
norms on the subject as the case may be. Refund will however be in
respect of amount at which the landholders sold the land and not of
subsequent sales. As regards subsequent transactions, the subsequent C
purchasers will have remedies against their respective vendors. Claims
of builders/private entities entitled to refund will be taken up after settling
claims of third parties from whom the builders/private entities had collected
monies. No interest will be payable on such amounts.
(h) The third parties from whom money had been collected by the D
builder/private entities will either be entitled to refund of the amount
from and out of and to the extent of the amount payable to the builder/
private entities in terms of above direction, available with the State, on
their claims being verified or will be allotted the plots or apartments at
the agreed price or prevalent price, whichever is higher. Every such
claim shall be verified by HUDA or HSIDC. In cases where, E
constructions have been erected and the entire project is complete or is
nearing completion, upon acceptance of the claim, the plots or apartments
shall be made over to the respective claimants on the same terms and
conditions. Except for such verified and accepted claims, the remaining
area or apartments will be completely at the disposal of HUDA or HSIDC, F
as the case may be, which shall be free and competent to dispose of the
same in accordance with the prevalent policy and procedure.
In order to facilitate such exercise all third parties who had
purchased or had been allotted the plots or apartments shall prefer claims
within one month from today, which claim shall be verified within two
G
months from today.
(i) As found by us in the preceding paragraphs, substantial sums
were made over to “middle men”. In the pending investigation, the CBI
may do well to unravel the truth. In any case, such hefty sums which
were made over to “middle men” cannot be said to be rightfully earned
by and belonging to them. In fact, this actually represents the return for H
286 SUPREME COURT REPORTS [2018] 5 S.C.R.

A being able to garner the lands in question and getting requisite licences
under the provisions of the Haryana Act and a benefit derived out of
fraud on power. In our view this money rightfully belongs to the State
and none other. We direct the authorities of the State as well as the
Central Government to reach the depths of such transactions and recover
every single pie and make it over to the State Government. A complete
B
investigation in the transactions including unearthing unnatural gains
received by “middle men” shall be undertaken by the CBI.
(j) If CBI has filed charge sheet before the concerned Court, the
same may be dealt with as per law.

C (k) The State shall give benefit of “Rehabilitation and Resettlement
of Land Acquisition Oustees” policy of the State/HUDA/HSIDC to the
landholders. Area so required shall be reserved out of the acquired land
itself.
(l) The State may revisit its policy of change of land use and
D giving colonization licence in respect of land which is subject matter of
acquisition.
(m) We are given to understand that a Commission of Enquiry
was appointed by the State of Haryana to enquire into certain facts
concerning acquisitions in respect of lands in Gurgaon Manesar Urban
Complex and that the matter is presently subject matter of challenge in
E
a pending writ petition in the High Court of Punjab and Haryana on
account of which further steps are held up. Without expressing any
opinion on the merits or demerits of such challenge, we request the High
Court to deal with and dispose of the matter as early as possible and
preferably within two months from the date of receipt of a copy of this
F order so that public interest may not suffer by delay in such decision.
40. Before we close, we must record our sincere appreciation for
the efforts put in and for the invaluable assistance rendered by the learned
Amicus Curiae. His analytical approach and suggestions have helped us
immensely in resolving the issues.
G
41. The appeals stand allowed in the aforesaid terms. There shall
be no order as to costs.

Kalpana K. Tripathy Appeal allowed.

H