Holding

The State’s power to acquire land for public purpose cannot be employed to transfer title to a private builder; consequently, the release orders, licences and sale deeds in favour of the builder were illegal and were set aside.

Summary

The Supreme Court examined a land‑acquisition case where the Haryana Urban Development Authority had notified acquisition of land for a public purpose, but a private builder, Uddar Gagan Properties Ltd., entered into agreements with farmers after the notification and obtained licences and release orders to develop a colony. The Court held that the State’s power to acquire land cannot be used to transfer title to a private entity, and that the release orders, licences and sale deeds in favour of the builder were colourable exercises of power and illegal. While the acquisition notifications and awards were upheld, all subsequent actions benefiting the builder were quashed and the land vested in HUDA. The Court moulded relief, directing compensation to landowners, reimbursement to the builder, and restoration of the land to the State. The appeal was partly allowed, modifying the High Court’s order.

Issues considered

The acquisition was for a bona‑fide public purpose or a private benefit to the builder
Whether the exercise of eminent domain violated Articles 14, 21 and 300‑A of the Constitution
Legality of agreements to sell/collaboration agreements entered into by farmers whose land was under acquisition
Whether a writ court can annul sale transactions executed in violation of the Land Acquisition Act
Validity of licences and release orders issued under the Haryana Development and Regulation of Urban Areas Act, 1975
Locus standi of the farmers to challenge the licences and release orders
Effect of delay and latches on the writ petitions
Applicability of the doctrine of severability to the acquisition and subsequent releases

Legislation cited

Haryana Development and Regulation of Urban Areas Act, 1975
Haryana Urban Development Authority Act, 1977
Land Acquisition Act, 1894s. 16, s. 18, s. 28, s. 4, s. 48, s. 6, s. 9
Public Trust Doctrine (judicially evolved principle)

Subjects

land acquisitionpublic purposeabuse of powerpublic trust doctrineSection 48licencecolonizationcompensationconstitutional lawArticle 14Article 21Article 300-Afraudundue influencerelief moulding

Judgment

[2016] 2 S.C.R. 214

A UDDAR GAGAN PROPERTIES LTD.
v.
SANT SINGH & ORS.
(Civil Appeal No. 5072 of2016)
MAY13,2016
B
[ANIL R. DAVE AND ADARSH KUMAR GOEL, JJ.]
Land Acquisition Act, 1894 - Acquisition of land of original
owners-farmers for public purpose - issuance of acquisition
notification - Subsequently, builder entered into agreements with
some farmers whose land was under acquisition - Release of land
c in favour of builder - Challenge to - Held: Power of the State to
acquire land for a public purpose has been used to facilitate transfer
of title of the land of original owners to a private builder to advance
the business interest of the said builder, which is npt legally
permissible - Acquisition of land is for a private company without
D following the statutory procedure for the said purpose - Entertaining
application for· release of land in favour of the builder who came
into picture after acquisition notification and release of land to
such builder amounts to permitting profiteering at the cost of
livelihood and existence of a farmer - State enabled the builder to
enter the field after initiation of acquisition to seek colonization on
E the land covered by acquisition - Such fraudulent and clandestine
exercise of power by the State is not permitted by law - It is in
violation of Public Trust Doctrine - High Court rightly held that
there was abuse of power in releasing land in favour of builder -
Notifications and awards in favour of original owners upheld -
F Land covered thereby vests in the Development Authority free from .
all encumbrances - Release orders in favour of the builder quashed
- Haryana Urban Development Authority Act, 1977,
Partly disposing of the appeals, the Court
HELD: 1.1 There is no reason to disagree with the finding
G recorded by the High Court that the instant case is a gross abuse
of law on account of unholy nexus of the foncerned authorities
and· the builder to enable the builder to profiteer. The land could
either be taken by State for a eompelling public purpose or
returned to the land owners and not to the builder. [Para 13]
(235-C]
H
214
UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 215 •

1.2 There could be no objection to acquisition of land for a A
co11.1pelling public purpose nor to regulated development of
colonies, but entertaining an application for.releasing of land in
favour of the builder who comes into picture after acquisition
notification and release of land to such builder tantamounts to
acquisition for a private purpose. It amounts to transfer of B
resources of poor for the benefit of the rich .. It amounts to
permitting profiteering at the cost of livelihood and existence of
a farmer. T.his is against the philosophy of the Constitution and in.
violation of guaranteed fundamental rights of equality and right
to property and to life. What cannot be done directly cannot be
done indirectly also. [Para 14] (235~D-E] C
1.3 This apart, if State is to be party to directly or indirectly
select beneficiary of State.largesse - which in instant fact situation
the State certainly is - objectivity and transparency are essential
elements of exercise of public power which are required to be
followed. It is patent that the State has enabled the builder to D
enter the field after initiation of acquisition to seek colonization
on the land covered by acquisition. Id absence of State's action,
it was not possible for the builder to enter into the transactions
in question which was follo,wed by withdrawal from acquisition.
But for assurance from some quarters, the builder could not have
made investment nor land owners could have executed the E
transactions in question. Such fraudulent and clandestine exercise
of power by the State is not permitted by law. This is in violation
of Public Trust Doctrine.[Para 15] (235-F-H]
1.4 Reliance on .Pol.icy dated 6th March, 2000 is
misconceived. The policy is applicable only to release of such F
land from acquisition as is owned/ purchased by the developers
before the issue of notification under Section 4 of the Land
Acquisition Act, 1894. This condition was required to be strictly
·complied with and no person other than original owners prior to
acquisition could directly or indirectly avail of the said policy. G
Even a bona fide error .could not justify a patent illegality. In the
instant case, the builder itself did not have even an inch of land
before the notification. It is also patent that the application for
grant of licence, though purportedly made by the land owners,
has in fact been made by the builder. Referencti to the order of
the High Court in Writ Petition filed by the builder is of no avail H
> 216 SUPREME COURT REPORTS (2016) 2 S.C.R.

A to the appellant as it is only a direction to consider the claim of
the writ petition"-rs in accordance with law. The validity of claim
of the builder has not been adjudicated upon in the said order.
Even in order in the Writ Petition and other connected matters,
there was no consideration or adjudication of the issue.with regard
to the validity of release of land in favour of a builder who came
B
into picture after the acquisition notification, which took away
the basis of the claim for any relief. [Para 17] [236-B, C-G]
1.5 While it is true that a belated petition cannot be
entertained under Article 226 of the Constitution, it is well settled
that this is only a rule of practice based on sound and proper
c exercise of discretion and not a jurisdictional bar. Exercise of
discretion to .quash an illegal action based on fraud or abuse of
law even belatedly may not be liable to be interfered with under
Article 136 of the Constitution. The land sought to be acquired
for a public purpose is allowed to be transferred to private
D persons, any administrative action or private transaction could
be held to be vitiated by fraud. There is no legal sanction for
such action. [Para 18] [236-G-H; 231-A-B]
1.6 There is no ground to interfere with the finding recorded
by the High Court that there was an abuse of power in releasing
E the land in favour of the builder. Once it is found that action of
the State and the builder resulting in transfer nf land -from land
owners to the builder wa11 without any authority of law and by
colourable exercise of power, none of the contentions raised by
the builder could accepted. The issue of moulding relief
separately may be considered but the builder cannot be allowed
F • to retain the land acquired illegally. Undoing of such illegal actions
would clearly be in the interests of justice. The wrong has to be
remedied. (Para 22] (238-C-D]
1.7 The High Court rightly observed that the notified public
purpose was valid but the subsequent events resulted in illegality.
G The High Court also rightly held that it would be inappropriate
to release the land in favour of the builder by permitting the
builder to take over the property and granting licence for
colonization on the land covered by acquisition. Further, view of
the High Court that doctrine of severability cannot be invoked
H and the entire acquisition was liable to be quashed needs
UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 217 •

