HC quashes GMADA’s non-construction charge demand, calls it arbitrary, misapplied

The Punjab and Haryana High Court has quashed GMADA’s demand for non-construction charges, holding that the authority arbitrarily applied a three-year construction condition to a plot governed by a five-year timeline under the Land Pooling Scheme. The court ruled that the retrospective demand from the subsequent purchaser — who had acquired the plot from the original buyer with departmental permission — was legally unsustainable.

The Bench of Justice Sureshwar Thakur and Justice Vikas Suri observed the issue concerned a plot allotted under the Land Pooling Scheme, which required the initial allottee to raise construction within five years. The condition, however, was misapplied, suggesting that construction must be completed within three years of the initial allotment. This was incorrect both for the initial allottee and the current allottee — the petitioner.

Elaborating, the Bench observed the policy stipulated that the three-year period for construction was to be applied if the plot was transferred to a new owner. But the interpretation was irrational and created an unfair situation where the new allottee was left without shelter.

The initial allottee failed to build within five years. After the period expired on October 27, 2020, she was granted permission to transfer the plot to the petitioner — subsequent allottee. If the three-year construction period was still applied to the petitioner, it would render the deed of conveyance meaningless and frustrate the department’s permission to transfer the plot. As such, applying the three-year period to the petitioner would undermine her rights and the purpose of the property transfer, and it would lead to significant harm to the ability to use the property as intended.

The Bench added the demand, under the circumstances, was arbitrary and contrary to the policy dated September 9, 2008, which allowed five years for construction. Applying a three-year period to the plot transferred with GMADA’s consent would erode the petitioner’s rights and defeat the policy’s intent.

It held that once GMADA permitted the original allottee to transfer the plot after accepting non-construction charges for six months, the subsequent purchaser was entitled to the benefit of that approval and payments. The court further noted that the petitioner had commenced construction and claimed 25 per cent completion, which, under the policy, exempted her from further non-construction charges.

The Bench also found that GMADA rejected the petitioner’s representations without addressing the key issues. The court ruled that the department’s failure to act within the stipulated five-year period and its subsequent approval of the sale “estopped” it from raising demands at a later stage. “Applying the three-year rule in these circumstances is both inequitable and misplaced,” the Bench asserted. Allowing the writ petition, the high court set aside the demand raised against the petitioner.

Punjab