REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.7020 OF 2009 (Arising out of SLP © No. 7099 of 2007]

Haryana State Industrial Dev. Corp.                         . .. Appellant(s)

Versus

Shakuntla and Ors.                                                  ... Respondent(s)    

With  

CIVIL APPEAL NO.7021 OF 2009 [Arising out of SLP © No. 7187 of 2007]

Haryana State Industrial Dev. Corp.                          ... Appellant(s)

Versus

Raj Bala and Ors.                                                      ... Respondent(s)

With

CIVIL APPEAL NO.7022 OF 2009 [Arising out of  SLP © No. 20142 of 2007]

Shakuntla and Ors.              .. Appellant(s)

Versus

State of Haryana & Ors.                                           ... Respondent(s)

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With

CIVIL APPEAL NO.7052   OF 2009 [Arising out of SLP © No. 2390 of 2008]

State of Haryana and Ors.          ... Appellant(s)

versus   

Shakuntla and Ors.         .. Respondent(s)

With

CIVIL APPEAL NO. 7023 OF 2009 (Arising out of SLP © No. 9841 of 2008]

State of Haryana and Ors.             ... Appellant(s)

versus

Smt. Raj Bala and Anr.. .. Respondent(s)  

J U D G M E N T

TARUN CHATTERJEE, J.

1. Delay condoned.

2. Leave granted.

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3. These appeals by special leave have arisen from a judgment dated  

14th of  December,  2006 of  a  Division  Bench of  the High Court  of  

Punjab and Haryana at Chandigarh passed in CWP No. 2479/2006  

whereby the High Court had set aside the Notifications dated 11th of  

November, 2002 and 12th of November, 2003 issued under Sections 4  

and  6  of  the  Land  Acquisition  Act,  1894,  (in  short  ‘the  Act’)  

respectively so far as the acquired lands of the claimant-respondents  

are concerned, subject to certain conditions to be fulfilled by them.

4. The facts in appeal arising out of S.L.P. No. 7099/2007 are sufficient  

to decide the questions of law that have arisen in these appeals. In  

that  view  of  the  matter,  let  us  narrate  the  facts  involved  in  

SLP©No.7099 of 2007 in a nutshell and the decision of which will also  

govern the other Special Leave Petitions [Appeals].

5. On 15th of November, 2002, a notification under Section 4 of the Act  

was issued by the State Government of Haryana for the purpose of  

acquisition of lands situated in Village Khandsa, Tehsil and District  

Gurgaon for the purpose of development of a corporate complex for  

industrial,  institutional,  commercial  and  recreational  purposes.  The  

respondent  no.1,  being one of  the owners of  the notified acquired  

lands, filed objections under Section 5 of the Act, for exclusion of their  

lands.  The  Haryana  Government,  later  on,  that  is  on  12th of  

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November, 2003 issued a Notification under Section 6 of the Act, in  

respect of the aforementioned lands declaring that the lands notified  

were needed by the Government for a public purpose.  

6. On 16th of  July,  2005,  the  High  Court  of  Punjab  and  Haryana  at  

Chandigarh disposed of  the petitions filed by respondent no.1 and  

others, directing that the grievances of the land owners be considered  

by a High Powered Committee, constituted to look into whether the  

lands of the owners concerned could be released from acquisition.  

The  High  Powered  Committee  submitted  its  consolidated  report  

containing  its  observations  and  recommendations  to  the  State  

Government  on  10th of  November,  2005.  The  Committee  

recommended the acquisition of the lands of respondent no.1 on the  

basis  of  the  parameters  of  evaluation  formulated  for  the  same  

purpose.  On the basis  of  the same parameters,  some other  lands  

were released, land belonging to M/s Orient Crafts being one such  

plot. The recommendations of the Committee were to be applicable to  

all such cases pending before the High Court and they would not be  

disturbed  till  further  orders  of  the  Government.  Aggrieved  by  the  

recommendations of the High Powered Committee, respondent no.1  

filed  a  writ  petition  before  the  High Court  of  Punjab  and Haryana  

contending that the said report was liable to be quashed as the policy  

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of pick and choose was adopted in the matter of releasing lands and  

that  the  acquisition  of  lands  was  discriminatory.  The  High  Court  

concluded that the case of respondent no.1 was on a better footing  

than that of M/s Orient Crafts since a perusal of the site plan shows  

that the land of M/s Orient Crafts which is similarly placed with the  

land of the respondent no.1,  does not  contain any structure unlike  

that of the land of the respondent no.1 containing a pucca structure.  