modification. [Para 23] [238-F] A
1.8 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 concerns the land transferred to a private builder B
by abusing thf,' 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 land owners. who are not able to refund the sale
consideration received by them may permit the builder to illegally C
retain the land. Moreover, it may not be practicable in the present
fact situation to restore the land to the land owners 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 would be sheer exploitation. From the impugned judgment D
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 was specifically held in the impugned judgment that
no development had taken place till the judgment of tire High
Court. Any subsequent transactions or development are of no
consequence for rights of parties. Any subseq.uent transactions E
entered into by the builder cannot be taken into account and are
hit by the principle oflis 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 F
risk and their remedy will be only against the bUilder. If pendency
of litigation ,was suppressed, the third parties· can take their
remedies against the builder. Without prejudice to their said
private remedies, the court may try to balance equities to the
extent possihfe. If the authorities have proceeded to entertain
applications for licence to give undue benefit to the builder by G
way of helping him to take overland undertbe cloud ofacquisition,
it may call for action against those who have misused their power.
[Para 25] [239-B-H; 240-A-B]
1.9 Land is· scarce natural resource. Owner of land has
guarantee agarnst being deprived of his rights except under a H
218 SUPREME COURT REPORTS [2016] 2 S.C.R.

A valid law for com pelting needs of the society and not otherwise.
The commercial use of land can certainly be rewarding to an
individual. Initiation of acquisition for public purpose may deprive
the owner of valuable land but it cannot permit another person
who may be able to get permission to develop c.olony to take
over the said land. If the law allows the State to take land for
B
housing neMs, the State itself has to keep the title or dispose of
land consistent with Article 14 after completion of acquisition. If
after initiation of acquisition, process is not to be completed, land
must revert back to owner on the date of notification and not to
any one else directly or indirectly.This is not what has happened.
c However, having regard to the irreversible situation though in
normal circumstances land may have reverted to land owners,
the relief would have to be moulded.[Para 26, 28) [240-B-D, E-F)
1.10 Notifications dated 11th April, 2002, 8th April, 2003
and awards dated 6th April 2005 are upheld. The land covered
D thereby vests in HUDA free from all encumbrances. HUDA may
forthwith take possession thereof. 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. Consequently, all licences
granted in respect of the land covered by acquisition would stand
transferred to HUDA. Sale deeds/ other agreements in favour of
E the builder in respect of the said land are quashed. The builder
would not be entitled to recover the consideration paid to the
owners but would be entitled to reimbursement. Creation of any
third party rights by the builder also stand quashed. The sale
consideration paid by the builder to the land owners would. be
F treated as compensation under the award. The land owners would
not be required to refund any amount. The land owners who have
not received compensation would be at liberty to receive the
same. The land owners would also be at liberty to prefer reference
under Section 18 of the 1894 Act, if such reference has not been
earlier preferred. The builder would be entitled to refund/
G reimbursement of any payments made to the State, to the land
owners or the amount 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
H the builder bas collected money. No interest would be payable
UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 219

on the said amount. The third parties from whom money has been A
·coll~cted by the builder would be entitled to either the refund of
the amount, out of and to the extent of the amount payable to the
builder. No interest would be payable on the said amount. [Para
29] [240-F-H; 241-A-F]
CIVIL APPELLATE JURISDICTION: Civil Appeal,No. 5072 B
of2016
From the Judgment and Order dated 20.12.2013 of the High Court
of Punjab & Haryana at Chandigarh in CWP No. 19069 of 2011
WITH
c
C. A. NOS. 5073-77, 5079-85, 5086, 5087-5099 AND 5100 OF
2016
Shyam Divan, Harish Salve, K.K. Venugopal, S. Guru Krishna
Kumar, Mahabir Singh, Dr. Rajeev Dhawan, Kavin Gulati, Sr. Advs.
Anil Grover,.AAG, Tejveer Singh Bhatia, R.N. Karanjawala,Adv. Ms. D
Ruby Singh Ahuja, Ms. Deepti Sarin, Chah~! Chawla, Ms. Kanika
Agnihotri, Jai Shankar Singh, Upender Thak~·r, Ms. Aakansha Munjal,
(For M/s.Karanjawala & Co.), Ms. Kanita Agnohotri, Tejveer Bhatia,
Ms. Deepti Sarin,ChahafChawla, (For Mis. Karanjawala & Co.), Piyush
Hans, Satish Kumar,. Sanjay Kumar Vi sen, Ms. Nupur Singhal, Ms.
AnubhaAgrawal, Sanjeev K. Bhardwaj, Anil Karnwal, (For Sun ii Roy), E
· Nikhil Jain,_ Gagan Deep Sharma, Ms. Preeti Singh, Tejveer Bhatia,
Gaurav Sharma, Rohan Swarup, Ms. Binu Tamta, Ms. Virula Sinha,
(For Ms. Sushma Suri), D.N. Goburdhan, M.L. Sharma, Dinesh Verma,
Subhasish Bhowmick, S.L. Aneja, Ajay Pal, Amit Mehra, P.P Nayak,
Siddharth Mittal, Surender Singh, Dr. Kailash Chand, Kamal Mohan
F
Gupta, Rohit Kumar Singh, Advs., them for the appearing parties.
The Judgment of the Court was delivered by
ANIL R. DAVE, J. I. Leave granted. Principal question
which has fallen for consideration is whether the power of the State to
acquire land for a public purpose has be~n used in the present case to G
facilitate transfer of title of the land of original owners to a private builder .
to advance the business interest of the said builder which is not legally
~ permissible. Further question is whether on admitted facts, the acquisition
ofland is entirely or partly for a private company without following the
statutory procedure for the said purpose. Further question is how in the
H
220 SUPREME COURT REPORTS (2016] 2 S.C.R.

A facts and circumstances relief could be moulded.
2. Vide notification dated 11'" April, 2002, 850.88 acres of land
was proposed to be acquired for residential/commercial Sector 27-28,
Rohtak, Haryana by the Haryana Urban Development Authority under
the Haryana Urban Development Authority Act, 1977 ('the 1977 Act'). ~
B However, the final notification dated 8'" April, 2003 under Section 6 of
the Land Acquisition Act, 1894 ('the 1894 Act'), according to the
impugned order of the High Court, was in respect of 441.11 acres. Award
dated 6"' April, 2005 was for 422.44 acres. Appellant -Uddar Gagan
Properties Limited ('the Builder') who is a Builder-cum-Developer
entered into collaboration agreements with some of the fanners-owners_
c whose land was under acquisition on 02"' March, 2005 for development
ofa Colony in accordance with the Haryana Development and Regulation
of Urban Areas Act, 1975('the 1975 Act'). The Builder made applications
on and around 21" March, 2005 to the Director, Town and Country
Planning, Chandigarh, Haryana for grantoflicence to develop a colony
D on land covering about 280 acres. The licences were granted on and
around 12'h June, 2006 and corresponding land was released from
acquisition. The licences were addressed to the owners but remitted to
the builder. This was followed by execution of sale deeds in favour of
the builder through power of attorney holder of the land owners.

