Holding

The Supreme Court held that the High Court's judgment in Anil Sabharwal v. State of Haryana shall have prospective effect from 23 April 1996, thereby avoiding discrimination and validating prior actions, and affirmed the legitimacy of prospective overruling.

Summary

The case concerned allotments of land under the discretionary quota of the Haryana Urban Development Authority Act, 1988, Section 30. The Punjab & Haryana High Court had earlier laid down principles for such allotments in S.R. Dass (1988) and later in Anil Sabharwal (1997) introduced new principles, refusing to apply them prospectively. The Supreme Court was asked how to avoid discrimination among allottees whose plots were allotted after 31‑Oct‑1989. The Court held that the High Court's judgment in Anil Sabharwal should be given prospective effect from 23‑Apr‑1996, thereby smoothing anomalies and preventing discrimination, and affirmed that prospective overruling is a valid judicial device. It also clarified that allotments made before that date could be cancelled only if they violated the earlier S.R. Dass guidelines. The appeals were allowed and the related writ petitions dismissed.

Issues considered

Whether the High Court's decision in Anil Sabharwal v. State of Haryana can be applied prospectively to avoid discrimination among allottees after 31‑Oct‑1989.
Whether prospective overruling is permissible under constitutional and statutory law.
Whether allotments made prior to 23‑Apr‑1996 can be cancelled if not in conformity with the S.R. Dass principles.

Subjects

urban developmentland allotmentdiscretionary quotaprospective overrulingdiscriminationHaryana Urban Development Authority ActSection 30judicial precedentprospective declaration of law

Judgment

A HARSH DHINGRA
v.
STATE OF HARYANA AND ORS,

SEPTEMBER 28, 2001

·B rs~ RAJENDRA BABU, DORAISWAMY RAJU AND K.G.
BALAKRISHNAN, JJ.]

Urban Development and Town Planning :
Haryana Urban D'lvelopment Authority Act, 1988: Section 30.
c
Allotment o.fplots-Discretionary quota-High Court.formulated certain
principles on which such allotments could be made' with certain corU:litions-
This decision held the field .for nearly a decade-Subsequently, in another
decision High Court set out new principles and refused to make the decision
effective prospectively-Supreme Court upheld cancellation of allotment of
D discretionary quota made after 3.J -10-1989-Discrimination between allottees
subsequent to 31~10-1989-Avoiding of-Held: Subsequent decision o.f High
Court made e.f.fei:tivefrom the date of passing o.f interim order i.e. 23-4-1996-
This course will iron out and smoothen the creases and avoid discrimination-
Constitution of India, 1950, Articles, 141 and 226.
E Doctrine:
"Doctrine of Prospective Overruling~Explained.
A Division Bench of the High Court in S.R. Dass s case, while examining
the scope of Section 30 of the Haryana Urban Development Authority Act,
F 1988 regarding allotment of plots under discretionary quota, formulated
certain principles on which such allotments could be made with certain
conditions. For nearly a decade the decisions were taken by the State
Government in terms of the decision of this case. . ~

Subsequently, the High Court in Anil Sabharwals case formulated
G ·certain new set of principles in the matter of making discretionary allotment.
But the High Court refused to apply this decision prospectively. The appeal
against this decision was dismissed by this Court with certain observations.
This Court also upheld cancellation of the allotments out of the discretionary
quota made after 31-10-1989. Hence this appeat

H The following question arose before this Court :-
446
HARSH DHINGRA v. STATE 447
In what manner discrimination between the allottees subsequent to A
31-10-1989 can be avoided?

Disposing of the appeal, the Court

HELD : 1. In the larger public interest and to avoid the discrimination
between the allottees subsequent to 31-10-1989 the decision of the High Court
B
in Anil Sabharwal's case should be made effective from a prospective date
and in this case from the date on which interim order had been passed on 23·
4-1996. If this course is adopted, various anomalies in respect of different
parties will be ironed out and the creases smoothened so that discrimination
is avoided. [452-G-H]

Anil Sabharwal v. State of Haryana, (1997) 2 PLR 7, overruled
c
prospectively. r

S.R. Dass v. State of Haryana, (1988) PLJ 123, referred to.

