SC Sets Aside Haryana Govt Decisions, Tells Builders To Return Gurgaon Land To State

In unraveling the mystery around what is commonly referred to as the Manesar land fraud, the Supreme Court (SC) has come down heavily on the previous Haryana state government for misusing state machinery to benefit private entities and real estate developers.  

Virulently criticising the previous Bhupinder Singh Hooda-led government, the SC on March 12 set aside two of its key decisions related to land acquisition near Gurgaon, a move which the top court termed as "nothing but fraud on power". While it directed the Central Bureau of Investigation (CBI) to get to the bottom of the matter that involved a fraud of a scale of Rs 15,000 crore, the apex court has now restored the acquired land lying with developers with the state agencies.

While delivering its order, the SC said public interest “was not the underlying objective” behind the decisions taken by the state government on August 24, 2007, and January 29, 2010. The motive, the top court said, was to confer undue advantage on private entities.

How the story unfolded?

On August 27 in 2004, the Haryana Industries Department issued a notification, saying it planned for acquiring land measuring about 912 Acres from three villages ─ Manesar, Lakhnoula and Naurangpur in Gurgaon district ─  for setting up Chaudhari Devi Lal Industrial Township. Following the notification, farmers and land owners were "forced" to sell their immovable assets to developers at throwaway prices. According to media reports, developers brought 400 acres of land, which was worth Rs 1,600 crore in the market at that time, for Rs 100 crore, making windfall.

On August 24 in 2007, however, the state government suddenly passed an order scrapping its plan of acquisition. Following which, the developers who had made a kill, approached the government to build private housing societies. They were given a go-ahead for the same ─ a move the court says was “not bonafide exercise of power by the state machinery”.

On January 29, 2010, the state came up with another notification closing the acquisition proceedings.

What does the apex court say?

In its 97-page order, the SC said the methodology with which the act was carried out show that developers were aware that acquisition would not go through, but the landholders were confronted with "smoke screen" of acquisition. They were cornered and persuaded in entering into transactions with the builders and private entities, the SC said.

Middlemen and builders enriched themselves at the expense of the landholders and public interest which was to be achieved by acquisition, the top court observed.

"The record indicates that various entities, including certain 'middlemen' cornered unnatural gains and walked away with huge profits taking the entire process of acquisition for a ride. Substantial sums have exchanged hands in the form of settlement money," the SC said.

What happens now?

The land now belongs to the Haryana State Industrial Development Corporation (HSIDC) and the Haryana Urban Development Authority (HUDA). Builders lose control of the land and would get interest-free compensation at the rate at which they had purchased the land and the amount they had invested to develop it.

In case a project has been completed and has been sold on the said land, the buyers will be given possession of the units after verification. The unsold inventory would, however, now belong to the HUDA or the HSIDC.

Shortchanged farmers, said the SC, could move court for enhanced compensation. The state government will be responsible for paying this additional cost.

With inputs from Housing News