E 3. It was on these undisputed facts thatthe High Court was called
upon to examine the questions on a group of petition/s by the land owners
which are framed in the impugned judgment as follows :-
[i] Whether the object behind the subject-acquisition was to
achieve a bona-fide public purpose or to use it as a cloak for
F the private benefit of Builder-cum-Developer?
[ii] Whether the power of 'eminent domain' has been exercised
in violation of Articles 14, 21 and 300-A of the Constitution?
[iit} Whether it is lawful to enter into 'Agreement to Sell' or
'Collaboration Agreement· in respect of the land under
G acquisition and can an instrument of sale be executed in
respect of such land?
[iv] Whether a writ cou;t in exercise of its powers under Article
226 of the Constitution is competent to annul a sale-
transaction executed in violation of and 011 playing a fraud
H on the Statute?
UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 221
[ANIL R. DAVE, J.)

[v} Whether the orders granting Licenses or releasing the A
acquired land have been passed in favour of JI'" respondent
in accordance with provisions of 1975 State Act? ·
..
[vi} Whether the petitioners have got locus standi to challenge
the. 'licences' or the orders of release of the acquired land in
favour of respondent No. 11? B
[vii} Whether writ petitions suffer from inordinate delay and
latches?"
4. It was held that in view of the scheme of the 1977,fict, the
notified public purpose for acquisition was covered by Section 3(f)(ii)
and (iv) of the 1894 Act, but the events following the notification for C
acquisition unfolded different story. After receipt ofnotices by the land
owners under Section 9 of the 1894 Act, calling upon them to appear
before the Collector for determination of compensation, the builder
suddenly surfaced in March, 2005 and applied for grant of licences for
setting up colony on the land ·covered by the notification and paid full D
sale consideration to the land owners. The Government files deceptively
projected the initiative .to release land at the instance of farmers and
owners while the real fact was to transfer the title of land to the builder.
Factual matrix based on record noticed in the judgment of the High
Court is as follows :-
E
'.'{60}. Awards No. 1, 2 and 3 were admittedly passed on .06'"
April, 2005 i.e. a day before the expiry of the statutory period
of two years. As per the categoric stand taken by the Land
Acquisition Collector in the written statement initially filed,
he took over the possession of land and handed-over it to the
Estate Officer. HUDA, Rohtak on that very day, i.e., 06th April, F
2005. The official record also substantiates this plea of the
respondents. On doing so, the acquired land stood vested
absolutely in the State Government, free from all encumbrances
by virtue of Section 16 of the 1894 Act.
xxx xxx G
[62}. The Government Files pertaining to the grant of licence
or release of land in favour of 11th respondent have been.
deceptively captioned as if the entire initiative to seek the
release of land is at the instance of the farmer-owners of the
acquired land. That very record, however, falsifies this facade. H
222 SUPREME COURT REPORTS [2016] 2 S.C.R.

A The application dated 21st March. 2005 [receipt No. 2461}
is on the letter-head of respondent No. JI. It is signed by one
of its Directors. Form 'LC-I', however. earlier thumb
impressions of previous owners along with the attested copies
of 'Power of Attorney' and 'Collaboration Agreements'
executed by them in favour of respondent No. II. The
s· Application Forms refer to deposits of demand drafts of lacs
of rupees. Who paid that requisite fee or statutory charges?
Was it by the farmers whose land already stood acquired and
·who had not received even a single penny of co_npp1sation?
OR was it deposited by respondent No. II? The copies of
c Demand Drafts answer this query as every penny was
deposited by respondent No. JI only.· The illiterate or semi-
illiterate farmers had no knowledge except that their land
was under acquisition and there was a Builder willing to pay
them a price which was much more than the Government
compensation.
D
[63]. It is quite unfortunate and misleading that every relevant
Government file recites, say for example, that "Shri Surat
Singh and other individuals have submitted request on LC-I
for setting up of Residential Plotted Colony over an area
measuring 84. 04 Acres....... the applicants have deposited an
E amount of ''34, 091401- towards Scrutiny Fee and '42, 020001
- towards Licence Fee'. The said application was dealt with
first time vide office note dated 19th August, 2005 yet no
where it is disclosed that the land had already been acquired,
award passed and it stood vested in the State free from all
F encumbrances. In the subsequent notings, the so-called
'applicants' disappeared and all the Officers starting from
the District Town Planner onwards, have worked over-board
. to contribute in favour of the claim of II th respondent. "
5. It was concluded :-
G "[69]. From the facts noticed above, there can be no different
conclusion but to infer that though the proposal to acquire
land for the developmept of Urban Sectors at Rohtak was
mooted, approved and was taken to a logical conclusion for
a bona-fide public purpose. However, during the interregnum
H and before passing the Award, an unholy nexus to promote
UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 223
[ANIL R. DAVE, J.]

the private interest of respondent No. 11 sprouted which de- A
· railed the public purpose of acquisition and led to the misuse
of power under Section 48 of the 1894 Act. Respondent No.
11 exploited the moments of suspense and succeeded in
entering into distress-sale agreements with the desperate
. owners who were sandwiched and had no other choice but to
B
give in for a comparatively better offer.
[70}. To say that the landowners entered into varied contracts
with Respondent No.11 voluntarily, willingly or without undue
pressure. is too farcical to be believed. The~~_is. a natural and
conventional bondage between the land and its tiller. A farmer
seldom sells the land save for the compelling reasons. c
Agricultural 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 yardstick to be
followed is the Collector :S rate fixed for the purpose of D
registration charges. The farmer can not 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 No. 11 to indulge
in the best bargain. For the farmers the offer was like 'better
you give the wool than the whole sheep·. There was no free E
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 offarmers. They were gropping in the F
dark. They had no clue that the land will be released. They
accepted the unreasonable and unfair unilateral terms and
lost their land. ·
{71}. The sale price of the land was determined by respondent
a
No. 11 gnd not by the market forces. Given choice between G
retaining their land or selling it to the Builder for the offered-
price, not a single farmer would have agreed to sell it. The
circumstances forced the /a11dow.1iers to accede to the offer
made by 11th respondent made. It is a proven case of
unconscionable bargain exerted through undue influence and
fraud, both. The sample 'agreements' on record truly reveal H
224 SUPREME COURT REPORTS [2016] 2 S.C.R.

