SHAM LAL Vs STATE OF PUNJAB .
Bench: G.S. SINGHVI,GYAN SUDHA MISRA
Case number: C.A. No.-006284-006284 / 2013
Diary number: 5216 / 2011
Advocates: ARUN K. SINHA Vs
K J JOHN AND CO
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NON-REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6284 OF 2013 (Arising out of SLP(C) No. 5100 of 2011)
Sham Lal and others …Appellants
versus
State of Punjab and others …Respondents
with
CIVIL APPEAL NO. 6285 OF 2013 (Arising out of SLP(C) No. 10669 of 2011)
CIVIL APPEAL NO. 6286 OF 2013 (Arising out of SLP(C) No. 17956 of 2011)
CIVIL APPEAL NO. 6287 OF 2013 (Arising out of SLP(C) No. 21292 of 2011)
CIVIL APPEAL NO. 6288 OF 2013 (Arising out of SLP(C) No. 15313 of 2011)
J U D G M E N T
G. S. Singhvi, J.
1. Leave granted.
2. These appeals are directed against order dated 19.01.2011 of the
Punjab and Haryana High Court whereby the writ petitions filed by the
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appellants questioning the acquisition of their land for implementation of
Ring Road Phase-I Development Scheme (for short, ‘the scheme’) were
dismissed.
3. The appellants own small plots of land within the municipal limits
of Bhatinda. They constructed houses on their respective plots. Some
did so after getting the building plans sanctioned by the competent
authority while others did that after depositing the development charges.
The Municipal Council (now the Municipal Corporation), Bhatinda has
provided civic amenities like electricity, water, sewerage, etc., in the
localities where the appellants have constructed their houses.
4. By resolution dated 12.12.2000, Improvement Trust, Bhatinda (for
short, ‘the Trust’) framed the scheme covering an area measuring 45.57
acres. Thereafter, notice under Section 36 of the Punjab Town
Improvement Act, 1922 (for short, ‘the Act’) was issued to enable the
interested persons to file objections. Some of the appellants filed
objections and prayed that their plots may not be acquired because they
had already constructed houses after getting the plans sanctioned from the
competent authority. After hearing the objectors, the Chairman of the
Trust passed the following order:
“The objectors whose construction is of ‘A’ category as per survey plan, are adjusted and exempted as per
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Government instructions subject to the condition that no structure falls in the roads.
So far exemption and adjustment of small plot-holders, the matter will be taken up in the Trust meeting. Hon’ble Lo- cal Bodies Minister and Local Minister have also desired that small plot-holder be adjusted and exempted on pay- ment of requisite fee/charge. I recommend that small plot- holders be adjusted and exempted while taking up the mat- ter in the Trust meeting for approval of the scheme. It will not affect the scheme, rather will minimize the litigation.
Rest of the objections carry no weight and are rejected, further proceedings be done for completion of the scheme and STP be requested accordingly.”
5. The layout plan of the area was approved by STP (South). The
Trust also passed resolution dated 1.1.2002 and approved the lay out plan.
Simultaneously, the concerned officers were directed to take action for
getting the scheme approved from the State Government. In the
resolution, it was specifically mentioned that ‘A’ class buildings be
adjusted in the scheme and, as per the policy of the State Government,
small plot holders may also be adjusted on `as is where is’ basis subject
to the payment of development and exemption charges. For the sake of
reference, the resolution passed by the Trust is reproduced below:
“The layout plan is passed unanimously. Action be taken to get approval from the Government in time. “A” class building marked in the Survey Plan and the Layout Plan are adjusted. As per Government public welfare policy, the lands of small-plot-holders which are shown in the plan as shaded in cross-lines are adjusted as is where is. However, the owners of adjusted buildings and plots shall be liable to pay development and exemption charges. The above
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decision is taken unanimously keeping in view the interest of the public as well as of the Trust. This shall not affect the Scheme of the Trust and the important project of the Ring Road shall be completed which shall decreases the traffic and pollution in the town. Shri Gulzar Singh, DTP, got a note written that there are no rules for adjustment has been written to earlier about this and the adjustment of the plots is in the interest of the public as well as the Trust. This shall not hinder the planned development which is the main object of the Trust.”