2. Prospective declaration oflaw is a device innovated by this Court to
avoid reopening of settled issues and to prevent multiplicity of proceedings. D
It is also a device adopted to avoid uncertainty and avoidable litigation. By
the very object of prospective declaration of law it is deemed that all actions
taken contrary to the declaration of law, prior to the date
of declaration are validated. This is done in larger public interest.
Therefore, the subordinate forums, which are bound to apply the law declan.'CI
E
by this Court, are also duty bound to apply such dictum to cases, which
would arise in future. Since it is indisputable that a court can overrule a
decision there is no valid reason why it should not be restricted to the future
and not to the past. Prospective overruling is not only a part of constitutional
policy but also an extended facet of sfare dedsis and not judicial legislation.
(452-H; 453-A·B] F
Babu ram v. C.C. Jacob, (1999] 3 SCC 362 and As/wk Kumar Gupta v.
State of U.P., (1997] 5 SCC 201, relied on.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6840 of 2001.

From the Judgment and Order dated 5.2.98 of the Punjab and Haryana G
High Court in C.W.P. No. 5851 of 1996.

WITH
C.A. Nos. 6841, 6842, 6843-44, 6845, 6846, 6847, 6848, 6849, 6850;
6851, 6852, 6853, 6854, 6855, 6856, 6857, 6858, 6859, 6860. 6861, 6862, H
448 SUPREME cquRTREPORTS [2001] SUPP. 3 S.C.R.
A 6863, 6864, 6865, 6866, 6867, 6868, 6869, 6870, 6871, 6872, 6873, 6874,
6875, 6876, 6877, 6878, 6879, 6880, 6881, 6882, 6891, 6883; 6884, 6885,
6886, 6887, 6888, 6889, 6890 of 2001.

AND
Writ Petition (C) No. 256 of 1998.
B'.
Under Article 32 of the Constitution of India.

WITH
W.P. (C) Nos. 267, 324, 364, 423, 419, 422, 420, 421/98, 205, 266, 204,
c 230,267,220,247,261,231,221,219,275,227,240,241,245,269,260,263,
270,212,210,234,273,214,254,256,271,228,229,255,224,239,237,232/
2000, 481/98, 236, 252/2000, 492/98, 225, 238 268, 249, 250, 216, 209, 264,
208,265,211,257,207,235,222,217,233,246,258,262,251,259,215,213,
223,244,243,272,242,200,277,486,484,485,652,649,641,642,640,635,
636, 637, 638, 639, 643, 644, 645,646, 647,648, 650, 633, 634,651/2000,
D 62, 61,63/2001, W.P. (C) No. D.1312~, D.13126, D.13127, D.13128, D.1407,
D.1483, D.1484/2001, D.17472/2000, D.13238, D.13544/2001, D.20885,
D.20999/2000,210312001, D.21363, D.21364, D.21365/2000, D.2432, D.253,
3442, D.4459, D.6384, D.6388, D.6391, D.9219/2001, 457, 458, 459, 460,
461,462, 463/2000, D.13434, D.13435, D.13543, D.13830, D.13930, D.14842,
E D.15311, D.15312, D.15315, D.15314, D.13518, D.13839, D.15313, D.13415,
D.15700, D.15548, D.15554, D.15782, D.13864 and D.15139 of 2001.

