Himachal Pradesh High Court
Reserved On: 12.03.2025 vs State Of H.P. And Another on 8 April, 2025
2025:HHC:9583
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CMPMO No. 436 of 2024
Reserved on: 12.03.2025
Decided on: 08.04.2025
————————————————————————————-
M/s Hemkunt Iron & Steel Pvt. Ltd.
……Petitioner
Versus
State of H.P. and another …….Respondents
————————————————————————————-
Coram
The Hon’ble Mr. Justice Satyen Vaidya, Judge
Whether approved for reporting?1 Yes
For the Petitioner : Mr. Shrawan Dogra, Senior Advocate,
with Mr. Manik Sethi, Advocate.
For the Respondent : Mr. Anup Rattan, Advocate General, with
Mr. Hemand Kumar Verma, Deputy
Advocate General and Mr. Shalav
Thakur, Asstt. Advocate General.
————————————————————————————
Satyen Vaidya, Judge
Aggrieved against the order/communication dated
18.07.2024 (Annexure P-5) issued by respondent No.2,
petitioner has invoked the jurisdiction of this Court under
Article 227 of the Constitution of India for following relief:
“A. A direction be issued under the Supervisory
jurisdiction to annul the order-cum-communication dated
18.07.2024 (Annexure P-5) passed by respondent No.2
as being patently perverse based on illegal
consideration and to direct the respondents to decide the
application of the petitioner for the grant of the Section1 Whether reporters of print and electronic media may be allowed to see the order?
2 2025:HHC:9583
118 Permission strictly in terms of law within stipulated
time without considering the objections as mentioned in
the order-cum-communication dated 18.07.2024
(Annexure P-5).”
2. The case as set-up by the petitioner is that it had
purchased a piece of land measuring 9-07 Bighas after
obtaining permission dated 6.5.1981 from the State
Government under Section 118 of the H.P. Tenancy and Land
Reforms Act, 1972 (for short, “The Act“) for establishment of
an industrial unit. The petitioner started its industrial
production on 10.03.1984. The unit of the petitioner was
registered with the Department of Industries on 01.02.2014.
On 24.04.2023, the petitioner has entered into an agreement
to sell with M/s M.T. Autocraft Private Limited whereby the
land purchased by the petitioner has been agreed to be
further sold to M/s M.T. Autocraft Pvt. Ltd.
3. As the petitioner is obligated to seek prior
permission of the State Government to sell the land as per the
provisions of the Act, petitioner initiated the process for the
same and finally the Deputy Commissioner, Solan
recommended the case of the petitioner to the State
Government on 20.02.2024 in terms of Rule 38A (2) (a) of the
3 2025:HHC:9583
H.P. Tenancy and Land Reforms Rules, 1975 (for short, “The
Rules”).
4. The State Government is the competent authority
to take final decision on the application of the petitioner.
When the decision making was delayed by the competent
authority, the petitioner approached this Court by way of
CMPMO No.375 of 2024. The said petition was disposed of by
a co-ordinate Bench of this Court vide order dated
28.06.2024 in following terms:
“11. Accordingly, I deem it appropriate to dispose
of this petition by directing the competent authority
to decide the application submitted by the petitioner
after taking into consideration the recommendations
made by the Deputy Commissioner, Solan on or
before 12th July, 2024.”
5. Thereafter, the impugned order/communication
was issued whereby the application of the petitioner has been
rejected.
6. I have heard learned counsel for the parties and
have also gone through the records of the case carefully.
7. The grounds for rejection of the application of the
petitioner have been mentioned in the order/ communication
dated 18.07.2024 as under:
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“(a) M/s Hemkunt Iron & Steel Pvt. Ltd. purchased land
to set up an industry after taking permission under
Section 118 of the H.P. Tenancy and Land Reforms Act,
1972 in the years 1981. The land should have been put
to use within two years, however, the certificate issued
by the Deputy Director Industries, dated 02.12.2023
mentions that the industry “started production in 1984
as acknowledged by this office on 01.02.2014”.
Therefore, it appears that production was actually
delayed beyond the permissible limited. This is in
violation of the act and the very purpose of permission
under Section 118 seems to have violated.
(b) Further it is cleared from the record that the
construction of the shed was taken up in the year 2005
which was on 105 square meter area out of total
7037.08 Sq. meters, total plot area. This also points out
that the constructed area was only a small shed on
more than 09-07 bigha land. This also shows that seller
has actually violated the provisions of the act and has
deliberately not produced entire record to show the
exact position of the site. This can be verified from the
valuation report submitted with the case.
