Holding

Section 3(3)(a)(iv) does not expressly prohibit transfer of community sites; the right to transfer can be curtailed only by clear statutory provision, and the State's circulars are ultra vires.

Summary

The DLF Qutab Enclave Complex Educational Charitable Trust (the appellant) challenged State of Haryana's circulars that barred the transfer of community sites earmarked for schools and other amenities to third or fourth parties. The High Court had held such transfers illegal, but the Supreme Court examined whether Section 3(3)(a)(iv) of the Haryana Development and Regulation of Urban Areas Act, 1975, expressly prohibited such transfers and whether executive instructions could curtail the incidental right of transfer inherent in ownership. The Court held that the provision does not impose a restriction, that any limitation on transfer must be expressly provided by statute, and that the State's circulars were ultra vires. Consequently, the High Court’s judgment was set aside and the appeals were allowed.

Issues considered

Does Section 3(3)(a)(iv) of the Haryana Development and Regulation of Urban Areas Act, 1975, impose a restriction on the colonizer's right to transfer community sites to third or fourth parties?
Can executive circulars issued by the State of Haryana lawfully restrict such transfers in the absence of a clear statutory provision?
Is the right to transfer land, being incidental to ownership, subject to curtailment by mere executive instruction?
How should the terms 'development works' and 'amenities' be interpreted with respect to the colonizer's obligations?
Does clause (t) of the licence agreement, which caps profit, limit the colonizer's right to transfer land?

Legislation cited

Constitution of Indias. Article 300A
Haryana Development and Regulation of Urban Areas Act, 1975s. 10, s. 24, s. 2(c), s. 2(d), s. 2(e), s. 2(g), s. 2(i), s. 3(3)(a)(iv), s. 7

Subjects

urban developmentland transferlicencecolonizerstatutory interpretationpurposive constructionproperty rightsregulatory statutecommunity amenitiesconstitutional property right

Judgment

MIS. D.L.F. QUTAB ENCLAVE COMPLEX EDUCATIONAL A
CHARITABLE TRUST
v.
STATE OF HARYANA AND ORS.

FEBRUARY 17, 2003
B
[S.S. SINHA AND DR. AR. LAKSHMANAN, JJ.]

Urban Development :

Haryana Development and Regulation of Urban Areas Act, 1975; Section C
3(3)(a)(iv):

Grant of licence to colonizer-Colonizer earmarking certain sites for
construction of Schools/community buildings-Transfer of sites to lessee-
Jssuance of instruction by State restricting colonizer's right to farther transfer- D
High Court dismissed the writ petition of colonizer holding transfer of such
sites/lands by the licensee illegal-On appeal, held: Right to transfer such
sites/lands would be subject to the building laws/Regulating statutes-Purpose
is to ensure establishment ofschools/community buildings at its reserved places
but such provision of law cannot put restrictions as to the person/persons who
would run and manage these Institutions-A regulating statute must not be E
construed to put a limitation prohibiting transfer of lands which does not
affect its user-Right to transfer being incidental to the right a/ownership,
having regard to Constitutional _provisions under Article 300A, cannot be
taken away save by authority of law-Such right may be subject to the transfer
of obligation of transferee as laid down in the Statute/Licence.
F
'Development work' and 'Amenity '-Distinction between in the context
of the Act-Discussed

Interpretation of Statutes:

'Rule of purposive constructions '-Discussed. G
Words and Phrases:

'Institutions' and 'persons'-Meaning of-Jn the context of Haryana
Development and Regulation of Urban Areas Act, 1975.
H
2 SUPREME COURT REPORTS [2003] L. S.C.R.
(
A A colonizer purchased free hold lands in Haryana for setting up a
colony and was granted licence as per provisions of the Haryana
Development and Regulation of Urban Areas Act. The colonizer created
an Educational Charitable Trust (appellant) and marked certain sites for
construction of schools/community buildings thereon. The Trust leased out
B certain sites to the lessee who were granted building plans by the State/
respondents for construction on these sites. The State issued instructions
to the colonizer restricting transfer of these community sites, which was
challenged by the Appellant-Trust by filing a writ petition. High Court
dismissed the same. Hence the present appeal.

c conditions
It was contended for the appellants that neither the rules nor
of licence imposed any embargo on transfer of lands to third
party by the colonizer; that since the terms and conditions of licence
regulate user of the lands, these restrictions are to be operative qua the
terms and conditions of the licence and not qua the owners of the property;
that having regard to the fact that third parties/fourth parties had
D undertaken to abide by the terms and conditions of the licence the purpose
and object for enactment of the Act would not be violated; that the
instructions issued by the State/Executives was not backed by any statute;
that instructions/directions issued by the State could not have given
retrospective effect/operation.

E On behalf of the respondents, it was submitted that though there does
not exist any express bar on transfer of lands but the same may be inferred
impliedly having regard to the srhcme of the Act, by applying rules of
interpretation ; that colonizer was regularised by restricting to enter into
a profitable venture; and that by allowing the colonizer to create third-
F party/fourth party interest, the purpose and object of the Act would be
defeated.

