Simply Put: What now in Gurgaon after SC restores acquisition?

Haryana announced land acquisition in 2004, withdrew it in 2007 after owners had already sold cheap to builders. It was fraud, apex court said on Monday.

Written by Varinder Bhatia | Published: March 14, 2018 12:45 am
On Tuesday in Gurgaon, Ashok Yadav points to land that once belonged to his family. His uncle, Naresh Yadav of Naurangpur village, sold their 4 acres for a throwaway Rs 20-25 lakh per acre, he says, following the government’s acquisition notification in 2004. (Express Photo by Manoj Kumar)

What is the land fraud case in Gurgaon?

In August 2004, Haryana announced land acquisition proceedings in Manesar, Lakhnaula and Naurangpur villages for a township project. Farmers resorted to distress sale of land to builders, who were seen as offering better value than the government compensation. Once the sales were over, however, the government unexpectedly withdrew the notification, allegedly with fraudulent intentions.

Who went to the Supreme Court?

In 2011, 117 affected landowners from Manesar filed a civil writ petition seeking action against the state government and builders for having allegedly compelled them to divest their land at throwaway prices under the threat of acquisition. They pleaded that since the acquisition proceeding was initiated and then withdrawn with mala fide intentions, all transactions, including sale deeds, be set aside.

What did the court order on Monday?

Terming the withdrawal of acquisition proceedings a “fraud” and “mala fide exercise of power”, the apex court restored acquisition of 688 acres in the three villages. The court ruled that the land shall vest in Haryana Urban Development Authority (HUDA) and Haryana State Industrial & Infrastructure Development Corporation (HSIDC), free from all encumbrances. The court directed the CBI to investigate all transactions and recover all moneys, and hand it over to the state government. It also asked the agency to unearth all “unnatural gains received by the middlemen”.

How exactly did the “middlemen” gain?

On August 27, 2004, Haryana issued a notification under Section 4 of the Land Acquisition Act, announcing the acquisition of 912 acres in Manesar, Lakhnaula and Naurangpur to set up the ‘Chaudhary Devi Lal Industrial Township’. On August 25, 2005, a notification under Section 6 of the Act was issued for 688 acres; the rest of the land was released from acquisition. Thereafter, a notification under Section 9 was issued, saying the compensation to affected landowners would be announced on August 26, 2007.

From 2004 to 2007, private builders struck deals with the landowners. A total of 114 sale deeds were executed. At that time, it was expected that the compensation would be around Rs 12.5 lakh per acre, on a par with the prevailing government rates.

To persuade the landowners, the builders offered them Rs 20-25 lakh per acre. As the date for the announcement of final compensation award came closer, the builders reportedly offered Rs 80 lakh per acre. But on August 24, 2007, two days before the scheduled date, the government dropped acquisition proceedings, and announced that a fresh notification would be issued later. The builders then sold the landholdings at Rs 1.2 crore to Rs 4.5 crore per acre.

What are the consequences of the order?

The court has said that it intended to not just restore the status quo ante, but to also ensure that the process of land acquisition was taken to its logical conclusion, and the stated objective of the acquisition was achieved.

What happens to those who have bought plots/apartments on the land?

Buyers other than those who entered into deals between 2004 and 2007 will have remedies against their vendors. Claims of builders/private entities entitled to refund will be taken up after settling claims of third parties from whom the builders/private entities had collected money. No interest shall be payable on such amounts.

“The third parties from whom money has been collected by the builder will be entitled to either the refund…, out of and to the extent of the amount payable to the builder…, available with the State, on their claims being verified or will be allotted the plots at the price paid or price prevalent, whatever is higher,” the court said.

How much time do third parties have?

All third parties who had purchased or been allotted plots or apartments shall submit claims within one month from March 12. The claims shall then be verified by HUDA or HSIDC within two months from March 12. The state government has a year to comply with the court’s order. The final report has to be submitted to the court within one month after the expiry of one year from March 12.

Will original owners get their land back?

No. As per the order, “If the result of forcing land holders to enter into unnatural and unreasonable bargain was achieved by wrongful utilization of the power conferred under the Act, in its writ jurisdiction a superior court would be justified in granting the relief of invalidating such transaction…”

However, the court added, “in the circumstances, the public interest which the acquisition was intended to achieve will never be sub-served… The real and substantial relief would be in restoring the situation where the process of acquisition is made free from such supervening vested interests and is enabled to achieve the objective that the acquisition was intended to sub-serve.”

What happens to the licences the builders got to acquire the land?

All licences have been transferred to HUDA. “Sale deeds/other agreements in favour of the builder in respect of the said land are quashed… Creation of any third-party rights by the builder also stands quashed. The sale consideration paid by the builder to the landowners will be treated as compensation… The landowners will not be required to refund any amount.”

What happens to current landowners?

“The transferee builders who are the current owners of the land would have a right to seek allotment of the same from the State, consideration for which would be determined at the present days’ market value or market value as on such other date as this Hon’ble Court may deem fit. Credit would be given to the builders for the amounts that they had paid to the original landholders.”

Should the builders not wish to purchase the land at such rate, it may be auctioned, with the amount paid for acquisition being deducted from the price secured. “Actual construction costs of any construction made on the lands would also be adjusted and the balance would be retained by the State…”

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