Therefore, this is a case of violation of Section 118 of the
Act and the Industry named M/s Hemkunt Iron & Steel
Pvt. Ltd. is trying to sell this land in violation of the Act.
Thus, the case is rejected.”
8. The aforesaid order/communication has been
addressed by the Additional Chief Secretary (Revenue),
Government of Himachal Pradesh to the Deputy
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Commissioner, Solan with copies to the petitioner and M/s
Autocraft Pvt. Ltd. with direction as under:
“You are, therefore, requested to enquire the case
under Section 118 of H.P. Tenancy and Land Reforms
Act, 1972 and if violation is found suitable action
should be taken as per law.”
9. Learned Advocate General, at the time of hearing of
the matter, raised an objection as to maintainability of the
petition under Article 227 of the Constitution of India on the
ground that such jurisdiction is available with this Court only
with respect to the order or decision or conduct of judicial or
quasi-judicial authority which may be termed as Court or
Tribunal. According to learned Advocate General, the order
assailed in the present petition is neither judicial nor quasi-
judicial order, rather the State Government while exercising
the powers under the Act and the Rules has performed purely
an administrative function.
10. On the other hand, Sh. Shrawan Dogra, learned
Senior Advocate representing the petitioner has opposed the
contention raised by learned Advocate General. He submitted
that the function performed by the State Government in
exercise of powers under Section 118 (2) (h) read with Rule
38-A(2) of the Rules, is quasi-judicial in nature as it affects
6 2025:HHC:9583
the substantive rights of a party. Mr. Dogra would submit
that the power vested in the State Government, under the Act
and the Rules, is to take decision either to accept or reject the
application after considering the material submitted to it by
the District Collector. Keeping in view the inherent
mechanism provided under the Act and the Rules, the
decision either to accept or reject the application has to be
backed by the reasons based on objective considerations and
not on the ipse-dixit of the authority. In this manner, it is
tried to be suggested that the Act and Rules require the
authority to act judicially while deciding the application for
permission to transfer the land otherwise barred by the
provisions of Section 118 of the Act. Learned Senior Counsel
also pointed out that the power of review available with the
State Government on the application of the applicant, whose
application has been rejected, clearly points out the existence
of mandate to decide the matter judicially.
11. In order to assess the rival contentions of the
parties, it will be useful to notice the relevant provisions of
the Act and Rules as under:
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(a) Sub Section 1 of Section 118 of the Act prohibits
the transfer of land in favour of a person who is
not Agriculturist;
(b) Clause (h) of Sub Section 2 of Section 118 reads as
under:
“Nothing in sub section (1) shall be deemed
to prohibit the transfer of land by any person
in favour of a non-agriculturist with the
permission of the State Government for the
purpose that may be prescribed;
(c) The second proviso to clause (h) of Sub Section 2 of
Section 118 reads as under:
“Provided further that a non-agriculturist
who purchases land under clause (dd) or in whose
case permission to purchase land is granted under
clause (h) of this sub section shall put the said
land to such use for which the permission has
been granted within a period of two years or a
further such period not exceeding one year, as
may be allowed by the State Government for
reasons to be recorded in writing, to be counted
from the day on which the sale deed of land is
registered and if he fails to do so or diverts,
without the permission of the State Government,
the said use for any other purpose or transfer by
way of sale, gift or otherwise, the land so
purchased by him, in the prescribed manner, vest
in the State Government free from all
encumbrances”
12. Rule 38-A of the Rules reads as under:
38-A Purpose for which land is transferrable under
section 118(2)(h)(1) Where a non-agriculturist intends to acquire land in
his name by way of sale, gift, will, exchange, lease or
mortgage with possession, he shall apply for
permission under clause (h) of sub-section (2) of
8 2025:HHC:9583section 118 of the Act, in Form LR-XIV duly supported
with the documents specified, to the Collector in whose
jurisdiction the land is situated.