Allowing the appeal, the Court

HELD: 1.1. Right of transfer of land is indisputably incidental to
G the right of ownership. Such a right can be curtailed or taken away only
by reason of a statute. An embargo upon the owner of the land to transfer
the same should not be readily inferred. Section 3(3)(a)(iv) of the Haryana
Development and Regulation of Urban Areas Act does not expressly
impose any restriction. The same is merely a part of an undertaking.
Assuming that a prohibition to transfer the land can be read therein by
H necessary implication, the consequence of violation of such undertaking
"'
'

D.L.F. QUTABENCLA VECOMPLEXEDUCATIONALCHARJT. TRUSTv. STATE 3
has not been specified. In other words, if a transfer is made in violation A
of the undertaking, the statute does not provide that the same would be
illegal or the transferee would not derive any title by reason thereof.
[14-8, CJ

.·\ 1.2. The right of a transferee would be subject to the building laws
or regulatory statute relating to user of the property. In the event the B
Government takes over the plots it would be at liberty to transfer such
land to any person or institution including a local authority as it may deem
fit. Purpose of such a clause, therefore, is to ensure that schools, hospitals,
community centres and other community buildings are established at the
places reserved therefor in the sanction plan but there does not exist any C
embargo as regards the person or persons who would run and manage
the same. (14-D, E)

1.3. A regulatory act must be construed having regard to the purpose
it seeks to achieve. State as a statutory authority cannot ask for something
which is not contemplated under the Act. A statute relating to regulation D
of user of land must not be construed to be a limitation prohibiting transfer
of land which does not affect its user. [14-F)

1.4. Respondents have sought to impose a ban specifically by issuance
of the impugned circulars which in unmistakable terms go to show that
even according to them such a bar did not exist prior thereto. A transfer E
prohibited by a statute would be illegal and not irregular. Once it is held
that such transfer would only be 'irregular' which can be cured, it would

- necessarily mean that there ·was no absolute statutory bar in relation
thereto. If it be held that the transfers by the colonizer were illegal, there
was no occasion for respondents to pass the building plans keeping in view
the fact that transferee thereof did not acquire any title whatsoever. Such
F

a right of transfer to third parties to raise construction having been
accepted by the respondents earlier, it does not now lie in their mouth to
contend that there existed a statutory bar. (14-H; 15-A, 8, CJ

1.5. When different terminologies are used by the legislature it must G
be presumed that the same had been done consciously with a view to
c_onvey different meanings. Had the intention of the legislature been, as
has been held by the High Court, that the cost foi: such a construction
has to be borne by the licensee irrespective of the fact as to whether it
undertakes such construction itself or get them constructed by its
contractors, there was absolutely no reason as to why clearer terms could H
4 SUPREME COURT REPORTS [2003] 2 S.C.R.

A not be used by the legislature. The phrase 'at his own cost' refer to the
licensee, whereas in the case of his nominee being either an institution or
a person, as the case may be, the phrase 'at its cost' have been used. The
expression "at his own cost" and "at its cost" must be held to have separate
and distinct meaning. They are not meant to aim at the same person.
[15-H; 16-A, BJ
B
1.6. It may be that the agreement is between the appellant and
Respondent No.2 but the same would not mean that the transferees from
the appellant would not be bound by the terms and conditions of the licence
as the statutory obligations of the licensee would percolate down to its
C transferees as they would be claiming interest under the licensee. In terms
of the provisions of the Act, Rules and the conditions of licence, the
Director, Town and Country Planning as also the State ofHaryana would
be entitled to exercise control in terms of the statutory provisions over
the subsequent transferees. Creation of third party or fourth party interest,
it is axiomatic, would not by itself take away the right of control of the
D State and other regulatory measures which can be taken under the statute.
[16-E, F)

1.7. The liability of the colonizer in the matter of construction of
schools, hospitals etc. would continue in the event he or his transferees
fail to comply the conditions of licence and he would be subjected to the
E consequences laid down therefor in Section 10 of the Act. The Government
in other words would continue to regulate the user for which the site had
been earmarked and upon failure of the licensee or his transferees to
comply with such statutory obligation the Government would be entitled
to take over such land. The power of the Government to take over the
p lands must be held to be restricted and would be applicable only in a case
where community services had not been developed. (16-G, H; 15-F)

1.8. Basic Rule of interpretation of Statute is that the Court shall
not go beyond the statute unless it is absolutely necessary so to do. Rule
of 'purposive constructions' would be resorted to only when the statute
G to observe or when read literally it leads to manifest injustice or absurdity.
[17-D]

1.9. Ownership of land jurisprudentially involves a bundle of rights.
One of such rights is the right to transfer. Such a right, being incidental
to the right of ownership, having regard to Article 300A of the Constitution
H of India, cannot be taken away save by authority of law. [18-B, CJ
D.LF QUTAB ENCLAVE COMPLEX EDUCATIONAL CHAR!T. TRUST v. STATE [SINHA. J.] 5
• Charan Lal Sahu v. Union of India, (1990) 1 SCC 613; Shamarab v. A
Parulekar v. The District Magistrate, Thana, Bombay and two Ors., (1952) 3
SCR 683; The State of Punjab v. Ajaib Singh and Anr., (1953) 4 SCR 245;
· Tirath Singh v. Bachittar Singh and Ors., (195512 SCR 457 and Canara /3ank
v. Nuclear Power Corporation of India Ltd. and Ors., (19951 Supp. 3 SCC
...! 81, held not applicable .
B
._
2. Having regard to the fact that the appellant had made its intention
to transfer the lands known through advertisements in the widely
circulated newspapers; offerees must be held to have exercised their 'due
diligence' at the time of acquisition of interest in the plots and in that view
of the matter such interest cannot be put in jeopardy unless it is found
out without any difficulty whatsoever that the colonizer had no right to
c
transfer the land and the effect of such transfer would lead to illegality.
The fourth parties are bona fide transferees for value and thus their right
of claiming interest cannot be jeopardized by reason of executive
instructions or otherwise particularly in absence of any pleadings by the
Respondents to the effect that fraud has been practised by the colonizer D
) or the parties colluded with one another to achieve an illegal purpose.
[20-H; 21-A, BJ

,t' CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4908 of2002.