A that illiterate/semi-literate farmers were asked to sign the
documents on dotted-lines forcing them to sell out most of
their- ancestral holdings. The en-mass 'Agreements'
conclusively belie the plea of need-based bona-fide sales.
How the Courts should deal with the unconscionable contracts
" which are injurious to public good and public interest, has
B
been eloquently answered by the Supreme Court in Central
Inland Water Transport Corporation Limited & Anr. Vs. Brojo
Nath Ganguly fie Anr. {1986] 3 SCC, 156 saying that
"...... Article 14 of the Constitution guarantees to all persons
equality before the law and the equal protection of
c laws........ This principle is that the courts will not enforce and
will, when called upon to do so, strike down an unfair and
unreasonable contract, or an unfair and unreasonable clause
in "a contract, entered into between parties who are not equal
in bargaining power. ..... Fol' insta11ce, the above principle will
D apply where the inequality of bargaining power is the result
of the great disparity in the eco11omic strength of the
contracting parties......... !/ will also apply where a· man has
no choice or rather no meaningful choice, but 10 give his
assent to a contract or to sign 011 the dotted line in a prescribed
or standard form or to accept a set of rules as part of the
E contract, however unfair, unreaso11able a11d unconscionable
a clause in that co11tract or form or rules may be..... ".
[72]. If there were good and justifiable reasons, though
conspicuously missing from the record, for 11ot proceedi11g
with the subject-acquisitio11, the State Govemment as a
F guardian of people:. rights could shelve off its previous pla11
to develop Sector 27-28 at Rohtak through the State age11cy
and release the land to its owners. It, however, did not do so.
Rather, the State u11leashed the threat of its mighty power
under the ruse of emi11ent domai11 a11d created a psycho-fear
G i11 the mi11d of poor farmers that they would, if did not agree,
lose the land a11d its value both.
[73]. We may 11ow also deal with yet another vigorously argued
plea that the land was as a matter of fact released from
acquisition or most of the lice11ces were granted 10 respondent
H
No. 11 u11der the directio11s of this Court. The official
UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 225
[ANIL R. DAVE, J.]

respondents in the written statements have repeatedly referred A
to CWP Nos. 14451 to 14453 of 2010 which were allow.ed by
a learned Single Judge on 06'" December, 20 JO directing the
State and its authorities to extend the benefit of Section 48 of
the 1894 Act to the landowners and grant them licences. It is
pertinent to mention that while CWP No. 14451 of 2010 was B
filed by Mis Uddar Gagan Properties Private Limited -
respondent No. 11 along with s01i1e land-owners represented
it, in the 2nd case also the said Builder-cum-Developer was
one of the writ petitioner and the other farmers were also
impleaded "THROUGH THEIR POWER OF ATTORNEY
HOLDER - SHRI SANJAY JAIN... ", namely, the authorised C
representative of respondent No. II. All the three writ petitions
were, thus, filed by respondent No. 11 only. It is interesting to
note that the learned Single Judge in his order dated 06th
December, 2010 has said that "Two sets of replies have been
filed by respondents no. 1 and 2. While admitting the entire
0
factual aver men ts made in the writ petiiions regarding the
ownership. of the acquired land by the petitioners, their
applications for grant of licence and release of the part of
the lan(l and grant of licence to the petitioners in CWP
No.14452 of 2010 and 14451 of 2010, it is stated that
possession of the land where the Rabi crop was standing could E
not be taken over by the Estate Officer, HUDA, Rohtak/Land
A~g_uisition Collector, Hissar as the land owners were granted
tirlle upto 30.4.2005 at their request. Subsequently, the matter
was referred to the Deputy Commissioner, Rohtak who vide
his report dated 17.3.2006 confirmed the possession of the
land owners upto October, 2005. Thereafter on account of · F
. status quo issued by the High Court in CWP Nos.1893 and
I 894 of 2006, possession of tracts o:f!Gnd for which licence
was granted could not be taken over from the petitioners".
[Emphasis applied].
[74}. It may be seen that 'the public purpose' of acquisition, G
the factum of taking possession of the acquired land on 06th
April, 2005, non-existence of any Government policy or a
provision in the Statute to grant Licence for an acquired land
'-..,- _)
etc. etc. were not disclosed before the learned Single Judge.
Only selective information convenient to the cause of H
226 SUPREME COURT REPORTS [2016] 2 S.C.R.

A respondent No. 11 was brought on record. There is a serious
doubt on the nature of contest given by the official respondents
who took it like a 'friendly match'. The collusion between
respondent No. 11 and the senior functionaries is writ large
in the fact that despite unambiguous opinion given by the.
Advocate General, Haryana that it was a fit case to file Letters
B
Patent Appeal, the Department secured a contrary opinion
from the office of LR, Haryana and allowed the judgment of
learned Single Judge to attain finality. In this entire process,
the Constitutional Office of the Advocate General was also
belittled. We fail to understand as how the opinion given by
c the Advocate General could be over-ruled by securing a
tai/iJr-m.ade opinion from an inferior authority.
[75]. The 'names of landowner-farmers were kept at the
forefront in the Government files or before the Court to hide '
the identity of respondent No. 11 wherever possible and to
D.· ·1 give a misleading impression as if the real beneficiaries of
State largess were the small time landowners. The fact. of the
matter_ is that the farmers have not got eyen an inch of the
released land, which has been formally transferred in favour
of respondent No. 11 through the Sale Deeds executed in
January, 2007, again by General Power of Attorney holders
E of the farmers, namely, authorised representatives of
respondent No. 11. The only irresistible conclusion can be
that the farmers stood ousted from the scene since Marchi'
April, 2005 and it was the 11th respondent who masqueraded
for them, othenvise where was the occasion for the landowners
F to execute Sale Deeds on 25th January, 2007 through the
Power of Attorneys obtained from them in March, 2005?
xxx xxx
[79]. The Vendors and the Vendee both had full and informed
knowledge of the fact that the transacted land had since been
G acquired and Award also passed. The Vendee was aware of
the fact that the Vendors did not possess a clean title, yet the
Sale Deeds were presented and got registered, after about
two years of the ·passii1g of the Awards, on 06th April, 2005.-
Every such transaction in respect of the acquired land was
H indeed null and void having no existence in the eyes of law.
UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 227
[ANIL R. DAVE, J.]

[80}. ............ Secondly, it is not a case of challenging the A
Sale Dee~s for the breach of any bilateral terms and
conditions or on the conventional grounds where a question
of fact has to be proved. The incidental relief to declare the
Sale Deeds as null and void is an offshoot of the broader
issues raised by the petitioners including those hovering
B
around the systematic colourable exercise of power by the
State apparatus. A Constitutional Court while performing its
solemn duty as a Trustee of the fundamental rights of the
citizens shall thus be well within its right to lift the veil and
unmask the private ·ob)ect behind an acquisition carried out
in disregard to the. mandate of Articles 14 and 300-A of the c
Constitution.
xxx xxx
[82}. Power of land acquisition vested under the 1894 Act
could be invoked only in public interest and not for creating
land-bank in favour of respondent No. 11 through distress D
sales. The State cdn not force the landowners IQ surrender
their title in favour of and at a price to be dictated by a private
beneficiary. The notified public purpose was only a ruse to
enable respondent No. II to purchase the land at the lowest
possible price for maximizing the profiteering. It is so well E
seflled that an action to be taken in a particular manner as
provided by a Statute, must be taken, done or performed in
the manner prescribed or not at all. The .rule laid down by the
Privy Council in Nazir Ahmad Vs. King Emperor, AIR 1936
PC, 253 that "where a power is given to do a certain thing in
a certain way, the thing must be done in that way or not at F
all", has been approved and further expanded by the Apex
Court in a catena of decisions. Whe1l an action is taken in
furtherance of explicit power given by a Statute, the legitimacy
of invoking such power shall depend entirely upon the extent
of achieving the net-end object for which the Statute enables G
the exercise of such power. These principles have been violated
in whole-!!flme in the case in hand as the pretended public
purpose was neither intended nor was finally achieved.
[83]. There Is too much hype created by the official respondellfs
with reference to the legislative Scheme of the 1975 State Act. H
228 SUPREME COURT REPORTS (2016]2 S.C.R.