Moreover, no  nullah flows through the land of M/s Orient Crafts as  

averred by the appellant Corporation. As such, the land of M/s Orient  

Crafts was held to be wrongly released from acquisition amounting to  

discrimination against respondent no.1. Accordingly, the High Court  

ordered the release of the land belonging to respondent no.1 on the  

following grounds:

i. That they will  maintain the green belt as desired by the  

Department  which  is  essentially  required  to  lay  the  

infrastructure.

ii. That  they  would  pay  the  proportionate  internal  and  

external  charges  to  the  Haryana  State  Industrial  

Development  Corporation (in short  the ‘HSIDC’)  as and  

when it is required by the authorities.

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7. Before us, the learned counsel for the appellants argued, at the first  

instance,  that  since  a  High  Powered  Committee  having  been  

appointed  to  examine  the  cases  of  land  acquisition  had  

recommended the acquisition of  the lands of  the respondents,  the  

decision of  the High Court  to  quash the particular  acquisition  was  

fallacious. The High Powered Committee had adopted certain guiding  

principles  for  ascertaining  the  status  of  the  land  notified  for  

acquisition, the first three conditions being;-

I. The land for which CLU (change of land use) has been  

obtained  and  the  Industrial  unit  is  under  construction/  

constructed or running, not to be acquired; but if the CLU  

obtained  but  no  construction  initiated  and  duration  of  

sanction had expired before the issue of notification under  

Section-4,  shall  not  be  considered  as  a  case  of  CLU  

obtained,  keeping in  view the provisions of  the Punjab  

Scheduled  Roads  and  Controlled  Areas  Restrictions  of  

Unregulated Development Rules, 1965 (Rule 26 f)

II. The Industrial units constructed without permission, if fit in  

the  overall  planning  and  do  not  interfere  in  the  road  

network,  will  be  adjusted  as  these  are  subject  to  the  

condition  that  the  Town  and  Country  Planning  

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Department has not filed prosecution case in the Court of  

Law for the violations, and shall  give an undertaking to  

the Committee that they will apply to the Director, Town  

and Country Planning for compounding the offences and  

shall pay all  the charges/ fees to the Government as per  

policy of the Department of Town and Country Planning  

Haryana.

III. To ensure continuity of the Industrial Estate, land under  

acquisition,  which  is  essential  for  integrated  planning,  

shall not be released.

These guidelines and parameters for evaluation of the merits of  

each case were approved by the Government of Haryana and Punjab  

and were subsequently  notified  through the newspaper  ‘The Tribune’  

and were also made available in the website of HSIDC.  

8. The land belonging to the respondent had houses and shops built  

prior to the notification issued under Section 4 of the Act. However  

this  does  not  amount  to  fulfilment  of  the  conditions  necessary  for  

release of the land under the criteria laid down in the abovementioned  

parameters  and  as  such,  this  particular  land  was  rightly  

recommended for acquisition. On the other hand, the land belonging  

to  M/s  Orient  Craft  was  recommended  for  release  by  the  High  

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Powered Committee on grounds which were beyond the scope of the  

criteria applied under the parameters approved by the Government.  

Moreover, as rightly pointed out by the High Court, the observation of  

the Committee regarding a seasonal nullah passing through the lands  

of M/s Orient Craft are contrary to the actual facts. Consideration of  

this observation in releasing the land of M/s Orient Craft betrays an  

element of either partiality or insincerity on the part of the Committee.  

Though, no construction was raised on the land of M/s Orient Craft,  

the State of Haryana sought an affidavit from the General Manager of  

M/s Orient Craft before releasing their land. In the affidavit filed by the  

Senior General Manager of M/s Orient Craft, it was averred that they  

would leave the land as desired by the HSIDC which is essentially  

required to lay the infrastructure. Moreover, it was averred that they  

would also pay the proportionate external and internal developmental  

charges to the HSIDC. Consequent to the submission of this affidavit,  

the  Director  of  Industry  &  Commerce,  Haryana,  released  the  land  

belonging to M/s Orient Craft. This procedure of release of the land  

notified for acquisition clearly does not conform to the guidelines that  

were formulated and approved at the first place.