From the Judgment and Order dated 7.3.2001 of the Punjab and Haryana E

- High Court in C.W.P. No. 7245 of 1997.
WITH
C.A. Nos. 4909, 4910 and 4911 of 2002.

M.L. Varma, Harish N. Salve, Parag P. Tripathi, Mahendra Anand, Ms. F
B. Vijayalakshmi Menon, Ajay Goyal, Ms. Manjula Gupta, Priya Kumar,
S.R. Setia, Satinder S. Gulati, Neeraj Kumar Jain, Sanjay Singh, Ms. Hemantika
Wahi, Alatnjit S. Nand, Vinay Garg and Sudarsh Menon for the appearing
parties.

The Judgment of the Court was delivered by G
S.B. SINHA, J. Interpretation of section J(3)(a)(iv) of the Haryana
Development and Regulation of Urban Areas Act, 1975 (hereinafter called
and referred to for the sake of brevity as 'the said Act') falls for consideration
...
in these appeals which arise out of a judgment and order of the Punjab and
Haryana High Court dated 7.3.2001 passed in C.W.P. No.7245of1997 filed H
6 SUPREME COURT REPORTS [2003) 2 S.C.R.

A by the appellant ofCivil Appeal No. 4908 of 2002.

Mis. DLF Universal Ltd. (DLF) is a public limited company registered
and incorporated under the Indian Companies Act. It purchased free-hold
lands at Gurgaon in the State of Haryana for setting up a colony known as
DLF Qutab Enclave Complex. It applied for and was granted licence in terms J
B of the provisions of the said Act.

Mis. DLF Universal Limited and other group of companies created
DLF Qutab Enclave Complex Educational Charitable Trust (Trust) wherefore
85 sites were earmarked for constructions of schools community buildings in
the complexes. The said sites vested in the Trust by reason of a deed. The
C Trust entered into agreements of lease with Gunjan Nikunj Educational Institute
(P) Ltd. Mr. A.H. Handa, New Ekta Educational Society, Satish Mohindra
and Sukhjeet Kaur Mann (hereinafter referred to as 'fourth parties').

Three of the lesses from the Trust, namely, New Ektct Educational
D Society, Satish Mohindra and Sukhjeet Kaur Mann applied for approval and
were granted building plans by the 2nd respondent herein.

On or about 9.2.1994 the 2nd Respondent issued a letter to the DLF
directing it to ensure that no other fourth party right is created on community
site, in respect whereof third party interest was created prior to 7 .8 .1991. The
E said cut off date was fixed purported to be on the basis of the resolution taken
in a meeting held under the Chairmanship of the then Chief Minister of the
State of Haryana wherein a resolution was adopted to the effect that no
further third party right could be created. The State of Haryana by a letter
dated 25.10.1994 issued instructions as regards transferring community sites
to third and fourth parties and raising constructions thereupon which are
F broadly classified into three heads:

I. Where community sites are still in the ownership of the colonizers
II. Sites where colonizers have created third party rights before
7.8.1991
G III. Cases where the licensee has created fourth party right on
community sites.

The said instructions were followed by another addenda in terms of a
letter dated 13 .2.1996 stating that the time scheduled of three years for
constructions on community buildings would also apply to all sites where
H third and fourth party rights have been created before 7.8.1991 and in respect
D.L.F. QUTAB ENCLAVE COMPLEX EDUCATIONAL CHARIT. TRUST v. STATE (SINHA, J.] 7
thereof, the remaining conditions of letter dated 25. l 0.1994 shall be applicable . A
.The legality or validity of the directions contained in the said two letters
dated 25.10.94 and 13.2.96 were the subject matter of the writ petition filed
by the Trust in Punjab and Haryana High Court marked as Civil Writ Petition
_,.
r No. 7245 of 1997.
~

It appears that a proposal was mooted in the said proceeding as to B
whether. the dispute between the parties could be amicably resolved and
pursuant thereto or in furtherance thereof by an order dated 21.9.2001 the
Trust was given an opportunity by the High Court to obtain and file affidavits
of the parties in whose favour licences had been granted for construction and·
,,..__ running of the schools.
c
Allegedly, the respondent No. I and 2 pursuant to the observations made
by the High Court hek) meetings with all concerned and found the said
proposal to be acceptable.

Thereafter affidavits were filed by the concerned fourth parties stating
that they would abide by the conditions of the licence issued in favour of D
DLF as also the rules and regulations and instructions issued by the First and
Second Respondents. Jn the said affidavits it was further affirmed that schools

- would be built within the time specified by the Respondents.

The High Court by an order dated 13.12.2000 recorded that the parties
had nearly reached a consensus and draft agreement was directed to be put E
up for its consideration.

However, the learned Advocate General for the State of Haryana on or
"'"
about 16.2.200 I appeared and stated. before the High Court that it was not
possible for the State to accept the said proposal and requested that the Writ
Petition be decided on merits. F
The Writ Petition by reason of the impugned judgment was dismissed
holding.

I
(i) The petitioner is a duplicate of the licensee. It has been created
I
to fiddle with figures. A consuming avarice and not charity is the G
cause for its creation.

(ii) The Act and the Rules do not permit the licensee to transfer sites
without the permission of the competent authority. The action of
the respondents in refusing to recognize the transfers cannot be
said to be illegal.
-, H

... ;.
'''
A
8 SUPREME COURT REPORTS [2003] 2 S.C.R.

(iii) The impugned circulars are not arbitrary, illegal or unfair. These
do not impinge upon the protection of Article 14 of the
r
Constitution.

