2015 Supreme(P&H) 135

IN THE HIGH COURT OF PUNJAB AND HARYANA
[DIVISION BENCH]
Before
The Hon’ble Mr. Justice Surya Kant
The Hon’ble Mrs. Justice Lisa Gill
CWP No. 4212 of 2013 [O&M]
DLF Limited & Ors.
v.
State of Haryana & Ors.
{Decided on 18/02/2015}

Headnote:Validation Act--Act enacted by State Legislature found to be defective by Supreme Court--Whether State is empowered to enact a new law whereby removing the defect retrospectively--YES.

       (A) Constitution of India, 1950, Art.102--Validation Act--Act enacted by State Legislature found to be defective by Supreme Court--Whether State is empowered to enact a new law whereby removing the defect retrospectively--Legal principles summed up.

       The legal issues that emerge well settled as per the cited case-law may be conjointly summed up as follows:-

       [i] The validity of a Validating Law depends upon the twin-test as to whether the Legislature possesses the competence over the subject-matter and whether while making the amendment or validation law, it has removed the defect or cured the lacuna which the Courts had found in the existing law;

       [ii] If the Legislature is empowered to legislate over the subject matter, it can enact such a valid law even retrospectively so as to bind even the past transactions;

       [iii] The Legislature while making a law with retrospective effect can not sit over the Court’s judgment or usurp the judicial power, for no such power has been vested in it under the Constitution but it can remove the basis which led to the Court’s decision. (Para 79)

       (B) Haryana Development & Regulation of Urban Areas Act, 1975--Constitutional validity of Act of 2012--Certain provisions of 1975 Act were held to be defective by Supreme Court on interpretation of language of statute whereby HUDA was charging charges for non-construction of community centres as per licences given for development of land--State Legislature enacted Act of 2012 where by such defects were removed with retrospective affect--Held;

       (i) The validation of a tax, fee or charge which has been declared illegal by the Court, can be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed by the Legislature.

       (ii) Surely, the Legislature can not directly over-rule a judicial decision except that it can retrospectively remove the substratum or foundation of a judgment to make that decision ineffective--Such an exercise is a valid legislative recourse save that it does not transgress any other constitutional limitations.

       (iii)That there is no constitutional inhibition against the State Legislature from curing the lacuna or removing the defect in the Principal Act of 1975 with retrospective effect, i.e., from the date such defect of lacuna had occurred--Haryana Development & Regulation of Urban Areas (Amendment and Validation) Act, 2012. (Paras 86 to 91)

       In the light of the above discussion and findings, we sum-up the conclusions as follows:-

       (i) The Haryana Development and Regulation of Urban Areas [Amendment and Validation] Act, 2012 [Haryana Act No. 4 of 2012] is upheld except sub-Section [2] of the Validation Clause added below Section 23-A and inserted through Section 5 of the Haryana Act No. 4 of 2012;

       [ii] Sub-Section [2] which is a part of the Validation Clause and has been added to Section 23-A, is hereby struck-down being unconstitutional as it ultra-vires the permissible limits of Legislative powers--The writ petitions challenging the vires of Haryana Act No. 4 of 2012 are accordingly dismissed, except to the extent above;

       [iii] In view of the first proviso added to Section 3[3][a][iv] of the Haryana Development and Regulation of Urban Areas Act, 1975, which has come into force with immediate effect, the petitioners and other licence-holders are entitled to the benefit of extended period of 4+2 years for the construction 2012, i.e., when the Haryana Act No. 4 of 2012 was notified;

       [iv] Those community building sites which the petitioners had transferred to the State Government and which are yet to be constructed by the State or its agency, shall be retransferred to the petitioners within a period of three months from the date of receipt of a certified copy of this order, so as to enable them to construct the same or get such sites constructed, within the extended period as per conclusion No. [iii] above;

       [v] The petitioners, if they fail to raise construction over the left-out community building sites within the extended period, shall be liable to pay ICB charges irrespective of the date of licences, in accordance with Section 3[3]]a][vi-a] of the 1975 Act which has come into force retrospectively;

       [vi] Since the Legislature has validly brought into force sub-Section [1] of Section 23-A for the validation of ICB charges already recovered from the petitioners or other licence-holders, the claim of the petitioners for the refund of those charges is rejected and their writ petitions qua this relief are hereby dismissed, subject to conclusion No. [viii] below; of Urban Areas Act, 1975 which is regulatory in nature, is hereby upheld;

       [viii] In view of our conclusion No. [ii], Civil Writ Petition [No. 10509 of 2013] filed by M/s Ansal Properties and Infrastructure Limited to the extent it seeks refund or readjustment of the amount of Rs.983.74 lacs in compliance with the judgment of the Hon’ble Supreme Court in its favour and reported as [2009] 3 SCC, 553, is allowed and the respondents are directed to refund or readjust that amount against other dues of the petitioner without payment of any further interest, within a period of three months from the date of receipt of copy of this order;

       [ix] The contentious issues with regard to [a] as to how many community building sites have already been constructed by the petitioners and handed-over to the State; [b] how many such vacant sites have been transferred to the State Government; [c] how many such transferred sites have been constructed by the State or its agency and [d] whether the liability towards ICB charges has been correctly assessed on proportionate basis against 25% sites, are directed to be placed before the Principal Secretary, Town and Country Planning Department, Haryana, who shall accord opportunity to the petitioners as a period of six months from the date of receipt of a certified copy of this order and till then the demand, if any, raised against the petitioners even in respect of those community building sites which were transferred to the State Government and are said to have been constructed by the State or its Agency at their expenses, shall be kept in abeyance. (Para 125)

       (C) Haryana Development & Regulation of Urban Areas (Amendment and Validation) Act, 2012--Recovery of Refund--Sub-Section [2] of Section 23-A which is part of the Validation clause to the extent it empowers the State Government “to order the recovery of the amount of construction of which the refund has been taken by the licensee under the judgment, order or decree” of the Court, is ultra-vires Part-III of the constitution--Held;

       (i) The law does not permit the legislature to take back what has been granted in implementation of the Court’s decision--Such a course is impermissible.

       (ii) Sub-Section [2] of Section 23-A, i.e., the Validation Clause which has gone far-beyond the well-defined limits of respective areas of operation under the Separation of Powers doctrine appears to have been enacted with the object to wriggle out of the consequences that have fallen upon the respondents as a result of the judgment in Ansal’s case and such a recourse being impermissible within the Constitutional frame-work, the afrore-stated provision can not sustain and is hereby struck-done being totally unconstitutional. (Para 108)