Rajendra Tyagi & Another vs State Of U.P. And 8 Others
2015 Latest Caselaw 5209 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Chief Justice's Court
 

 
Case :- PUBLIC INTEREST LITIGATION (PIL) No. - 59488 of 2015
 

 
Petitioner :- Rajendra Tyagi & Another
 
Respondent :- State Of U.P. And 8 Others
 
Counsel for Petitioner :- Samir Sharma
 
Counsel for Respondent :- C.S.C.,Lal Sahab Yadav,Mahendra Pratap,Not Known,Udayan Nandan
 

 
Hon'ble Dr. Dhananjaya Yeshwant Chandrachud,Chief Justice
 
Hon'ble Yashwant Varma,J.

Ghaziabad Development Authority1 submitted a proposal to the Collector and District Magistrate, Ghaziabad for the resumption of 43.99 hectares of land. The Commissioner, Meerut Division issued separate resumption notifications in exercise of powers conferred by Section 117 (6) of the U.P. Zamindari Abolition & Land Reforms Act, 19502. By the first of those notifications dated 7 February 2014, land admeasuring 1.7120 hectares comprised in Khasra Nos. 949 and 1080 was resumed from the Nagar Nigam, Ghaziabad and was vested in GDA for the purpose of planned development. By the second notification dated 3 December 2014, land admeasuring 5.2040 hectares comprised in Khasra Nos. 96, 97, 952 and 1034 was resumed from the Gram Sabha/Nagar Nigam, as the case may be, and was vested in GDA for planned development. The possession of the land was transferred on 11 May 2015. GDA advertised a scheme on 28 June 2015 by which it invited bids for the sale of two plots of land, which forms the subject matter of the present proceedings. These were listed at serial nos. 20 and 21 of the auction notice. Both of these plots were comprised in the Noor Nagar Scheme and were described respectively as plot GH-2 admeasuring 5535 sq.mtrs. and plot GH-1 admeasuring 12045 sq.mtrs. The brochure issued by GDA laying down the terms and conditions governing the allotment of group housing and non-residential plots, inter alia, stipulated that the purchaser would obtain free hold rights. Clause 2.4 which is material, reads as follows:

"2.4 Purchaser shall get freehold rights in the plot, provided that the freehold right shall be subject to architectural control prescribed by the GDA/Ground Coverage & FAR as given in Table. - 1 Other terms and condition will be as per building bye laws."

GDA has stated that it fixed a reserved price at Rs.22,200/- per sq. mtrs. The eighth and ninth respondents participated in the auction. On 25 July 2015, a letter was issued to the ninth respondent allotting plot GH-1. On the same day, a communication was issued to the eighth respondent allotting plot GH-2 to him. The allotment of plot GH-1 to the ninth respondent was on the basis of the highest bid of Rs.24,200/- per sq. mtr at a total consideration of Rs.29.14 crores upon which, after computing lease rent and free hold rights, a total demand of Rs.32.64 crores was made. The allotment of plot GH-2 to the eighth respondent was on the basis of the highest bid of Rs.24,500/- per sq. mtrs. at a value of Rs.13.56 crores. After computing lease rent and free hold rights, a total demand of Rs.15.18 crores was made.

The petitioners in these proceedings which have been instituted in public interest, have sought to challenge the resumption notifications issued respectively on 7 February 2014 and 3 December 2014 besides challenging the allotments made to the eighth and ninth respondents on 25 July 2015. Several grounds have been urged on behalf of the petitioners in support of the writ petition. The first ground is that the land had vested in the State under the provisions of Section 4(1) of the Act, after which under Section 117(1) of the Act, the land which has vested in the State is vested in the Gram Sabha or any other local authority by the State. Under sub-section (6) of Section 117, the State Government is empowered to amend or cancel any notification made in the case of a Gram Sabha or local authority and to resume the land upon which the Government is empowered to vest the land resumed in the same or any other local authority. Hence, it was urged that the provisions of sub-sections (1) and (6) of Section 117 would indicate that the absolute title to the land which vests in the State under Section 4 is conferred upon the State. GDA proceeded on the misconceived basis that it had absolute title to the land and proceeded to issue an auction notice on that basis. In this regard, reliance was placed on the law laid down by the Supreme Court in Maharaj Singh vs. State of U.P.3. The submission before the Court is that GDA has proceeded on a misconceived basis that it has an absolute right, title and interest in the land which it was alienating and the sale and auction in favour of the eighth and ninth respondents must be treated as void.