(iv) The failure of the Authority to act or the mere silence of the State
cannot be a ground for the court to put its seal of approval on T
B deeds which do not have the sanction of the Statute and the
Rules.

Mr. Harish Salve, the learned senior counsel appearing on behalf of
appellant in Civil Appeal No. 4909 of 2002 would submit that the said Act,
the Rules framed thereunder or the conditions of licence do not provide ior
C imposition of any embargo on transfer of the lands, in question to third
parties by DLF and as such the impugned judgment is not sustainable. The
-
learned counsel would contend that by reason of the said Act only grant of
licence as regards regulation of user of land is contemplated and the restrictions
imposed thereunder must be held to be operative qua the terms and conditions
·of licence and not qua the owners of the properties. Mr. Salve would urge
D that so long the user of the land conforms to the provisions of the Act, Rules
or the terms and conditions of the licence, no restriction on exercise the right
of the owner to transfer the land can be imposed having regard to absence
of a statutory provision in relation thereto. He would argue that the question
as to whether the Trust was an entity independent of DLF is wholly irrelevant
E or not inasmuch as even assuming that it is so, having regard to the terms and
conditions of licence as the thjrd parties and the fourth parties are claiming
interest through the owner, they would also be bound thereby. In that view
of the matter and particularly having regard to the fact that the fourth parties
by way of affidavits had undertaken to abide by the terms and conditions of
the licence granted pursuant to or in furtherance of the said Act and the Rules
F framed thereunder, the purport and object for which Town Planning Act has
been enacted would not be violated. It was argued that conversely if it be
held that the DLF was entitled to transfer those lands to the third parties, the
profits accrued by reason of the transactions of the Charitable Trust lose
relevance for a decision upon the validity of the refusal of the Government
G to sanction the building plans. The le~rned counsel would submit that having
regard to the expression 'development works' meaning 'internal and external
development works', used in the statute, no fetter on transfer of lands can be
inferred, as long as lands reserved for construction of schools, hospitals,
community centres etc. are used for the said purpose. By reason of the
provision contained in Section 3(3) of the Act, it was' submitted the licensee
H was merely obligated to construct or get constructed schools, hospitals,
D.L. F. QUTAB ENCLAVE COMPLEX EDUCATIONAL CHARJT TRUST v. STATE [SINHA, J.] 9

community centres etc. and thus, in terms thereof no prohibition has been A
imposed as regard transfer thereof to an institution or an individual so as
enable them to undertake construction of Schools, hospitals and community
centers at their own cost.

Drawing our attention to the instructions dated 9 .2.1994 issued by the
Director, Town & Country Planning impugned in the writ petition, the learned B
counsel would submit that the same merely shows that an executive decision
in relation thereto was taken which was not backed by any statute or statutory
rule and as such the same should have been declared ultra vires by the High
Court.

Mr. M.L. Verma, the learned counsel appearing on behalfofthe appellant C
in Civil Appeal No. 4908 submitted that in the facts and circumstances of this
case the High Court should not have made adverse comments as regard the
functioning of the Trust.

The learned counsel appearing on behalf of the appellants in Civil D
Appeal No. 4910 and 4911 would inter alia submit that keeping in view the
fact that the Trust issued advertisements which were published in various
newspapers in the year 1991 declaring availability of educational sites in the
.. colony in question, it cannot be said, that the respondents No. I and 2 were
not in the know thereof. It was submitted that the appellants upon due enquiry
satisfied themselves about the title of the DLF whereafter only they purchased E
the lands in questio~ bona fide and for valuable considerations within the
knowledge of the State of Haryana and as at no point of time the State of
Haryana objected thereto, the purported impugned directions issued in the
year 1994 and 1996 could not have given retrospective effect and retrospective
operation with effect from 7.8.1991.
F
Mr. Mahendra Anand, the learned counsel appearing on behalf of the
Respondent Nos. I and 2 would, on the other hand, submit that although
there does not exist any express bar on transfer of lands by the owners
thereof by creating third party or fourth party interest, the same must be
inferred having regard to the scheme of the said Act. The learned counsel G
would contend such a scheme would appear not only from the interpretation
clauses of the Act but also from Section 7 thereof as also the rules framed
thereunder and the licences granted pursuant thereto or in furtherance thereof.
According to the learned counsel having regard to the scheme of the act, the
Court should apply the rule of purposive construction so as to hold that the
licensee itself was bound to construct schools, hospitals, community centres H
10 SUPREME COURT REPORTS [2003] 2 S.C.R.
(:
A etc. at its own cost. It was submitted that if the State can take over the lands
without payment of any compensation, it must necessarily be held that it has
also the concomitant right to keep control therecover which would include
imposing restriction on transfer of the said land. The owner of the land by
necessary implication, the learned counsel would urge, was not entitled to
B exercise any right over the property and its right to use the same was restricted
io get constructions raised through a third party wherefor also it has itself to
incur costs. Mr. Anand would contend that the extent of regulation can further
be judged by the fact that a colonizer is not entitled to enter into a profitable
venture, the reasonable profit being restricted to 15% by the Legislature and
thus in the event the owner could create third party and fourth pa1 ty interests,
C the same would defeat the very purpose and object of town planning. ---
,.
The said Act was enacted to regulate the use of land in order to prevent
ill plant and haphazard urbanization in or around towns in the State of Haryana.
It came into force with effect from 16th November, 1971 except Section 10
thereof which came into force on 30th January, 1975 when the State Act
D received the assent of the Governor of State of Haryana.

'Colony' has been defined in Section 2(c) of the said Act in the following
terms: i-
,._
"colony" means an area of land divided or proposed to be divided
into plots flats for residential, commercial or industrial purposes subject
E
to ce1tain restrictions specified therein."

