Haryana Land Acquisition Fraud: Supreme Court Nullifies Malicious Transactions

The Supreme Court of India, in its landmark judgment on March 12, 2018, exposed a large-scale land acquisition fraud in Haryana. The case involved the illegal acquisition of land by private builders in connivance with state officials, leading to significant financial loss for landowners. The Court held that the state government had engaged in ‘fraud on power’ to benefit private entities at the expense of landholders. This case serves as a precedent in protecting landowners from coercive acquisition tactics used for private profiteering.

In this judgment, the Supreme Court not only declared the fraudulent land transactions null and void but also directed the Central Bureau of Investigation (CBI) to probe the role of state officials in facilitating such illegal transactions. The ruling also ensured that the land in question would be utilized for its original intended purpose, safeguarding the interests of the landowners who had been forced to sell under duress.

Background of the Case

The dispute dates back to August 27, 2004, when the Haryana Government issued a notification under Section 4 of the Land Acquisition Act, 1894, proposing to acquire 912 acres of land in Manesar, Lakhnoula, and Naurangpur villages for the development of Chaudhary Devi Lal Industrial Township. The follow-up notification under Section 6 was issued on August 25, 2005, confirming the acquisition of 688 acres.

However, the landowners claimed they were coerced into selling their land to private builders at low rates, under the looming threat of compulsory acquisition. Subsequently, the acquisition was withdrawn in 2007 and 2010, after the builders had acquired a substantial portion of the land. This indicated a fraudulent collusion between the state and private entities to deprive original landowners of fair compensation.

Petitioner’s Argument

The landholders, represented by various petitioners, argued that:

• The Haryana government, in collusion with private builders, issued the acquisition notification only to create panic among landowners.
• Landowners were forced to sell their land at meager rates due to fear of compulsory acquisition.
• Once the builders acquired the land at low prices, the government conveniently withdrew the acquisition process.
• The acquisition process was manipulated to benefit private parties, violating the rights of landowners.
• The withdrawal of acquisition was a clear case of fraud on power and must be declared illegal.

Respondent’s Argument

The Haryana Government and private builders defended their actions by stating:

• The withdrawal of the acquisition process was done in public interest.
• The state had received applications for grant of licenses from private parties, which required withdrawal of acquisition.
• The land transactions were voluntary, and landowners willingly sold their land.
• Since no coercion was exercised by the state, the land sales were legitimate.

Key Observations by the Supreme Court

The Supreme Court meticulously examined the chain of events and found the acquisition process to be fraudulent. Key observations made by the Court included:

• The acquisition was initiated not for public interest but to create fear among landowners and force them into distress sales.
• The withdrawal of acquisition after land had been transferred to private builders proved mala fide intent.
• The government acted as an intermediary for private builders rather than safeguarding the interests of landowners.
• The actions of the Haryana Government constituted a ‘fraud on power,’ making the entire process null and void.
• The decisions taken by the state on August 24, 2007, and January 29, 2010, were found to be illegal and fraudulent.

Supreme Court’s Verdict

The Supreme Court delivered a strong verdict in favor of the landowners, ensuring that justice was served. The key rulings included:

• The acquisition withdrawal notifications dated August 24, 2007, and January 29, 2010, were declared illegal and void.
• The Court ruled that the entire process was vitiated by fraud and amounted to an arbitrary exercise of power.
• The acquired land was ordered to be transferred to the Haryana Urban Development Authority (HUDA) or Haryana State Industrial and Infrastructure Development Corporation (HSIIDC).
• Private builders were barred from recovering payments from original landowners since the transactions were based on coercion.
• The Supreme Court directed a CBI investigation to probe the role of state officials in facilitating the fraud.

Significance of the Judgment

This ruling is significant for several reasons:

• Protection of Landowners: The judgment reinforces the rights of landowners against coercive acquisition tactics used by state authorities.
• Judicial Scrutiny of Government Actions: The ruling demonstrates how courts can step in to prevent misuse of power by state governments.
• Prevention of Real Estate Frauds: By nullifying fraudulent land transactions, the judgment discourages private entities from manipulating acquisition processes for profit.
• Ensuring Transparency in Land Deals: The Court emphasized that acquisition and land sales must be transparent and lawful.

Key Takeaways

• State governments cannot use land acquisition laws as a tool to benefit private entities at the cost of landowners.
• The withdrawal of acquisition after land is sold to private builders indicates mala fide intent and is liable to be quashed.
• The ruling sets a precedent for ensuring fairness in land acquisition and preventing fraudulent practices.
• The Supreme Court reaffirmed that the government must act in the genuine public interest and not for private gains.
• The judgment highlights the role of judicial intervention in preventing large-scale land frauds.

Conclusion

The Supreme Court’s decision in this case is a landmark ruling that upholds the principles of fairness, transparency, and accountability in land acquisition processes. The ruling not only provides relief to affected landowners but also serves as a warning against the misuse of governmental power for private benefit. By ordering a CBI investigation, the Court has ensured that those responsible for the fraudulent transactions will be held accountable.

This case serves as a significant precedent for land acquisition disputes across the country, reinforcing the importance of protecting landowners’ rights and ensuring that acquisition processes are carried out in a lawful and just manner.

Petitioner Name: Rameshwar & Others
Respondent Name: State of Haryana & Others
Judgment By: Justice Adarsh Kumar Goel, Justice Uday Umesh Lalit
Place Of Incident: Manesar, Haryana
Judgment Date: 12-03-2018

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