The second submission which has been urged is that the resumption of land under Section 117(6) is for effectuating a public purpose. Once the land has been resumed and entrusted to GDA on the basis of a representation made to the Collector and District Magistrate, it was not open to GDA to proceed to allot the land to one or more private developers and any such modality would amount to a fraud on power. The land has been vested with GDA for the purpose of ensuring planned development and the alienation of land to a private developer cannot be regarded as being in effectuation of the purpose underlying the resumption under Section 117 (6) of the Act.

Thirdly, it was sought to be urged that the fixation of the reserved price at the auction on the basis of the cost of acquisition and the charges of development incurred by GDA is manifestly contrary to public interest. Since the purpose of the auction, as has been stated in the counter filed by GDA, was to augment the financial resources of GDA for development and maintenance of infrastructure, utilities and amenities, there was no basis to fix a reserved price on the basis of the cost of acquisition. The reserved price ought to have been computed on the basis of the market value after taking into account all necessary and material circumstances.

Pleadings have been exchanged in the petition. We have heard learned counsel appearing on behalf of the petitioners as well as learned counsel appearing on behalf of GDA, the State and the contesting private respondents.

The first aspect of the matter which falls for consideration relates to the interpretation of the provisions of Section 117 of the Act. Sub section (1) of Section 117 empowers the State Government to issue a notification at any time after the estate has vested in the State under Section 4(1). Sub section (1) of Section 117 provides as follows:-

"117. Vesting of certain lands, etc. In Gaon Sabhas and other Local Authorities. - (1) At any time after the publication of the notification referred to in Section 4, the State Government may [by general or special order to be published in the manner prescribed], declare that as from a date to be specified in this behalf, all or any of the following things, namely -

(i) lands, whether cultivable or otherwise, except lands for the time being comprised in any holding or grove;

(ii) forests;

(iii) trees, other than trees in a holding on the boundary of a holding or in a grove or abadi;

(iv) fisheries;

(v) hats, bazars and melas, except hats, bazars and melas held on lands to which the provisions of Clauses (a) to (c) of sub-section (1) of Section 18 apply or on sites and areas referred to in Section 9; and

(vi) tanks, ponds, private ferries, water channels, pathways and abadi site,-

which had vested in the State under this Act, shall vest in a Gaon Sabha or any other local authority established for the whole or part of the village in which the said things are situate or partly in one such local authority (including a Gaon Sabha) and partly in another:

Provided that it shall be lawful for the State Government to make the declaration aforesaid subject to such exceptions and conditions as may be [specified in such order]."

Sub section (6) of Section 117 is in the following terms:

"(6)The State Government may at any time, by general or special order to be published in the manner prescribed, amend or cancel any declaration, notification or order made in respect of any of the things aforesaid, whether generally or in the case of any Gaon Sabha or other local authority and resume such thing and whenever the State Government so resumes any such things, the Gaon Sabha or other local authority, as the case may be, shall be entitled to receive and be paid compensation on account only of the development, if any, effected by it in or over that things:

Provided that the State Government may after such resumption make a fresh declaration under sub-section (1) or sub-section (2) vesting the thing resumed in the same or any other local authority including a Gaon Sabha, and the provisions of sub-sections (3), (4) and (5), as the case may be, shall mutatis mutandis, apply to such declaration."