9. It appears that the release of the land of M/s Orient Craft would not  

frustrate the whole object of acquisition for expansion of the industrial  

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estate since the undertaking of M/s Orient Craft to release land as  

desired by the HSIDC amounts to fulfilment of the lands needed by  

the  HSIDC  in  that  area.  However,  the  manner  in  which  it  was  

released  and  the  grounds  that  were  relied  on  for  its  release  are  

fraught with defects that raise doubts regarding the impartiality and  

sincerity  of  the  authority.  The  appellant  corporation  has  sought  to  

justify the decision of the High Powered Committee to release that  

particular land by referring to a judgment of this Court in the case of  

Anand Buttons v. State of Haryana and others   [(2005) 9 SCC 164]    

wherein this court observed:  

“...reasoning of the High Court cannot be faulted for the  simple reason that the authority, who has to carry out the  planned  development  of  the  industrial  estate,  is  in  the  best position to judge as to which land can be exempted  from the acquisition without jeopardizing the development   scheme. It  is not possible for the court  to sit  in appeal   over  the  exercise  of  such  satisfaction  by  the  authority   vested  with  the  task  of  implementing  the  development  plan.”

Thus the validity of the decision of the concerned authority was  

upheld on the ground that it has to carry out the planned development of  

the industrial estate and so it is in the best position to judge as to which  

land  can  be  exempted  from  acquisition  without  jeopardising  the  

development scheme.  As such, it was rightly held by this court in Anand  

Buttons’s Case (supra) that it is not possible for the court to sit in appeal  

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over the exercise of such satisfaction by the authority vested with the  

task of implementing the development plan.  

10. The task of such authority is no doubt to ensure the smooth execution  

of the development plans and since they have a firsthand knowledge  

of  the  ground  realities,  they  are  surely  at  a  better  position  than  

anyone else to decide as to which land is to be acquired and which is  

to be released. But when there has been a guideline laid down for the  

same task and it has been approved and notified, the issue becomes  

a matter of policy which the authority has to follow with a reasonable  

amount of uniformity. In the given facts of the case, the respondents  

have  alleged  discrimination  thereby  attracting  Article  14  of  the  

Constitution  of  India.  As  held  in  the  case  of  Union  of  India  v.  

International Trading Co.   [(2003) 5 SCC 437]  , Article 14 applies to  

matters  of  government  policy  and  such  policy  or  action  would  be  

unconstitutional if  it  fails to satisfy the test of reasonableness. This  

Court observed :  

“...It is law that Article 14 of the Constitution applies also  to matters of governmental policy and if the policy or any  action of  the Government,  even in  contractual  matters,   fails  to  satisfy  the  test  of  reasonableness,  it  would  be   unconstitutional. While the discretion to change the policy   in exercise of the executive power, when not trammelled  by any statute or rule is wide enough, what is imperative   and  implicit  in  terms  of  Article  14  is  that  a  change  in  policy  must  be  made  fairly  and  should  not  give  impression  that  it  was  so  done  arbitrarily  on  by  any  

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ulterior  criteria.  The  wide  sweep of  Article  14  and  the  requirement of every State action qualifying for its validity   on this touchstone irrespective of the field of activity of   the State is an accepted tenet. The basic requirement of  Article  14  is  fairness  in  action  by  the  state,  and  non- arbitrariness in essence and substance is the heart beat  of  fair  play.  Actions are amenable,  in  the panorama of   judicial review only to the extent that the State must act   validly  for  discernible  reasons,  not  whimsically  for  any  ulterior  purpose.  The  meaning  and  true  import  and  concept  of  arbitrariness  is  more  easily  visualized  than  precisely  defined.  A  question  whether  the  impugned  action is arbitrary or not is to be ultimately answered on   the facts and circumstances of a given case. A basic and  obvious  test  to  apply  in  such cases is  to  see whether  there  is  any  discernible  principle  emerging  from  the  impugned action and if so, does it really satisfy the test of   reasonableness. Where a particular  mode is prescribed  for doing an act and there is no impediment in adopting  the  procedure,  the  deviation  to  act  in  different  manner  which does not disclose any discernible principle which is   reasonable  itself  shall  be  labelled  as  arbitrary.  Every  State action must be informed by reason and it  follows  that an act uninformed by reason is per se arbitrary.”

The  discretion  to  change  a  policy  in  exercise  of  the  executive  

power,  which appears to be the case in the present matter,  must be  

exercised fairly and should not give the impression that it was so done  

arbitrarily or by any ulterior criteria. It has been observed by this court,  

as noted herein above, that a question whether the impugned action is  

arbitrary  or  not,  is  to  be  ultimately  answered  on  the  facts  and  

circumstances  of  the  given  case.  It  was  rightly  held  that  where  a  

particular  mode  is  prescribed  for  doing  an  act  and  there  is  no  

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impediment in adopting the procedure, the deviation to act in a different  

manner  which  does  not  disclose  any  discernible  principle  which  is  

reasonable itself shall be labelled as arbitrary.

