Supreme Court Ruling Brings Relief to 58 Real Estate Projects in Haryana

The Supreme Court (SC) recently delivered a landmark judgment that has not only set the developers of Ambience Mall in Gurugram free from criminal liability but also provided a significant breather for 58 real estate projects across Haryana where de-licensing of land was undertaken. This decision comes as a major relief for developers who have been embroiled in legal battles over the legitimacy of their projects.

The apex court’s judgment overturned a 2020 ruling by the Punjab and Haryana High Court, which had ordered a CBI investigation and quashed the town and country planning department’s orders to de-license two chunks of land (8 acres and 3.9 acres) out of 18.98 acres approved for constructing the Ambience Lagoon Island residential complex. The de-licensed land was then permitted for the construction of the Ambience Mall, a major commercial complex in Gurugram.

The high court's judgment was challenged by both the Haryana government and the developer, Ambience Developers and Infrastructure Private Limited, represented by Raj Singh Gehlot. The state legislature had also enacted a legislation to grant legitimacy to past actions of the town and country planning department, including the de-licensing of land. The Haryana Development and Regulation of Urban Areas (Second Amendment and Validation) Bill, passed in August 2020, aimed to validate various actions taken by the department, thereby providing legal cover to the developers.

The validation clause in the bill stated that notwithstanding any judgment, decree, or order of any court or tribunal, any action taken or orders issued by the director before the commencement of the HDRUA (Amendment and Validation) Act, 2020, would be deemed valid and effective. This clause was crucial in ensuring that the actions taken by the department, including de-licensing, would not be subject to legal scrutiny.

The statement of objects and reasons of the amendment and validation bill highlighted the primary purpose of making express statutory provisions to clarify certain provisions of the HDRUA and to validate various actions taken by the department. This was intended to reconcile conflicting judicial pronouncements on the issue and provide a clear legal framework for future developments.

Solicitor General Tushar Mehta informed the apex court that an inquiry following the high court's judgment revealed that 58 projects had been developed in a similar fashion due to de-licensing. If the high court's judgment were to stand, these projects, many of which were established long ago, would be at serious risk. The SC bench noted that the CBI, after filing an FIR, reported that the act of de-licensing 8 acres of land was found to be in accordance with the law. However, the bench also pointed out that the only alleged illegality pertained to the misrepresentation in the Apartment Buyers’ Agreement.

The apex court further stated that Section 3(3A), introduced by the 2020 amendment to retrospectively validate the disputed actions of the town planning authorities, was not under challenge in the present proceedings. The court emphasized that it would not be appropriate to entertain any such challenge, particularly when the issue could be independently agitated by the parties before the appropriate forum if they so desired.

Among the 58 projects where de-licensing was undertaken, 39 alone were in the Gurgaon Manesar Urban Complex. The rest are spread across other districts in Haryana, including Faridabad, Palwal, Sonepat, Jhajjar, Rohtak, Mahendergarh, Kurukshetra, and Jind. Some notable examples include:

- Ramprastha Builders in Sectors 92, 93, 95 of the Gurgaon Manesar Urban Complex for residential plotted (June 2020) - Infinitive Analytics Pvt Ltd in Sector 70 Gurugram for affordable group housing (March 2019) - Model Economic Township (previously Reliance Haryana SEZ) in Jhajjar for industrial plotted (December 2019) - Ansal Properties and Infrastructure in Sector 35 of Sonepat for Group housing (September 2019) - Bharti Land Ltd in Faridabad Sector 43 for group housing (February 2014) - Shiv Sai Infrastructure in Faridabad Sector 86 for Group housing (December 2015) - Omaxe Construction in Sector 11 and 14 of Palwal for residential plotted (January 2019) - Shree Dham Developers in Sector 7-A of Jind for residential plotted (April 2018)

This Supreme Court ruling is a significant development in the real estate sector, providing much-needed clarity and legal validation for developers who have been navigating complex regulatory frameworks. It is expected to bring stability and confidence to the real estate market in Haryana, ensuring that similar projects can proceed without the fear of legal challenges.