6. Thereafter, the District Town Planner inspected the area of the
scheme by associating the trustees and the officers of the Trust and sent
letter dated 3.1.2002 to the Chairman of the Trust pointing out several
deficiencies in the layout plan, including the following:
(i) The existing streets situated in and around the scheme area
were not shown in the layout plan.
(ii) The proposal for closure of a large number of streets was
technically faulty and was contrary to public interest.
(iii) The closure of gates of private houses opening to the streets
was not warranted.
(v) The categorisation of the constructions as ‘A’, ‘B’ and ‘C’
classes had not been shown in the plan.
7. The District Town Planner suggested that the layout plan be
redrawn keeping in view the ground situation and the link roads be
integrated in the new plan. It is not clear from the record whether the
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deficiencies pointed out by the District Town Planner were rectified and
the suggestions made by him were accepted.
8. By an order dated 15.01.2002, the Secretary, Local Government
Department, Punjab partially annulled the resolution passed by the Trust.
For the sake of reference that order is reproduced below:
“Government of Punjab Department of Local Government
(L.G. 2 Branch)
ORDER
Whereas Improvement Trust, Bhatinda passed a resolution No.8/2002, dated 1.1.2002. In this resolution, it was decided to adjust as per site small plot holders failing in 45.57 acre Development Scheme ring road Phase-1.
2. Whereas the resolution No.8/2002 passed by the trust is not as per provisions of the Govt. instructions No. 5051- 2C.I/76./ 32537, dated 8.9.1976.
3. After considering all aspects of the case I, B.C. Gupta, I.A.S. Secretary to Government of Punjab, Local Government Department exercising the powers under Section 72-E of Punjab Town Improvement Act, annul partially the resolution No.8/2002, dated 1.1.2002 of Improvement Trust, Bhatinda.
Dated: 15.1.2002 B.C. Gupta, I.A.S.
Secretary, Government of Punjab Local Government Department,
Punjab”
9. Thereafter, the State Government issued notification dated
17.1.2002 under Section 42(1) of the Act and sanctioned the scheme not
only for the construction of ring road but also for development of area for
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residential, commercial and public buildings. The State Government also
rejected the recommendation of the Trust to adjust the vacant plots
coming within the boundaries of the scheme.
10. The residents of Khasra Nos.2399 and 2356 and members of Jujhar
Singh Nagar Welfare Society, Bhatinda submitted representation dated
25.12.2002 to the Administrator/Chairman of the Trust and Secretary,
Local Self Government Department for release of their plots by pointing
out that while preparing the scheme and notifying the same, the Trust and
the State Government ignored the fact that a large number of houses had
already been constructed. The concerned authority partly accepted the
representation and changed the boundaries of the scheme so as to exclude
some portions of the properties of the representationists.
11. As a sequel to the issue of final notification under Section 42(1) of
the Act, Land Acquisition Collector, Improvement Trust, Bhatinda passed
award dated 16.1.2004 whereby he fixed market value of the acquired
land at the rate of Rs.600/- per sq. yard.
12. Since the appellants could not persuade the Trust and the State
Government to exempt/release their land, they filed Writ Petition Nos.
2570/2004, 4272/2004, 10823/2004, 12439/2004, 15187/2004 and
19700/2006 and prayed for quashing the notice issued under Section 36
and the notification issued under Section 42 of the Act. This prayer was
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founded on the following assertions:
i) The scheme was framed by the Trust without considering the
relevant parameters.
ii) Those who had filed objections were not given effective
opportunity of hearing.
iii) The decision to release only ‘A’ class constructions was
discriminatory and violative of Article 14 of the Constitution.
iv) The State Government arbitrarily rejected the recommendations
made by the Trust for adjusting the small plots on which houses had
already been constructed.
v) The order passed by the Secretary to the Government is vitiated
due to violation of the principles of natural justice in as much as the plot
owners were not given effective opportunity of hearing and no reason
was assigned for modification of resolution dated 1.1.2002 passed by the
Trust.
