2022 (7) TMI 1509 - SC - Indian Laws

True nature of the collaboration agreements whereby the owner (title holder) parted with possession to the colonizer / developer for payment of valuable consideration and allocation of a certain number of constructed units or percentage of built-up area - Scope of the term transfer . HELD THAT - This Court s findings are summarized as follows a. The expression transfer used is not confined to sale lease or other encumbrance. It includes development and/or collaboration agreements as well as licenses issued (for development) during the suspect period whether or not in favour of the developer. b. The lands covered by licenses issued to Paradise (ultimately transferred to Green Heights); Karma (for which collaboration was entered into with Unitech); Ram Pyari Balbir Singh Earl and Frontier (ultimately used by Godrej); Express Greens (DLF); Kalinga and Innovative amount to transfer. c. With respect to Green Heights a sum of Rs. 5 crores per acre is payable by Green Heights to HSIIDC. Therefore the final amount payable is 2.681 acres x Rs. 5 crores Rs. 13, 40, 50, 000 /- (rupees thirteen crores forty lakhs and fifty thousand only) within six months from the date of this judgment failing which interest at the rate of 6% per annum shall be levied from the date of default. Green Heights is entitled to recover from Paradise such proportionate sums it may be entitled to claim having regard to the terms of their agreement. d. With respect to Godrej a sum of Rs. 5 crores per acre is payable by Godrej to HSIIDC. Therefore final amount payable is 13.743 acres x Rs. 5 crores Rs. 67, 36, 30, 000 /- (rupees sixty-seven crores thirty-six lakhs and thirty thousand only) within six months from the date of this judgment failing which interest at the rate of 6% per annum shall be levied from the date of default. Godrej is entitled to claim such proportionate sums as it may be entitled to in terms of its agreement with Frontier Earl Balbir Singh and Ram Pyari in accordance with law. e. Upon full compliance with directions above the lands covered by Green Heights and Godrej s projects shall be excluded from the deemed award. f. With respect to Karma the 25.95 acres of land subject of License No. 206 of 2008 forms part of the deemed award. The State shall take appropriate steps and issue the supplementary award in respect of these lands within six months from the date of this judgment. Karma is entitled to compensation in accordance with the Acquisition Act as on the date of the notification under Section 4 and is entitled to statutory benefits such as interest solatium etc. on such determined compensation. g. Lands measuring 2.9875 acres and 10.881 acres respectively belonging to R.P. Estates and Subros are excluded from the deemed award. h. With respect to Express Greens (DLF) contentions to exclude the project from the deemed award are rejected. It is directed that (i) HSIIDC shall complete the process of validating the title of allottees including the title to the undivided and proportionate land share within six months from the date of this judgment; (ii) HSIIDC shall notify the balance allottees about the execution of sale deed - the process of execution and registration of sale deed to be completed within six months from the date of this judgment. HSIIDC shall ensure that a designated nodal officer is deployed to scrutinize the relevant documents and facilitate the execution of such sale deeds; and (iii) All rights title and interest in respect of the unsold 39 townhouses in the independent floors vests with the HSIIDC which shall deal with them in accordance with its policies and applicable laws. Likewise in case of unsold apartments all rights title and interest shall vest with HSIIDC. (iv) With respect to 96 apartments on the 15th tower which have been completed but no occupation certificate has yet been issued the DTCP shall ensure due inspection and decision on the pending occupation certificates. HSIIDC to complete any deficiency that has to be rectified. (v) With respect to club houses and boundary wall in sector M-1 and M1(A) the HSIIDC is directed to take up work immediately and complete the same with eighteen months from the date of this judgment. (vi) All unconstructed and unallotted portions as well as construction rights (such as FAR) in respect of unconstructed unallotted plots etc. including two school sites shall vest absolutely with HSIIDC. HSIIDC is entitled to develop these areas in accordance with its policies within the frame work of the applicable Master Plan development laws. DLF is entitled to collect amounts if any in terms of the main judgment of this Court. It shall hand over all records relating to the allottees and technical data pertaining to the entire project to HSIIDC within one month from the date of this judgment. i. With respect to Kalinga it is directed that (i) HSIIDC shall complete verification of all the relevant documents furnished by Kalinga. Any additional documents or invoices or relevant materials which Kalinga may wish to rely upon shall be furnished to HSIIDC within two weeks. Thereafter HSIIDC shall conduct verification and based upon that exercise and relevant inquiries (for which it may seek such assistance of Kalinga as is necessary) indicate the final valuation within six months from the date of this judgment. The amount in furtherance of that valuation shall be released within three months of completion of verification. (ii) HSIIDC shall complete the verification of documents in relation to all those who claim refund as allottees of Kalinga within six months. Such allottees or flat owners (who have not obtained possession) shall be disbursed the amounts they are entitled to within six months thereafter. (iii) In the event of any dispute with respect to the entitlement or amounts payable it is open to the concerned allottee or flat buyer to take recourse to appropriate proceedings in law i.e. by filing civil suit or complaints under the Consumer Protection Act 1986. It is clarified that no proceeding application or contempt petition in this regard will be entertained by this Court. j. With respect to ABW it is directed that HSIIDC to refund the amounts payable to the allottees of the entire project i.e. allottees of residential units/plots and commercial or shop space within the next twelve months from the date of this judgment failing which interest at the rate of 6% per annum shall be levied from date of default. The lands of ABW shall form part of the deemed award. k. With respect to Speed Town the contentions to exclude the land from the deemed award are rejected. It is held that Speed Town shall be entitled to the compensation to be decided in respect of the land on the same basis as in the case of all others entitled to it. l. With respect Paramveer the contentions to exclude the hotel block from the deemed award are rejected. All rights title and interest in those portions of Innovative s properties shall vest in HSIIDC and be part of the deemed award. Innovative shall be entitled to amounts like in the case of all other developers/owners in accordance with the main judgment. HSIIDC shall verify its claims. In the event of any dispute in this regard Innovative is at liberty to press its claim in substantiative legal proceedings and not their miscellaneous applications before this Court m. With respect to Legend Heights HSIIDC is directed to (i) Hand over commercial units to allottees who were either granted occupation and /or in whose favour conveyance was executed. As far as others are concerned HSIIDC to first verify the claims of all persons/entities who claim to have paid substantial amounts and have not been allotted their spaces and shall depending on the stage and nature of construction and the extent of amount paid (it is more than 75 per cent of the total consideration) hand over possession of the units after due completion. (ii) Duly verify and pay refunds sought by any allottee within six months of the date of this judgment failing which interest at the rate of 6% per annum shall be levied from date of default. (iii) In respect of all unallotted units and areas which can be constructed upon title shall vest exclusively with HSIIDC. n. With respect to Dharamveer and other petitioners as well as similarly placed individuals the rights and title in respect of lands under their occupation is vested with HSIIDC. It is up to the HSIIDC to frame such scheme as is permissible in accordance with its parent enactment and a non-discriminatory manner by a scheme in regard to such land (i.e. the 27 acres to which the petitioners and others like them may claim relief) as it may deem appropriate. In case the HSIIDC chooses to do so it shall be bound by all provisions of the Master Plan and Zoning and such other rules and regulations as are applicable in the area and shall strictly enforce them. o. The State is directed to ensure that all references pertaining to the acquisition are answered as expeditiously as possible. The concerned reference courts are hereby directed to conclude all the proceedings in 185 references received for 365 acres of land and pronounce the award in accordance with law within a period of one year from the date of this judgment. p. It is clarified that wherever the allottees have not paid the full amounts (payable in terms of the agreements) HSIIDC shall be entitled to the same rights in law as in the case of the original builder/developer which include but are not limited to insisting full payment before handing over possession to the allottees.

