Summary
The Supreme Court found that Haryana’s abandonment of the Manesar land acquisition enabled builders and intermediaries to profit from purchases induced by the threat of acquisition. It annulled the withdrawal decisions as fraud on power. To restore the public purpose, it deemed an award to have been passed on 26 August 2007 for specified transferred lands and directed vesting in HUDA/HSIDC, with compensation adjustments and protection for verified apartment purchasers. Lands not transferred during the specified period were excluded.
Issues
- Whether abandonment of acquisition and licensing of post-notification purchasers amounted to fraud on power.
- Whether restitution required restoration to sellers or completion of acquisition in the public interest.
- How compensation, development expenditure, third-party purchases and intermediary gains should be treated.
Held
- The acquisition power cannot be used to induce landholders to sell to private builders and then abandoned to confer private advantages. The undisputed sequence, policy restrictions on licences for post-notification purchasers, exceptional gains and withdrawal decisions established extraneous considerations and fraud on power. A public-law class challenge was maintainable; individual cancellation suits were not indispensable. (¶¶ 21, 24, 30, 31, 32, 33)
- The greater victim was public interest. Merely returning land to sellers would not achieve the acquisition’s purpose. Full restitution required removing the intervening fraud and completing the otherwise valid process. Sellers were not treated as equally culpable, but were not entitled to restoration of their holdings. (¶¶ 33, 34, 35, 36, 38)
- The decisions of 24 August 2007 and 29 January 2010 were annulled. An award was deemed passed on 26 August 2007 only for lands covered by the section 6 declaration and transferred between 27 August 2004 and 29 January 2010. Untransferred lands were excluded. Subject to the further directions, covered land and licences vested in HUDA/HSIDC; the specified intervening period was excluded for section 24(2) purposes. (¶¶ 39(a), 39(b), 39(c), 39(d))
- Builders could not recover sale consideration from landholders. It counted towards compensation, with references permitted within three months. Any enhanced compensation was adjusted against sums already received; excess receipts were not recoverable from sellers. HUDA/HSIDC reimbursement to builders was limited to verified original purchase payments and eligible actual development expenditure within its norms, without interest and after third-party claims; subsequent purchasers retained remedies against their vendors. (¶¶ 39(f), 39(g))
- Verified third-party purchasers were entitled to the directed refund or allotment arrangements. Claims were to be filed within one month and verified within two months; completed or nearly completed projects received specific protection. Remaining property could be disposed of by HUDA/HSIDC under prevailing procedure. Landholders were to receive rehabilitation-policy benefits with the necessary area reserved from acquired land. (¶¶ 38, 39(h), 39(k))
- Authorities were directed to recover intermediary gains belonging to the State, and the CBI to investigate the transactions fully. Criminal proceedings were to follow law; the Court did not adopt the investigation’s untested conclusions against parties. The pending challenge concerning the enquiry commission was left on merits to the High Court, with a request for prompt disposal. (¶¶ 19, 39(i), 39(j), 39(m))
Result
Appeals allowed without costs. Withdrawal decisions annulled; deemed award, vesting, compensation, third-party protection, recovery and investigation directions issued, subject to the specified exclusions.