A At the cost of repetition, it may be mentioned that applications
for the grant of Licences were moved mostly in Marchi April,
2005 though respondent No. 11 continued dropping in such
applications in the year 2006 also. All the Licences were
issued after passing of the Award in April, 2005 and before
the execution of Sale Deeds in January, 2007. The Builder
B
did not own an inch of land, yet every licence was addressed
to it and sent with a specific enclosure that respondent No. 11
was the sole owner of the licensed and released land. The
issuance of licence, in our considered, view, was a fraud played
on the policy behind the 1975 Act. We say so for the reasons
c that Section 2[d] of the Act defines 'colonizer' to mean "'an
individual, company or association, body of individuals,
whether incorporated or not, owning land for converting it
into a colony..... ". Section 2[k} defines the expression 'owner'
to include a person in whose favour a lease of land in an
urban area for not less than 99 years has been granted.
D
Section 3[1} mandatorily requires that "'any owner desiring
to convert his land into a colony" can make an application
for the grant of Licence. Sub-Section [2} obligates the Director
to inquire into "'title to the land". Similarly, Rule 3 of the
Haryana Development and Regulation of Urban Areas Rules,
E 1976 requires an owner of the land desirous of setting up a
colony to apply along with requisite documents including
.
"'copy or copies of all title deeds
-
... ". A mis-directed reliance
has been placed on Rule 17 of these Rules which says ·that
"the Colonizer shalJ not transfer the licence granted to him
under Rule 12 to any other person without the prior approval
: F
of the Director". It has already been dealt with in extenso
that the true owners were left with no choice but to enter into
the Collaboration Agreements with the Butfder, who was so
sure of obtaining the licences and getting the land released
that he ousted the owners from the consequential benefits of
G the licences in 2005 itself by paying them "entire sale
consideration" for the land which had already vested in the
State free from all encumbrances.
xxx xxx
[87]. Repeated reference to Section 48[1] of the 1894 Act is
H
UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 229
[ANIL R. DAVE, J.]

also equally misconceived and misplaced. The Full Bench in A
Ram Murti Sarin s case [supra} says that if possession has
not been taken by the Land Acquisition Collector as per the
Award announced by it, the State Government can allow the
.acquisition proceedings to lapse without any notification
under Section 48 of the Act, if it is no longer interested in B
acquisition of land. Had the official respondents followed
the law in letter and spirit after arriving at the conclusion
that the State was not interested in acquisition of land, the
one and only consequence ought to have been to 'allow the
acquisition to lapse and resultant return of land to the original
owners. Here is a case where ariificial reasons were created, C
the records were fudged with the aid of the Deputy
Commissioner, Rohtak, to mislead the fact that the possession
of acquired land was not taken while ':'nnouncing the Award.
The responsible officers of the State Government, in their
anxiety to help out respondent No. JI, have completely
overlooked the interest of landowners or of the General Public D
to whom thousands of plots could have been allotted at a
fairly low price through the aegis of HUDA.
xxx xxx
[89}. The obje<:tion of delay or latches raised against the E
petitioners merits rejection at-least on two counts. Firstly, it
·is decipherable from the Government record that the process
of granting licences or releasing the land commenced in the·
year 2006 and continued till the year 2011. In fact, till the
last date of hearing, the official respondents, for the reasons
best known to them, did not deem it necessary to bring it on F
record as to how much land [out of 422.44 acres] has since
-beel) released in favour of respondent No. 11. It, however,
appears from the submissions made at the bar that a major
chunk of land has now goi1e into the hands of respondent
No. 11 in due course of time except a few patches where the {i
State/ HUDA intends to develop 'public utilities' to facilitate
the said resprmdent. Secondly, no development ll'hatsoever
has been carried out till date and it was informed that the
land is still lying in its original form without any construction
having been made. (emphasis added) "
H
230 SUPREME COURT REPORTS [2016] 2 S.C.R.

,.
A 6. It is clear from the findings recorded by the High Court that the
transfer of title of land, covered by the notification for acquisition, in
favour of a builder, who sought release ofland for setting up of a colony,
was clearly to defeat the law and the notified purpose of acquisition. It
was observed that on this undisputed factual position, the plea of
alternative remedy of seeking annulment of sale deed by a suit could not
B
be entertained. Relief of setting aside of sale transaction was incidental
and consequential to the finding of illegal exercise of power to release
the land covered by acquisition proceedings to the builder who was not
the original owner. It became necessary to undo the illegality and
systematic fraud. It was undisputed that the builder did not own an inch
c was
ofland prior to acquisition and it only the land acquisition proceedings
coupled with the capacity of the builder to seek licences for colonization
ofland covered by acquisition which enabled itto acquire title. Contrary
to the legal mandate of requirement of a colonizer owning of its own
land, ownership ofland could not be allowed to be acquired by the sword
ofacquisition on the head of the original owners.
D
7. The High Court has observed that circumstances of the situation
which created helplessness for the farmers to surrender their rights and
unholy nexus of the builder with the officers of the Government resulted
in constitutional guarantee of equality and fair play being defeated and
acquisition power being abused to transfer the land to the builder in the
E name of acquisition by the State for public purpose.
8. On the aspect of moulding the relief, following operative order
was passed :-
{9./}. In the light of the discussion and for the reasons stated
F above, we allow these writ petitions in the following terms:-
[i] Since the subject acquisition neither intended nor has
achieved its 'public purpose', the notifications dated 1l'"
April, 2002 and 8th April, 2003 issued under Sections ./ and
6 of the Land Acquisition Act, 189./ are hereby quashed in
G
entirety. As a result thereto, the subsequent awards passed on
06th April, 2005 can not sustain and are consequently
quashed;
[ii} As a necessary corollary, the licenc.es granted to
respondent No. 11- Builder-cum-Developer dated 12'" June,
2006, 1st August, 2006, 1st September, 2006 or issued
H
UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 231
[ANIL R. DAVE, J.J

thereafter, even if not not brought on record but pertaining to A
the acquired land, are hereby declared null and void and
quashed;
{iii] Consequently, the release orders like dated 12th June,
2006 [P-28 and P-29] or any such like release orders
pertaining to the land acquired vide the notifications dated B
11th April, 2002 and 08th April, 2003, passed in purported
exercise of powers under Section 48{1] of the 1894 Act are
hereby quashed;
{iv] As a result of the declaration and directions issued at {ii]
and {iii] above, the Sale Deeds executed in favour of· c
respondent No. 11 on different dates in January, 2007 in
respect of the acquired land are declared to be null and void
and non-existent in the eyes of law;
-·
{v] Those landowners who have neither received
compensation nor entered into any Collaboration or D
Agreements to Sell with respondent No. 11, shall be restored
with the possession of their respective land forthwith.
{vi] Those landowners who have received compensation but
have not entered into ai1y Collaboration or Agreements to
Sell with respondent No. 11, shall also be returned their E
respective land subject to their deposit of the entire amount
of compensation along with simple interest at the ·rate of 9%
as prescribed under Section 28 of the Land Acquisition Act,
1894. The possession shall be restored in their favour within
one week of refund of the compensation amount;
F
[vii] Those landowners who have entered i111o Collaboration
or Agreements to Sell with respondent No. 11, shall be given
option to return the Sale Consideration received by them from
respondent No. 11 along with simple interest @ 7% per annum
within a period of three months from the date of receipt of
certified copy of this order. If any one of them has received G
compensation from the State, he/she shall be required to refund
the same in the manner as laid down for the landowners falling
in direction No. {vi] above. On doing so, the possession of ·
their acquired land shall be restored to them within one week;
{viii] If any of the landowners falling in Category {vii] above H
232 SUPREME COURT REPORTS [2016] 2 S.C.R.

