Himachal Pradesh High Court: “Shall Put The Land To Such Use” U/S 118 Tenancy Act Can’t Be Constructed As If Project To Be Completed Within Prescribed Period

The Himachal Pradesh High Court held that under Section 118 of the H.P. Tenancy and Land Reforms Act, 1972 cannot be constructed as if the project has to be completed with a prescribed period.

The Court held thus in a Writ Petition preferred by a company namely M/s Springdale Resorts and Villas Pvt. Ltd. against the State.

A Single Bench of Justice Ajay Mohan Goel observed, “… the expression used in the statute ‘shall put the land to such use’ cannot be constructed as if the Project per se has to be completed within the period prescribed. If this interpretation is given to the Clause, then said interpretation would not only be dangerous, but it would be a regressive interpretation rather than a progressive interpretation.”

The Bench enunciated that in a case where permission is granted in favour of a person or an entity to purchase the land under Section 118 of the 1972 Act and after registration of the Sale Deed, the party does not take any steps whatsoever in the direction within the prescribed period, then the traps thereof would come into play.

Senior Advocate Suneet Goel appeared for the Petitioner while Additional Advocate General (AAG) Rajpal Thakur appeared for the Respondents.

Case Background

The Petitioner company intended to develop an integrated housing project over a land and hence, entered into an Agreement to Sell with the owners of the land. The Town and Country Planning Department issued the Essentially Certificate recommending the said land for transfer in favour of the Petitioner. The company sought permission under Section 118 of 1972 Act for the sale/purchase of the said land for the aforesaid purpose. Thereafter, a certificate for registration as a promoter was issued in favour of the company. The Sale Deeds were ultimately registered. The Petitioner contended that though the period of permission granted for the utilization of the land was to be counted from the date of registration of Sale Deed, nevertheless on the applications, the permission was extended.

After the registration of the Sale Deeds, the company could not immediately put to use/utilize the land as the same entailed various permissions from concerned authorities and departments. Thereafter, on account of the outbreak of the COVID-19 Pandemic, not only the requisite permissions were delayed, but the development work also could not be carried out. Hence, the company applied to the authority for extension of the permission to put to use the land and the same was extended. Subsequently, communication was addressed to the concerned Town and Country Planner submitting revised drawings and other documents, intending to revise the project. The Town and Country Planner alleged that the land has not been put to use and revised approval could only be processed after submitting fresh permission under Section 118 of the 1972 Act. Hence, the case was before the High Court.

Reasoning

The High Court in the above context of the case, said, “This Court is of the considered view that while issuing this communication, the Authority erred in not appreciating that on 18.09.2021 itself, vide Annexure P-9, it had granted the petitioner permission for proposed plotted housing colony and the permission which was accorded, was for development under Section 31 (b) of the Himachal Pradesh Town and Country Planning Act, 1977.”

The Court added that the permission initially granted was for the development of the site and it is not as if permission was accorded per se for the construction of the Housing Colony.

“Therefore, in terms of this statutory provision, within the period prescribed as from the date of registration of the Sale Deed, the purchaser “shall put the land to such use for which the permission has been granted”. … This Court is of the considered view that the words “shall put the land to such use for which the permission has been granted” are not to be interpreted as myopically as the respondents want the Court to read them”, it noted.

The Court was of the view that when an entity has granted permission under Section 118 of the 1972 Act to purchase the land for a particular project, the concern of the State, that the land should be used for the project for which the consent has been granted, is a genuine and bonafide concern.

“The period of two years along with extension, as prescribed in this statute, again cannot be construed in a myopic manner so as to mean that everything with regard to the Project has to be completed before the expiry of the period”, it remarked.

The Court observed that the actual construction work can be started only after all the permissions are there in favour of the parties, and therefore, if the words “shall put the land to such use for which the permission has been granted” are given the interpretation that the entire activity has to be completed from ‘A to Z’ within the period mentioned in the Proviso, then majority of the Projects would fall in the trap thereof.

“Accordingly, the only meaningful interpretation which can be given to these words is that the beneficiary of the permission has to demonstrate that cogent and meaningful steps stand taken by it to put the land to use for the purpose for which the permission has been granted and if this test is satisfied, then the same has to be construed and read that the permission holder has put the land to such use for which the permission has been granted”, it explained.

Conclusion

The Court further said that the words used in the statute that the land has to put to use have to be construed in a pragmatic manner and not in the manner as the Respondents are reading.

“These words do not imply that the Project has to be finished or completed before the expiry of the period of permission. All that it envisages is that some cogent and effective steps should have been taken by the parties to put the land to such use for which the permission was granted as in the present case, needful was done by the petitioner”, it added.

The Court, therefore, concluded that the Petitioner has already put the land to such use for which the permission has been granted, and therefore, the permission granted in favour of the Petitioner under Section 118 has not expired.

“… respondents-Authorities are, therefore, now directed to consider the case of the petitioner-Company for revision of drawings in light of existing Rules and Regulations and pass appropriate orders thereupon within six weeks”, it also directed.

Accordingly, the High Court allowed the Writ Petition and quashed the impugned communications.

Cause Title- M/s Springdale Resorts and Villas Pvt. Ltd. v. State of Himachal Pradesh & Others (Neutral Citation: 2025:HHC:33720)

Appearance:

Petitioner: Senior Advocate Suneet Goel and Advocate Vivek Negi.

Respondents: AAG Rajpal Thakur

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