(2) (a) On receipt of the application, complete in all
respects under sub-rule (1), the Collector shall, after
calling for the information from the revenue staff in
form LRXV and holding such enquiry as he may deem
fit, verify the title of the land in question and if he is of
the opinion that the application should be accepted, he
shall recommend application within a period of 30 days
from the date of its receipt by him to the State
Government for its consideration: Provided that if there
is any objection or shortcoming in the application Form
LRXIV, the Collector shall convey all such objection(s)
or shortcoming(s) at one time only to avoid un-
necessary delay: Provided further that in case of
transfer of land to Industrial/Tourism units or Hydro
electric projects, the documents shown in items II, VI
and VII of Part II of Form LRXIV and spot inspection
report of the revenue officers/officials in Form LRXV
shall not be required”
(b) On receipt of the recommendations made by the
Collector under clause (a) of this sub-rule, the State
Government shall consider the application and allow or
[reject the application within 30 days:]
Provided that in case of Industrial/Tourism units
or Hydro electric projects, the permission so granted
shall be subject to the fulfilment of other statutory
requirements if any;]
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(c) The applicant shall be informed of every order
passed by the State Government under clause (b) of
this sub-rule; and
(d) Any applicant, whose application has been rejected,
may, within 60 days of the date of order of rejection,
apply to the State Government to review the order and
the Government may, after making such further
inquiry as it may think fit, pass such order as it
considers necessary:
Provided that the State Government may
entertain the review application after the expiry of the
said period of 60 days, if it is satisfied that the
applicant was prevented by sufficient cause from filing
the review application in time.
(3) The permission under sub-rule 2 may be granted
for any of the following purposes and subject to the
following scales:-
Purpose Area Conditions Eligibility of Other
on transfer transferee(s) conditions
(e) For Such area as Shall not That the As per
industrial/ may be become person is proforma
religious/ certified by landless/ qualified to for
tourism/ the houseless undertake Essentialit
apartment Department such activity y
/ hydel concerned to be Certificate
project/BT certified by and
/IT project concerned Check list
department separately
as per notified
criteria laid
down by the
department
10 2025:HHC:9583
13. By referring to the binding precedents from
Province of Bombay vs Kusaldas S Advani [1950 SCC 551 :
(1950) SCR 621], Radheshyam Khare Vs State of Madhya
Pradesh 1958 SCC Online SC 43, Harinagar Sugar Mills
Ltd. vs. Shyam Sunder Jhunjhunwala & others reported
in AIR 1961 SC 1669 and Associated Cement Companies
Ltd. Vs P.N. Sharma and others AIR 1965 SC 1595 it can
be said that the following broad parameters are required to
declare an authority to have been vested with quasi-judicial
functions:
(a) A statutory authority has power to do any act
which will prejudicially affect the subject.
(b) The adjudication is on contest for an issue
between the two or more parties.
(c) Even if there are no two or more parties, the
contest is between the authority proposing to do
the act and the subject opposing it.
(d) The authority should be vested under the statute
expressly or impliedly, a duty to act judicially.
14. Further it has been held that if the Government
embarks upon curial functions and proceeds to exercise
judicial powers and decide disputes, in such circumstances,
it is legitimate to refer the authority who deals with the
matter as a “Tribunal”.
11 2025:HHC:9583
15. Thus, it becomes clear that the basic test to qualify
as “Tribunal” is that it should be a body vested with judicial
powers of the State. It has also been categorically held that
the word Tribunal mentioned in Article 227 of the
Constitution has the same meaning as in Article 136.
16. Coming to the facts of the case, it is not in dispute
that petitioner was non agriculturist and was granted
permission by the State Government to purchase land for
industrial purpose in the year 1981. Now in 2024 the
petitioner intends to transfer by way of sale the same land in
favour of another entity which also is not the agriculturist.
The petitioner is under prohibition to do it in terms of second
proviso to section 118(2)(h) of the Act, without permission
from the State Government.
17. Petitioner followed the procedure provided in Rule
38-A supra and the Collector recommended its case to the
State Government.
18. In the instant case the State Government has
rejected the case of petitioner. The decision of the State
Government would definitely prejudice the rights of subject
i.e. the petitioner herein as the petitioner’s investments
(tangible and intangible) are at stake. The mere fact that there
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is no adjudication between two or more rival contestants shall
also not be an impediment in light of what has been held in
Kusaldas S Advani (supra).
19. Thus, the question is as to whether the State
Government while taking decision in exercise of jurisdiction
under section 118(2)(h) of the Act and Rule 38-A of the Rules
discharges purely an administrative function or the Act and
Rules require the State Government to act judicially?
20. The Constitutional Bench of Hon’ble Supreme
Court in Board of High School and Intermediate Education
U.P. Allahabad Vs Ghanshyan Dass Gupta and others AIR
1962 SC 1110 by making reference to principles laid down in
Kusaldas S Advani supra observed as under:
“8. These principles have been acted upon by this Court
in later cases : see Nagendra Nath Bora v. Commissioner
of Hills Division Appeals, Assam [(1958) SCR 1240]
, Radheshyam Khare v. State of Madhya Pradesh [(1959)
SCR 1440] , Gullapalli Nageswara Rao v. Andhra Pradesh
State Road Transport Corporation [1959 Supp (1) SCR
319] , and Shivji Nathubha v. Union of India [(1960) 2 SCR
775] . Now it may be mentioned that the statute is not
likely to provide in so many words that the authority
passing the order is required to act judicially; that can
only be inferred from the express provisions of the statute
in the first instance in each case and no one circumstance
alone will be determinative of the question whether the
authority set up by the statute has the duty to act
judicially or not. The inference whether the authority
acting under a statute where it is silent has the duty to
act judicially will depend on the express provisions of the
statute read along with the nature of the right affected,
the manner of the disposal provided, the objective criterion
13 2025:HHC:9583if any to be adopted, the effect of the decision on the
person affected and other indicia afforded by the statute.