A fails to return the sale consideration to respondent No. JJ or
the compensation amount to the State, title of his/her land to
that extent, shall stand transferred in favour of respondent
No. Jl;
[ix] If the landowners fail to return the consideration amount
B to the private Builder as directed above and Respondent No.
11 perfects its title qua their land, the State Government would
be free to grant Licence to the said respondent to the extent
of such land, if so permissible under the 1975 Act;
[x} Respondent No. J/ shall be entitled to seek refund of the
c Licence fee, CLU or other statutory charges from the State,
within a period of six months but without any interest, to the
extent and for the land which shall siand released in favour
ef the orif{inal owners;
[xi] There shall be cost of '50, 0001- [Fifty Thousand] in each
D case on re~pondent No. 11 which it shall deposit within one
month with [i] Mediation and Conciliation Centre and [ii]
Lawyers' Welfare F_,und of High Court Bar in equal share."
9. When the matter first came up for hearing before this Court,
reliance was placed on an order of this Court dated 5'h August, 2011 in
E SLP (Civil) ..... ./2011 (CC 12415of2011 ), titled Stllte ofHll~vamt versus .
Si11dltu Education Foundation granting stay of the High Court
judgment. The order of this Court in the said case has been referred to
in the impugned order also. The said petition has been subsequently
dismissed by this Court on 7'h September, 2015 (being SLP (Civil)
No.22354 of 2011 ). This Cow1. while issuing notice, granted stay of
F operation of the impugned judgment. However, vide order dated 13'"
March, 2015, it was clarified that stay could not mean that any further
development could be effected on the property. However, certain
interlocutory applications have been filed wherein applicants claim to
have purchased the plots on and after 6"' February, 2012, during pendency
of the litigation to support the appellant-builder. Applications have also
G
been filed by some land owners who were not party before the High
Court to support the impugned judgment. Even though persons who
claimed to have purchased the plots during pendency oflitigation may
have no right whatsoever to oppose the writ petitions, we have heard
counsel representing them only with a view to consider the diverse view
H points presented before the Court.
UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 233
[ANIL R. DAVE, J.]

10. We have heard Shri Shyam Divan, learned senior counsel for A
the builder, S/Shri Harish N. Salve and Dr. Rajeev Dhawan, learned
senior counsel, apart from other counsel, also appearing for the builder
or the purchasers and Shri K.K. Venugopal, learned senior counsel for
the land owners and other counsel for the land owners. We have also
heard learned counsel for the State. The record has also been produced
B
by the State.
11. The contentions on behalf of the appellants are that there is
nothing wrong with the policy of the State to permit colonization by a
private builder and thcsaid policy is not under challenge. The policy is
permitted by the 1975 Act and the High Court had issued a direction to
consider the case of the appellant as per the said policy. In spite of the c
award, the possession continued with the land owners and the power
under Section 48 of the 1894 Act was validly exercised for releasing the
land. Irrespective of the merits, the petition was liable to be dismissed
on the grounds of delay and latches and also on the principle of approbate
and reprobate since the land owners had executed sale-deeds in favour D
of the builder and taken benefit of collaboration from the builder. It was
also submitted that the operative direction in th·e impugned judgment
giving options to the land owners "to retain the land or to receive the
compe.nsation paid to them by the builder with interest or to refund the
compensation collected to the State", will result in a truncated colony
being set up which will be contrary to the concept of integrated E
development. It was also submitted that the High Court has wrongly
assumed that there 'was no policy applicable to the present situation
permitting colonization. Reliance was also placed on policy dated 26'h
March, 2000. Shri Divan pointed out that as per report of the Chartered
Accountants, the builder had spent a sum ofRs.64.58 crores on payments F
made to the original land owners and to the Government towards stamp
duty and registration charges. The builder has also spent on development
and construction, EDC/IDC, financial cost, licence/scrutiny fee/
conversion charges, office/admin and other expense amounting to a sum
ofRs.174.62 crores. The builger had collected a sum ofRs.114.91 crotes
from thitd parties towards sale consideration of carved out plots/units in G
residential plotted colony at Sector 27 (part in Section 26 & 28) Rohtak,
· Haryana. Thus, the builder had already spent approximately Rs. I 00
crores in excess of the amount it had received and will not be able to
recover the same from the land owners if the land is to be returned
against consideration collected from them. Dr. Dhawan added that the H
234 SUPREME COURT REPORTS [2016] 2 S.C.R.

A issues ofundue influence could be decided only in a suit. The finding of
malafide was recorded unmindful of the standard of the proof required
and requirement of impleading party against whom allegation was made.
In any case, the relief could be moulded having regard to the transactions
which had already taken place laying down law prospectively. It was
also submitted that after acquisition, the HUDA could dispose of the
B
acquired land even without carrying out any development thereon.
Acquisition could not be challenged after the award. Bona fide purchasers
were entitled to restitution. Shri Salve submitted that as against the
problem of farmers on account of the forcible acquisition, equally serious
problem ofurban middle-classes for living space needs to be considered.
c Once acquisition is quashed, the validity of sale by fam1ers to the builders
should be left to be gone into in private law remedy where equity could
be balanced. If the acquisition is valid and the order of release under
Section 48 is quashed, the land has to revert to the State. In this fact
situation, the impugned order could not be justified. In absence of cross-
examination and weighing of equities, the land could not be returned to
D
the land owners who have already received the compensation or the
sale consideration. The alleged fraud and undue influence or coercion
may render a contract voidable but not void and the civil court has to
balance equities for setting aside such a sale. Learned counsel for the
State submitted that the object of the policy to permit colonization by a
E private builder is to prevent haphazard constructions. The policy helped
integrated fast development and enabled the State to impose restrictions
for reserving houses for weaker sections. It was submitted that the
roads have already been constructed and in case release ofland in favour
of the builder was to be quashed, the land should revert to the HUDA.

