1. Land acquisition proceedings — Decision to withdraw acquisition declared mala fide — Dispute over whether collaboration agreements and development rights constitute transfer during the suspect period. (Para 1 , 2 , 4 , 5 )
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2022 Supreme(SC) 673
SUPREME COURT OF INDIA
Uday Umesh Lalit, S. Ravindra Bhat, Pamidighantam Sri Narasimha, JJ.
Rameshwar & Ors. – Appellants
Versus
State of Haryana & Ors. – Respondents
Miscellaneous Application No. 50 of 2019 in Civil Appeal No. 8788 of 2015 with Diary No(S). 26552 of 2019, MA 2150 of 2020 in C.A. No. 8788 of 2015, MA 2149 of 2020 in C.A. No. 8788 of 2015, Conmt. Pet.(C) No. 2226 of 2018 in C.A. No. 8788 of 2015, MA 1175 of 2019 in C.A. No. 8788 of 2015, Diary No(S). 24553 of 2019, Diary No(S). 45026 of 2019, SLP(C) No. 5490 of 2021, Diary No(S). 7888 of 2020, Conmt. Pet. (C) No. 513 of 2020 in C.A. No. 8788 of 2015, MA 1521 of 2020 in C.A. No. 8788 of 2015, MA 2067 of 2020 in C.A. No. 8788 of 2015, MA 2228 of 2020 in C.A. No. 8788 of 2015, SLP(C) No. 2147 of 2021, Diary No(S). 5699 of 2021, Diary No(S). 7775 of 2021, Diary No(S). 9505 of 2021, Diary No(S). 6705 of 2022, Diary No(S). 9002 of 2022, M.A. No. 864 of 2019, Diary No. 45009 of 2019. and Conmt. Pet. (C) No. 716 of 2021 in MA 50 of 2019 in C.A. No. 8788 of 2015
Decided On : 21-07-2022
Advocates:
Advocate Appeared:
For the Petitioner: Mr. Parijat Kishore, AOR Mr. Siddhant Buxy, AOR Mr. Devashish Bharuka, AOR Mr. M.L. Lahoty, Adv. Mr. Paban K. Sharma, Adv. Mr. Anchit Sripat, Adv. Mr. Pranab Kumar Nayak, Adv. Mr. Himanshu Shekhar, AOR Mr. Ranjit Kumar, Sr. Adv. Mr. Gopal Sankaranarayanan, Sr. Adv. Mr. Siddharth Batra, AOR Ms. Shivani Chawla, Adv. Mr. Brijender Chahar, Sr. Adv. Ms. Jyoti Chahar, Adv. Mr. Karan Chahar, Adv. Ms. Pooja Chahar, Adv. Mr. Shashi Bhushan, Adv. Mr. Vinay Garg, AOR Mr. Randeep Singh Rai, Sr. Adv. Mr. Ayush Shrivastava, Adv. Ms. Rubina Virmani, Av. Mr. Rituraj Singh, Adv. Mr. Shivendra Singh, AOR Mr. Anil Grover, Sr. AAG Mr. Anjay Bansal, Adv. Mr. Satish Kumar, Adv. Mr. Sanjay Kumar Visen, AOR Mr. Rahul Khurana, Adv. Ms. Noopur Singhal, Adv. Mr. Alok Sangwan, Sr. AAG Mr. Sumit Kumar Sharma, Adv. Mr. Anurag Kulharia, Adv. Dr. Monika Gusain, AOR Ms. Gunjan Sinha Jain, Adv. Mr. Miteesh Charan, Adv. Mr. Pranam Jain, Adv. Mr. Chanchal Kumar Ganguli, AOR Mr. Somesh Arora, Adv. Mr. Aviral Kashyap, AOR Mr. Vimal Sinha, Adv. Mr. Shish Pal Laler, Adv. Mr. Atul, Adv. Mr. Hitesh Kumar, Adv. Mr. Aayush, Adv. Mr. Vedant Pradhan, Adv. Mr. Vikram Singh Jakhar, Adv. Mr. Ravi Panwar, AOR Mr. Pulkit Deora, Adv. Mr. Udit Gupta, Adv. Mr. Anup Jain, Adv. Mr. Akshay Goel, Adv. Mr. Vyom Chaturvedi, Adv. Mr. Harsh Gurbani, Adv. Ms. Prache Gupta, Adv. Mr. Naman Joshi, Adv. Mr. Guneet Sidhu, Adv. Mr. Yuvraj Francis, Adv. Ms. Manisha Ambwani, AOR Mr. Siddharth Batra, AOR Ms. Shivani Chawla, Adv. Mr. Chinmay Dubey, Adv. Mr. Anurag Ojha, Adv. Mr. Karan Agarwal, Adv. Ms. Shubhangi Tuli, AOR Mr. Mukesh Kumar Maroria, AOR Mr. Arvind Kumar Sharma, AOR Ms. Pragya Baghel, AOR Mr. Nitin Bhardwaj, AOR Mr. Ankur Bansal, AOR Ms. Rashi Bansal, AOR Mr. Aditya Verma, AOR Mr. Gaurav Goel, AOR Mr. Sunny Choudhary, AOR Mr. Avadh Bihari Kaushik, AOR Mr. Ranbir Singh Yadav, AOR Mr. Vikas Mehta, AOR Ms. Ranjeeta Rohatgi, AOR Mr. Rameshwar Prasad Goyal, AOR M/s. Karanjawala & Co., AOR Mr. E. C. Agrawala, AOR Mr. Umesh Kumar Khaitan, AOR Ms. Shally Bhasin, AOR Ms. Meenakshi Chauhan, AOR Mr. Amarjeet Singh, AOR Mr. Abhinav Agrawal, AOR Mr. S. S. Jauhar, AOR Mr. Ramendra Mohan Patnaik, AOR Mr. Amit Pawan, AOR