Summary

Issues Involved:
1. Applications filed by various companies and entities for clarifications on the main judgment.
2. Determination of whether collaboration or development agreements constitute 'transfer' under the main judgment.
3. Specific applications by M/s. Paradise Systems Pvt. Ltd., M/s. Karma Lakelands Pvt. Ltd., Frontier Home Developers Pvt. Ltd., M/s. R.P. Estates Pvt. Ltd., M/s. Subros Ltd., Express Greens/DLF Home Developer Ltd., M/s Kalinga Realtors Pvt. Ltd., ABW Infrastructure Ltd., Speed Town Planners Pvt. Ltd., Innovative Infradevelopers Pvt. Ltd., and individual landowners.
4. Directions for HSIIDC and State regarding the handling of deemed awards, compensation, and third-party interests.

Detailed Analysis:

I. Applications Filed by:
(a) M/s. Paradise Systems Pvt. Ltd. and Green Heights Projects Pvt. Ltd.
- Facts: Paradise entered into collaboration agreements with Sunshine Telecom Services Pvt. Ltd. and later with Green Heights Projects Pvt. Ltd., receiving substantial sums and transferring development rights.
- Arguments: Paradise and Green Heights argued that no 'transfer' occurred during the suspect period and that they retained ownership.
- HSIIDC's Stand: HSIIDC argued that effective control and possession were transferred to the developers, constituting a 'transfer' under the main judgment.
- Conclusion: The Court held that the collaboration agreements constituted a 'transfer' as they involved parting with substantial rights for valuable consideration.

(b) Karma Lakelands Pvt. Ltd. and Unitech Ltd.
- Facts: Karma entered into collaboration agreements with Unitech and applied for a development license after the declaration under Section 6.
- Arguments: Karma argued that their lands should not be included in the deemed award as they were bona fide owners who had purchased the lands long before the notification.
- HSIIDC's Stand: HSIIDC argued that Karma's actions, including applying for a license, indicated an intent to impede the acquisition process.
- Conclusion: The Court held that the collaboration agreements and the grant of the license constituted a 'transfer,' and the lands were included in the deemed award.

(c) Frontier Home Developers Pvt. Ltd., Balbir Singh, Ram Pyari, Earl Infotech Pvt. Ltd., and Godrej Properties Ltd.
- Facts: Frontier and other parties entered into collaboration agreements and transferred development rights to Godrej.
- Arguments: Godrej and others argued that no 'transfer' occurred as the original owners retained title and that the main judgment did not apply to their case.
- HSIIDC's Stand: HSIIDC argued that the collaboration agreements and subsequent transactions constituted a 'transfer' under the main judgment.
- Conclusion: The Court held that the collaboration agreements constituted a 'transfer,' and the lands were included in the deemed award.

