A) ABSTRACT / HEADNOTE

The dispute concerns the appellant’s attempt to secure release of his industrial land from compulsory acquisition initiated under the Land Acquisition Act, 1894. His grievance arose from the State’s alleged discriminatory refusal to release his land, despite comparable release orders granted to neighbouring factories under various policies.

The State resisted on grounds of delay, deemed vesting, and lack of entitlement under policy norms. Central to the adjudication was the statutory requirement of obtaining a Change of Land Use (CLU) certificate under the Punjab Scheduled Roads & Controlled Areas Restrictions of Unregulated Development Act, 1963, which governs controlled areas around Sonipat since the 1964 notification.

The appellant, though claiming long-standing industrial use, failed to produce any CLU either for himself or his predecessor. The Supreme Court held that CLU is a mandatory prerequisite for seeking land release and the absence of CLU disentitles the appellant from parity with industries whose land had been released after securing CLU. The plea of discrimination thus failed.

The Court also weighed the extensive public expenditure already made to develop the acquired area and found that release of the appellant’s land would disrupt planned development. Nevertheless, acknowledging continued physical possession and the existence of a running factory, the Court exercised its extraordinary power under Article 142 of the Constitution to direct that compensation be calculated under the more beneficial Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

The decision thus reaffirms the statutory rigidity of CLU requirements while balancing equitable considerations through constitutional discretion.

Keywords: Land acquisition; CLU; Controlled area; Discrimination; Deemed possession; Article 142.

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The appeal arose from the appellant’s persistent attempts to obtain release of his industrial premises from compulsory acquisition undertaken for the planned development of Sonipat. The State issued a Section 4 notification on 09.11.1992 for acquiring land for residential and commercial expansion, including a sector road. The appellant’s property formed part of the notified area and was eventually included in the Section 6 declaration covering 329.70 acres.

The Award No. 10 issued on 05.11.1995 recorded that possession had already been taken under Rapat Roznamcha No. 229. Over the years, the appellant instituted multiple writ petitions seeking either quashing of acquisition or release of land. His third writ petition assailed the order dated 17.08.2010, whereby his representation seeking release was rejected without elaborate reasoning. The High Court dismissed the petition on the basis of deemed vesting, holding that physical possession retained by the appellant could not defeat acquisition.

The dispute must be read within the background of Haryana’s administrative policies for release of land from acquisition. The State framed policies dated 26.06.1991, 26.10.2007, and subsequently 24.01.2011, permitting consideration of release of pre-existing factories provided certain criteria most importantly, CLU were fulfilled. The appellant invoked discriminatory treatment because several industries from the same village had been granted release orders under these policies. He also claimed that his factory pre-dated the acquisition, hence his land should be excluded.

The State rejected the claim principally on the absence of CLU, asserting that Sonipat had been declared a controlled area by notification dated 23.09.1964, and that no industrial or commercial activity could legally exist without prior CLU under the 1963 Act. The Supreme Court was required to examine whether lack of CLU defeats the appellant’s claim, whether deemed possession bars relief, and whether discriminatory release orders granted to others create enforceable rights. The Court also considered wider development implications, including substantial public expenditure already incurred. The judgment ultimately balanced statutory mandates with constitutional equity.

D) FACTS OF THE CASE

The appellant purchased two parcels of land at Sultanpur, Sonipat, measuring 386 sq. yards and 3078 sq. yards, through a registered sale deed dated 04.08.1986 from the proprietor of M/s Haryana Kamoplast Industries. The appellant claimed that an industrial unit had been functional on the property since 1970. On 09.11.1992, the State of Haryana issued a Section 4 notification under the Land Acquisition Act, 1894, covering several villages including Sultanpur for planned development.

The Section 6 declaration followed on 06.11.1993, confirming acquisition. The appellant alleged that he had filed objections under Section 5-A, although the State disputed this assertion. The Land Acquisition Collector’s Award No. 10 dated 05.11.1995 indicated that possession of the land had already been taken through Rapat Roznamcha No. 229 prepared contemporaneously and the land vested in the Government.

The appellant challenged acquisition through multiple writ petitions. His first petition was dismissed; his second petition was withdrawn while his representation for land release was pending before the State. On 17.08.2010, the State rejected his request for release, prompting his third writ petition.

Before the High Court, the appellant argued parity with landowners whose lands had been released under policies dated 26.06.1991 and 26.10.2007. He asserted continuous possession and existence of a running factory predating the acquisition. The State denied his claims, emphasising absence of CLU, delay and laches, deemed vesting, and distinguishing the cases of released lands. The High Court accepted the State’s stand and dismissed the petition.

The appeal before the Supreme Court therefore centred on the legality of refusal to release land, the relevance of CLU, allegations of discrimination, and potential application of equitable powers considering continued physical possession.

E) LEGAL ISSUES RAISED

i. Whether the appellant was entitled to release of land from acquisition despite absence of a valid CLU certificate?
ii. Whether refusal to release the appellant’s land amounted to unconstitutional discrimination vis-à-vis similarly situated landowners?
iii. Whether large-scale development expenditure and planning considerations legally precluded release of the appellant’s land?
iv. Whether delay, laches or principles of res judicata barred the appellant’s writ petition?
v. Whether the Supreme Court could exercise Article 142 to grant enhanced compensation notwithstanding denial of release?