Advocate Appeared:
For the Petitioner: Mr. Parijat Kishore, AOR Mr. Siddhant Buxy, AOR Mr. Devashish Bharuka, AOR Mr. M.L. Lahoty, Adv. Mr. Paban K. Sharma, Adv. Mr. Anchit Sripat, Adv. Mr. Pranab Kumar Nayak, Adv. Mr. Himanshu Shekhar, AOR Mr. Ranjit Kumar, Sr. Adv. Mr. Gopal Sankaranarayanan, Sr. Adv. Mr. Siddharth Batra, AOR Ms. Shivani Chawla, Adv. Mr. Brijender Chahar, Sr. Adv. Ms. Jyoti Chahar, Adv. Mr. Karan Chahar, Adv. Ms. Pooja Chahar, Adv. Mr. Shashi Bhushan, Adv. Mr. Vinay Garg, AOR Mr. Randeep Singh Rai, Sr. Adv. Mr. Ayush Shrivastava, Adv. Ms. Rubina Virmani, Av. Mr. Rituraj Singh, Adv. Mr. Shivendra Singh, AOR Mr. Anil Grover, Sr. AAG Mr. Anjay Bansal, Adv. Mr. Satish Kumar, Adv. Mr. Sanjay Kumar Visen, AOR Mr. Rahul Khurana, Adv. Ms. Noopur Singhal, Adv. Mr. Alok Sangwan, Sr. AAG Mr. Sumit Kumar Sharma, Adv. Mr. Anurag Kulharia, Adv. Dr. Monika Gusain, AOR Ms. Gunjan Sinha Jain, Adv. Mr. Miteesh Charan, Adv. Mr. Pranam Jain, Adv. Mr. Chanchal Kumar Ganguli, AOR Mr. Somesh Arora, Adv. Mr. Aviral Kashyap, AOR Mr. Vimal Sinha, Adv. Mr. Shish Pal Laler, Adv. Mr. Atul, Adv. Mr. Hitesh Kumar, Adv. Mr. Aayush, Adv. Mr. Vedant Pradhan, Adv. Mr. Vikram Singh Jakhar, Adv. Mr. Ravi Panwar, AOR Mr. Pulkit Deora, Adv. Mr. Udit Gupta, Adv. Mr. Anup Jain, Adv. Mr. Akshay Goel, Adv. Mr. Vyom Chaturvedi, Adv. Mr. Harsh Gurbani, Adv. Ms. Prache Gupta, Adv. Mr. Naman Joshi, Adv. Mr. Guneet Sidhu, Adv. Mr. Yuvraj Francis, Adv. Ms. Manisha Ambwani, AOR Mr. Siddharth Batra, AOR Ms. Shivani Chawla, Adv. Mr. Chinmay Dubey, Adv. Mr. Anurag Ojha, Adv. Mr. Karan Agarwal, Adv. Ms. Shubhangi Tuli, AOR Mr. Mukesh Kumar Maroria, AOR Mr. Arvind Kumar Sharma, AOR Ms. Pragya Baghel, AOR Mr. Nitin Bhardwaj, AOR Mr. Ankur Bansal, AOR Ms. Rashi Bansal, AOR Mr. Aditya Verma, AOR Mr. Gaurav Goel, AOR Mr. Sunny Choudhary, AOR Mr. Avadh Bihari Kaushik, AOR Mr. Ranbir Singh Yadav, AOR Mr. Vikas Mehta, AOR Ms. Ranjeeta Rohatgi, AOR Mr. Rameshwar Prasad Goyal, AOR M/s. Karanjawala & Co., AOR Mr. E. C. Agrawala, AOR Mr. Umesh Kumar Khaitan, AOR Ms. Shally Bhasin, AOR Ms. Meenakshi Chauhan, AOR Mr. Amarjeet Singh, AOR Mr. Abhinav Agrawal, AOR Mr. S. S. Jauhar, AOR Mr. Ramendra Mohan Patnaik, AOR Mr. Amit Pawan, AOR
The Court held that 'transfer' in the context of land acquisition includes not only formal sales or leases but also collaboration agreements, granting of development rights, and issuance of licenses during the suspect period, as these effectively part with substantial ownership rights for valuable consideration, regardless of whether formal title remains.