13. In the counter affidavits filed on behalf of the respondents, it was
claimed that the scheme had been framed in accordance with the
provisions of the Act and the plots of the writ petitioners could not be
exempted/adjusted because they were within the boundaries of the
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scheme. It was also pleaded that the scheme was sanctioned after hearing
the objectors and no discrimination had been practised in releasing the
plots or granting exemption to the particular parcels of land. According to
the respondents, a total of 46 constructions (34 ‘A’ class constructions
and 12 ‘C’ class constructions) were in existence at the time of issue of
notice under Section 36 and all ‘A’ class constructions were exempted in
accordance with the policy of the State Government.
14. During the pendency of the writ petitions, the Chairman of the
Trust Shri Jagroop Singh submitted report dated 27.12.2005 to the State
Government mentioning therein that the record of the Trust does not
contain any indication about the issuance of notice under Section 9 of the
Land Acquisition Act, 1894 (for short, ‘the 1894 Act’) and the award was
not pronounced on 16.1.2004 at Bhatinda. Shri Jagroop Singh also
pointed out that the award was incomplete because assessment of houses,
trees, tubewell, etc., had not been done. He suggested that the plots on
which construction had already been raised may be left out so that the
Trust will not be required to contest unnecessary litigation. Deputy
Commissioner, Bhatinda also sent letter dated 22.7.2006 to the State
Government stating that 5222 sq. yards land should be acquired for the
scheme and the remaining 2278 sq. yards should be released.
15. The Division Bench of the High Court dismissed the writ petitions
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by recording the following reasons:
a) The writ petitioners cannot complain that they were not given
opportunity of hearing because most of them had not filed objections in
response to the notice issued by the Trust under Section 36 of the Act.
b) The recommendations made by the Trust for release of the plots
was not binding on the State Government and no illegality was
committed by invoking the provisions of Section 72-E for the purpose of
modification of resolution dated 1.1.2002.
c) The report of the District Town Planner could not be relied upon
for recording a finding that there were factual errors in the layout plan,
and, in any case, the deficiencies pointed out by him were not relevant for
deciding the legality of the notification issued under Section 42 of the
Act.
d) No evidence was produced by the writ petitioners to show that they
had constructed houses prior to the issue of notice under Section 36 of the
Act.
e) The satisfaction recorded by the competent authorities on the
necessity and justification of framing the scheme and approving the same
cannot be subjected to judicial review.
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16. S/Shri Pinaki Misra, Shyam Divan, learned senior counsel and Shri
Manoj Swarup, learned counsel appearing for the appellants argued that
the impugned order is liable to be set aside because the High Court has
not assigned cogent reasons for negating their clients’ challenge to the
acquisition of land. Learned counsel pointed out that most of the
appellants had constructed residential houses much before the issue of
notice under Section 36 and the State Government committed serious
error by not exempting their plots on the ground that the constructions
were not ‘A’ class. They relied upon the judgments of this Court in Sube
Singh v. State of Haryana (2001) 7 SCC 545 and Hari Ram v. State of
Haryana (2010) 3 SCC 621 and argued that the State cannot practise
discrimination in the matter of grant of exemption from acquisition or
releasing the acquired land on which construction had already been raised
merely because the quality of construction is different. Learned counsel
emphasized that the Trust, which had framed the scheme, had itself
recommended exemption of the small plots, and the Secretary to the
Government illegally modified the resolution of the Trust by exercising
the power vested in the State Government under Section 72-E of the Act.