11.Thus in the given facts of the case, the action of the Committee in  

releasing the lands of M/s Orient Craft would not be arbitrary in so far  

as  it  has  deviated  from  the  procedure  laid  down  in  the  form  of  

guidelines  approved  for  the  same  purpose,  provided  a  principle  

discerned  from  the  deviation  is  within  the  bounds  of  the  

reasonableness test.  From a perusal  of  the facts of the case, it  is  

clear that the release of the land of M/s Orient Craft may be said to be  

based  on the  logic  that  as  the  undertaking  of  M/s  Orient  Craft  to  

release their land as desired by the department had fulfilled the lands  

needed by the HSIDC, so the deviation in releasing the same has a  

justifiable reason. So, we may safely say that such deviation from the  

procedural guidelines is not unjustified in the present situation. This  

leads us to the question as to why such a reasonable principle was  

not applied in the case of the lands of the respondent,  though the  

same were contiguous and adjoining the lands of M/s Orient Craft and  

thereby releasing the land of the respondent also.

12.As  the  deviation  from the  guidelines  in  releasing  the  land  of  M/s  

Orient Craft has been found to be not wrongful, there is no question of  

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committing two wrongs by applying the same yardstick to release the  

lands of the respondents. As such, we do not find anything wrong in  

the decision of the High Court to release the lands of the respondents  

from acquisition.  

13.Thus, let  us now consider the question raised by the respondents  

regarding the validity of the conditions laid down by the High Court for  

release of their lands. As noted herein earlier, the High Court had laid  

down the following conditions for the release from acquisition of the  

lands of the respondents :-

i. That they will maintain the green belt as desired by the  

Department  which  is  essentially  required  to  lay  the  

infrastructure.

ii. That  they  would  pay  the  proportionate  internal  and  

external  charges  to  the  HSIDC  as  and  when  it  is  

required by the authorities.

It is obvious that these conditions laid down are very similar to the  

undertaking  of M/s Orient Craft which was filed in the form of an affidavit  

as mentioned earlier. At the risk of repetition, we would like to mention  

the two conditions mentioned in the undertaking of M/s Orient Craft viz.:-

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i. That  they  would  leave  the  land  as  desired  by  the  

department  which  is  essentially  required  to  lay  the  

infrastructure.

ii. That they would also pay the proportionate external and  

internal  development  charges  to  the  HSIDC  as  and  

when assessed and demanded.  

Thus,  the intention of  the  High Court  is  clearly  to  bring  parity  in  the  

status of the lands of the respondents vis-á-vis that of M/s Orient Craft.  

This  is  justifiable  since  the  same  principle  has  been  applied  that  is  

discernible from the act of release from acquisition of the land of M/s  

Orient Craft, as has already been observed.  

14. However,  the  respondents  have  argued  against  the  validity  of  the  

condition to maintain a green belt on their land up to 50 meters on  

two grounds. First, they relied on a judgment of this Court in the case  

of Raju S. Jethmalani v. State of Maharastra   [(2005) 11 SCC 222]    

wherein it  was held that  the burden to make available green area  

cannot  be  put  on  the  citizens.  Secondly,  it  was  argued  that  the  

condition of maintaining 50 meters green belt is not supported by any  

law  in  force,  and  also  that  even  under  Section  3  of  the  Punjab  

Scheduled  Roads  &  Controlled  Areas  (Restriction  of  Unregulated  

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Development) Act, 1963, there is no condition of maintaining green  

belt.  

15.     Before taking up the first point, we would like to clarify one thing  

about  the  second  point.  It  is  true  that  Section  3  of  the  Punjab  

Scheduled  Roads  &  Controlled  Areas  (Restriction  of  Unregulated  

Development) Act, 1963 does not explicitly require the maintenance  

of 50 meters green belt. However, one must take into consideration  

the fact that the Corporation had been appointed as a nodal agency  

by the State Government for rapid industrialisation of the State and so  

it had to carry out the planned development of the industrial estates.  

The  needs  of  industrialisation  and  economic  development  are  so  

dynamic  that  it  is  not  possible  to  limit  these  needs  by  certain  

legislative  provision.  These  needs  will  change  according  to  the  

growing economic demands. In the present case in hand, the need  

for rapid industrialization of the State was recognised by the State  

Government  and  accordingly  notifications  were  issued  by  it  under  

Sections 4 and 6 of the Act, which was clearly done according to the  

applicable rules and procedures. Moreover, there is no law in force  

that  categorically  limits  the  area  to  which  a  green  belt  may  be  

extended, and this means that it is a need based decision on the part  

of the authority though it has to be within reasonable bounds. So the  

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mere fact that Section 3 of the Punjab Scheduled Roads & Controlled  

Areas (Restriction of Unregulated Development) Act, 1963 does not  

explicitly require the maintenance of 50 meters green belt, cannot be  

allowed to frustrate the attempt to meet the ever increasing economic  

needs of rapid industrialisation.  In this regard,  we may once again  

look  back  to  the  judgment  in  Anand  Button’s case  (supra)  and  

conclude that since the nodal agency is in the best position to decide  

how much is needed for the maintenance of 50 meters green belt,  

there is nothing wrong in requiring the same in the given case.