A duty to act judicially may arise in widely different
circumstances which it will be impossible and indeed
inadvisable to attempt to define exhaustively: (vide
observations of Parker, J., in R. v. Manchester Legal Aid
Committee [1952 2 QB 418].”
21. The State Government as per Rule 38-A (2)(b) is
under mandate to consider the application as the term used
is “shall consider” and thereafter has the power to either allow
or reject the application. The term “consider” needs to looked
in the perspective it has been used. Rule 38-A (3) provides for
purpose and scale with respect to permissible acquisitions.
The particulars departments are required to fulfil preparatory
requirements by issuance of essentiality certificate etc. On
receipt of the application, complete in all respect under sub-
rule 1, the Collector has been vested with power to examine
the same and if he is of the opinion that the application
should be accepted, he shall recommend the same to the
state Government for consideration.
22. It will also be necessary to notice certain
clarifications issued by the State Government on the subject
as under:
No.Rev. B.A.(3)-5/2000-I
Government of Himachal Pradesh
Department of Revenue
14 2025:HHC:9583From:
The Principal Secretary (Revenue) to the
Government of Himachal Pradesh.
To
All the Deputy Commissioners
in Himachal Pradesh.
Dated: Shimla-2, the 22nd September, 2011.
Subject:- Regarding permission to get the land
transferred by non-agriculturists under
Section 118 of the H.P. Tenancy and Land
Reforms Act, 1972.
Madam/Sir,
In continuation of this Department notification
of even number dated 29th July, 2011, I am directed to say
that it has been experienced that under the provisions of
Section 118 of the H.P. Tenancy and Land Reforms Act,
1972 following types of application are generally made by
non-agriculturists:-
7. Application to purchase land for purposes specified
in Rules.
8. Permission to sell land/structure by the non-
agriculturists acquired with permission u/s 118.
9. Permission by non-agriculturists to purchase
land/structure from non-agriculturists selling as in
2 above.
10. Permission to change purpose for which land was
purchased with prior permission of the State
Government.
11. Permission for extension of period to utilize land
purchased with permission of the State Government.
12. Permission for extension of period for registration of
sale deed.
While processing the cases under aforesaid situations
following guidelines may be adhered to:-
1. Application to purchase land for purposes
specified in Rules.
These application may be processed in accordance
with the Rule 38-A of the H.P. Tenancy and Land
Reforms Rules, 1975 as amended in year, 2011 and
further instructions issued vide letter No. Rev.B.A.(3)-
5/2000-I, dated 5th September, 2011.
15 2025:HHC:9583
2.Permission to sell land/structure by non-
agriculturists.
(i) In case of application received within a period of 2
years or 3 years (if extension has been granted),
the application should have attached a copy of
permission letter vide which permission to
purchase was granted and copy of extension letter,
if an extension was required and was granted.
(ii) In case of application received after a period of 2
years or 3 years (if extension has been granted) the
application should have attached a Utilization
Certificate issued by the concerned department
where Essentiality Certificate was required for the
initial permission under Rule 38-A and in other
cases by the local body concerned or by concerned
Naib/Tehsildar/ Tehsildar/SDM/ADM/ ADC/DC.
3. Permission to purchase land/structure from non-
agriculturist.
In case the proposed purchaser is a non-
agriculturist, he has to apply for permission to
purchase as per provisions of Rules on form LR-XIV
provided that in cases, where the land is proposed
to be utilized for the same purpose for which earlier
permission was granted, the recommendations of
the department concerned will be sufficient in place
of an essentiality certificate. However, in case the
purpose for which acquisition is being made in
different from that for which permission was
originally granted then Essentiality Certificate from
the concerned Department will be required if the
Rules specify an EC for the changed purpose.
4. Permission to change land use of land purchased
with prior permission of the State Government.
(i) In case of an application made within a period of 2
years or 3 years (if extension has been granted), it
should have attached:-
(a) Copy of permission letter vide which permission
to purchase was received,
(b) Copy of extension letter, if relevant, and
(c) Essentiality certificate from the relevant
department wherever the new purpose requires
such an essentiality certificate under the Rules.