R.K. Jain, S.K. Bagga, S.B. Sanyal, Jagdeep Dhankar, P.C. Jain, Rakesh
Dwivdi, S.S. Jawali, Haminder Lal, Ms. Varuna Thandari Gugnani, Ms. Sureshta
Bagga, Manoj Goel, Ms. Abha R. Sharma, Rajesh Sharma, S. Pani, Vijay Singh
F Charak, Rajesh K. Sharma, Ms. Shalu Sharma, Goodwil.1 Indeevar, Naresh
Kaushik, Lalitha Kaushik, N.K. Roy, Ms. Shilpa Chohan, Jinnander Mann, Ms.
Manita Venna, M.S. Mollah, Devashish Bhartika, Surya Kant, Jasbir Singh
Malik, S.K. Sabharwal, Hemantika Wahi, Manoj Swarup, Manish Khandewal,
..
Ajay Gupta, Sanjay Goswami, Sanjay K. Visen, A.S. Bhasme, K.K. Mohan,
Pradeep Gupta, Naresh Bakshi, Ms. S. Janani, Gurdeep Singh, Dr. K.L. Sharma,
G
Ashok K. Mahajan, Pramod Dayal, Ms. Lipika Shanna, R.K. Kapoor, B.R.
Kapur, Anis Ahmad Khan, K.B. Rohatgi, Mahesh Kasana, Ms. Aparna Rohatgi
Jain, Nidesh Gupta, Naveefi Singh, Sumet Lal, Pradeep K. Bakshi, Girdhar G.
Upadhyay, Syed Ali Ahmad, Syed Tanweer Ahmad, Vikas Bansal, A.K. Raina,
R.D. Upadhyay; Anil Mittal, K.K. Gupta, Anant Vtjay Palli, Atul Sharma, Ms.
H Rekha Palli, D.B. Vohra, Ms. Neetu Sharma, Kamal Sh~a, G.G. Singh,
HARSH DHINGRA v. STATE [RAJENDRA BABU, J.] 449

Debasis Misra, Suresh C. Gupta, A Gureshwar Shanna, Sanjay Pal, Ms. Ranjana A
Dutta, Shankar Divate, N.M. Popli, Sanjeev Kumar, Ms. B. Sunita Rao, Anshul
Tyagi, Vikrant Yadav, Praveen Swarup, Sanjay Sarin, Ashok Mathur, J.K.
Srivastava, S.R. Setia, Maninder Singh, Ms. Pratibha M. Singh, Ms. Kavita
Wadia, Sudhir Walia, M.S. Dahiya, Harishankar, Rohit Tandon, Anil Gupta,
Heniant Batra, Mrs. Asha Batra, Ms. Manjula Gupta, Manohar Singh Bakshi,
B
B.K. Satija, M.P. Jha, Ram Ekbal Roy, Anil K. Chopra, K.G. Bhagat, Vineet
Bhagat, Nandlal, Ms. Suresh Kumari, Ajay Shanna, Krishan Pal ~ingh, Ravi
Kapur, P.M. Anand, Bhag Singh Jindal, S.K. Rishi, L.N. Gupta, S.P.· Khatri,
Rajiv Khataria, Ms. S.S. Gurpriya, Ms. Kusum Choudhary, Punit Jindal, Anil
Katiyal, Inderjit Shanna, S.C. Nagpal, A.P. Mohanty, Som Nath Saini, KS.
Dhaliwal, Sarwan Gupta, Daya Choudhary, Seeraj Bagga, Narender Nagar, c
Ashok Anand, M.A. Chinnasamy, Ms. Sheela Goel, Yogesh Putani, P.N. Puri,
Prem Malhotra, Ms. lndu Malhotra, Ms. Neelam Shanna, Tara Chandra Shanna,
K.S. Rana, Ms. Suruchi Aggarwal, A.D. Sikri, Sudhir Nandrajog, Ranbir Singh
Yadav, T.N. Rao, Manmohan Singh, Ms. Bina Gupta, Ms. Vanita Bhargava,
Rakhi Ray, Ms. Divya Roy, Ajay Majithia, Yash Pal Dhingra, R. Nedumaran,
D
S. Srinivasan, Brijender Chahar, Jyoti Chahar, Vinay Garg, Kishan Datta, Uma

- Datta, Ravindra Bana, Jasbir S. Malik, Shashank Kumar, K.C. Dua, C.S. Ashri,
P.P. Singh, Rao Ranjit, Jai Prakash Dhanda and K.P. Singh, Advs. with them
for the appearing parties.

The Judgment of the Court was delivered by : E
RAJENDRA BABU, J.