Colonizer has been defined in Section 2(d) thereof which reads thus:

"( d) "colonizer" means an individual, company or association or body
of individuals, whether incorporated or not, owning or acquiring or
F agreeing to own or acquire, whether by purchase or otherwise land
for converting it into a colony and to whom a licence has been granted
under this Act"

"Development Works" in terms of Section 2(e) would mean internal
and external development works.
G
"External Development works" and "internal development works" have
been defined in Section 2(g) and 2(i) of the Act as under:

"(g) "external development works" include sewerage, drains, roads
and electrical works which may have to be executed in the periphery
•
H of, or outside, a colony for the joint benefit of two or more colonies;
I

I 'y

DLF. QUTAB ENCLAVE COMPLEX EDUCATIONAL CHARIT. TRUSTv. STATE [SINHA, J.] l J

(i) "internal development works" means- A
(i) metalling of roads and paving of footpaths;
(ii) turfing and plantation with trees as open spaces;
(iii) street lighting;
(iv) adequate and wholesome water supply; B
(v) sewers and drains both for storm and sullage water and necessary
provision for their treatment and disposal; and
(vi) any other work that the Director may think necessary in the interest
of proper development of a colony;
c
Interpretation clauses except Section 2(g) having regard to user of
expression "means" can neither be construed liberally nor can be held to be
exhaustive ones.

It is not in dispute that DLF is a colonizer. It is further not in dispute
that licences had been granted to it for the construction of a colony. It also D
stands admitted that schools, hospitals, community centers and other'
community buildings were required to be constructed in the colony in terms
of the licences granted under the Act.

Section 3 of the said Act provides for application for licence and grant
thereof. Sub-section (2) of Section 3 clearly states that the Director before E
granting the licence may enquire into the title of the land as also capacity of
the colonizer to develop a colony.

Such enquiry is also required to be made having regard to the plan
regarding development works to be executed in a colony and in conformity
with the development schemes of the colonies of the neighbouring areas. F
In terms of sub-section (3) of Section 3 of the said Act, the Director
r'
upon arriving at a satisfaction as regard the requirements specified in Clause
(a) to (f) would grant licence· subject to the licensee's furnishing a bank
guarantee and giving an undertaking as specified in clause (a) thereof.

The relevant provision of Section 3(3) of the said Act reads thus; G

"(3) After the enquiry under sub-section (2), the Director, by an order
in writing, shall-

(a) grant a licence in the prescribed form, after the applicant has
furnished to the Director a bank guarantee equal to twenty-five per H
12 SUPREME COURT REPORTS [2003] 2 S.C.R..

A cent of the estimated cost of development works as certified by the
Director and has undertaken.

(i) .. ..

(ii) .. ..

B (iii) the responsibility for the maintenance and upkeep of all roads,
open spaces, public park and public health services for a period
of five years from the date of issue of the completion certificate
unless earlier relieved of this responsibility and thereupon to
transfer all such roads, open spaces, public parks and public health
services free of cost to the Government or the local authority, as
c the case may be;
(iv) to construct at his own cost, or get constructed by any other
institution or individual at its cost, schools, hospitals, community
centers and other community buildings on the land; set apart for
this purpose, or to transfer to the Government at any time, if so
D desired by Government, free of cost the land set apart for schools,
hospitals, community centres and community buildings, in which
case the Government shall be at liberty to transfer such land to
any person or institution as it may deem fit.

Section 7 prohibits advertisement and transfer of plots and reads as
E under:

"7. Prohibition to advertise and transfer plots.-Save as prescribed in
Section 9, no person shall- I
(i) without obtaining a licence under Section 3 transfer or agree to
p transfer in any manner plots in colony or make an advertisement
or receive any amount in respect thereof;
(ii) erect or re-erect any building in any colony in respect of which
a licence under Section 3 has not been granted;
(iii) erect or re-erect any building other than for purpose of agriculture
G on the land sub-divided foragriculture as defined in clause (aa)
of section 2 af this Act."
The State of Haryana in exercise of its power under Section 24 of the
said Act made the Haryana Development and Regulation of Urban Ar.:as.
r
Rules, 1976 (hereinafter referred to as 'the Rules'). Rule I 0 provides that the '~
H applicant for grant of a licence would be required to fulfil certain conditions
I
I

)\
/

D.L.F. QUTAB ENCLAVE COMPLEX EDUCATIONAL CHARIT. TRUST v. ST ATE [SINHA, J J J3

laid down therefor. Rule 11 specifies the conditions required to be fulfilled A
by the applicant. Sub-rule (e) of Rule 11 is identically worded with Section
3(3)(a)(iv) of the Act.

Licence to a· colonizer is granted in form LC-IV. Condition No.(b) of
the licence again is in identical tenns with Section 3(3)(a)(iv) of the said Act.
B
Although the object of the said Act is laudable but does it mean that
with a view to achieve the same the regulatory provisions contained therein
should be construed as a total prohibition on transfer of land not only in
relation to those which are required for development works but also to schools,
hospitals, community centres and other community buildings, is the core C
question involved in these app~als.

