Another blow to DLF as high court nixes Haryana’s 350-acre land allotment

The Punjab and Haryana High Court on Wednesday annulled the Haryana government's decision in 2010 to allot 350 acres of land in Wazirabad, Gurgaon to DLF, for developing a high-end residential complex with commercial and sports facilities and a golf course.

The high court has now ordered that the land be returned to the Haryana government, dealing a big blow to the country's largest real estate developer DLF and the Bhupinder Singh Hooda government in Haryana.

A division bench of the high court comprising Justice Surya Kant and Justice Amol Rattan Singh directed the Haryana government to allot the land through international bidding. However, the court has permitted DLF to participate in the fresh bidding.

This is the second blow to DLF in a week's time, after the Supreme Court on 27 August rejected its request to stay the order on the Rs630-crore penalty imposed by the Competition Commission of India (CCI) over unfair trade practices and directed the company to deposit the amount in the court registry within three months (See: SC directs DLF to pay up Rs630-cr CCI penalty in 3 months).

The high court order comes on a batch of petitions filed by farmers and the panchayat challenging the acquisition and transfer of the land to DLF. The villagers say they were told that the government was acquiring the land for a recreational park.

About 278 acres of the land belonged to the panchayat was later acquired by the state government through a notification in 2003. The plot includes another 76 acres the state government had earlier acquired from farmers for the Haryana Urban Development Authority (HUDA).

After the acquisition, the land was initially meant for industrial infrastructure and residential purposes and was jointly owned by HSIIDC (Haryana State Industrial and Infrastructure Development Corporations Ltd) and HUDA (Haryana Urban Development Authority).

DLF had, in August 2009, bagged the 350-acre land for Rs1,750 crore to develop a recreation and leisure project. DLF received the letter of acceptance from the Haryana State Industrial and Infrastructure Development Corporation Ltd (HSIIDC) after the company emerged as the successful bidder.

Meanwhile CNBC-TV18 reported quoting sources that DLF is paying the Rs1,750-crore in installments. The matter is also before the apex court on environment concerns.

The court had, in 2012, restrained DLF from carrying out any construction and from creating any third-party rights.

Six petitions were filed in the high court by land owners and panchayats challenging the acquisition and the government's decision to transfer the land to DLF. The petitioners say that the Forest Conservation Act makes the permission of the ministry of environment and forest mandatory for using the land for commercial purposes.

They say the government's decision of acquiring forest land measuring around 278 acres in 2003 for "public purpose" and later in 2010 handing it over to DLF for construction and sale of Golf Villas, which was a "private purpose" was done in collusion with DLF.

Also, around 76 acres earlier acquired for the Haryana Urban Development Authority (HUDA) were also transferred to DLF for the project.

The petitioners had sought quashing of the acquisition notification of August 2003 for a total of around 278 acres, which were purchased from the villagers for Rs55.66 crore but handed over to DLF in 2009 for Rs1,703 crore along with the other piece of already-acquired land.

DLF said it would challenge the high court's order, claiming that it won the land in an international competitive bid conducted twice by the government of Haryana in 2009-10.

DLF had emerged as the sole bidder for the 350-acre plot after the bids of other parties - Unitech and a Malaysia-based consortium comprising Country Heights, Country Club of South Africa and Rajarhat IT Park - could not qualify on technical grounds.

The only qualified bidder, DLF, had quoted its bid at Rs12,000 per sq mt against the reserve price of Rs11,978 per sq mt.

DLF said it is awaiting a copy of the court order and would respond after studying the order.

''The copy of the order is still awaited but we wish to clarify that it will have no bearing on any of our completed or ongoing projects. This land was to be developed in the future. After reading the order and taking legal advice, we will take appropriate steps.''

Reports quoting some brokers say DLF has already launched a project on the land and even made many bookings. It is one of the premium projects launched by the company around the Golf Course Road, the reports added.