F 12. Opposing the above submissions, Shri K.K. Venugopal, learned
senior counsel of the land owners submitted that the facts speak for
themselves. The builder has emerged on the eve of making of the award
to make huge profits by exploiting helplessness of land owners facing
imminentthreatoflosing land under the notifications. The builder obtained
power of attorney in favour of its nominee and the land owners signed
G documents finding no other way to save their land irrespective of illegality
of the State action. The builder could have taken the risk of investing
money in illegally dealing with the land covered by acquisition only ifit
had assurance from the authorities that the land will be released to it
even though law did not permit it. Thus, creating a situation which
H compelled the land owners to surrender their rights in favour of a builder
UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 235
[ANIL R. DAVE, J.]

was abuse of the power of acquisition. In such a situation, the land A
owners had no means to know the name of the officers or their precise
role in advancing the illegality. Undisputed facts unequivocally indicate
clear fraud and abuse of power. Relief could be moulded by overlooking
technicalities to advance justice. It was also submitted that the State
Government itself had ordered CBI investigation in some identical cases
B
as also noted in the order of this Court dated 6'h October, 2015 in SLP
(Civil) No.5725/20 I 5 (Rameshwar & Anr. vs. State ofHaryana & Ors.).
I 3. We have given serious thought to the rival contentions. We
have found no reason whatsoever to disagree with the finding recorded
by the High Court that present case is a gross abuse of Jaw_ on account
of unholy nexus of the concerned authorities and the builder to enable
c
the builder to profiteer. The land could either be taken by State for a
compelling public purpose or returned to the land owners and not to the
builder.
14. There could be no objection to acquisition of land for a
compelling public purpose nor to regulated development of colonies, but D
entertaining an application for releasing of land in favour of the builder
who comes into picture after acquisition notification and release ofland
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 oflivelihood and existence E
ofa farmer. This is against the philosophy of the Constitution and in
violation of guaranteed fundamental rights of equality and right to property
and to life. What cannot be done directly cannot be done indirectly also.
I 5. This apart, if State is to be party to directly or indirectly select
beneficiary of State largess - which in present fact situation the State F
certainly is - objectivity and transparency are essential elements of
exercise of public power which are required to be followed. It is patent
that the State has enabled the builder to enter the field after initiation of
acquisition to seek colonization on the land covered by acquisition. In
absence of State's action, it was not possible forthe builder to enter into
the transactions in question which was followed by withdrawal from G
acquisition. But for assurance from some quarters, the builder could not
have made investment nor land owners could have executed the
transactions in question. Such fraudulent and clandestine exercise of
power by the State is not permitted by law. This is in violation of Public
Trust Doctrine laid down inter alia in Reliance Natural Resources Ltd.
' H
236 SUPREME COURT REPORTS [2016] 2 S.C.R.

A versus Reliance Industries Ltd.', Centre for Public Interest Litigation
versus UOF; Special Reference 1 of 2012 U/ A 143( I) of Constitution
oflndia3 and Manohar Lal Sharma versus Principal Secretary'.
16. Reliance on Policy dated 6" March, 2000 is misconceived.
The subject of the said document is:
B "Release ofandfi"om acquisition owned!purchased by the developers
be(ore the issue of notification under Section - 4 of the Land
Acquisition Act. 1894 but submitted application for grant of
permission for change of land use for starred hotels/ licence for
setting up of residential colonies thereafter "
(emphasis added)
C 17. Thus, the policy is applicable only to release of such land from
acquisition as is owned/ purchased by the developers before the issue of
notification under Section 4 of the Land Acquisition Act, I 894. This
condition was required to be strictly complied with and no person other
than original owners prior to acquisition could directly or indirectly avail
of the said policy. Even a bona fide error could not justify a patent
0
illegality. In the present case, it is und.isputed case of the builder itself
that it did not have even an inch ofland before the notification in question.
It is also patent that the application for grantoflicence, though purportedly
m:i'de by the land owners, has in fact been made by the builder. Reference
to the order of the High Court dated 25'" March, 2008 in Civil Writ
E Petition No. 4767 of2008 filed by the builder is ofno avail to the appellant
as it is only a direction to consider the claim of the writ petitioners in
accordance with law. The validity of claim of the builder has not been
adjudicated upon in the said order. Even in order dated 6'" December,
20 I0 in Civil Writ Petition No. 14452 of2010 and other connected matters,
F there was no consideration or adjudication of the issue with regard to
the validity ofreleaseofland in favourofa builder who came into picture
after the acquisition notification, which took away the basis of the claim
for any relief.
18. While it is true that a belated petition cannot be entertained
under Article 226 of the Constitution, it is well settled that this is only a
G rule of practice based on sound and proper exercise of discretion and
not a jurisdictional bar. Exercise of discretion to quash an illegal action

• (2010) 1sec1:
' (2012) 3 sec 1
'(2012) 10 sec 1
'(2014)9SCC516
H
UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 237
[ANIL R. DAVE, J.)

based on fraud or abuse of law even belatedly may not be liable to be- A
interfered with under Article 136 ofthe Constitution. 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 5• There is no legal sanction for such action, as already
explained.
19. It is well settled that use of power for a purpose different from B
the one for which power is conferred is colourable exercise of power.
Statutory and public power is trust and the authority on whom such power
is conferred is accountable for its exercise. Fraud on power voids the
action of the authority6·1 Mala fides can be inferred from undisputed
facts even without naming a particular officer and even without positive c
evidence'. In the present case, abuse of power in dealing with the matter
by the functionaries of the State is more than clear as.rightly found by the
High Court. Challenge to acquisition may not be confined to those who·
have. not accepted the amount of compensation or consideration. Once
such order/transaction is vitiated there could b.e no estoppel on the ground
that compensation/consideration has been received, as the land loser has D
little choice in the face ofacquisition".
20. Acquisition ofland is a serious matter. It may result in depriving
a tenure holder not only of his property but also his profession, livelihood
and social security". Even plight ofinvestors in plots/ flats in land covered
by acquisition or litigation cannot be a ground to ignore illegal actions of E
depriving a farmer of his land". As already observed, and is settled law,
State's power of compulsory acquisition cannot be used to enable a private
entity-to acquire title even if private person offers more compensation than
the State." It is also well settled that no legitimacy can be conferred to an
abuse of power to advance a private purpose by invoking doctrine of
prospective overruling 13 • F
'Royal Orchid Hotels v. G. Jayarama Reddy (2011) JO SCC 608. para 22
' State of Punjab v. Gurdial Singh ( 1980) 2 SCC 417
7
Greater Naida Industrial Development Authority v. Devendra Kumar (2011) 12 SCC
375, para 39
' State of Punjab v. Ramjilal ( 1970) 3 SCC 602, pr 9-1 O; Express Newspapers (P) Ltd.
v. UOI (1986) 1sec133. pr. 119-120 G
'(2011) 12 sec 375. para 43.
io ibid, para 45
11
ibid, para 47
"State ofBiharv. Kameshwar Singh, AIR ( 1952) SC 252, pr. 45, 52: Chairman Indore
Vikas Pradhikaran v. Pure Industrial Coke (2007) 8 SCC 705, pr 53-56; Devinder
Singh v. State of Punjab (2008) I SCC 728
ll Bangalore City Cooperative V. The State of Karnataka (2012) 3 sec 727, para 41 H
238 SUPREME COURT REPORTS [2016] 2 S.C.R.

