Government exemption notification under Section 178(2) upheld for Mohali township land acquisition with 96% landowner acceptance

The SC upheld the government's exemption notification under Section 178(2) of the Punjab Regional and Town Planning and Development Act, 1995, validating the land acquisition process for Mohali township development. The Court found the exemption legally justified to prevent haphazard urban development, noting 96% of landowners had accepted compensation. The acquisition was deemed valid under Article 300A and the Land Acquisition Act, 1894, with adequate compensation provided. The Court rejected mandatory rehabilitation requirements but directed that appellants could seek higher compensation through Section 18 reference within six weeks.

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Issues Involved:
1. Validity of the exemption of land from certain provisions of the Punjab Regional and Town Planning and Development Act, 1995.
2. Impact of the exemption on the legality of the land acquisition process.
3. Requirement of rehabilitation measures for expropriated landowners and applicability of the 'Land Pooling Scheme'.

Issue-wise Detailed Analysis:

1. Validity of the Exemption Notification:
The appellants did not challenge the notification dated 10th February 2004 granting exemption in their writ petitions. The High Court noted that without challenging the exemption notification, the appellants could not argue the acquisition violated the 1995 Act. Despite this procedural lapse, the court examined the merits. Section 178(2) of the Punjab Regional and Town Planning and Development Act, 1995 allows the State Government to exempt areas from the Act's provisions if it causes undue hardship or if circumstances render it expedient. The court found that the exemption was justified due to the rapid growth of Mohali and the need for planned development to avoid haphazard construction. The exemption was not just based on the cumbersome process of formulating master plans but on a realistic assessment of urgent needs. The court concluded that the exemption was legally valid, as the government had exercised its power appropriately to prevent unplanned development.

2. Impact on Legality of Land Acquisition:
Since the exemption was upheld, the question of the acquisition being invalid due to non-compliance with the 1995 Act did not arise. The appellants did not challenge the acquisition process under the Land Acquisition Act itself. The court distinguished the present case from Sanjeet Singh's case, noting that the acquisition was for the expansion of an existing township (Mohali) and not for establishing a new city. The land was already declared a local planning area under Section 56(5) of the 1995 Act. The court rejected the appellants' contention that the notification was issued without following due procedure, as no such challenge was raised in the writ petitions. Thus, the acquisition process was upheld as valid.

3. Requirement of Rehabilitation Measures:
Article 300A of the Constitution and the Land Acquisition Act do not mandate rehabilitation measures as a precondition for land acquisition. The court noted that while rehabilitation is not a legal requirement, it is a matter of fairness and equity. The appellants argued for the applicability of the Land Pooling Scheme formulated by the State Government in 2008. However, the court found that the scheme was prospective and could not be applied retrospectively to completed acquisitions. The court also noted that applying the scheme retrospectively would create confusion and potential litigation. The court acknowledged the State Government's offer to allow the appellants to seek higher compensation through a reference to the civil court, despite the lapse of the statutory period for such applications. The court directed that if the appellants file applications within six weeks, the Collector should refer the claims to the civil court for determination of compensation.

Conclusion:
The Supreme Court upheld the exemption notification, validated the land acquisition process, and rejected the argument for mandatory rehabilitation measures. However, it provided relief to the appellants by allowing them to seek higher compensation through the civil court. The appeals were dismissed with no costs.

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