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2025 Supreme(P&H) 533

PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH
SURESHWAR THAKUR, VIKAS SURI, JJ.
Faith Buildtech Private Limited - Appellant
Vs.
State Of Haryana And Others - Respondent
CWP No. 4987 of 2023 (O&M)
Decided On : 24-04-2025

Advocates:
Advocate Appeared:
For the Appellant :Mr. Puneet Bali, Senior Advocate with Mr. Prateek Rathee, Advocate, Ms. Niharika Mittal, Advocate, Mr. Asutosh Singh, Advocate and Mr. Shwas Bajaj, Advocate
For the Respondent:Ms. Svaneel Jaswal, Addl. A.G., Haryana. Mr. Kunal Soni, Advocate for Mr. Prateek Mahajan, Advocate

The court ruled that unilateral re-demands for fees post-license surrender constituted unjust enrichment and were not legally enforceable, affirming the integrity of contractual agreements.

Headnote:(A) Haryana Development and Regulation of Urban Areas Act, 1975 - Haryana Development and Regulation of Urban Area Rules, 1976 - Notification dated 24.7.2020 amending the Rules of 1976 - Dispute over re-demands of license fee, conversion charges, and infrastructure development charges following the surrender of licenses Nos. 45 and 90 of 2014. (Para 21-24)

(B) The court invalidated the imposition of re-demands as arbitrary, declaring them to be an unjust expropriation of previously paid charges without a legitimate basis. (Paras 26-28)

(C) It was affirmed that unilateral changes in contractual terms by the licensing authority contravene established rights under the original licenses, which cannot be altered without consent or due process. (Para 37)

Facts of the case:
The petitioner, a company, sought to challenge the validity of a notification that imposed conditions for surrendering licensing and demanded payments on grounds of forfeited fees after no construction activities over a period exceeding 10 years.

Findings of Court:
The impugned notification was quashed to the extent of unjust enrichment and arbitrary re-demands against the licensee; losses owing to the respondent's failure to develop infrastructure were highlighted.

Issues: Whether the re-demands of fees following license surrender were justified; the legitimacy of unilateral amendments to contracts without consent.

Ratio Decidendi: The court ruled that re-demands made under the amended rule constituted an unlawful imposition of penalties not provided for in the original contract terms, underscoring the importance of adherence to contractual agreements and legal principles regarding unjust enrichment and forfeiture.

Result: The court quashed the impugned annexures to the extent of arbitrary financial demands.

Table of Content
1. factual background of the case (Para 2 , 3 , 4 , 5 , 6)
2. arguments by the petitioner on excessive demands. (Para 13 , 14 , 15)
3. counterarguments by the state. (Para 16 , 17 , 19)
4. court analysis of legal implications. (Para 18 , 21 , 22)
5. court's reasoning on breach of contract. (Para 23 , 24 , 25 , 26)
6. court's observation on unjust enrichment. (Para 27 , 28 , 29)
7. assessment of liabilities and responsibilities. (Para 30 , 31 , 32 , 33)
8. court's view on estoppel and argument validity. (Para 34 , 35 , 36)
9. conclusion on the quashing of impugned provisions. (Para 37)
10. final order disposing of the petition. (Para 38)

JUDGMENT :

Sureshwar Thakur, J.

Through the instant petition, the petitioner espouses for the according of the hereinafter extracted reliefs-

(i) For setting aside the notification dated 24.7.2020 (Annexure P-12), wherebys the Haryana Development and Regulation of Urban Area Rules, 1976 (for short the Rules of 1976), became amended by way of inserting Rule 17-B and renaming the aforesaid rules as Haryana Development and Regulation of Urban Areas (Amendment) Rules, 2020.

(ii) For amendment/modification of the policy dated 20.10.2020 (Annexure P-13) and for quashing of the order dated 27.8.2021 (Annexure P-4), framed/passed by respondent No. 4, wherebys the licence holders, have been forced to transfer 4.40 acres of land in favour of respondent No. 4 in lieu of surrender of licence Nos. 45 and 90 of 2014.

(iii) For modification of the order dated 31.12.2021 (Annexure P-10), passed by respondent No. 3, wherebys the request of the petitioner for seeking surrender of Licence No. 45 dated 16.6.2014 has been accepted but only after the compliance of the condition of transfer of land measuring 0.6625 acres in favour of respondent No. 3 through a gift deed No. 4840 of 19.10.2021 (Annexure P-16) by the petitioner.

(iv) For modification of the order dated 28.12.2021 (Annexure P-9) passed by respondent No. 3, wherebys the application moved by the petitioner for seeking surrender of Licence No. 90 dated 13.8.2014 has been accepted but only after the compliance of the condition of transfer of land measuring 3.7375 acres in favour of respondent No. 3, through a gift deed No. 4197 of 28.9.2021 (Annexure P-15) by the petitioner.

(v) For issuance of direction upon respondent No. 3 to refund/adjust the forfeited amount of Rs. 31.760 crores along with due interest under the surrender policy of the State under impugned Rule 17-B of the notification dated 24.7.2020.

(vi) For cancellation of the gift deeds (Annexures P-15 and P16).

(vii) For issuance of directions upon respondent No. 1 to frame rules regarding the time frame for initiation and completion of development of essential infrastructure including external developments, with regard to any area qua which licences are issued to the developers.

Factual background

2. It is averred in the instant petition, that the petitioner is a company incorporated under the provisions of the Indian Companies Act, 1956. The State Government with a view to create town like infrastructure for the controlled area of Sohna, vide notification dated 15.11.2012, notified the Final Development Plan of Sohna 2031. Subsequently, the petitioner through its affiliate companies embarked upon the aggregation of the lands for development and submitted the applications for grant of licence for Group Housing Colony in Sectors 4, 32 and 35 in Sohna, and, accordingly, four licences respectively bearing Licence Nos. 38 of 2014, 39 of 2014, 45 of 2014 and 90 of 2014 became granted to the affiliate companies of the petitioner for the above purpose. It is further averred thereins, that the petitioner has made an investment of Rs. 618 crores approx. for the purchase of the lands, stamp duty, scrutiny fee, licence fee, conversion charges, EDC and IDC for the said licences. The petitioner under Licence No. 45 of 2014, conceptualized the development of a group housing colony on land measuring 17.806 acres i

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