Learned counsel then argued that the High Court committed serious error
by refusing to quash the order passed by the Secretary despite the fact
that he did not assigned any reason for modification of resolution dated
01.01.2002. Learned counsel referred to the report of the District Town
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Planner to show that the scheme framed by the Trust was deficient in
several aspects and argued that such a defective scheme cannot be
effectively implemented and the plots of the appellants cannot be
acquired to give benefit to private developers, who are likely to grab the
acquired land by the methodology of allotment through lottery or by
auction. Learned counsel submitted that the scheme framed by the Trust
is not only for the ring road, but also for residential and commercial
purposes and there is absolutely no justification to demolish the houses of
the appellants for providing plots to others. In support of this argument,
the learned counsel relied upon the judgments of this Court in Dev Sharan
v. State of U.P. (2011) 4 SCC 769, Narpat Singh v. Jaipur Development
Authority (2002) 4 SCC 666 and Tulsi Cooperative Housing Society,
Hyderabad v. State of A.P. (2000) 1 SCC 533. Learned counsel also
relied upon additional affidavit dated 26.11.2009 filed by Shri Gora Lal,
Executive Officer of the Trust before the High Court and the statement
made by the Additional Advocate General, Punjab on 16.9.2009 that the
State Government will have no objection to the release of the land except
the area falling under the proposed ring road and the berms appurtenant
thereto and argued that in view of the stand taken by the State
Government, the High Court was not at all justified in rejecting the
appellants’ prayer for ordering release of their plots. Learned counsel also
criticised the High Court’s view that the writ petitions were belated.
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They pointed out that the appellants had approached the Court soon after
finalisation of the scheme by the State Government and they cannot be
accused of being guilty of delay because notice under Section 9 of the
1894 Act had not been served upon them and they had no knowledge
about the award passed on 16.1.2004.
17. Shri Salil Sagar, learned senior counsel for the Trust supported the
impugned order and argued that this Court may not entertain the prayer of
the appellants because that will result in frustration of ring road scheme.
He pointed out that the State Government had sanctioned the scheme not
only for construction of ring road, but also for residential and commercial
purposes and submitted that a portion of the ring road has already been
completed after taking possession of the acquired land from other
landowners and obtaining loan from the financial institutions. Shri Sagar
emphasized that the plots on which ‘A’ class construction had been raised
prior to the issue of notification under Section 36 were exempted from the
scheme and the appellants cannot claim parity because they constructed
houses after the issue of notice under Section 36 or their constructions
were not of ‘A’ class. Learned senior counsel argued that if smaller plots
are exempted then the scheme will be jeopardized and the people of the
area will suffer serious injury inasmuch as they will be deprived of the
benefit of planned development of residential and commercial area. Shri
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Sagar submitted that the additional affidavit filed by the then Chairman of
the Trust, Shri Jagroop Singh was rightly discarded by the High Court
because one of his relatives was the writ petitioner and the sole object of
the additional affidavit was to help him.
18. We have considered the respective submissions. Before examining
the appellants’ challenge to the scheme, we may notice order dated
16.09.2009 passed by the Division Bench of the High Court. The same
reads as under:
“IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH
C.W.P. NO. 2570 OF 2004
Arun Kumar and others v. State of Punjab and others
Present: Mr. Ashok Singla, Advocate for the petitioner. Ms. Rita Kohli, Addl. A.G. Punjab, for the respondent No.1. Mr. C.M. Munjal, Advocate, for respondent No.2 and 4. None for respondent No.3
Learned counsel for Respondent No.1 submits that she has obtained instructions to state that the State Government would have no objection to the release of land which is subject matter of acquisition other than the land falling under the purported ring road and the berms appurtenant thereto.
In view of the above Mr. C.M. Munjal learned counsel representing respondents No.2 and 4 states that he would obtain instructions based on the statement made on behalf of respondent No.1.
Adjourned to 22.10.2009 so as to enable the learned counsel for respondents No.2 to 4 to obtain instructions.
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16.9.2009.”
19. We may also mention that during the course of arguments, the
learned counsel appearing for the appellants categorically stated that their
clients do not want to question the acquisition of land for the ring road
and that their objection is mainly directed against utilization of the
acquired land for commercial, residential and institutional purposes.
20. The question whether the policy framed by the State Government
to grant exemption only to ‘A’ class constructions is constitutional is no
longer res integra and must be treated as concluded by the judgments of
this Court in Sube Singh v. State of Haryana (supra) and Hari Ram v.
