Isabella Mariam

The Supreme Court of India Division Bench of Justice J.B. Pardiwala and Justice R. Mahadevan delivered a significant judgement concerning oustee entitlements in the context of land acquisition. The Court held that the respondents cannot claim, as a matter of legal right, that they should be allotted plots under the 1992 policy rates. The Bench directed that any such claims must be processed in accordance with the revised 2016 policy. A four-week period has been granted for eligible applicants to submit online applications with the requisite amount under the 2016 policy. Authorities are required to process these applications within eight weeks of their receipt. The Court made it clear that there would be no extension of the deadline and called for strict vigilance to ensure that unscrupulous individuals do not exploit the process.

The matter arose from a series of Second Appeals filed before the Supreme Court against a common judgment and order dated 12 August 2016 issued by the High Court of Punjab and Haryana. The High Court had affirmed the decisions of the First Appellate Courts, which in turn had upheld trial court decrees in favour of various respondents who claimed allotment of plots as oustees under the 1992 policy.

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The dispute centered on land acquired under a policy implemented by the State of Haryana. The acquisition process began with a Notification under Section 4 of the Land Acquisition Act, 1894 in 1989, followed by a Section 6 Notification in 1990. Awards were passed in 1992. According to the policy in force, apart from monetary compensation, affected landowners (oustees) were to be allotted alternative plots. The respondents argued that their entitlement to plots should be governed by the terms of the 1992 policy, including its price structure.

The appellants, represented by the Estate Officer, Haryana Urban Development Authority (HUDA), disputed this claim. They contended that the applicable policy for allotment was the revised policy of 2016. Senior counsel Ms. Aishwarya Bhati, Additional Solicitor General, representing the appellants, argued that many of the oustees had not submitted applications in the prescribed format or deposited the required earnest money as mandated by the 1992 policy and related advertisements.

The appellants cited the brochure dated 1 October 1992 for plots in Sector 19 Part-II and Sector 20 in Kaithal, which specified that applications must be addressed to the Estate Officer, HUDA and be accompanied by an earnest money deposit equal to 10% of the tentative sale price. A similar clause was present in an advertisement dated 22 December 1999, which stated: "Only such applications shall be deemed to be valid as are accompanied by specified earnest money equivalent to 10% of the tentative sale price."

It was submitted that several plaintiffs had failed to fulfill these procedural requirements and that, as a result, suits seeking relief under Section 39 of the Specific Relief Act, 1963, were not maintainable. Furthermore, the appellants contended that suits were barred by limitation under Article 113 of the Limitation Act, 1963, having been instituted between 14 to 20 years after the relevant awards were issued. The Estate Officer also argued that some allotments had been made under duress due to court orders or arrest warrants, not because of the oustees' compliance with the policy.

The respondents, represented by Dr. Surender Singh Hooda, Mr. Rajiv Raheja, and Mr. Sidharth Mittal, argued that the High Court had rightly relied on the precedents established in Brij Mohan and Others v. Haryana Urban Development Authority and Jarnail Singh & Others v. State of Punjab. They maintained that there was no obligation to deposit 10% earnest money and that the 2016 policy could not be retrospectively applied.

They asserted that several of them had in fact submitted applications and participated in the draw of lots. One respondent claimed that his father's application had been accepted and a plot had been earmarked. The respondents expressed willingness to deposit the plot price at the 1992 rate of Rs. 863 per square yard but objected to the 2016 rate of Rs. 1122 per square yard.

The trial courts had issued conflicting decisions. In Smt. Nirmala Devi v. The Estate Officer, HUDA (Civil Suit No. 538 of 2007), the trial court dismissed the suit due to lack of compliance with procedural requirements and the bar of limitation. In contrast, in Dixit Lal v. HUDA (Civil Suit No. 228/1 of 2009), the trial court decreed in favour of the plaintiff, reasoning that the 1999 advertisement was not consistent with the 1992 policy, thereby waiving the requirement for earnest money. It also held that subsequent policy modifications could not apply retrospectively.

The High Court upheld the decrees in favour of the oustees, stating that the matter was covered by the precedents in Brij Mohan and Jarnail Singh. Consequently, the Second Appeals filed by the Estate Officer were dismissed.

The Supreme Court began its analysis by examining the precedents in Brij Mohan and Jarnail Singh. Regarding Brij Mohan, the Court noted that two questions had been considered: (1) whether HUDA must charge only actual land cost plus development charges, or market rate; and (2) the interpretation of "normal allotment rate."

The Court stated in Brij Mohan (supra) that "the Land Acquisition Act, 1894 contemplates only benefits like solatium, additional amount and higher rate of interest to the oustees and not allotment of plots at cost price." Further, it was observed that "HUDA or the State Government does not have any scheme providing for allotment of plots at actual cost to land losers."