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In case of other purposes, no other document is
required.
(ii) In case of an application made after a period of
2 years or 3 years (if extension has been
granted) it should have attached:
(i) Utilization Certificate issued by the concerned
department where the original purpose required
an Essentiality Certificate and in case of other
purposes by local body concerned or by the
concerned NT/Tehsildar/SDM/ADM/ADC/DC.
ii) Essentiality Certificate in case the Rules specify
this requirement for the changed purpose. In
other cases, no other documents are required.
5. Permission for extension of period for
registration of sale deed.
The application should have attached a copy of
permission letter granted by the Government.
6. Permission for extension of period to utilize land
purchased with permission of the State
Government.
The application should have attached a copy of
land transfer deed.
You are, therefore, requested to kindly follow
procedure outlined above and ensure that only the
documents listed in each situation outlined above are
sought for processing the matter for permission of the State
Government.
Yours faithfully,
Sd/-
Deputy Secretary (Revenue) to the
Government of Himachal Pradesh.
No.Rev.B.A.(3)-5/2000-II-Loose
Government of Himachal Pradesh
Department of Revenue
From
The Principal Secretary (Revenue) to the
Government of Himachal Pradesh.
To
1. All the Principal Secretaries, to the Govt. of H.P.
2. All the Head of Departments in Himachal
Pradesh.
3. All the Deputy Commissioners in Himachal
Pradesh.
Dated:Shimla-2, the 28th May, 2012.
17 2025:HHC:9583
Subject:- Regarding permission to get the land transferred
by non-agriculturists under Section 118 of the
H.P. Tenancy and Land Reforms Act.
Madam/Sir,
In continuation of this Department letter No.
Rev.B.A.(3)-5/2000-I, dated 22nd September, 2011 (copy
enclosed) on the subject cited above, I am directed to say
the essentiality certificates of the department concerned are
being obtained under the provisions of Rule 38-A of the H.P.
Tenancy and Land Reforms Rules, 1975 for the purpose of
acquisition of land by non-agriculturists in the State of H.P.
for different purposes. Such Essentiality Certificate is
obtained basically to know the exact requirement of area,
suitability of land and eligibility of non-agriculturist, to
undertake the proposed activity.
There are instances where land has already
been put to a particular use either by a non-agriculturist
after obtaining approval under section 118 or by an
agriculturist after securing such approvals as may have
been required and the said property is to be further sold to
a non-agriculturist. Existing instructions would appear to
make it necessary for the relevant department to issue an
Essentiality Certificate in the form given with Rule 38A. It is
clarified that in such cases the requirement of essentiality
certificate will be met if the Department concerned issues a
NOC together with a recommendation that the transferee is
eligible to carry out the relevant activity.
Yours faithfully,
Sd/-
Deputy Secretary (Revenue) to the
Government of Himachal Pradesh.
No.Rev.B.F.(10)-7/2008-II
Government of Himachal Pradesh
Department of Revenue
From
The Principal Secretary (Revenue) to the
Government of Himachal Pradesh.
To
All the Deputy Commissioners
in Himachal Pradesh.
Dated:Shimla-2, the 15th March, 2012.
Subject:- Instructions regarding utilization or change of
land use of land purchased with prior permission
18 2025:HHC:9583
of the State Government under the provisions of
Section 118 of the H.P. Tenancy and Land
Reforms Act, 1972.
Sir,
I am directed to say that transfer of land to non-
agriculturist is barred under section 118 of the H.P.
Tenancy and Land Reforms Act, 1972 except with the
permission of the State Government which is provided for
under clause (h) of sub-section under section 118 of the
H.P. Tenancy and Land Reforms Act, 1972 except with the
permission of the State Government which is provided for
under clause (h) of sub-section (2) of the said section.
Further, land purchased with prior permission of the State
Government, has to be “used for the purpose for which the
permission has been granted within two years” which is
extendable by a period “not exceeding one year” (to be
counted from the date of registration of the deed).
After having acquired the land, the non-
agriculturist normally uses the land for the purpose for
which the permission has been granted. However, in certain
cases the non-agriculturist seeks permission to sell the land
or change the purpose for which land is to be used. While
the procedure for such applications has been given vide
letter No. Rev.B.A.(3)-5/2000-I, dated 22nd September,
2011, there has been some lack of clarity on the cases
which will be entertained. In order to clarify matters the
following decision has been taken:-
1. Permission shall ordinarily be granted-
(i) Where the non-agriculturist seeks permission to
sell the land or change the purpose for which it
is to be used within the period prescribed for its
use.