State of Haryana (supra). In Sube Singh’s case, the Court considered the
appellant’s plea that the decision of the State Government not to exclude
their property from acquisition was arbitrary and discriminatory inasmuch
as the State Government had, in terms of the policy decision taken by it,
excluded from acquisition ‘A’ class constructions. The State Government
justified the exclusion only of ‘A’ class construction by asserting that the
nature of construction constituted a rational ground for making a
distinction between various parcels of land for the purpose of grant of
exemption. While rejecting the plea of the State, this Court observed:
“It remains to be seen whether the purported classifica- tion of existing structures into A, B and C Classes is a
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reasonable classification having an intelligible differentia and a rational basis germane to the purpose. If the State Government fails to support its action on the touchstone of the above principle, then this decision has to be held as arbitrary and discriminatory. It is relevant to note here that the acquisition of the lands is for the purpose of planned development of the area which includes both res- idential and commercial purposes. That being the pur- pose of acquisition, it is difficult to accept the case of the State Government that certain types of structures which according to its own classification are of A Class can be allowed to remain while other structures situated in close vicinity and being used for same purposes (residential or commercial) should be demolished. At the cost of repeti- tion, it may be stated here that no material was placed be- fore us to show the basis of classification of the existing structures on the lands proposed to be acquired. This as- sumes importance in view of the specific contention raised on behalf of the appellants that they have pucca structures with RC roofing, mosaic flooring, etc. No at- tempt was also made from the side of the State Govern- ment to place any architectural plan of different types of structures proposed to be constructed on the land notified for acquisition in support of its contention that the struc- tures which exist on the lands of the appellants could not be amalgamated into the plan.
On the facts and circumstances of the case revealed from the records, we are persuaded to accept the contention raised on behalf of the appellants that the rejection of the request of the appellants for exclusion of their land hav- ing structures on them was not based on a fair and reas- onable consideration of the matter. We are of the view that such action of the Government is arbitrary and dis- criminatory.”
21. In Hari Ram’s case, the Court noted that prior to 26.10.2007, the
Government did not have a uniform policy for withdrawal from
acquisition and observed:
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“As regards the guidelines provided in the Letter dated 26-6- 1991, this Court has already held that classification on the basis of nature of construction cannot be validly made and such policy is not based on intelligible differentia and a rational basis. What appears from the available material is that for re- lease of the lands under the subject acquisition, no policy has been adhered to. This leads to an irresistible conclusion that no firm policy with regard to release of land from acquisition exis- ted.
It is true that any action or order contrary to law does not confer any right upon any person for similar treatment. It is equally true that a landowner whose land has been acquired for public purpose by following the prescribed procedure cannot claim as a matter of right for release of his/her land from acquisition but where the State Government exercises its power under Section 48 of the Act for withdrawal from acquisition in respect of a particular land, the landowners who are similarly situated have a right of similar treatment by the State Government. Equality of citizens' rights is one of the fundamental pillars on which the edifice of the rule of law rests. All actions of the State have to be fair and for legitimate reasons.
The Government has obligation of acting with substantial fair- ness and consistency in considering the representations of the landowners for withdrawal from acquisition whose lands have been acquired under the same acquisition proceedings. The State Government cannot pick and choose some landowners and release their land from acquisition and deny the same bene- fit to other landowners by creating artificial distinction. Passing different orders in exercise of its power under Section 48 of the Act in respect of persons similarly situated relating to the same acquisition proceedings and for the same public purpose is def- initely violative of Article 14 of the Constitution and must be held to be discriminatory.”
22. By applying the ratio of the above noted judgments to the facts of
these cases, we hold that one of the reasons assigned by the State
Government for not excluding the appellants’ land from acquisition,
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namely, the quality of construction was irrelevant and extraneous and the
High Court committed serious error by rejecting the appellants’ plea that
the respondents had discriminated them in the matter of grant of
exemption from acquisition.
23. We shall now consider whether the State Government was justified
in rejecting the recommendations made by the Trust for adjustment of the
small plots subject to payment of the requisite fee/charges. Section 72-E
of the Act which was invoked by the Secretary for partial annulment of
resolution dated 1.1.2002 reads as under:
“72-E Power of State Government and its officers over trust -
(1) The State Government and Deputy Commissioners acting under the orders of the State Government, shall be bound to require that the proceedings of trusts shall be in conformity with law and with the rules in force under any enactment for the time being applicable to Punjab generally or the areas over which the trusts have authority.