Construction of schools, hospitals and community centres and other
community.buildings do not come within purview of the term 'development
works' They come within the purview of the tenn "Amenities". Only in
relation to the development works the colonizer is bound to pay the D
development charges, carry out and complete development works. He has
also the responsibility to maintain the same for a period of five years from
the date of issue of the completion certification whereafter the same is required
to be handed over to the Goyemment or the local authority as the case may
be, free of cost.
E
At the outset, we m~y notice that the cost of development works
indisputably is to be raised from the plot holders, but as c.onstruction of
schools, hospitals, community centres and other community buildings do not
come within the purview of the term 'development works', the costs therefor
are not to be borne by them.
F
The expression "Development Work" as noticed hereinbefore is not
synonymous with "Amenity". The expression "Amenity" has been used only
in proviso appended to Clause (v) of Section 3(3)(a) and Rule 2(b) of the
Rules. Rules are subservient to the Act, although they may be read con-
jointly with the Act, if any necessity arises therefor. Even Rule 5 specifies the G
obligation of the colonizer as regard providing for the development works.
The expression "amenity" as defined in Rule 2(b) of the Rules is wider than
"development works". No principle of construction of statute suggests that a
wider expression used in the rule may be read in the Statute employing
narrower expression. Even in the rule the said expressions have been used for
different purpos~s. The licence, also does not postulate that all amenities H
I
/
;"'

14 SUPREME COURT REPORTS [2003] 2 S.C.R.

A must be provided by the colonizer at its own expense. If the terms
'Development Works' and 'Amenity' are treated as carrying the same meaning
the plot holders may be held to be bound to meet the costs for construction
of schools, hospitals, community centres etc. The cost of construction in
terms of the said provisions thereof is to be borne by DLF or its nominees.

B Right of transfer of land is indisputably incidental to the right of
ownership. Such a right can be curtailed or taken away only by reason of a
statute. An embargo upon the owner of the land to transfer the same in the .
opinion of this Court should not be readily inferred. Section 3(3)(a)(iv) of the
Act does not expressly impose any restriction. The same is merely a part of
C an undertaking. Assuming that a prohibition to transfer the land can be read
therein by necessary implication, it is interesting to note that the consequence
of violation of such undertaking has not been specified. In other words, if a
transfer is made in violation of the undertaking, the statute does not provide
that the same would be illegal or the transferee would not derive any title by
reason thereof.
D
The right of a transferee, however, would be subject to the building
laws or regulatory statute relating to user of the property. In terms of the said
Act, in the event the Government, takes over the plots it would be at liberty
to transfer such land to any person or institution including a local authority
as it may deem fit. Purpose of such a clause, therefore, is to ensure that
E schools, hospitals, community centres and other community buildings are
established at the places reserved therefor in the sanction plan but there does
not exist any embargo as regards the person or persons who would run and
manage the same.

F A regulatory act must be construed having regard to the purpose it
seeks to achieve. State as a statutory authority c.annot ask for something
which. is not contemplated under the Act. A statute relating to regulation of
user of land must not be construed to be a limitation prohibiting transfer of
land which does not affect its user.

G The plan provides that schools, hospitals etc. would be located at
particular sites. When that purpose is satisfied, the Court in the name of
interpretation would not make a further attempt to find out who did so.

It is not in dispute that respondent Nos. I and 2 have sought to impose
such a ban specifically by reason of the impugned circulars issued in the
H years 1994 and 1996, which in unmistakable terms go to show that even
DLF. QUTAB ENCLAVE COMPLEX EDUCATIONAL CHARIT. TRUST v. STATE [SJNHA,J.J l 5

according to them such a bar did not exist prior thereto. It is accepted that A
even the concerned respondents had recognised at least three transfers. If
transfer of the sites reserved for construction of school was prohibited under
the statute, it is axiomatic that in absence of any provisions contained therein,
the respondent .could not exercise any power of regularizing such transaction.
A transfer prohibited by a statute would be illegal and not irregular. Once it B
is held that such transfer would only be 'irregular' which can be cured, it
would necessarily mean that there was no absolute statutory bar in relation
thereto. The building plans which were submitted on various days in 1992
and onwards had been accepted and sanctioned. If it be held that such transfers
by the DLF Qutab were illegal, there was no occasion for the respondents
No. 1 and 2 herein to pass the building plans keeping in view of the fact that C
transferee thereof did not acquire any title whatsoever. Such a right of transfer
to third parties to raise construction having been accepted by the respondents
No. 1 and 2 prior to 1994, it does not now lie in their mouth to coritend that
there existed a statutory bar. The primal question is as to whether by reason
of an executive fiat, a right to transfer one's own property could be curtailed?
The answer to the said question must be rendered in the negative. D
Expropriatory statute, as is well known, must be strictly construed.

In terms of Section 3 of the Act, a colonizer has to construct schools,
hospitals, community centres and community buildings at its own cost or to E
get the same constructed by any other .institution at its cost and for the said
purpose lands have to be set apart. However, in the event the same is not
done within a reasonable time, the State would be at liberty to take over the
lands and fulfil the said objects as specified in the sanctioned plan. The
power of the Government to take over the lands must be held to be restricted
and would be applicable only in a case where community services had not F
been developed. In other words, where the community services had not been
developed the question of acquisition thereof by the Government would arise
and not in any other situation.

The High Court in our opinion, committed a manifest error in holding
that despite the fact that the statute uses two different expressions as regards G
cost to be incurred for construction of schools, Hospitals and community
centres etc. the effect thereof would be the same. In case of licensee the
words used are 'at his own cost' where as in respect of the others, the words
used are 'at its cost'. When different terminologies are used by the legislature
it must be presumed that the same had been done consciously with a view H
)
J...,I

16 SUPREME COURT REPORTS [2003] 2 S.C.R.

A to convey different meanings. Had the intention of the legislature been, as
has been held by the High Court, that the cost for such a construction has to
be borne by the licensee irrespective of the fact as to whether it undertakes
such constructions itself or get them constructed by its contractors, there was
absolutely no reason as to why clearer terms could not be used by the
B legislature. The words 'at his own cost' refer to the licensee, whereas in the
case of his nominee being either an institution or a person, as the case may
be, the words 'at its cost' have been used. The expression "at his own cost"
and "at its cost" must be had to have separate and distinct meaning. They are
not meant to aim at the same person.

