Land pooling: HC quashes preferred location charges

The Punjab and Haryana High Court has held that the Greater Mohali Area Development Authority (GMADA) cannot impose preferred location charges (PLC) on transferees of land allotted under the 2013 land pooling policy.

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Allowing a bunch of 118 petitions filed by transferees from the original allottees, the Bench of Justice Sureshwar Thakur and Justice Vikas Suri ruled: “A perusal of the land pooling policy issued by the Government of Punjab vide notification dated June 19, 2013, and the brochure of the allotment scheme floated for Sectors 88-89, SAS Nagar (Mohali), by the State of Punjab and other respondents, makes it is clear that there is no such condition of charging any extra amount on account of preferred location charges.”

The Bench added the respondents and allottees were bound by the terms and conditions of the land pooling policy and the allotment scheme brochure, which formed the foundation for the letters of intent issued to the original allottees, making these contractual obligations inviolable.

Rejecting GMADA’s contention that a distinction existed between original allottees and subsequent transferees, the court ruled that both stood on “co-equal footing”. It held that imposing PLC selectively upon transferees amounted to an arbitrary and unjust alteration of the contract, violating fundamental principles of contract law.

“Both the original allottees and their transferees do stand on a co-equal footing and there cannot be any distinction between the original allottees and their transferees nor there appears to be any well-founded intelligible differentia having a nexus with the objective sought to be achieved,” the Bench added.

The court reaffirmed that the contractual covenants governing the allotment of land under the policy were inviolable and could not be unilaterally altered. The original allottees acquired complete rights, title, and interest in the allotted plots through binding contracts with GMADA, as reflected in the letters of intent. These contractual conditions retained their force even when the plots were subsequently transferred, making any unilateral modification or “novation” by the authorities impermissible. Any interference with these vested rights would amount to an untenable and arbitrary alteration of the contractual framework, the court added.

The Bench allowed the writ petitions, quashing the PLC charges imposed by GMADA, while directing it to refund any such charges deposited by the petitioners within two months, along with simple interest at 6 per cent per annum from the date of deposit.

The court also ordered the authority to deliver encumbrance-free possession of the plots to the petitioners within two weeks and execute the conveyance deeds within a fortnight.