(2) The State Government may exercise all powers necessary for the performance of this duty and may among other things, by order in writing, annul or modify any proceeding which it may consider not to be in conformity with law or with such rules as aforesaid, or for the reasons, which would in its opinion justify an order by the Deputy Commissioner under section 72- B.
(3) The Deputy Commissioner may, within his jurisdiction for the same purpose, exercise such powers as may be conferred upon him by rules made in this behalf by the State Government.”
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24. A reading of the above reproduced provision makes it clear that in
terms of Section 72-E(1), the State Government is duty bound to ensure
that the proceedings of the Trusts remain within the bounds of law. The
Deputy Commissioners, on being ordered by the State Government are
also under an obligation to ensure that the proceedings of the Trusts
coming within their jurisdiction are in conformity with the law and the
rules made under various enactments. Section 72-E (2) lays down that
for performance of its duty under Section 72-E (1), the State Government
can exercise all the powers including annulment or modification of any
proceeding of the Trust which may, in its opinion, be not in conformity
with law or the rules framed thereunder or which would in its opinion
justify an order by the Deputy Commissioner by virtue of exercise of
such power as may be conferred upon him by the rules made in this
behalf by the State Government.
25. Though the plain language of Section 72-E does not postulate grant
of hearing by the State Government or the Deputy Commissioner, as the
case may be, to those who may be affected by modification or annulment
of the resolution passed by the Trust, but the rules of fairness require that
while modifying or setting aside the resolution passed by the Trust, the
State Government or the Deputy Commissioner, as the case may be, must
give some indication of the application of mind by recording reasons,
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howsoever, briefly. If the order passed under Section 72-E represents
inscrutable face of the sphinx, the Court is entitled to infer that the
concerned authority had either not considered the relevant records or not
applied mind to the rationale of the decision taken by the Trust or the
recommendations made by it.
26. A reading of order dated 15.1.2002 passed by the Secretary does
not show that the concerned officer had considered the pros and cons of
the resolution passed by the Trust for adjustment of the smaller plots and
then decided to partially annul the same. Therefore, the High Court
should have quashed the order passed under Section 72-E of the Act and
directed the State Government to decide the matter afresh. Its failure to
adopt that course has resulted in manifest injustice and adversely affected
the the appellants
27. If the recommendations made by the Trust are considered in the
light of the fact that the appellants had already constructed their houses
and a statement was made on behalf of the State Government before the
High Court that it has no objection to the release of the plots other than
those falling under the ring road and the berms appurtenant thereto, it
becomes clear that the Secretary had arbitrarily cancelled that part of the
resolution of the Trust.
28. An additional fact of which cognizance deserves to be taken is that
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the scheme framed by the Trust was not only for construction of ring road
but also for development of commercial, residential and institutional
plots. It is difficult, if not impossible, to fathom any reason why the
Secretary to the Government rejected the recommendations made by the
President for exemption of the land belonging to small plot holders
despite the fact that the acquired land was intended to be utilised not only
for construction of ring road but also for development of commercial,
residential and institutional plots, which would have been ultimately
allotted to other persons by draw of lots or by auction. How could there
be a justification to demolish the residential houses of the appellants for
providing commercial, residential and institutional plots to others? In our
considered opinion, the decision taken by the Secretary was wholly
arbitrary, unreasonable and unjustified and the High Court committed
grave error by refusing to quash the same.
29. In view of the above conclusion, we do not consider it necessary to
deal with the arguments advanced by learned counsel for the parties on
the basis of the report submitted by the District Town Planner.
30. As a sequel to the above discussion, the appeals are partly allowed,
the impugned order is set aside and the State Government and the Trust
are directed to exclude the appellants’ land from the scheme except to the
extent the same is required for constructing the ring road. The concerned
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officers of the Trust are directed to take appropriate action in this regard
within a period of three months from the date of receipt/production of a
copy of this order.
...….……..…..………………..J. [G.S. SINGHVI]
...….……..…..………………..J. [GYAN SUDHA MISRA]
New Delhi, August 6, 2013.
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