2018 (3) TMI 1964 - SC - Indian Laws

Supreme Court overturns fraudulent land acquisition benefiting private builders, orders completion for public interest

Rameshwar & Others Versus State of Haryana & Others

The Supreme Court found that the Haryana Government's land acquisition process and subsequent decisions were influenced by fraudulent considerations, ... Invocation of Sections 4 & 6 for the alleged public purpose - divestment of valuable and fertile land at throwaway prices under the threat of acquisition to the private persons - prayer for enquiry/investigation through an independent agency in respect of the entire fraud played by the respondents and their officials - HELD THAT:- In the light of the principles emerging from the decisions rendered by this Court, the decisions taken to confer advantages and benefits upon the builders/private entities rather than to carry out or effectuate public purpose. The record indicates that various entities including certain “middlemen” cornered unnatural gains and walked away with huge profits taking the entire process of acquisition for a ride. Substantial sums have exchanged hands in the form of settlement money. All the steps and stages show that the builders/private entities were well aware that the acquisition would not go through but the landholders were confronted with the smoke screen of acquisition and were cornered and persuaded in entering into transactions with the builders/private entities. The transactions so entered into between the landholders and the concerned builders/private entities could not be said to be voluntary and free from any influence. The unnatural and unreasonable bargain was forced upon the landholders by creating façade of impending acquisition. The inescapable conclusion, therefore, is that there was an unholy nexus between the governmental machinery and the builders/private entities in devising a modality to deprive the innocent and gullible landholders of their holdings and jeopardize public interest which the acquisition was intended to achieve - the initiation of class action and filing of Writ Petition in the present matter was perfectly justified and all the submissions made by the learned Counsel appearing for various builders/private entities are dismissed - The appeals stand allowed. Issues Involved:1. Legality of Haryana Government's land acquisition process.2. Validity of land transactions between landholders and private builders.3. Allegations of fraud and mala fide intentions in the acquisition and subsequent withdrawal.4. Role of government policies and compliance with the Land Acquisition Act.5. Appropriate relief and restitution for affected landholders and public interest.Issue-Wise Detailed Analysis:1. Legality of Haryana Government's Land Acquisition Process:The Supreme Court examined the Haryana Government's issuance of a Section 4 notification on 27.08.2004 for acquiring 912 acres of land for setting up the Chaudhary Devi Lal Industrial Township. The land acquisition process involved several steps, including objections under Section 5A, a report by the Land Acquisition Collector, and a subsequent Section 6 notification on 25.08.2005. However, the acquisition process was dropped on 24.08.2007, citing various reasons, including pending applications for licenses by private builders. The Court found that the decisions dated 24.08.2007 and 29.01.2010 were taken to confer advantages upon private builders rather than serving the public interest, thus constituting a fraud on power.2. Validity of Land Transactions Between Landholders and Private Builders:The Court noted that substantial portions of the land were purchased by private builders after the initiation of the acquisition process. These transactions were influenced by the impending acquisition, and the builders/private entities managed to purchase the land at significantly lower prices. The Court found that these transactions were not voluntary and were brought about by fraudulent influence, as the landholders were cornered and persuaded to sell their holdings under the threat of acquisition.3. Allegations of Fraud and Mala Fide Intentions in the Acquisition and Subsequent Withdrawal:The Court observed that the decisions to drop the acquisition and entertain applications for licenses from builders who purchased the land after the acquisition was initiated were not bona fide exercises of power. These decisions were guided by considerations extraneous to the provisions of the Land Acquisition Act and were designed to enrich the builders/private entities. The Court concluded that there was an unholy nexus between the government machinery and the builders/private entities, resulting in a fraud on power.4. Role of Government Policies and Compliance with the Land Acquisition Act:The Court examined the relevant policies issued by the Haryana Government, including the policy dated 19.12.2006, which allowed the release of land from acquisition if the applicants/landholders had applied for licenses before the issuance of the Section 4 notification. The Court found that the builders/private entities did not comply with these policies, as they purchased the land after the initiation of the acquisition process. The Court held that the decisions dated 24.08.2007 and 29.01.2010 were inconsistent with the relevant policy statements.5. Appropriate Relief and Restitution for Affected Landholders and Public Interest:The Court directed that the decisions dated 24.08.2007 and 29.01.2010 be set aside as they were brought about by mala fide exercise of power. The Court ordered that an award be deemed to have been passed on 26.08.2007 in respect of the lands covered by the Section 6 declaration and transferred during the period from 27.08.2004 to 29.01.2010. The lands were to vest in HUDA/HSIDC free from all encumbrances. The builders/private entities were not entitled to recover the consideration paid to the landholders, which would be treated as compensation under the award. The Court also directed the authorities to investigate and recover any unjust enrichment by 'middlemen' and ensure that public interest was subserved by the acquisition process.Conclusion:The Supreme Court found that the Haryana Government's land acquisition process and subsequent decisions were influenced by fraudulent considerations, benefiting private builders at the expense of landholders and public interest. The Court set aside the decisions to drop the acquisition and directed that the acquisition process be completed to serve the intended public purpose. The builders/private entities were not entitled to recover the consideration paid to the landholders, and the authorities were directed to investigate and recover any unjust enrichment.