Leave granted in all SLPs.

These appeals are directed against an order made on 21st March, 1997
F
in a batch of cases wherein the scope of Section 30 of the Haryana Urban
Development Authority Act, 1988 came up for consideration. The High Court
of }>unjab & Haryana held that the Government can make reservation of plots
while making development of the urban estates but that power is not limited.
However, the argument that the absolute power could vest in the Chief Minister
~n _allotment of p~ots. a~cordin~ to _his ~iscretion and ch? ice a~d such discretion G
IS tmmune from JUd1ctal SCrutmy IS rejected and the High Cdurt stated that the
distinguished and needy people in all walks of life can be granted land only
on the basis of some guidelines and indicated that t:1e Government of Haryana
may frame appropriate policy for allotment of plots to specified class of
persons and notify such policy and allotment under such policy should be made H
450. SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A by inviting applications through public notice from all those who belong to a
particular class. However, in respect of certain allotments that had already been
made the High Court indicated that certain class of persons such as those who
are bona fide purchasers who had constructed houses and other buildings,
original allottees who had constructed buildings after permission from HUDA,
members of the armed forces, police personnel who fought against terrorism,
B
civilians who were affected by the terrorists activities and allottees of plots to
whom small extends have been granted and the High Court gave certain
directions in that regard. This decision is reported in Anil Sabharwal v. State
of Haryana & Ors., ( 1987) 2 PLR 7.

C On an earlier occasion, a Division Bench of the High Court of Punjab
& Haryana in S.R. Dass v. State of Haryana, (1988) PLJ 123, examined an
identical question and formulated certain principles on which such allotments
could be made with certain conditions and that order was made on 20th
January, 1988. For nearly a decade, the decisions were taken by the Government
of Haryana in terms of the decision in S.R.Dass's case referred to above. An
D argument was submitted before the High Court that in view of this particular
feature of this case that the matter had been earlier judicially considered and
certain guidelines were given to the Government in the matter of making
discretionary allotment to an extent of 5 per cent and that new principles have
been set out in Anil Sabharwal's case and, therefore, that the decision should
E be made effective prospectively. The High Court, however, found no good
reason to hold the allotments made by respondent No. 3 in the case under the
discretionary quota should remain undisturbed. The High Court also stated that
the doctrine of prospective overruling cannot be applied because such power
can be invoked only by this Court and not by the High Court.

F The matter was carried in appeal to this Court. This Court by an order ...
made on 7 .5 .1997 dismissed the same subject to certain observations. Thereafter,
the High Court took steps by directing issue of a public notice in regard to
certain aspects of the case pursuant to the observations made by this Court. At
that stage, the HUDA filed S.L.P.(C) No.11238 of 1997 and this Court, by an
G order made on 7. 7 .97, gave certain clarifications and stated that in addition it
is also expedient that any remainif g allotments of the kind which have been
~ancelled by the High Court shoul~ also; be treated alike. Thereafter in C.A.No.
8637 of 1997 (HUDA & Anr. v. Anil S'abharwal & Ors.), this Court made an
order on 5.12.1997 to the following effect:

H "Leave granted limited to the question indicated in our order dated
HARSH DHINGRA v. STATE [RAJENDRA BABU, J.] 451
7.7.1997. A
The grievance of the appellants is that our order dated 7.5.97 in Sanjay
Jain v. Anil Sabharwal & Ors., [SLP(C) .... ./97 (CC.4325 /97] has been
misconstrued to mean that the legality of allotment of plots made under
the discretionary quota even prior to 31. l 0.1989 has been directed by
that order to be reopened and examined. It is submitted that such a B
misinterpretation results from a misconstruction of certain words in
that order, namely:

We are constrained to observe that the accountability of the
authorities who are responsible for making these arbitrary
allotments which have been rightly cancelled by the High Court
c
needs to be examined after their identity is fixed in an appropriate
proceeding. In addition, it is also expedient that any remaining
allotments of the kind which have been cancelled by the High
Court should also be treated alike. This exercise has not been
performed by the High Court in the present case. It is, therefore, D
expedient that as a follow up action, the High Court should proceed
to complete the exercise.'