As to the second question, the Court had previously held that "the normal allotment rate would be the rate advertised by HUDA in pursuance of which the plots are allotted." However, in the present case, the Court clarified that "the dictum as laid in Brij Mohan (supra) should not be read as laying down an absolute proposition of law that the 'normal allotment rate' in all circumstances shall be paid when the sector is first floated for sale."

Turning to Jarnail Singh, the Supreme Court noted that the Punjab and Haryana High Court Full Bench had stated in favour of each co-sharer being entitled to a plot, despite joint ownership. It also declared that Clause 6(V) of the 1994 policy was invalid. The Supreme Court, however, restricted its reliance on Jarnail Singh to the extent relevant to the current appeals.

The Court elaborated on the methods to determine the ratio decidendi of a judgment, referencing the "inversion test" by Eugene Wambaugh, Halsbury's test, and Goodhart's test. Applying these principles, the Bench concluded that "the case on hand is not covered by the dictum as laid in Brij Mohan (supra)."

Addressing the maintainability of suits under Section 39 of the Specific Relief Act, 1963, the Court recorded that "the plaintiff in a suit instituted by him under Section 39 of the Act 1963 is obliged to satisfy the court with appropriate pleadings and cogent evidence that the defendant is committing breach of a particular obligation which is binding on him." The Court clarified that mandatory injunctions are discretionary, and only applicable when there is an enforceable obligation.

On the procedural compliance by the oustees, the Court stated: "when the scheme in question specifically provides that an oustee shall file an application in a specified format with deposit of the requisite amount towards earnest money then it is a part of the obligation on the part of the oustee to do so before he calls upon the State to allot the plot in accordance with the terms of the scheme."

Regarding limitation, the Court remarked that "there is no explanation worth the name why it took 14-20 years for the plaintiffs to institute their respective suits for mandatory injunction." It found the suits barred by limitation, applying either Article 58 or 113 of the Limitation Act.

Discussing rehabilitation, the Court observed: "It is not necessary that in all cases, over and above compensation in terms of money, rehabilitation of the property owners is a must." Citing Narmada Bachao Andolan, the Court further noted that "the plea of deprivation of right to livelihood under Article 21 of the Constitution is unsustainable in land acquisition cases."

On the reasoning in the trial court judgment in Dixit Lal, the Court found the conclusion that the advertisement was not in consonance with the 1992 policy to be "not convincing."

The Court declared that "the respondents are not entitled to claim as a matter of legal right, relying on the decision of Brij Mohan (supra), that they should be allotted plots as oustees only at the price as determined in the 1992 policy." Instead, it held that the 2016 policy shall govern any claims.

The Court granted a four-week period for respondents to "prefer an appropriate online application with the deposit of the requisite amount in accordance with the policy of 2016." It added that "if within this four-week period, any of the respondents prefer an online application in accordance with the scheme of 2016, the authority concerned shall look into the applications and process them in accordance with the scheme of 2016."

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It was further directed that "there shall not be any further extension of time for the purpose of applying online with the deposit of the requisite amount." The Court made an exception for those "who may not be in a position to prefer online applications," permitting them to submit applications manually.

The Court instructed that "the entire exercise, from the date of receipt of the online application, shall be completed within a period of eight weeks." It warned that "unscrupulous elements should not ultimately derive any benefit or advantage from the allotment of land to the oustees" and directed the State and HUDA to remain vigilant.

Finally, it was stated: "A condition should be imposed at the time of allotment that the allottee shall not be entitled to transfer the plot to any third party without the permission of the competent authority, and in any case, not within five years from the date of the allotment."

The Court conveyed that it is not necessary that in all cases, over and above compensation in terms of money, rehabilitation of the property owners is a must. It stated that any beneficial measures taken by the Government should be guided only by humanitarian considerations of fairness and equity towards the landowners. The Court clarified that ordinarily, rehabilitation should only be meant for those persons who have been rendered destitute because of loss of residence or livelihood as a consequence of land acquisition, specifically for people whose lives and livelihood are intrinsically connected to the land. Finally, the Court made it very explicitly clear that in cases of land acquisition, the plea of deprivation of right to livelihood under Article 21 of the Constitution is unsustainable. All the appeals were disposed of in these terms, and the Registry was directed to circulate one copy of the judgment to all High Courts.

Case Title: Estate Officer, Haryana Urban Development Authority and Ors. v. Nirmala Devi

Neutral Citation: 2025 INSC 843

Case Number: Civil Appeal No. 7707 of 2025 (Arising out of Special Leave Petition (C) No. 15148 of 2017)

Bench: Justice J.B. Pardiwala, Justice R. Mahadevan