C The words 'institution' or 'person' evidently do not refer to a building
contractor as understood in ordinary parlance. It must be held to carry different
meanings. Indisputably, any person can get constructions made on his own
land either under his own supervision or through a contractor. For the purpose
of raising constructions through a contractor, permission of the statutory
authorities is not necessary. In that view of the matter, clearly the legislature
D did not contemplate that the words 'any other institution or individual' refer
only to a building contractor for the purpose of construction of the buildings
alone and for no other purpose.

It may be that the agreement is between DLF and the respondent No.
2 but the same would not mean that the transferees from the DLF would not
E be bound by the terms and conditions of the licence as the statutory obligations
of the licensee would percolate down to its transferees as they w.ould be
claiming interest under the licensee. In terms of the provisions of the said
Act, Rules and the condition of licence, the Director Town and Country
Planning as also the State of Haryana would be entitled to exercise control
p in terms of the statutory provisions over the subsequent transferees. Creation
of third party or fourth party interest, it is axiomatic, would not by itself take
away the right of Control of the State and other regulatory measures which
can be taken under the statute.

In other words, the liability of the colonizer in the matter of construction
G of schools, hospitals etc. would continue in the event he or his transferees fail
to comply the conditions of licence and he would be subjected to the
consequences laid down therefor in Section I 0 of the said Act.

The Government in other words would continue to regulate the user for
which the site had been earmarked and upon failure of the licensee or his
H transferees to comply with such statutory obligation the Government would
:- I
'' \
,/ .r
DLF. QUTABENCLAVECOMPLEXEDUCATIONALCHARIT TRUSTr. STATE[SINHA,J.] 17

~"!'
be entitled to take over such land. A
The question may be considered from another angle. A statutory
obligation had been placed upon the colonizer. The right of colonizer to
transfer the land would be subject to such obligation inasmuch as it cannot
transfer a right higher than it has. The right to transfer the land shall carry
with it the obligation of the owner thereof to use the land in particular B
manner as laid down in the statute as also the terms of the licence. It is also
pertinent to note that a draft rule was published on 13th December, 1991 in
terms whereof a condition was imposed in conditions (e) in the licence granted
in form LC-IV to the following effect:

"No third party rights will be created without obtaining the prior C
permission of the Director"

The said Amendment itself goes to show that the legislature sought to
remedy a mischief which was existing prior thereto. Such a step on the part
of the State of Haryana is also a pointer to the fact that even according to it, D
prior permission therefor was not required.

Basic Rule of interpretation of Statute is that the Court shall not go
beyond the statue unless it is absolutely necessary so to do. Rule of 'purposive
constructions' would be resorted to only when the statute to observe or when
read literally it leads to manifest injustice or absurdity. E
It may be true that 55% of the acquired lands were plottable but as to
whether D.L.F. has recouped its investments by transferring the plottable
land to the plot holders is a. question which, in our opinion, is irrelevant for
the purpose of construction of statute. The High Court, in our opinion,
therefore, adopted a wrong approach. F
It is also incorrect to contend that sub clauses (iii) and (iv) of Section
3(3)(a) of the Act stand on a different footing. A bare perusal of the said
provision would olearly show they are not. In terms of clause (iii), a colonizer
is responsible to maintain and upkeep of all roads, open spaces, public parks
and pub lie health services for a period of five years from the date of issue G
of the completion certificate whereas in terms of clause (iv), a colonizer
undertakes to construct schools, hospitals, community centers and other
community buildings or get the same constructed by any other institution or
individual. Sub-clauses (iii) and (iv) of Clause (a) of sub-section (3) of Section
3 of the said Act, thus, aim at different purposes.
H
f

!",

18 SUPREME COURT REPORTS [2003] 2 S.C.R.

A We do not also agree with the submission of Mr. Anand to the effect
that as regards development of community sites, the State acts as a parens
patriae. The State Act have been enacted for regulation of user of land so that
the development of a town may not haphazard. It seeks to achieve the purposes
mentioned in the preamble and no other.

B In these cases, we are not concerned with the question as to whether the
provisions of the Transfer of Property Act are applicable in the State of
Haryana or not. Ownership of land jurisprudentially involves a bundle of
rights. One of such rights is the right to transfer. Such a right, being incidental
to the right of ownership; having regard to Article 300A of the Constitution
C of India, cannot be taken away save by authority of law.

We may now consider the decisions whereupon Mr. Anand placed
strong reliance.

In Charan Lal Sahu v. Union of India, [1990] 1 SCC 613 this Court
D was considering the provision of Bhopal Gas Leak Disaster (Processing of
Claims) Act, 1985. The question which arose for consideration therein was
as to whether the State has the requisite jurisdiction and power as a 'parent'
to fight litigation for the victims so as to uphold their fundamental rights. A
question as to whether the State Act is ultra vires the Constitution also arose
for consideration. The Court with a view to uphold the constitutionality of
E the Act that the Scheme of the Act suggests an obligation on the part of the
State. The court, in the fact situation obtaining therein, took recourse to the
principles of liberal interpretation holding:

"The freedom to search for the 'spirit of the Act' or the quantity of
the mischief at which it is aimed (both synonymous for the intention
F of the Parliament) opens up the possibility of liberal interpretation
"that delicate and important branch of judicial power, the concession
of which is dangerous, the denial ruinous". Given this freedom it is
a rare opportunity though never to be misused and challenge for the
. judges to adopt and give meaning to the Act, articulate and inarticulate,
and thus translate the intention of the Parliament and fulfil the object
G
of the Act. After all, the Act was passed to give relief to the victims
who, it was thought, were unable to establish their own rights and
fight for themselves. It is common knowledge that the victims were
poor and impoverished. How could they survive the long ordeal of
litigation and ultimate execution of the decree or the orders unless
H provisions be made for their sustenance and maintenance, especially
I
~

DLF. QUTABENCLAVECOMPLEXEDUCATIONALCHARIT. TRUSTv. STATE[SINHA,J.J l 9

when they have been deprived of the right to fight for these claims A
themselves? We, therefore, read the Act accordingly."