The effect of Section 117(1) of the Act is that after the estate has vested in the State Government under Section 4, the State Government is empowered to direct that the land, among other things, which had vested in the State, shall vest in the Gram Sabha or any other local authority established in respect to the village in question. Under sub-section (6), however, the State Government is empowered to amend or cancel any declaration or notification made by it and to order resumption. When the State Government issues an order of resumption, the Gram Sabha or local authority, as the case may be, is entitled to receive compensation on account only of the development, if any, effected by it in or over the land or thing. Under the proviso to sub-section (6), the State Government, upon resumption, is empowered to make a fresh declaration vesting the land resumed in the same or any other local authority including the Gram Sabha. The provisions of sub-sections (1) and (6) make it abundantly clear that the vesting of land in the Gram Sabha or the local authority does not confer an absolute title which at all material times continues to vest in the State Government. Indeed that is the basis on which the State under sub-section (6) of Section 117 is empowered to cancel or amend a notification of vesting which has been issued under sub-section (1). Upon the issuance of such a notification, the Gram Sabha or local authority in which the land has originally vested, is entitled to receive compensation in respect of the development carried out by it thereon.

The true nature of the vesting in the State Government under sub-section (1) of Section 4 as contrasted with the vesting under sub-sections (1) and (6) of Section 117 in the Gram Sabha or local authority has been adjudicated upon in the judgment of the Supreme Court in Maharaj Singh (supra). The Supreme Court observed as follows:

"In the instant case the Act contemplates taking over of all zamindari rights as part of land reforms. However, instead of centralizing management of all estates at State level, to stimulate local self-government, the Act gives an enabling power - not obligatory duty - to make over these estates to Gaon Sabhas which, so long as they are in their hands, will look after them through management committees which will be under the statutory control of Government under Section 126. Apart from management, no power is expressly vested in the Sabhas to dispose of the estates absolutely..."

The principle is stated thus:

"...the vesting in the State was absolute but the vesting in the Sabha was limited to possession and management subject to divestiture by Government. Is such a construction of 'vesting' in two different senses in the same section, sound? Yes. It is, because 'vesting' is a word of slippery import and has many meanings. The context controls the text and the purpose and scheme project the particular semantic shade or nuance of meaning. That is why even definition clauses allow themselves to be modified by contextual compulsions. So the sense of the situation suggests that in Section 117(1) of the Act 'vested in the State' carries a plenary connotation, while 'shall vest in the Gaon Sabha' imports a qualified disposition confined to the right to full possession and enjoyment so long as it lasts..."

GDA, in the present case, has proceeded to deal with the land on a manifestly misconceived basis that the absolute title to the land has vested in it. Clause 2.4 of the terms and conditions notified by GDA clearly proceeded on the basis that the purchaser would get free hold rights in the plot. GDA to whom entrustment of land was made under Section 117(6) was clearly acting beyond the scope of its powers in issuing such a notification and purporting to dispose of a free hold interest in the land which it was entrusted by the State Government in exercise of the powers conferred by Section 117 (6) of the Act.

In its counter affidavit, GDA has stated its understanding of the legal position by stating thus:

"...Whether it is the land acquired under the provisions of the Land Acquisition Act or resumed land under the Notification the GDA becomes the owner and has paid the consideration. It is competent to allot the developed land / plot..."

(emphasis supplied)

This is clearly not consistent with the position in law as laid down by the Supreme Court in Maharaj Singh (supra). GDA has proceeded on the basis that whether the land has been acquired under the Land Acquisition Act, 1894 or the land has been resumed under a notification issued under Section 117(6) of the U.P. Zamindari Abolition and Land Reforms Act, 1950. GDA becomes the owner of the land and is competent to deal with it on that basis. This is contrary to the settled legal position that the entrustment to GDA under sub-section (6) of Section 117 is for controlling and managing the land and the land does not fall in the title or ownership of GDA. Title has vested in the State under Section 4 of the Act. The land continues to be in the ownership and title of the State Government.

