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2026 Supreme(Online)(HP) 1949

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Jyotsna Rewal Dua, J
Himland Real Estates Private Limited – Appellant
Versus
State Of H.P – Respondent
CWP No. 2659 of 2022

Advocates:
For the Appellants/Petitioners: Suneet Goel, Udit Shaurya Kaushik
For the Respondents: L.N. Sharma, Rajrat Choudhry, Piyush, Amit Singh Chandel

The vestment of land to the State under Section 118 of the H.P. Tenancy and Land Reforms Act, 1972, is not automatic upon the expiry of the stipulated period; it requires a finding of conscious default, and meaningful steps taken toward project completion must be considered by authorities.

Headnote:(A) H.P. Tenancy and Land Reforms Act, 1972 - Section 118 - Permission to purchase land - Vestment of land with State - Concept of failure to put land to use - Appellate court intervention - The court held that the vestment of land upon expiry of the period granted under Section 118 is not automatic and does not occur merely due to efflux of time. Vestment requires a factual finding of conscious default, negligence, or refusal on the part of the permission holder. Where non-compliance is due to circumstances beyond the control of the petitioner or due to procedural delays in obtaining statutory clearances, the vesting clause cannot be enforced punitively. The term "put the land to use" must be interpreted purposefully, meaning the beneficiary must demonstrate cogent and meaningful steps toward the project's completion rather than entire project completion from inception to finish. (Paras 4)

(B) Administrative Law - Quasi-judicial orders - Principles of natural justice - An impugned order that ignores established legal principles regarding the procedural safeguards against penal forfeiture is liable to be quashed. Re-evaluation by the competent authority is necessary where the authority fails to factor in valid legal precedents and committee recommendations for time-exclusion due to statutory hindrances. (Paras 4)

Facts of the case:
The petitioner purchased land for a residential project under Section 118 approval. Despite fencing and initial construction, the project was delayed due to disputes over bank guarantees and waiting for various departmental clearances. The District Collector ordered the land to vest back to the State. After various litigations and interventions by a committee, the government denied the requested relaxation. The petitioner challenged this denial.

Findings of Court:
The court observed that the petitioner has undertaken substantial work, including road construction, water/sewerage infrastructure, and foundation works for numerous units. It held that the interpretation of "putting land to use" should not be myopic and that delays caused by statutory/procedural constraints should be excluded. The impugned order of rejection was quashed, and the authority was directed to reconsider the case.

Issues: Whether the vestment of land under Section 118 is automatic upon expiry of the specified timeline, and whether individual delays due to clearances should be excluded.

Ratio Decidendi: Vesting under the Act is a penal consequence that requires a finding of conscious default. Where the petitioner takes meaningful steps, strict time-bound completion is not the sole benchmark for compliance.

Result: Petition allowed; impugned order quashed; matter remanded for fresh consideration.

Table of Content
1. overview of section 118 proceedings and the petitioner's grievances regarding land vesting. (Para 1 , 2)
2. current status of construction work on site and submissions by parties. (Para 3)
3. interpretation of section 118 vestment clause and procedural requirements for state authorities. (Para 4)

The genesis of this writ petition lies in proceedings instituted against the petitioner under Section 118 of the H.P. Tenancy and Land Reforms Act, 1972 (hereinafter referred to as the Act) on account if its alleged failure in putting the land in question to use within the stipulated period in terms of the permission granted to it and in terms of the provisions of the Act. The main grievance of the petitioner at present is against the order passed by respondent No.1 on 25.03.2022 (Annexure P-23) declining to grant any relaxation to the petitioner by extending the period for setting up its project.

2. Facts relevant for the purpose of this writ petition:

2(i). Registration certificate was issued by respondent No.4 in favour of the petitioner as promoter on 15.10.2005 with validity period of 05 years. Essentiality certificate was issued in petitioner’s favour for purchasing 151-05 bighas of land in Village Jharmajri, Tehsil Nalagarh, District Solan, H.P. on 10.05.2006. The respondent- State granted permission to the petitioner under Section 118 of the Act on 10.05.2006 for purchasing the land for setting up a residential colony. Separate sale deeds for different parcels of land were executed and registered in petitioner’s favour during the years 2006 & 2007.

2(ii) On 10.08.2007, respondent No.4 directed the petitioner to furnish different bank guarantees for different parcels of land. The petitioner did not furnish the bank guarantees. It raised an issue about its liability to furnish the bank guarantees. Consequently, respondent No.4 did not issue licence in petitioner’s favour rather notices were issued to it on different dates in the year 2008. Petitioner responded on 28.12.2008 that in lieu of bank guarantees demanded from it the title deeds of certain other properties belonging to it be kept as security. The dispute was not resolved. The petitioner instituted Civil Writ Petition No. 7318/2010 before this Court. The writ petition was finally withdrawn on 19.08.2015. The petitioner, thereafter, furnished the requisite bank guarantees to respondent No.4.

2(iii). The concerned Tehsildar on 10.02.2015 informed respondent No.5- Collector, District Solan that though the petitioner had fenced the land in question, constructed approach road, had obtained electricity and water connections, raised foundation of the building and also planted trees over some part of land in form of park but no other construction had been carried out. The above was followed by a notice issued to the petitioner under Section 118 of the Act. The District Collector, Solan on 08.04.2016 ordered vestment of entire land purchased by the petitioner i.e. measuring 151-05 bighas with the State Government on the ground that petitioner had not raised the residential colony on the land i.e. the purpose for which the permission to purchase the land was granted to it under Section 118 of the Act and the time period stipulated in the permission letter had lapsed. The appeal preferred by the petitioner against the aforesaid order was decided by the Divisional Commissioner on 04.09.2018. The Divisional Commissioner remanded the case to the Collector for afresh decision in light of instructions dated 05.02.2016 issued by the Additional Chief Secretary (Revenue) Govt. of H.P which provided for exclusion of the period during which the concerned person was prevented from putting the land into use due to statutory hindrances on account of certain actions of the Government.

2(iv). Feeling aggrieved against the order dated 04.09.2018 passed by the Divisional Commissioner, the petitioner as well as respondent- State preferred their revision petitions before the F

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2026 Supreme(Online)(HP) 1949

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLAJyotsna Rewal Dua, JHimland Real Estates Private Limited – AppellantVersusState Of H.P – RespondentCWP No. 2659 of 2022

The vestment of land to the State under Section 118 of the H.P. Tenancy and Land Reforms Act, 1972, is not automatic upon the expiry of the stipulated period; it requires a finding of conscious default, and meaningful steps taken toward project completion must be considered by authorities.

Cases Referred (1)

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Jyotsna Rewal Dua, J
Himland Real Estates Private Limited – Appellant
Versus
State Of H.P – Respondent
CWP No. 2659 of 2022