New Delhi: The Punjab and Haryana High Court Friday quashed a 2001 order of the Haryana government that allowed construction of the Ambience Mall in Gurugram, after it de-licensed a certain portion of over 18 acres of land, which was originally meant for a residential complex, to construct a commercial building.
The court declared the construction of the mall unauthorised, spelling trouble for the multi-brand retailer.
The bench of Justices Rajan Gupta and Karamjit Singh also ordered a CBI probe into the “illegal” conversion of land from residential to commercial, and the alleged connivance between the authorities and the builder.
The Haryana government was also directed to take appropriate steps in accordance with the law, which means the mall could be demolished unless the builder approaches the Supreme Court and obtains a stay of the high court direction.
The order came on a 2015 petition filed by residents of Ambience Lagoon Island Residential Complex, who argued that the residential project was originally conceived on an area of 18.98 acres. However, later, in collusion with the authorities it was reduced to 10.98 acres in 2001 by de-licensing 8 acres for commercial purpose. Another 3.9 acres was taken out by reducing the residential area to merely 7.93 acres, they alleged.
The builder defended his actions in the court by relying upon the builder-buyer agreement in which a clause specifically stated the housing complex would come up on 10.98 acres, while the rest of the area was reserved for “future development”.
But the bench rejected the builder’s arguments and said an agreement between two parties couldn’t override the law to regulate urbanisation, and prevent ill-planned and haphazard development.
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Several violations by the builder showed that “he acted in a manner as if he was not governed by any Enactment/Rules,” the court said.
“In view of the same, the reliance placed by the counsel for the builders repeatedly on builder-buyer agreement is absurd,” the bench said.
Authorities failed to notice stark omissions
In a scathing indictment of Haryana’s Town and Development Authority that approved de-licensing of the land, the high court said the same was done “ignoring all statutory provisions and throwing caution to winds”.
The builder flouted the law from the day he applied for a license in 1992, the court said. During the hearing, it was discovered that he had never submitted the lay-out plan while applying for a licence and at the outset made changes to the applications.
Strangely, the court remarked, this application was accepted by the authorities and even license was granted. “It is inconceivable that concerned authorities failed to notice the stark omissions, interpolations and tampering with the basic document required for the purpose of initiation of a project,” said the court.
Repeatedly, the authorities were told by the judges to produce the project’s lay-out plan. However, the state counsel showed his inability.
This made the court observe: “It appears, the builder, never intended to submit the lay out plan as his intention from the very beginning was just not to establish a housing project but other commercial buildings within the area sanctioned for group housing.”
Only cancellation is permissible, no de-licensing
In 2001, the builder sought delicensing of 8 acres out of 18.98 acres with further permission for erection of commercial complex. While the order granting permission to establish the commercial structure was passed on 16 October 2001, the order to de-license the same was given two days later.
The authorities acted more promptly than expected and this showed a preconceived plan for a commercial complex to be raised with the area earmarked for a residential project, the court said.
“This led to a situation that almost every statutory provision contained in the Act and the Rules was violated resulting in a cascading effect compromising open spaces, roads, parks, community buildings and schools etc,” said the court.
There was no provision under the General Clauses Act that allowed delicensing by authorities, the state counsel admitted, when asked by the court to specify the provision under which it was done.
The lawyer tried to justify the Act by referring to clause 21 of the Act, which says the power to grant a licence also contains implied power to delicense as well.
This argument was dismissed as being “bereft of any merit or logic”.
“The Act (General Clauses) contains a specific provision for cancellation of licence in case the builder fails to comply with specific conditions of licence. If any such situation had arisen, the only option with the authorities was to have invoked powers under Section 8 of the Act and cancel the licence. In this context, the term ‘delicensing’ is a misnomer,” the court held.
De-licensing ignored vested right of apartment owners
Holding that the percentage of undivided interest of each apartment owner, as stipulated in the Deed of Declaration, has to have a permanent character, the court said de-licensing order ignored this vested right.
This share, it ruled, cannot be altered without consent of the apartment owners expressed in an amended declaration, duly executed and registered as per the law.
By resorting to delicensing and sanction of the commercial project, the authorities completely acted in flagrant violation of the law, the court said.
The court also observed that the builder had submitted his Deed of Declaration eight years after he applied for licence. However, the authorities failed to prosecute him.
“The conclusion is inescapable that the submission of Deed of Declaration was intentionally delayed for so many years as there appears to be dishonest intention of the builder from the very inception of the project to dupe the buyers by raising a commercial complex within the space sanctioned for group housing project,” the bench declared.
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