"Unfathomable How CBI Treated Allotment Illegal": Punjab & Haryana High Court Discharges Haryana Ex-CM Bhupinder Hooda In Land Allotment Case

The Court was hearing connected revision petitions by a company and the former Haryana Chief Minister, who were facing prosecution in a CBI FIR alleging conspiracy, cheating, and criminal misconduct under the Prevention of Corruption Act in relation to the re-allotment of an institutional plot by the development authority.

A Bench of Justice Tribhuvan Dahiya, while stating that “it is unfathomable as to how the investigating agency can consider the re-allotment of plot unlawful on its own, and proceed to register a criminal case on that basis”, further observed that “the re-allotment of plot to the AJL, vide order dated 28.08.2005 passed by BSH, stands unanimously ratified by the Authority ex-post facto on 16.05.2006, …the decision has not been reviewed or recalled, nor declared illegal by any Court of law, …the allotment is valid as on date, it has also not been cancelled, nor declared illegal or arbitrary.”

Background

The case concerned an institutional plot allotted to Associated Journals Limited (AJL) for establishing an office connected with publication activity. The allotment terms required construction within the stipulated timeline, failing which the authority then initiated action under the governing statute and ultimately resumed the plot for non-construction, also processing a refund of the deposited amount.

After the resumption attained finality through the statutory appeal and revision route, the company continued to seek restoration from the Government. The matter later moved through the departmental file, including opinions within the administrative hierarchy and a legal opinion indicating that restoration/re-allotment to the same allottee could not be done once the resumption had attained finality, though a fresh allotment at prevalent rates could be considered in accordance with policy/procedure.

Despite the file noting that the plot could be advertised and the company could apply, the then Chief Minister, acting as Chairman of the authority, directed that the plot be re-allotted to the company at the original rates with interest, coupled with conditions requiring construction within a specified period. Pursuant to this, the authority issued the demand and re-allotment communications, and the amount demanded (including interest component) was deposited by the company.

A vigilance case was first registered at the State level and later transferred to the CBI, culminating in a CBI FIR invoking offences including conspiracy and cheating under the IPC and provisions of the Prevention of Corruption Act.

Court’s Observation

The High Court noted that, at the stage in question, the prosecution's case fundamentally proceeded on the premise that the re-allotment was “illegal” and violative of the statute governing the authority, and that this supposed illegality itself was projected as the basis to attract criminal offences.

The Court faulted this approach in clear terms, holding that it was not for the investigating agency to unilaterally treat the re-allotment as unlawful and register a criminal case on that basis. It stated that it was “unfathomable” how the investigating agency could itself proceed to term the reallocation illegal and initiate criminal action.

The Court noted that “even the Government auditors have dropped their objection regarding financial loss to the Authority on account of this re-allotment, the legality of decision taken by BSH has also not been questioned before any Court or Tribunal, either by the Authority or the Government or anyone else, the FIR in question has been lodged by the Vigilance on the basis of a source report, and not on a complaint by the Authority”.

Ignoring these vital facts of the matter, the Court underscored that “the CBI has taken upon itself to term the re-allotment illegal, being violative of the 1977 Act, which would, in its view, attract criminal liability under the provisions of the IPC and the PC Act invoked against the petitioners” and held such an approach to be “absolutely illegal, and far from any procedure known to law.”

The High Court further held that criminal liability premised on cheating/dishonest inducement could not be sustained in the absence of demonstrable wrongful loss to the authority or unlawful gain to any person. It was observed that when an act had not been declared illegal and had not resulted in any loss to the authority, there could be no unlawful gain either, and in the absence of wrongful loss or wrongful gain, the element of dishonest inducement to part with property could not be made out.

The High Court also rejected the contention that, following the 2018 amendment to the Prevention of Corruption Act, substituting Section 13(1), charges under the unamended provision could not be framed since the chargesheet was filed after the amendment.

The Court held that the offences alleged against the petitioners were stated to have been committed before the amendment, and the FIR had also been registered before it. Relying on the decision in Sri Managipet alias Mangipet Sarveshwar Reddy, the Court observed that offences committed before the amendment are to be tried under the unamended provision.

"Therefore, there is no material indicating any loss to the Authority, nor has any assessment been made by it in this regard; rather, it has accepted and implemented the decision to re-allot the plot on the rate fixed, ...merely because statements of some officers of the Authority or Government have been recorded to the effect that re-allotment of the plot at current rates would have fetched more money to the Authority, it cannot form a basis to contend that any loss has actually been caused, ...the statements are without any factual basis, ...to claim on this premise that the re-allotment caused any loss to the Authority, is fictional which cannot afford any ground to frame charge for commission of the alleged offence", the Court concluded. 

Conclusion 

Allowing the revisions, the High Court set aside the order framing charges (and the connected order declining discharge) passed by the Special Judge, CBI, and discharged the petitioners in the CBI case arising out of the impugned FIR.

Cause Title: The Associated Journals Limited/Bhupinder Singh Hooda v. Central Bureau of Investigation (Neutral Citation: 2026:PHHC:030777)

Appearances

Petitioner: Sartej Singh Narula, Senior Advocate, with Mayur Singla, Advocate, and Amardeep Singh Sandhu, Advocate; R.S. Cheema, Senior Advocate, Pardeep Singh Poonia, Senior Advocate

Respondent (CBI): Ravi Kamal Gupta, Advocate.

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