A 21. We are also conscious of the legal position that under the
scheme of the l 894Act, the land losers get compensation as on the date
of Section 4 notification. Any transfer of title thereafter for release of
land to a person who is not owner on the date of notification under
Section 4 can be viewed as abuse of power under Section 48 of the Act.
Moreover, no such transferee can claim any right other than
8
compensation. While notification under Section 4 of the 1894 Act may
not prevent creation of an encumbrance on the land, such encumbrance
does not bind the Government".
22. In view of the above, we do not find any ground to interfere
with the finding recorded by the High Court that t_h7i:e.was an abuse of
C power in releasing the land in favour of the builder. Once it is found that
action of the State and the builder resulting in transferofland from land
owners to the builder was without any authority oflaw and by colourable
exercise of power, none of the contentions raised by the builder could
accepted". We may consider the issue ofnioulding relief separately but
D the builder cannot be allowed to retain the land acquired illegally. Undoing
of such illegal actions would clearly be in the interests of justice. The
wrong has to be remedied.
23. We find that the operative part of the order passed by the
High Court needs modification. The entirety of the acquisition need not
E be quashed. What needs to be quashed is the abuse of power and illegal
consequential actions which took place after the acquisition notifications.
The High Court has rightly observed that the notified public purpose
was valid but the subsequent events resulted in illegality. The High
Court also rightly held that it will be inappropriate to release the land in
favour of the builder by permitting the builder to take over the property
F and granting licence for colonization on the land covered by acquisition'•.
Further, view of the High Court that doctrine ofseverability cannot be
invoked and the entire acquisition was liable to be quashed needs
modification in the facts of this case.

G "(1995) 2 sec 528. [Gyan Chand V. Gopala & Ors.]:(1995) 5 sec 335
[Mahavir & Anr. v. Rural Institute. Amravati & Anr.]: ( 1996) 3 SCC
124 [The U.P. Jal Nigam. Lucknow Thr. its Chairman & Anr. v. Mis.
Kalra Properties Pvt. Ltd .. Lucknow & Ors.]: (2008) 9 SCC 177 [Meera
Sahni v. Lieutenant Governor of Delhi] and (2014) 15 SCC 394. pr. 14-
15; (2012) 12 sec 133 pr.18
" (2007) 9 sec 304
H "'Para 69 of the impugned judgment which has already been quoted.
UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 239
[ANIL R. DAVE, J.]

24. In view of the above, it is not necessary to refer to all the A
decisions cited on behalf of the appellant on the question that the court
may not entertain a belated petition or may apply the doctrine of
promissory estoppel or approbate and reprobate or insist on strict proof
of ma/afidies or to confine the relief to an individual who approaches
the court on facts which speak for themselves.
B
25. Once release of land under acquisition is found to be ma/a
fide or arbitrary exercise of power, acquisition ofreleased land stands
revived 17 • The operative direction of the High Court to quash the
acquisition to the extent it has neither been challenged nor concerns the
land transferred to a private builder by abusing the power of acquisition
or on account of any ext~aneous considerations does not appear to be
c
justified. Similarly the direction of permitting the builder to retain the
land of those land owners who are not able to refund the sale consideration
received by them may permit the builder to illegally retain the land.
Moreover, it may not be practicable in the present fact situation to restore
the land to the land owners but they can be duly compensated while D
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 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 E
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
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. 18 Any F
subsequent transactions entered into by the builder cannot be taken into
account and are hit by the principle of /is pe1idens. 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 oflitigation G
was suppressed, the third parties can take their remedies against the
builder. Without prejudice to their said private r~medies, the court may
try to balance equities to the extent possible. We are also of the view
11
(2014) 15 sec 394, para 14
18 ibid, pr 11 H
240 SUPREME COURT REPORTS [2016] 2 S.C.R.

A 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 actioA against those
who have misused their power and to find out the considerations for
sue~ misuse.

B 26. Land is scarc_e natural resource. Owner ofland 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 ofland can
certainly be rewarding to an individual. Initiation ofacquisition for public
purpose may deprive the owner of valuable land but it cannot permit
another person who may be able to get permission to develop colony to
c take over the said land. If the law allows the State to take land for
housing needs, the State itself has to keep the title or dispose of land
consistent with Article 14 after completion of acquisition. If after initiation
of acquisition, process is not to be completed, land must revert back to
owner on the date of Section 4 notification and not to any one else
D directly or indirectly. This is not what has happened.
27. As already observed, the power to release land from acquisition
has to be exercised consistent with the doctrine of public trust and not
arbitrarily. Functioning of a democratic government demands equality
and non-arbitrariness. Rule of law is the foundation of a democratic
E society. 19
28. However, having regard to the irreversible situation which has
been brought about, though in normal circumstances land may have
reverted to land owners, the relief will have to be moulded.
29. Keeping the above in mind, we are of the view that ends of
F -justice will be served by moulding the reliefas follows:
i) Notifications dated 11'" April, 2002, 8'" April, 2003 and
awards dated 6'h April, 2005 are upheld. The land covered
thereby vests in HUDA free from all encumbrances.
HUDA may forthwith take possession thereof.
G (ii) 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. ··
iii) Consequently, all licences granted in respect of the land
covered by acquisition will stand transferred to HUDA.
H " NOIDA Entrepreneurs Assn. v. NOIDA (2011) 6 SCC 508. prs. 40-41
-
.1

UDDAR GAGAN PROPERTIES LTD. v. SANT SINGH 24I
[ANIL R. DAVE, J.)

iv) Sale deeds/ other agreements in favour of the builder in A
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 party rights by the builder also stand
qu~shed,_,
B
v) The sale consideration paid by the builder to the land mvners
will be treated as compensation under the award. The
land owners will not be required to refund any amount. The
land owners who have not received compensation will be
at liberty to receive the same. The land owners will also be
at liberty to prefer reference under Section 18 of the 1894 c
Act within a period of three months, if such reference has·
not been earlier preferred.
vi) The builder will be entitled to refund/ reimbursement ofany
payments made to the State, to ·the land owners or the
amount spent on development of the land, from HUDA on D
being satisfied about the extent of actual expenditure not
exceeding HUDA norms on the subject. Claim of the builder
will be taken up after sett] ing claim of third parties from
whom the builder has collected money. No interest will be
· payable on the said amount. E
vii) The third parties from whom money has been collected by
the builder will be entitled to either the refund of the amount,
out ofand to the extent of the amount payable to the builder
under the above direction, availablewith the State, on their
claims being verified or. will be allotted the plots at the price F
paid or price prevalent whatever is higher..No interest will
be payable on the said amount.
viii) The State shall give benefit of "Rehabilitation and
Resettlement of Land Acquisition Oustees" policy of the
State/ HUDA to the land owners. Area so required shall be G
reserved out of the acquired land itself.
ix) The State Government may enquire into the legality and
bona fides of the action of the persons responsible for
illegally ·entertaining the applications of the builder and
releasing the land to it, when it had no title to the land on the
H
242 SUPREME COURT REPORTS [2016] 2 S.C.R.

A date of the notification under Section 4 of the 1894 Act and
proceed against them in accordance with law.
x) This Judgment be complied with within one year.
xi) Quarterly progress report of the action taken in pursuance
of this judgment be filed by the State in this Court and final
B report of compliance may be filed within one month after
expiry of one year from today for such further direction as
may become necessary.
30. The matters will be treated as disposed of except for
consideration of the report of compliance to be submitted by the State
c Government.
Nidhi Jain Appeals partly disposed of.