F) PETITIONER / APPELLANT’S ARGUMENTS

The appellant’s counsel urged that several similarly situated factories within Sultanpur village had been granted release orders at both pre-award and post-award stages under the 1991 and 2007 policies. He relied on release orders granted to Devraj Dewan, Northern India Carbonates Pvt. Ltd., Gatta Factory, Ashok Sawing Machine, and Deewan Palace to argue discriminatory treatment.

He emphasised that his factory had existed since 1970, thus falling within the conditions of the 1991 policy, which protected pre-existing factories. He argued that the 2010 rejection order was non-speaking and violated the principle of reasoned decision-making as laid down in Siemens Engg. & Mfg. Co. v. Union of India, 1976.

He further submitted that the High Court erred in treating possession as deemed possession, since he continued to physically occupy and operate a factory on the land. He relied on decisions such as Sube Singh v. State of Haryana, Hari Ram v. State of Haryana, and Raghbir Singh Sehrawat v. State of Haryana, which emphasise fair consideration of release claims and limitations of deemed possession. He contended that the State’s refusal was arbitrary, especially when his objections and representations were consistently pursued.

G) RESPONDENT’S ARGUMENTS

The State argued that the writ petition suffered from gross delay and laches, as the acquisition became final decades earlier. It asserted that the appellant had sought compensation under Section 9 without seeking release, thereby accepting acquisition. It invoked res judicata on the ground that earlier writ petitions had been dismissed or withdrawn.

Substantively, the State emphasised that the appellant did not possess a valid CLU, which was mandatory under the 1963 Act since Sonipat’s declaration as a controlled area in 1964. Without CLU, no industrial activity was legally permissible, and therefore the appellant’s land could not be considered for release under the policies.

It distinguished release orders granted to other landowners, noting that they possessed valid CLUs prior to the Section 4 notification and their situations were not comparable. The State also submitted that the acquisition area had undergone extensive planned development, with public expenditure of Rs. 2661.88 lakhs on roads, water, sewerage, drainage and commercial plotting, making release infeasible.

H) RELATED LEGAL PROVISIONS

i. Section 4, 5-A, 6, 9, 16 and 48(1) of the Land Acquisition Act, 1894
ii. Punjab Scheduled Roads & Controlled Areas Restrictions of Unregulated Development Act, 1963
iii. Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013
iv. Article 142, Constitution of India
v. State Policies dated 26.06.1991, 26.10.2007, 24.01.2011

I) JUDGEMENT 

The Court first addressed the determinative issue of CLU. Analysing the 1964 notification under the 1963 Act, it held that all land within the controlled area required CLU for any industrial or commercial land use. The appellant admitted no CLU had been obtained either by him or his predecessor.

The Court found on the record no document evidencing CLU, nor any rejoinder contesting the State’s claim. It held that CLU is a statutory prerequisite; thus, the appellant’s reliance on 1991 and 2007 policies which presuppose lawful industrial existence was untenable. His factory could not be treated as legally established and therefore did not qualify for land release.

On discrimination, the Court compared cases of other landowners and found they were distinguishable. For example, Devraj Dewan had applied for CLU in 1992 and obtained it prior to the Section 4 notification. Similar lawful compliance was evidenced for other instances. Thus, unlike the appellant, they satisfied statutory norms. The Court held that unequal cases could not claim equal treatment.

The Court also considered large-scale infrastructure development already completed in the acquired land. Expenditure exceeding Rs. 26 crores and planned public utilities including fire station, police station, and multiplex development demonstrated that releasing the appellant’s land would disrupt integrated planning and disturb green belts and roads.

On delay and res judicata, the Court held that although the appellant filed multiple writ petitions, none resulted in a merits-based adjudication of his release claim. Therefore, the bar of res judicata did not apply, nor would delay defeat the claim because the State itself continued examining release requests until 2020–21.

Ultimately, the Court dismissed the appellant’s claim for release on merits but acknowledged his continued physical possession and operation of a factory. It therefore invoked Article 142 to grant equitable relief by directing that compensation be computed under the 2013 Act as on its commencement date, emphasising that this was a non-precedential order based on peculiar facts.

a. RATIO DECIDENDI

The core ratio rests on the statutory mandate that land within a controlled area under the 1963 Act cannot be developed or used for industrial purposes without a valid CLU. The Court interpreted the 1964 notification declaring Sonipat a controlled area as creating a compliance obligation binding on all landowners.

The appellant’s inability to produce any CLU, coupled with the State’s unrebutted assertion of its absence, rendered his industrial unit an unauthorised activity not entitled to policy protection. Consequently, acquisition proceedings, including refusal to release land, were entirely lawful.

A second component of the ratio concerns the principle of reasonable classification under Article 14. The Court found that landowners who had secured CLUs constituted a distinct class from those who had not. As policy benefits were tied to validly established industrial units, the appellant’s plea of discrimination failed. The distinction was held to be intelligible and rationally related to the object of planned development.