Analysis and Conclusion of I (a), (b), and (c):
- Key Points: Collaboration agreements involved parting with possession and substantial rights for valuable consideration, constituting a 'transfer' under the main judgment.
- Final Directions: Green Heights and Godrej were directed to pay sums to HSIIDC, and upon payment, their lands would be excluded from the deemed award. Karma's lands were included in the deemed award, and compensation was to be determined.

II. Applications Filed by:
(a) M/s. R.P. Estates Pvt. Ltd. and M/s. Subros Ltd.
- Facts: Both entities owned lands included in the notification under Section 4 and declaration under Section 6 but did not enter into any transactions during the suspect period.
- Arguments: They argued that their lands should be excluded from the deemed award as they retained ownership and did not transfer any rights.
- HSIIDC's Stand: HSIIDC agreed that these lands were not transferred and should be excluded from the deemed award.
- Conclusion: The Court excluded the lands of R.P. Estates and Subros from the deemed award.

III. Express Greens / DLF Home Developer Ltd.
- Facts: DLF acquired development rights and licenses from ABW and developed the Express Greens project.
- Arguments: Home buyers and DLF sought exclusion of the project from the deemed award, arguing that DLF should complete the project and maintain high standards.
- HSIIDC's Stand: HSIIDC argued that the transactions were part of the fraudulent scheme and should be included in the deemed award.
- Conclusion: The Court rejected the exclusion request but directed HSIIDC to validate titles and complete pending work, ensuring the interests of home buyers.

IV. Applications Filed by:
(a) M/s Kalinga Realtors Pvt. Ltd.
- Facts: Kalinga purchased lands and development rights from ABW and claimed expenses for developing the Madelia project.
- Arguments: Kalinga sought proper calculation of amounts payable by HSIIDC and verification of its claims.
- HSIIDC's Stand: HSIIDC agreed to verify the claims but disputed the amounts.
- Conclusion: The Court directed HSIIDC to verify documents and determine the final valuation, with provisions for arbitration in case of disputes.

V. ABW Infrastructure Ltd.
- Facts: ABW purchased substantial lands and floated development schemes but did not undertake any development.
- Arguments: The Society representing allottees sought directions for HSIIDC to complete the project or refund amounts.
- HSIIDC's Stand: HSIIDC agreed to refund amounts to allottees as no development had taken place.
- Conclusion: The Court directed HSIIDC to refund amounts to allottees within twelve months, with interest for delays.

VI. Applications Filed by:
(a) Speed Town Planners Pvt. Ltd.
- Facts: Speed Town entered into collaboration agreements and an agreement to sell with Girnar, a subsidiary of Unitech.
- Arguments: Speed Town sought exclusion of the lands from the deemed award or refund of amounts paid.
- HSIIDC's Stand: HSIIDC argued that the transactions were part of the fraudulent scheme and should be included in the deemed award.
- Conclusion: The Court rejected the exclusion request but directed compensation determination for Speed Town.

VII. Applications Pertaining to Innovative Infradevelopers Pvt. Ltd.:
(a) Legend Height Owners Welfare Association
- Facts: Innovative developed the Legend Heights commercial tower and sold units to various buyers.
- Arguments: The Association sought recognition of their ownership and completion of pending work.
- HSIIDC's Stand: HSIIDC agreed to verify claims and complete pending work.
- Conclusion: The Court directed HSIIDC to hand over units to verified allottees and complete pending work, with provisions for refunds.

(b) Paramveer Distributors Pvt. Ltd.
- Facts: Paramveer entered into an agreement with Innovative for a hotel block but claimed no construction was done.
- Arguments: Paramveer sought recognition of their ownership or refund of amounts paid.
- HSIIDC's Stand: HSIIDC argued that no construction was done, and the lands should be included in the deemed award.
- Conclusion: The Court rejected the exclusion request and directed compensation determination for Paramveer.

VIII. Applications Filed by:
(a) Dharamvir & Ors.
- Facts: Individual landowners claimed to have purchased lands during the suspect period and sought exclusion from the deemed award.
- Arguments: They argued that they were bona fide purchasers and had built houses on the lands.
- HSIIDC's Stand: HSIIDC argued that the purchases were made during the suspect period and should be included in the deemed award.
- Conclusion: The Court upheld the inclusion of these lands in the deemed award but directed HSIIDC to frame a scheme for their regularization.

IX. Other Issues:
- Clarifications: The Court clarified that 'transfer' includes development agreements and licenses issued during the suspect period.
- Directions: The Court directed the State to expedite the resolution of pending references and ensure compliance with the main judgment.

Conclusion:
The Court provided detailed directions for each issue, balancing the interests of landowners, developers, and third-party buyers while ensuring compliance with the main judgment. The HSIIDC and State were directed to take specific actions to resolve pending issues and ensure fair compensation and regularization of affected lands.