As a matter of fact, we may note at this stage that during the course of the hearing, the learned counsel appearing on behalf of GDA has stated before the Court that GDA could not have proceeded to allot the land to the eighth and ninth respondents on a freehold basis. As we have noted earlier in the narration of facts, both the letters of allotment dated 25 July 2015 in favour of the eighth and ninth respondents proceed on the basis that the land was being allotted on a freehold basis to the two developers. However, it was urged that notwithstanding this, GDA would be entitled to demand from the two bidders, the full extent of value albeit for allotting the land to them not on a free hold but on a lease hold basis. Moreover, it was submitted that the only person who can have a grievance against the action of GDA would be the successful bidder himself and since neither of the developers have an objection to this course of action, it was not necessary for the Court to entertain the writ petition at the behest of the petitioners.

We are not inclined to accept this submission which has been urged on behalf of GDA. As a statutory body governed by the provisions of the U.P. Urban Planning and Development Act, 1973, GDA is duty bound to follow procedures which are fair and consistent with Article 14 of the Constitution. GDA proceeded on the clearly misconceived notion that it was alienating an absolute interest in the land in pursuance of its advertisement. Having done so and having now fairly conceded before the Court that this legal basis was misconceived, it would not be open to GDA to assert a right to go ahead with the transaction notwithstanding the fact that the fundamental basis of the terms on which it proposed the alienation is found to be contrary to law. Such a submission cannot be asserted by GDA nor can it be accepted by the Court. Once, it is clear that the alienation of land proceeded on the entirely misconceived foundation that there is an absolute vesting of title in GDA, the decision to alienate the land in favour of the eighth and ninth respondents on that basis would have to be quashed and set aside.

We may also note that GDA has stated before the Court that in taking a decision to allot the lands in question, it was 'really' acting "in compliance and furtherance of the observations made by" a learned Single Judge of this Court. Since GDA states that it is in pursuance of a judgment of a learned Single Judge of this Court that it notified the land for alienation, it would be necessary to resolve this issue once and for all. The judgment of the learned Single Judge in Anil Kumar vs. State of U.P.4 arose on a writ petition filed by a Lekhpal who had been suspended on 16 June 2012 on the allegation that he had furnished false reports so that the names of private persons could be entered as Bhoomidhars in respect of Gram Sabha land which was reserved for public utility purposes, such as ponds or graveyards. The learned Single Judge held that "there is absolutely nothing wrong" in the order of suspension. However, having highlighted this aspect, the learned Single Judge proceeded to deal with how the writ petition disclosed "a horrible state of affairs" and confirmed the view which has been taken by the Court in several cases that the land of the Gram Sabha is State property. The learned Single Judge observed that particularly in the districts of Gautam Budh Nagar, Ghaziabad and Meerut such lands were being looted with the active assistance of revenue officers on a large scale. The learned Single Judge noted that it appears that there was a racket involving even the higher officers to usurp the land of the State and the Gram Sabha. In the course of the decision and after having held that the writ petition challenging the order of suspension was without substance, the learned Single Judge formulated what is clearly described as a "suggestion". Those suggestions in the order of the learned Single Judge read as follows:

"Suggestion:-

As the land of Ghaziabad, Gautam Budh Nagar, Panchsheel Nagar (Hapur) has become extremely valuable and as for industrial and residential purposes land in those districts is urgently required and as the courts are constantly restricting the scope of acquisition of the properties belonging to private persons/bhoomidhars hence the best solution is that the State shall resume the entire gaon sabha land in these districts under Section 117(6) of U.P.Z.A.L.R. Act. This will serve two purpose one the land illegally occupied by private person through active support by officers will be taken back. Chances of further manipulation and usurpation will not be there, secondly lot of land will be available without having recourse to land Acquisition Act for Industrial Development including construction of residential colonies."