16. As far as the judgment in the case of  Raju S. Jethmalani (supra) is  

concerned, we need to see whether the facts in that case are similar  

to the facts in the present case. In Raju S. Jethmalani, this court held  

that no burden can be placed on private citizens to provide suitable  

area in the locality for using the same as garden or park. This Court  

observed :

“...We fail to understand how can the burden be placed  on the appellants that they should provide suitable area in   the present locality for using the same as garden or park.   Rather,  the  burden  should  have  been  placed  on  the  Municipal Corporation or the State Government instead of   putting it on the appellants that they must provide some  space for garden and park. This direction, in our opinion,  appears to be wholly misconceived and we set aside the   impugned order of the Division Bench...”

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In  view of  the  above,  therefore,  the  burden  should  have  been  

placed on the Municipal Corporation or the State Government and not  

on  the  individuals.  This  appears  to  render  the  judgment  of  the  High  

Court in the present case fallacious as far as the conditions imposing  

maintenance of a green belt on the respondents is concerned. However  

in the present case, the purpose is very different from that in  Raju S.  

Jethmalani’s  case  and  also  the  applicable  Acts  are  different.  So  the  

need is to check whether the two situations are in  pari materia or not.  

We have to take into account the observations of this Court in Raju S.  

Jethmalani’s case (supra) that a development plan can be prepared of a  

land comprising of a private person but that plan cannot be implemented  

till the land belonging to the private person is acquired by the Planning  

Authority. Accordingly in Raju S. Jethmalani’s case (supra), the decision  

of  the High Court  to  impose burden on private individuals  to  provide  

suitable area for park was found to be faulty because of the fact that the  

Municipal Corporation had failed to acquire the land for the said purpose  

even though it was planned so initially. It is beyond any doubt that in the  

present  case,  the  HSIDC is  ready to  acquire  the  land  of  the  private  

persons i.e.  the respondents,  and so we fail  to relate the situation in  

Raju S. Jethmalani with that of the present case. Moreover, we cannot  

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frustrate the overall  purpose of the Act by relying on a judgment that  

relates to a matter under the Maharashtra Regional and Town Planning  

Act,  1966.  Thus,  we  need not  be bound by  the  decision  in  Raju  S.  

Jethmalani’s case (supra) as far as the burdening of a private person to  

provide  land  for  public  utility  is  concerned.  However,  so  far  as  the  

question of maintaining a green belt imposed by the High Court in the  

impugned order is concerned, we are not in a position to agree with such  

directions of the High Court.  

17.Leaving the land for the HSIDC to develop a green belt is different  

from that of requiring the private person to maintain the green belt  

since that will  be an unnecessary burden on that person. Since we  

have sought  to rely on the averment  made by M/s Orient  Craft  in  

order  to  bring  parity  between  the  status  of  the  lands  of  the  

respondents and M/s Orient Craft, we believe that the same criteria  

should be applied in releasing these lands from acquisition. The most  

important  issue  is  that  the  process  of  development  and  

industrialisation as planned and approved by the legislature should  

not meet a dead end because of a small stretch of land. As such, the  

land of the respondents shall be released from acquisition as was the  

case with  M/s  Orient  Craft,  but  the same shall  be  done on same  

grounds as was applied for the land of M/s Orient Craft. Accordingly,  

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affirming  the  judgment  of  the  High  Court,  we  only  modify  the  

conditions for fulfilment on the part of the respondents so that their  

land is released from acquisition. These are:-

i. They will release the land which is needed by the HSIDC for  

maintaining the green belt, undisturbed and such land shall  

be not more than the 50 meters prescribed for the Green Belt.

ii. They will pay the proportionate external and internal charges  

to the HSIDC as and when it is required by the authorities.

18.Apart  from the modifications that  we have made in  the conditions  

imposed by the High Court in the impugned judgment as mentioned  

above, we do not find any merit in these appeals.  

19.For  the  reasons  aforesaid,  the  appeals  are  disposed  of  with  the  

aforesaid modification of the impugned judgment of the High Court.  

There will be no order as to the costs.

……………………..J

[Tarun Chatterjee]

New Delhi; ……………………..J.

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October 22, 2009.    [V.S.Sirpurkar]

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