It is sufficient for us to clarify that by the above order dated 7.5.97 this
Court upheld cancellation of the allotments out of the discretionary
quota made after 31.10.89 and it was further said that any remaining E
allotments of the same kind should be treated alike to complete the
exercise. In other words, our order dated 7.5 .97 contained the direction
to treat all allotments out of the discretionary quota made after 31.10.89
without any exception, in order to examine the accountability of the
concerned authorities as also to avoid any discrimination between F
allottees subsequent to 31. 10.1989. That order was, therefore, concerned
entirely with the allotment made after 31.10.89 and did not refer to any
allotment prior to that date. We consider it necessary to say so to avoid
any possible misinterpretation by this Court's order dated 7.5.97.

We may, however, add that the only question for examination by this G
Court in Sm~iay Jain v. Anil Sabharwal's case being all the allotments
made subsequent to 31.10.89, our order is also not to be construed as
inhibiting any separate/independent action in respect of allotments for
any other period including period prior to 31.10.89. This appeal is
disposed of with this clarification." [emphasis supplied] H
452 SUPREME COURT REPORTS [2001) SUPP. 3 S.C.R.
A The question for consideration now is in what manner discrimination
between the allottees subsequent to 31.10.89 can be avoided. In relation to
classification made by the High Court, the grievances are made before us that
the same does not take note of.cases of (i) bona .fide purchasers, who did not
l:tave sufficient funds with them to start the construction and who have acquired
these plots without any profit motive; (ii) allottees to whom possession was not
B handed over.in time for them to commence construction who stand on the same
footing as those in respect of whom exception is made, who have made
construction on the plots in question; (iii) members of armed forces and Indian
Administrative Officers who are also involved in an operation like 'Blue Star',
the allotments could not be cancelled and the matters will have to be examined
c in the light of the same principles as had been done with reference to those who
were in the armed forces and fighting for "the defence of the country; (iv) certain
other classes still who are disabled either on account of serious ill health or such
as biind,ness. These instances are taken by way of sample by us to indicate that
the classification made by the High Court in respect of whom exception is made
will have to be reclassified or sub-classified or further classifications will have
D
to be made. That would be carving out too many exceptions involving a very
lengthy and treacherous exercise to be sucked in a quagmire from which to
extricate oneself will be well nigh impossible.

Further when the decision of the High Court in S.R. Dass's case [supra]
E had held the field for nearly a decade and the Government, the HUDA and the
parties to whom the allotments have been made have acted upon and adjusted
their affairs 'in terms of the said decision to disturb that state of affairs on the
basis that now certain other rigorous principles are declared to be applied in
Anil Sabharwal's' case would be setting the rules of the game after the game
i~ over, by which several parties have altered their position to their disadvantage.
F Therefore, we think that in the larger public interest and to avoid the
discrimination which this Court had noticed in the order dated 5.12.1997 the
decision of the High Court in Anil Sabharwal's case should be made effective
from a prospective date and in this case from the date on which interim order
had been passed on 23.4.1996. Therefore, it would be appropriate to fix that
G date as the date from which the judgment of the High Court would become
effective. If this course is adopted, various anomalies pointed out in respect of
different parties referred to above and other instances to which we have not
adverted to will be ironed out and the creases smoothened so that discrimination
is avoided.

H Prospective declaration of law is a device innovated by this Court to
HARSH DHINGRA v. STATE [RAJENDRA BABU, J.] 453
avoid reopening of settled issues and to prevent multiplicity of proceedings. It A
is also a device adopted to avoid uncertainty and avoidable litigation. By the
very object of prospective declaration of law it is deemed that all actions taken
contrary to the declaration of law, prior to the date of the declaration are
validated. This is done in larger public interest. therefore, the subordinate
forums which are bound to apply law declared by this Court are also duty
B
bound to apply such dictum to cases which would arise in future. Since it is
indisputable that a court can overrule a decision there is no valid reason why
it should not be restricted to the future and not to the past. Prospective overruling
is not only a part of constitutional policy but also an extended facet of stare
decisis and not judicial legislation. These principles are enunciated by this
Court in Baburam v. C. C. Jacob & Ors., [ 1999] 3 SCC 362, and Ashok: Kumar c
Gupta & Am: v. State of U.P. & Ors., (1997] 5 SCC 201.

