In a significant verdict, the Punjab and Haryana High Court has delivered major relief to landowners in Haryana and imposed a hefty fine of Rs 3 lakh on the Haryana Shehri Vikas Pradhikaran (HSVP). The court quashed the authority's decision to charge 2025-26 land prices and 11 per cent interest from individuals whose land was acquired for developing urban estates.
Court Slams HSVP for "Manifestly Arbitrary" Conduct
A division bench comprising Justice Anupinder Singh Grewal and Justice Deepak Manchanda passed a 45-page order on a batch of 58 writ petitions. The bench strongly criticized the HSVP, calling its conduct "wholly unjustified" and "tainted with mala fides." The court found that the HSVP acted in a "manifestly arbitrary" manner by demanding the prevailing 2025 rate of Rs 58,172 per square metre instead of the 2018 rate of Rs 21,500 per square metre.
The petitioners were "oustees"—landowners whose properties were acquired by HUDA/HSVP for development. Under policy, they are entitled to a reserved quota of residential plots in the developed sectors. The dispute began when these oustees applied under the oustee quota following a 2018 public notice and deposited earnest money.
Seven-Year Delay and Sudden Demand
The court noted that after the applications and deposits were made, HSVP went silent for nearly seven years. Then, suddenly in May 2025, the authority issued allotment letters applying the steeply escalated 2025-26 reserve price. The letters forced the oustees to pay 25 per cent upfront and the remaining 75 per cent in a lump sum within 180 days at a high interest rate of 11 per cent.
The landowners challenged this, terming the demand "arbitrary, illegal, unjust, non-transparent and discriminatory." They argued it violated the full bench ruling in the landmark Rajiv Manchanda vs HUDA case and the doctrine of legitimate expectation. They sought the quashing of these clauses and a direction to charge the "rate applicable in 2018."
Court's Directives: Price Reset to 2018, Interest Slashed
Relying on the Rajiv Manchanda ruling, the court reiterated that where the authorities are entirely at fault and an oustee could have been allotted a plot earlier, the oustee is entitled to the benefit of the price prevalent when the application was made. However, they must pay "reasonable interest" for the intervening period.
The bench found that HSVP had "misinterpreted" this mandate and "selectively and conveniently interpreted the said judgment to suit their own interests." It held that charging the 2025 price was contrary to both the precedent and Clause 15-A of HSVP’s own oustee policy from May 8, 2018.
The court issued clear directives:
- Reset the allotment price to the rate prevailing on the date of the application/advertisement in 2018 (Rs 21,500/sq m) instead of the 2025 price (Rs 58,172/sq m).
- Reduce the interest rate from 11% to 5.5% per annum, noting that HSVP itself uses this rate in other schemes.
- Strike down the harsh repayment schedule requiring a lump sum payment within 180 days.
- Order that the balance amount be payable over a period of six years in equal instalments with 5.5% interest.
- Direct HSVP to issue fresh allotment letters within two months.
Punitive Costs and a Warning to the State
Terming HSVP's repeated departures from binding precedent a "conscious attempt to circumvent a binding precedent rather than to faithfully apply it," the bench imposed Rs 3 lakh costs on HSVP as a "punitive measure." The court ordered this amount to be deposited in the Poor Patients Welfare Fund at PGIMER, Chandigarh.
The judgment also advised the state to "retrace its steps rather than persist in passing unjustified and legally unsustainable orders." This ruling is seen as a major victory for landowners and a strong judicial check on arbitrary actions by development authorities.