Headnote:(A) Land Acquisition Act, 1894 - Section 4 and 6 - Principles of mala fide exercise of power, fraud on power in the context of land acquisition and developer agreements - The Court invalidated the decision of the State of Haryana dated 29.01.2010, which withdrew the acquisition of lands following an earlier notification under Section 4. The Court found that such withdrawal was mala fide, causing landowners to part with property at undervalued rates, thereby benefiting private interests. Important conditions from the main judgment were reiterated, ensuring that the parties involved should not benefit from actions taken during the suspect period (27.08.2004 to 29.01.2010). Specifically, the collaboration agreements entered during this period were deemed to constitute 'transfer', invalidating sales that took place within that timeframe. The Court ordered various payments to be made by developers due to the invalidation of agreements found to align with fraudulent activities, emphasizing the need for equitable resolution regarding consumer rights and interests. (Paras 1-121)
(B) Legal Principles - The definition of transfer under the deemed award was expanded to include not just conveyance but all substantive agreements that transferred significant developmental rights during the suspect period, thus necessitating a broader application of rights to affected landowners. (Paras 38, 121)
Legal Category Hierarchy
- administrative law
- property law
-
practice and procedure
- arbitration (Para 72)
Table of Contents
2. Developers contend collaboration agreements without title transfer are not transfers — State argues parting with possession and development rights constitutes transfer of ownership interests. (Para 5 , 9 , 10 , 15 , 17 , 23 , 26 , 93 , 97 , 98 )
3. Collaboration agreements parting with possession and development rights for consideration leave only nominal title, effectively transferring the bundle of ownership rights. (Para 28 , 31 , 33 , 34 , 35 , 36 , 37 , 39 , 40 )
4. Transfer includes collaboration agreements and licenses that part with predominant ownership rights and possession for valuable consideration, regardless of whether formal title is conveyed. (Para 40 , 119 , 121 )
5. Collaboration agreements deemed transfers — Specific projects included in or excluded from deemed award — Directions for payments, refunds, and title validation for allottees. (Para 42 , 43 , 44 , 50 , 58 , 59 , 60 , 63 , 72 , 73 , 87 , 100 , 111 , 112 , 118 , 121 )
6. Does a collaboration agreement where the owner retains legal title constitute a transfer of property?
Yes. If the agreement parts with predominant ownership rights—including possession, development rights, and the ability to create third-party interests—for valuable consideration, it is a transfer. Such arrangements leave the owner with only a nominal title, effectively transferring the property's essential attributes. (Para 34 , 40 , 119 , 121 )
7. How are third-party allottees protected when land is included in a deemed award?
Allottees who paid full consideration and were granted possession or have registered conveyance deeds are entitled to clear title. Others may be entitled to possession upon completion or verified refunds, ensuring they do not suffer due to the developers' actions. (Para 41 , 58 , 59 , 110 , 111 )