Evidently, the learned Single Judge did not regard these as binding directions, as indeed none could have been issued of this nature, particularly on a writ petition challenging an order of suspension. The observations which has been extracted above were hence intended to suggestions of the learned Single Judge in order to activate the State to take steps to preserve land which had vested in the State under the Act. In the last sentence extracted above, the learned Single Judge opined that if this be done, it would reduce the opportunity for fabrication of records and land would then become available without recourse to the Land Acquisition Act, 1894 for industrial development including for residential colonies. This suggestion of the learned Single Judge is now being utilized by GDA to read it as a direction in the nature of mandamus to allot lands to private developers. We are affirmatively of the view that this amounts to a perversion of power by GDA and an attempt to misconstrue the observations which were made by the learned Single Judge to confer benefits upon private developers. Evidently, these observations had nothing to do with the allotment of land to private developers since they are confined to the need to protect the land which had vested in the State under the Act. The extracted observations in the order of the learned Single Judge cannot be read out of context, as GDA did, to grant legal sanctity to alienate lands entrusted under Section 117(6) to private developers.

In the present case, it would be also necessary for the Court to take note of the manner in which the reserved price was fixed by GDA. The basis which has been explained in paragraph 10 of the counter affidavit filed by GDA is as follows:

"That for the land which has been resumed and a part whereof has been allotted to respondent Nos.8 and 9, the respondent Authority, on an average, has paid Rs.8,750.72 per sq. mtrs. An amount of Rs.3,712/- has been spent on external development, Rs.825/- towards development of infrastructure and amenities totaling to Rs.13,287/-. Since about 40% of the land is incapable of being sold, therefore, the price which is the actual cost comes to about Rs.22,145/- which was rounded off to Rs.22,200/- was kept as the reserved price. The auction price at which the allotment was ultimately made is Rs.24,200/- and 24500/- which is above the reserved price. In terms of the G.O. issued by the Government of Uttar Pradesh providing for levy of free hold charges, the free hold charge was loaded on this price as also lease rent. The price ultimately receivable by the respondent Authority is Rs.27104/- and 27,440/- per sq.mtr."

At the same time, the clear position of GDA in paragraph 8 of the counter affidavit is that it took a decision to demarcate and allot the two group housing plots in question to augment the financial resources for development and maintenance of infrastructural facilities and amenities. GDA has stated before the Court that its decision to alienate two plots was necessary to meet the financial outlay for infrastructure, amenities and public utilities. If this be the position and the object of GDA was to maximize its revenue to ensure that it augmented its resources to meet its committed expenditure towards infrastructure, amenities and public utility services, we find no basis or rationale in the fixation of the reserved price on the foundation of the cost of acquisition. This is indeed what appears to have been done because GDA has computed, as the above extract would indicate, the average cost of acquisition at Rs.8750.72 per sqr. mtrs. to which it added the total cost of development of infrastructure which comes to Rs.13287/-. After making an allowance for land which could not be developed, the actual cost was worked out to Rs.22,145/- which was rounded off to Rs.22,200/-. This was fixed as a reserved price. It is inconceivable how a public authority, which was embarking upon a proposal to enhance its resources to meet its committed expenditure towards infrastructure, amenities and public utilities decided to alienate valuable land by fixing a reserved price on the basis of the cost of acquisition and development. This would result in the conferment of a largesse on a private developer. Undoubtedly, GDA proceeded to hold an auction but when the reserved price which is fixed as a basis of the auction is found to be fundamentally bereft of reason and logic, the action of the authority cannot be sustained. We may also note that in the present case even according to GDA, the land in question falls within the area of Zone-1 of the Master Plan 2021 in which a group housing activity, popularly known as Raj Nagar Extension was initiated by private developers. In an area of this nature which has already been developed, it defies reason to accept the position of GDA to the effect that it considered the fixation of a reserved price on the basis of the cost of acquisition as a correct and proper index of value.

For these reasons, we have come to the conclusion that the petition would have to be allowed. We accordingly allow the petition specifically on the grounds which we have adverted to above. Hence, it is not necessary for the Court to enter into the other submissions which have been urged before the Court. The petition is, accordingly, allowed by quashing and setting aside the allotments dated 25 July 2015 respectively to the eighth and ninth respondents. We however clarify that we are not entertaining the challenge to the order of resumption which was passed under Section 117(6) of the Act.

The petition is accordingly disposed of. There shall be no order as to costs.

Order Date :- 9.12.2015

VMA

(Dr. D.Y. Chandrachud, C.J.)

(Yashwant Varma, J.)