(ii) Where the land has been used for the purpose
for which it had been purchased.
(iii) Where the land is put even to partial use e.g.
structures etc. have been raised partially or fully
but it has not been fully used for the purpose for
which it was allowed to be purchased.
2. Where the land was not used at all within the
prescribed period in case this situation has arisen despite
bonafide efforts of the person to whom permission has been
granted, the time period that has elapsed in obtaining
statutory approvals that are essential for putting the land to
use for the stated purpose, shall be excluded for calculating
the time period stipulated. For this purpose, the concerned
department responsible for issuing the essentiality
certificate shall ascertain the factual position and pass a
19 2025:HHC:9583
speaking order and thereafter forward the proposal to this
Department through, the Deputy Commissioner concerned.
In cases of residential purpose or shop the Deputy
Commissioner, concerned shall ascertain such position and
forward the cases to Government with his clear cut
recommendations.
Yours faithfully,
Sd/-
Principal Secretary (Revenue) to the
Government of Himachal Pradesh.
Endst. No. As above. Dated: Shimla-2, the 15th March, 2012.
Copy forwarded for information and further necessary
action to:-
1. All the Principal Secretaries to the Government of
H.P.
2. All the Head of Departments, in H.P.
Sd/-
Deputy Secretary (Revenue) to the
Government of Himachal Pradesh.
23. Thus the departments required to make
preparatory assessments have been provided with criteria and
parameters according to which they have to submit their
reports to the Collector. Once the Collector is in receipt of
such reports he has to take decision as to whether the
application deserves approval or otherwise. The decision of
the Collector has to be based on objective considerations
derivable from the material before him. If the collector is
satisfied that the application should be accepted, he
recommends the same to the State Government for its
consideration.
20 2025:HHC:9583
24. In such circumstances it will be farcical to assume
that the power vested by the Act and the Rules in State
Government to take decision after consideration would mean
only a bare formality. There has to be application of mind as
to objective considerations, if any, taken into view firstly by
the preparatory authority(ies) and thereafter by the Collector.
For such an exercise a critical evaluation of the material
placed before State Government would be necessary. The
decision of the State Government to accept or reject the
application has to be supported by reasons and such reasons
have to be decipherable as per material considered by the
State Government. Thus, it cannot be said that the Act or
Rules do not impliedly require the State Government to act
judicially while exercising powers under Section 118(2)(h)
read with Rule 38-A of the Rules. The request made by a
person for diverting the use of land by sale, gift, mortgage etc.
cannot be brushed aside on mere ipse dixit of the authority.
25. Further, Rule 38A (2) provides a right to the party
against whom the decision is taken by the State Government
to file a review petition and in such event, the State
Government is empowered to pass such order as it considers
necessary after making such further inquiry as it may think
21 2025:HHC:9583
fit. The expression “further inquiry means, that even while
exercising the original jurisdiction to accept or refuse the
prayer for transfer of land, some inquiry is required to be
made.
26. In Purtabpore Co. Ltd. v. Cane Commr. of Bihar,
(1969) 1 SCC 308, Hon’ble Supreme Court observed as
under:
14. This takes us to the question whether the proceeding
which resulted in making the impugned orders is a quasi-
judicial proceeding or an administrative proceeding. There
was some controversy before us whether a proceeding under
clause 6(1) of the “order” is a quasi-judicial proceeding. It is
not necessary for us to decide that question as in this case
we are only concerned with the proceeding which resulted in
making the impugned orders. In that proceeding the only
question before the authorities was whether all or some of
the villages reserved for the appellant should be taken out
from the reserved area and reserved for the 5th respondent.
The plea of the 5th respondent was that all those villages
should be reserved for it, whereas the appellant insisted that
the reservation made in its favour should not be disturbed.
Whether there was a lis between the appellant and the 5th
respondent at an earlier stage or not, we are of the opinion,
as soon as the 5th respondent moved the Government for
altering or modifying the reservation made in favour of the
appellant, a lis commenced. The dispute that arose between
the appellant and the 5th respondent had to be decided on
the basis of the objective criteria, prescribed by clause 6 of
the “order” i.e. (1) the crushing capacity of the appellant mill;
(2) the availability of the sugarcane in the reserved area and
(3) the need for the production of sugar.