These appeals, therefore, stand allowed to the extent indicated above and
declaring that the judgment of the High Court in Anil Sabhcmval v. State of
Haryana & Ors. [supra] shall be effective from 23.4.1996. In the event in any
of the cases any allotment has been cancelled, the same shall be brought in D
conformity with the order made by us whether those allottees are parties in
these proceedings or not. The declaration made by us will have a general
application. It is also made clear that allotment orders made prior to 23.4.1996
can be cancelled if they are not made in conformity with the decision in S.R.
Dass v. State of Haryana [supra], after following due procedure. E
The appeals are allowed accordingly modifying the order made by the
High Court in the manner stated above.

W.P.(C) Nos. 256/98, 267/98, 324/98, 364/98, 423/98, 419/98, 422/98,
420/98, 421/98, 205/2000, 266/2000, 204/2000,230/2000, 267/2000, 220/2000, F
247/2000, 261/2000, 231/2000, 221/2000, 219/2000, 275/2000, 227/2000, 240/
2000, 24112000, 245/2000, 269/2000, 260/2000, 263/2000, 270/2000, 212/
2000, 210/2000, 234/2000, 273/2000, 214/2000, 254/2000, 256/2000, 271/
2000, 228/2000, 229/2000, 255/2000, 224/2000, 239/2000, 237/2000, 232/
2000, 481/98, 236/2000, 252/2000, 492/98, 225/2000, 238/2000, 268/2000,
249/2000, 250/2000, 216/2000, 209/2000, 264/2000, 208/2000, 265/2000, 211/ G
2000, 257/2000, 207/2000, 235/2000, 222/2000, 217/2000, 233/2000, 246/
2000, 258/2000, 262/2000, 25112000, 259/2000, 215/2000, 213/2000, 223/
2000, 244/2000, 243/2000, 272/2000, 242/2000, 200/2000, 277/2000, 486/
2000, 484/2000, 485/2000, 652/2000, 649/2000, 641/2000, 642/2000, 640/
2000, 635/2000, 636/2000, 637/2000, 638/2000, 639/2000, 643/2000, 644/ H
454 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A 2000, 645/2000, 646/2000, 647/2000, 648/2000, 650/2000, 633/2000, 634/
2000, 651/2000, 62/2001, 61/2001, 63/2001, W.P.(C) No. 013125/2001,
013126/2001, 013127/2001, 013128/2001, 01407/2001, 01483/2001, 01484/
2001, 017472/2000, 013238, 013544/2001, 020885/2000, 020999/2000,
02103/2001, 021363/2000, 021364/2000, 021365/2000, 02432/2001, 0253/
2001, 3442/2001, 04459/2001, 06384/2001, 6388/2001, 06391/2001, 09219/
B
2001, 457/2000, 458/2000, 459/2000, 460/2000, 46112000, 462/2000, 463/
2000, 013434/2001, 013435/2001, 013543/2001, 013838/2001, 013930/2001,
014842/2001, 015311/2001, 015312/2001, 015315/2001, 015314/2001,
. 013518/2001, 013839/2001, 015313/2001, 013415/2001, 015700/2001,
015548/2001, 015554/2001, 015782/2001, 013864/2001 & 015139/2001
c In the light of the order made by us in the above appeals, these writ
petitions have become unnecessary as the authorities concerned are bound to
bring their orders of cancellation of the allotments made or notices issued to
them for cancellation of the allotments in conformity with the order made in
the above appeals which we have disposed of just now. Therefore, these writ
D petitions have become unnecessary and shall stand disposed of accordingly. No
costs.

v.s.s. Appeals allowed and Petitions dismissed of.