8. What is the legal significance of obtaining development licenses during a suspect period of acquisition?
Applying for and obtaining licenses based on collaboration agreements during the suspect period, particularly before the scheduled award date, indicates foreknowledge of the state's intent to drop acquisition and establishes complicity in subverting the acquisition process. (Para 39 , 40 )
9. Are bona fide purchasers of land parcels during the suspect period protected from a deemed award?
No. Protection is extended to bona fide purchasers of constructed units or flats. Individuals who purchased land parcels during the suspect period are not protected, as they assumed the risk of the acquisition being completed. (Para 116 , 117 )
JUDGMENT
S. Ravindra Bhat, J.
INDEX
| Background | |
| I. Applications filed by: | |
| (a) M/s. Paradise Systems Pvt. Ltd. | |
| (b) M/s. Karma Lakelands Pvt. Ltd. | |
| (c) Frontier Home Developers Pvt. Ltd | |
| (d) Analysis and conclusion of I (a) (b) and (c) | |
| II. Applications filed by: | |
| (a) M/s. R.P. Estates Pvt. Ltd and M/s. Subros Ltd | |
| III. Applications filed by: | |
| (a) Express Greens / DLF Home Developer Ltd. | |
| IV. Applications filed by: | |
| (a) M/s Kalinga Realtors Pvt. Ltd. | |
| V. ABW Infrastructure Ltd. | |
| VI. Applications filed by: | |
| (a) Speed Town Planners Pvt. Ltd. | |
| VII. Applications pertaining to Innovative Infradevelopers Pvt. Ltd.: | |
| (a) Legend Height Owners Welfare Association | |
| (b) Paramveer Distributors Pvt. Ltd | |
| (c) Analysis of VII (a) and (b) | |
| VIII. Applications filed by: | |
| (a) Dharamvir & Ors.. | |
| IX. Other issues | |
| Conclusion | |
Background
1. The present judgment will dispose of various applications filed by the Haryana State Industrial and Infrastructure Development Corporation (hereinafter, “HSIIDC”) and others, by way of clarifications sought on the judgment delivered by this Court in Rameshwar v. State of Haryana, (2018) 6 SCC 215 (hereinafter, “main judgment”).
2. The main judgment of this Court had, after duly considering the sequence of facts and developments which occurred after publication of the notification under Section 4 of the (now repealed) LAND ACQUISITION ACT , 1894 (hereinafter, “Acquisition Act”) on 27.08.2004, read with the final decision of the State of Haryana (hereinafter, “State”) dated 29.01.2010 to not proceed with the said acquisition, declared as mala fide and inoperative the decision dated 29.01.2010. The Court's reasoning was that the State, in principle, had decided to withdraw from the acquisition after the notification under Section 4 , which was followed by the declaration under Section 6 and the receipt of objections from the concerned lands owners etc., even when the matter was posted for publication of the award on 26.08.2007. In the interim period, land owners, alarmed by the prospect of losing their holdings, were induced to sell or otherwise transfer their lands to colonizers / developers at significantly lower rates of compensation. Most of such colonizers / developers had entered into collaboration agreements after the notification under Section 4 , sought (and were granted) licenses by the Department of Town and Country Planning of the State of Haryana (hereinafter, “DTCP”). This Court found that upon an overall consideration of the materials (which included relevant official notings in government files, ministerial decisions and notifications), the state machinery was used to further private ends. The Court held that such a decision to withdraw from acquisition was a fraud on power under the Acquisition Act. Therefore, the judgment invalidated all transfers effected from the date of publication of the notification under Section 4 , to the date of publication of the State's decision to revoke the acquisition i.e., from 27.08.2004 to 29.01.2010 (hereinafter, “suspect period”).
3. Apart from invalidating the State's final decision, the judgment also contained consequential directions on various aspects. Before moving further, it would be useful to extract these directions:
“42. Having bestowed our attention to various competing elements and issues we deem it appropriate to direct:
42.1. The decisions dated 24-8-2007 and 29-1-2010 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.
42.2. The decision dated 24-8-2007 was taken when the matters were already posted for pronouncement of the award on 26-8-2007. Since all the antecedent stages and steps prior thereto were properly and validly undertaken, and since the decision dated 24-8-2007 has been held by us to be an exercise of fr