27. Thus by analogy, the inference would be that once
the party against whom the State Government has passed
order in exercise of powers under Section 118(2)(h) read with
Rule 38-A of the Rules, avails the remedy of Review a lis
22 2025:HHC:9583
comes into being and the State Government is required to
decide the same judicially by acting as a quasi-judicial
authority and for that matter as a Tribunal having trappings
of the Court. Viewed from this angle also it is hard to
comprehend that if the State Government would, at such
stage of hearing Review, would be a Tribunal, why it should
not partake the same role and responsibility while exercising
the original jurisdiction to decide on the recommendation
made by the Collector.
28. Further, the impugned order reveals a clear
prejudice to the petitioner herein as not only his application
has been rejected but the State Government has referred the
matter to Deputy Commissioner, Solan to hold inquiry and to
take action, if violation is found. Such a direction is in fact a
mandate to the Deputy Commissioner as the State
Government has clearly held in the impugned order as under:
“Therefore, this is a case of violation of section 118
of the Act and the Industry named M/s Hemkunt
Iron & Steel Pvt. Ltd. is trying to sell this land in
violation of the act. Thus, the case is rejected.”
29. Thus, I am of the considered view that the Act and
Rules require the State Government to act quasi-judicially
23 2025:HHC:9583
while exercising jurisdiction under Section 118(2)(h) read with
Rule 38-A of the Rules and hence for such purpose the State
Government shall be the Tribunal and its decision shall be
amenable to the supervisory jurisdiction of this Court under
Article 226 of the Constitution of India.
30. Noticeably, the State Government has passed the
order impugned herein after the directions were issued by a
co-ordinate bench of this Court on 28.6.2024 in CMPMO
No.375 of 2024. The said petition had also been filed under
Article 227 of the Constitution of India. In the said petition no
objection, as to maintainability, was raised by the State and
finally in compliance to the orders of this Court, the State
acted and passed the impugned order.
31. Having held the existence of jurisdiction to decide
the instant matter, now I proceed to examine the merits of
contentions, raised on behalf of petitioner, as to the legality or
otherwise of the impugned order.
32. The impugned order reflects two reasons for
rejecting the prayer of the petitioner. First is that the
petitioner had not put the land to use within two years and
second is that a shed on an area of 105 square meter was
24 2025:HHC:9583
constructed, whereas the total area of 7037.08 was sq.
meters.
33. In S.R. Venkataraman v. Union of India, (1979)
2 SCC 491, Hon’ble Supreme Court has held as under:
“6. It is however not necessary to examine the question of
malice in law in this case, for it is trite law that if a
discretionary power has been exercised for an
unauthorised purpose, it is generally immaterial whether
its repository was acting in good faith or in bad faith. As
was stated by Lord Goddard. C.J. in Pilling v. Abergele
Urban District Council [(1950) 1 KB 636 : (1950) 1 All ER
76] where a duty to determine a question is conferred on
an authority which state their reasons for the decision,
and the reasons which they state show that they have taken
into account matters which they ought not to have taken
into account, or that they have failed to take matters into
account which they ought to have taken into account, the
court to which an appeal lies can and ought to adjudicate
on the matter.
7. The principle which is applicable in such cases has thus
been stated by Lord Esher, M.R. in Queen on the Prosecution of
Richard Westbrook v. The Vestry of St. Pancras [(1890) 24 Q BD
371, 375 : 62 LT 440] :
“If people who have to exercise a public duty by
exercising their discretion take into account matters which
the Courts consider not to be proper for the guidance of
their discretion, then in the eye of the law they have not
exercised their discretion.”
This view has been followed in Sadler v. Sheffield
Corporation [(1924) 1 Ch 483] .
8. We are in agreement with this view. It is equally true that
there will be an error of fact when a public body is prompted
by a mistaken belief in the existence of a non-existing fact or
circumstance. This is so clearly unreasonable that what is
done under such a mistaken belief might almost be said to
25 2025:HHC:9583
have been done in bad faith; and in actual experience, and as
things go these may well be said to run into one another.
34. In Shalini Shyam Shetty v. Rajendra Shankar
Patil, (2010) 8 SCC 329, Hon’ble Supreme Court has held as
under:
“43 [Ed.: Para 43 corrected vide Official Corrigendum No.
F.3/Ed.B.J./84/2010 dated 26-8-2010.] In a rather recent
decision of the Supreme Court in Surya Dev Rai v. Ram Chander
Rai [(2003) 6 SCC 675], a two-Judge Bench of this Court
discussed the principles of interference by the High Court under
Article 227. Of course in Surya Dev Rai [(2003) 6 SCC 675] this
Court held that a writ of certiorari is maintainable against the
order of a civil court, subordinate to the High Court (SCC p. 688,
para 19 of the Report). The correctness of that ratio was doubted
by another Division Bench of this Court in Radhey
Shyam v. Chhabi Nath [(2009) 5 SCC 616] and a request to the
Hon’ble Chief Justice for a reference to a larger Bench is
pending. But insofar as the formulation of the principles on the
scope of interference by the High Court under Article 227 is
concerned, there is no divergence of views.”