The said decision, therefore, was rendered in a completely different
fact situation and is not applicable to the fact of the present case.

In Shamarao V. Parulekar v. The District Magistrate, Thana, Bombay B
and two Ors., [1952] 3 SCR 683 this Court was considering the provisions
of Preventive Detention Act. In that case the Court took recourse to literal
meaning. It was held that the Court should not interpret an act in such manner
which would defeat the provisions thereof whose meaning is quite plain.

No exception to the said ratio can be taken. c
In The State of Punjab v. Ajaib Singh and Anr., [1953] 4 SCR 254 this
Court was considering the constitutional validity of the provisions of Abducted
Persons (Recovery and Restoration) Act in terms whereof police officers
were entitled to take abducted person to the custody of the officer in charge
of the camp. The construction of the terms 'arrest and detention' came up for D
consideration and in that situation it was held:

"Sri Dadachanji contends that such consideration should not weigh
with the court in construing the Constitution. We are in agreement
with learned counsel to this extent only that if the language of the E
article is plain and unambiguous and admits of only one meaning
then the duty of the court is to adopt that meaning in-espective of the
inconvenience that such a construction may produce. If, however,
two constructions are possible, then the court mu.st adopt that which
will ensure smooth and harmonious working of the Constitution and
eschew the other which will lead to absurdity or give rise to practical F
inconvenience or makewell established provisions of existing law
nugatory."

In Tirath Singh v. Bachittar Singh and Ors., [1955] 2 SCR 457 an
election dispute was the subject matter of the Jis. The question which
arose for consideration therein was as to whether the principle of G
• natural justice had to be read in the proviso appended in the Section
99(1)(a) of the Act. Repelling such contention it was held:

"But it is a rule of interpretation well-established that, "Where the
language of a statute, in its ordinary meaning and grammatical
construction, leads to a manifest contradiction of the apparent purpose H
20 SUPREME COURT REPORTS [2003] 2. S.C.R.

A of the enactment, or to some inconvenience or absurdity, hardship or
injustice, presumably not intended, a construction may be put upon
it which modifies the meaning of the words, and even the structure
of the sentence". (Maxwell's Interpretation of Statutes, I 0th Edition.
(page 229). Reading the proviso along with clause (b) thereto, and
.
construing it in its setting in the section, we are of opinion that
B notwithstanding the wideness of the language used, the proviso
contemplates notice only to persons who are not parties to the petition."

In Canara Bank v. Nuclear Power Corporation of India Ltd. and Ors.,
[1995] Supp. 3 SCC 81, the question which fell for consideration of this
C Court was as to whether the Company Law Board performs judicial functions
that are ordinarily performed by courts under Section 9-A of the Act and in
that context it was held to be a court. The said decision cannot be held to
have any application in the instant case.

The said decisions having been rendered on the fact of the ·matters
D involved therein and cannot be held to have any application whatsoever in
the instant case.

The question which now arises for consideration is as to whether clause
(t) of the licence agreement can be read as a restriction of the right to transfer
the community sites. Clause (t) of the licence agreement reads as under:
E
(a) That the owner shall drive maximum net profit@ 15% of the total
cost of development of a colony after making provisions of statutory
taxes. In case the net profit exceeds the 15% after completion of the
project period, surplus amount shall either be deposited within two
months in the State Government Treasury by the owner or he shall
F spend this money on further amenities/facilities in his colony for the
benefit of the residents therein."

The cap on profit, in our opinion, is irrelevant for the purpose of
construction as regards the right of colonizer to transfer the land. Clause (t)
of the Licence, in other words, cannot be construed to put in an implied
G limitation of the owner of the land to transfer its land. It is for the State of
Haryana to invoke the said clause if and when any occasion arises therefor. •
Furthermore, having regard to the fact that the DLF had made its
intention to transfer the lands known through advertisements in the widely
H circulated newspapers; offerees must be held to have exercised their 'due
D.L.F. QUTAB ENCLAVE COMPLEX EDUCATIONAL CHARIT. TRUSTv. STATE [SINHA;J.J 2 J

diligence' at the time of acquisition of interest in the plots and in that view A
of the matter such interest cannot be put in jeopardy unless it is found out
without any difficulty whatsoever that the colonizer had no right to transfer
the said land and the effect of such transfer would lead to illegality. The
fourth parties are bona fide transferees for value and thus their right of
claiming interest cannot be jeopardized by reason of executive instructions or B
otherwise particularly in absence of any pleadings by the respondents No. I
and 2 to the effect that fraud has been practised by the colonizer or the
parties colluded with one another to achieve an illegal purpose.

For the reasons aforementioned the impugned judgment cannot be
sustained which is set aside accordingly. C
Before parting, however, we may observe that in the event, it is found
that the colonizer or the transferees had failed to discharge their obligations
in terms of the said Act, Rules and conditions of licence, it would be open
to the prescribed authorities to take such action against them as is permissible
~1-. D
For the foregoing reasons, the appeals are allowed but in the fact and
circumstances of the case, there shall be no order as to costs.

S.K.S. Appeals allowed.