A third branch of the ratio addresses the planning purpose underlying acquisition. The Court reaffirmed that substantial public expenditure and approved development plans cannot be jeopardised by selective land release. The State’s layout plans incorporating green belts, institutional plots, and utility corridors created binding constraints against ad hoc release.

Thus, the controlling principles are:

(1) the mandatory nature of CLU compliance;

(2) lawful differentiation between CLU holders and non-holders; and

(3) preservation of integrated urban planning.

b. OBITER DICTA

The Court’s observations regarding equitable considerations under Article 142 constitute obiter. It noted that despite deemed vesting, the appellant continued in physical possession and operated a factory, and the State had not convincingly disproved this.

Although this did not entitle him to release, it raised concerns of fairness, particularly since the acquisition dated back several decades. The Court mused that rigid statutory interpretation occasionally produces hardship warranting constitutional balancing hence the grant of enhanced compensation.

Additionally, the Court reflected that administrative decisions rejecting release requests must ordinarily contain reasons to satisfy principles of fairness, though in this case the absence of reasons was overshadowed by the absence of CLU. This observation underscores the expectation of reasoned governance even where statutory disqualification exists.

Another obiter remark concerned the State’s continuing examination of release cases until 2020–21, which the Court viewed as implicitly acknowledging that the appellant’s pursuit was not grossly delayed. Although unnecessary for the holding, this observation tempers traditional doctrine on laches in acquisition matters.

c. GUIDELINES

Although the Court did not lay down formal guidelines, certain operative principles emerge from its reasoning:

i. Land falling within a controlled area under the 1963 Act cannot qualify for release from acquisition unless the owner possesses a valid CLU prior to the Section 4 notification.
ii. Policy-based release must accord with statutory conditions. Policies cannot override mandatory requirements such as CLU.
iii. Parity claims based on release granted to others require strict proof of identical factual and legal circumstances, including statutory compliance and similar notification coverage.
iv. Physical possession retained by a landowner after deemed vesting does not by itself create rights to release but may justify equitable relief regarding compensation.
v. Large-scale public expenditure and executed development plans function as a strong negative factor against land release, as their disruption undermines planned development.
vi. Article 142 may be invoked in exceptional circumstances to mitigate hardship without disturbing statutory frameworks, but such orders are non-precedential.

J) CONCLUSION & COMMENTS

The judgment underscores the supremacy of statutory planning controls over equitable pleas for land release. The appellant’s longstanding industrial activity could not cure the fundamental defect of lacking CLU, a statutory precondition for lawful industrial land use in controlled areas.

The Court’s refusal to treat factually distinct release orders as precedents preserves the doctrinal coherence of Article 14 by preventing the propagation of illegality through false parity. The decision also strengthens urban planning jurisprudence by recognising that significant public expenditure and integrated development cannot be disturbed without compelling legal grounds.

However, the Court simultaneously acknowledges that acquisition jurisprudence must account for human and economic realities. Its invocation of Article 142 to extend benefits of the 2013 Act reflects a compassionate corrective to procedural rigidity. The balancing of strict statutory compliance with equitable constitutional discretion is a recurring theme in land acquisition cases, and this decision situates itself within that tradition.

The case illustrates the importance for industrial landowners in Haryana to strictly adhere to CLU requirements, as absence of CLU can nullify otherwise strong equitable claims. It also reflects judicial unwillingness to disturb planned development decades after acquisition. The decision, while doctrinally firm, remains sensitive to the individual hardships faced by landowners caught in long periods of litigation.

J) REFERENCES

a. Important Cases Referred

1. Sube Singh v. State of Haryana, (2001) 7 SCC 545.
2. Hari Ram v. State of Haryana, [2010] 2 SCR 756 : (2010) 3 SCC 621.
3. Sham Lal v. State of Punjab, (2013) 14 SCC 393.
4. Haryana State Industrial Development Corporation v. Shakuntla, [2009] 15 SCR 413 : (2010) 12 SCC 448.
5. Raghbir Singh Sehrawat v. State of Haryana, [2011] 14 SCR 1113 : (2012) 1 SCC 792.
6. Patasi Devi v. State of Haryana, [2012] 7 SCR 387 : (2012) 9 SCC 503.
7. Usha Stud & Agricultural Farms (P) Ltd. v. State of Haryana, [2013] 5 SCR 645 : (2013) 4 SCC 210.
8. Women’s Education Trust v. State of Haryana, (2013) 8 SCC 99.
9. Siemens Engg. & Mfg. Co. of India Ltd. v. Union of India, [1976] Supp. 1 SCR 489 : (1976) 2 SCC 981.
10. State of Punjab v. Bandeep Singh, [2015] 10 SCR 496 : (2016) 1 SCC 724.

b. Important Statutes Referred

1. Land Acquisition Act, 1894.
2. Punjab Scheduled Roads & Controlled Areas Restrictions of Unregulated Development Act, 1963.
3. Right to Fair Compensation and Transparency in Land Acquisition,
4. Rehabilitation and Resettlement Act, 2013.
5. Constitution of India (Article 142).