44. In para 38 sub-para (4) at SCC p. 695 of the Report, the
following principles have been laid down in Surya Dev
Rai [(2003) 6 SCC 675] and they are set out:
“38.(4) Supervisory jurisdiction under Article 227 of the
Constitution is exercised for keeping the subordinate courts
within the bounds of their jurisdiction. When a subordinate
court has assumed a jurisdiction which it does not have or
has failed to exercise a jurisdiction which it does have or the
jurisdiction though available is being exercised by the court
in a manner not permitted by law and failure of justice or
grave injustice has occasioned thereby, the High Court may
step in to exercise its supervisory jurisdiction.”
45. Sub-paras (5), (7) and (8) of para 38 are also on the same
lines and extracted below: (Surya Dev Rai case [(2003) 6 SCC
675] , SCC pp. 695-96)
26 2025:HHC:9583
“38.(5) Be it a writ of certiorari or the exercise of
supervisory jurisdiction, none is available to correct mere
errors of fact or of law unless the following requirements are
satisfied: (i) the error is manifest and apparent on the face of
the proceedings such as when it is based on clear ignorance
or utter disregard of the provisions of law, and (ii) a grave
injustice or gross failure of justice has occasioned thereby.
(6)***
(7) The power to issue a writ of certiorari and the
supervisory jurisdiction are to be exercised sparingly and
only in appropriate cases where the judicial conscience of the
High Court dictates it to act lest a gross failure of justice or
grave injustice should occasion. Care, caution and
circumspection need to be exercised, when any of the
abovesaid two jurisdictions is sought to be invoked during
the pendency of any suit or proceedings in a subordinate
court and the error though calling for correction is yet capable
of being corrected at the conclusion of the proceedings in an
appeal or revision preferred thereagainst and entertaining a
petition invoking certiorari or supervisory jurisdiction of the
High Court would obstruct the smooth flow and/or early
disposal of the suit or proceedings. The High Court may feel
inclined to intervene where the error is such, as, if not
corrected at that very moment, may become incapable of
correction at a later stage and refusal to intervene would
result in travesty of justice or where such refusal itself would
result in prolonging of the lis.
(8) The High Court in exercise of certiorari or supervisory
jurisdiction will not convert itself into a court of appeal and
indulge in reappreciation or evaluation of evidence or correct
errors in drawing inferences or correct errors of mere formal
or technical character.”
35. Keeping in view the above exposition of law, the
impugned order cannot withstand judicial scrutiny. As
regards the first reason, it clearly is against the provision of
27 2025:HHC:9583
Act. In the year 1981 when the permission was granted to the
petitioner to purchase the land there was no embargo that
the land had to be put to use within stipulated time. The
amendment to this effect was brought in the Act w.e.f.
25.03.1988. The amended provision cannot be applied
retrospectively more particularly when the amending act did
not specifically make such provision to be retrospective in
operation. Even otherwise also it has been observed in the
impugned order that the petitioner had started production in
the year 1984. As regards the second reason, the same also is
not in conformity with the provision of the Act and the Rules.
The permission was granted to petitioner to purchase the
land for establishing an industry. There is no material on
record to suggest that the permission was subject to any
condition to occupy the entire land with construction. In
addition, even the clarification issued by the State
Government on 15.3.2012, as reproduced above, itself
provided as under:
1. Permission shall ordinarily be granted-
(i) Where the non-agriculturist seeks permission to sell
the land or change the purpose for which it is to be
used within the period prescribed for its use.
(ii) Where the land has been used for the purpose for
which it had been purchased.
28 2025:HHC:9583
(iii) Where the land is put even to partial use e.g.
structures etc. have been raised partially or fully
but it has not been fully used for the purpose for
which it was allowed to be purchased.
36. That being so, the reasons assigned by the State
Government for rejecting the prayer of petitioner can easily be
termed to be perverse and thus, requires interference by this
Court.
37. In light of above discussion, the petition is allowed.
The impugned order/communication dated 18.07.2024,
Annexure P-5, issued by respondent No.2, is quashed and set
aside with direction to the State Government to take a
decision afresh strictly in terms of what has been held above.
The State Government shall complete the exercise within a
period of 30 days from the date of production of this order
before the competent authority.
38. The petition stands disposed of in the above terms,
so also the pending application(s), if any.
(Satyen Vaidya)
8th April, 2025 Judge
(GR)
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