Gurugram: In a scathing judgment this week, the Punjab and Haryana High Court slammed Haryana Shehri Vikas Pradhikaran (HSVP) over its practice of charging farmers, whose land was acquired for urban development, the current higher land rate for plot allotment as well as “exorbitant” interest for delayed payment.
The division bench of Justices Anupinder Singh Grewal and Deepak Manchanda, in the order pronounced Monday, didn’t just rule in favour of 58 petitions of such land “oustees”, but also called out the HSVP for its “arm-twisting approach”, “mala fide” conduct and attempts to circumvent settled law.
The bench also slapped a Rs 3 lakh fine on it for repeatedly ignoring court orders.
The land of petitioners were acquired from 2000 to 2002 for HSVP projects.
A case in point is of Ram Lal Mahendru. Back in 2001, the HSVP acquired his land in Ambala’s Sonda village to develop Sector 24. He became an “oustee” and was, according to policy, entitled to a residential plot at concessional rates. In 2018, the HSVP issued a public notice inviting applications from all such oustees. Mahendru applied online in December 2018, deposited Rs 50,000 earnest money and submitted all documents.
Nothing happened for almost seven years. Finally, this May, his allotment letter arrived.
Instead of charging him the 2018 rate of Rs 21,500 per square meter, that was applicable when he applied, the HSVP demanded the 2025 land rate of Rs 58,172 per square meter.
For a 41.28 square meter plot, Mahendru was being asked to cough up an additional Rs 15 lakh because the HSVP sat on his file for seven years. The letter also gave him just 180 days to pay 75 percent of the total amount in lump sum and demanded 11 percent annual interest in case of delay.
Mahendru went to court. And once his case got listed, the floodgates opened. Fifty-seven more petitions poured in, all with identical complaints. The court clubbed them together and reserved judgement.
Interestingly, in 2016, a full bench of the same court had already settled these exact issues in Rajiv Manchanda vs HUDA. Formerly known as the Haryana Urban Development Authority (HUDA), the HSVP is the urban planning agency in Haryana.
That judgment was crystal clear: charge oustees the price prevalent at the time of application or advertisement, not the “current price”. And, charge only “reasonable interest”. The HSVP even amended its policy in 2018 to comply with that judgment. Clause 15-A of its May 2018 policy clearly states that if allotment can’t be made despite determining eligibility, it should charge “the prevalent price at the time of application”.
The HSVP apparently ignored its own policy and the high court’s previous order.
Justice Deepak Manchanda, writing the 46-page judgment, stated: “Deliberate omission to disclose the price in the advertisement, followed by an attempt to take advantage of such omission to justify charging the current price, cannot be countenanced.”
The HSVP had argued that its advertisement issued in 2018 did not specify any allotment price and there was no stipulation that the allotment would be made according to the rate prevalent on the date of advertisement.
Also Read: What happens to Haryana real estate agents now? Govt agency HSVP to act as broker, take commissions
Interest & payment terms
In court, the HSVP claimed that 11 percent was “reasonable interest” as mandated in the Rajiv Manchanda order. However, nowhere in that judgement is 11 percent specified. The full bench only said charge “reasonable” interest. The HC asked HSVP’s lawyers to explain what made 11 percent interest reasonable.
The court further asked the HSVP to submit all of its other schemes and policies showing what interest rates it was charging in different situations. What emerged was that the HSVP charges 5.5 percent in some schemes, 9 percent in others, 11 percent for oustees and 12 percent in yet other cases.
“Such an approach is manifestly arbitrary,” the court observed.
It also noted that in HSVP’s own instructions dated December 2024, it prescribed “bank rate of interest” for delayed allotments, not 11 percent. So, the HSVP’s latest policy contradicted what it was demanding from these petitioners.
The court settled on 5.5 percent as reasonable interest—the lowest rate the HSVP charges in other schemes.
There was also a third issue: payment terms. The HSVP was demanding that oustees pay 75 percent of the plot price within 180 days. In 2018, the HSVP issued allotment letters to other oustees allowing them to pay up in six annual instalments. One such letter was produced in court.
Further, a coordinate bench of the high court had in 2023 allowed six-year instalments in a similar case (Naresh vs State of Haryana). That judgment had attained finality—the HSVP never challenged it.
So, why were Mahendru and others being treated differently? The court found no justification. “Once it was possible for the respondents to allot the plot on the date when the petitioner had applied, but the same was not done solely due to the respondents’ default… the petitioner cannot be penalised for such a delay,” Monday’s order states.
The bench observed that once Rajiv Manchanda settled these issues, the HSVP should have automatically applied those principles to all oustees. Instead, it compelled each individual oustee to move court. “Such conduct amounts to a conscious attempt to circumvent a binding precedent rather than to faithfully apply it,” the judges wrote.
The Rs 3 lakh fine imposed on HSVP is to be deposited with the Poor Patient Welfare Fund at Postgraduate Institute of Medical Education and Research (PGIMER), Chandigarh.
It’s a punitive measure, the court said, because HSVP’s conduct was “wholly unjustified” and “deserves to be deprecated”.
(Edited by Nida Fatima Siddiqui)