Ordinarily, Rehabilitation Should Only Be Meant For Those Who Have Been Rendered Destitute Because Of Loss Of Residence Or Livelihood As A Consequence Of Land Acquisition: Supreme Court

“Rehabilitation Is A Humanitarian Consideration, Not A Legal Right”: Supreme Court of India putting to rest decades of litigation surrounding the claims of land acquisition oustees to preferential allotment of plots. The Court held that “ousted landowners cannot, as a matter of legal right, demand allotment of plots under the 1992 policy”, firmly establishing that changing policy frameworks and inordinate delays foreclose such entitlements. While granting limited relief, the Court permitted applications under the 2016 policy “strictly subject to eligibility criteria,” emphasising that “rehabilitation is a matter of policy, not a fundamental or constitutional right.”

This ruling arose from disputes where landowners whose agricultural lands were acquired by HUDA during the 1990s claimed allotment of residential plots at concessional rates under the Haryana Government’s 1992 Rehabilitation Policy. The claims, however, were marred by two fundamental flaws: most of the oustees failed to apply within the stipulated period, and many approached courts after 14 to 20 years.

Despite conflicting verdicts at the trial court, appellate, and High Court levels—some favouring the oustees based on earlier precedents such as Brij Mohan v. HUDA (2011) 2 SCC 29—the State persisted in appealing the matter to the Supreme Court, seeking final clarity on the binding nature of past policies in the context of delayed claims.

The central legal issue before the Court was whether oustees could insist on plot allotment at rates determined under the 1992 policy, especially when they had failed to apply within the prescribed timeline, and whether the court could grant mandatory injunctions to enforce such claims under Section 39 of the Specific Relief Act, 1963.

The Court extensively examined Section 50 of the HUDA Act, 1977 which bars civil court jurisdiction and Regulation 5 of the 1978 HUDA Regulations which mandates submission of earnest money with applications. The Supreme Court underlined the procedural obligations upon claimants, remarking, “When the scheme in question specifically provides that an oustee shall file an application in a specified format with deposit of the requisite amount towards earnest money then it is a part of the obligation on the part of the oustee to do so before he calls upon the State to allot the plot.”

On the applicability of limitation law, the Court was unequivocal: “By no stretch of imagination, it can be said that the case on hand is one of recurring cause of action… the suits themselves were not maintainable as they should have been dismissed only on the ground of limitation.”

The respondents had invoked the authority of Brij Mohan’s case, but the Court clarified that the ratio therein was fact-specific. “The dictum in Brij Mohan (supra) cannot be read as laying down an absolute proposition of law that the normal allotment rate in all circumstances shall be the rate when the sector is first floated,” the Court noted.

Further, the Court reminded all parties that rehabilitation policies are essentially ex-gratia benefits and do not confer enforceable legal rights. The Court declared, “It is not necessary that in all cases over and above compensation in terms of money, rehabilitation of the property owners is a must.”

The judgment is a masterclass in doctrinal clarity. First, the Court held, “The respondents are not entitled to claim as a matter of legal right relying on the decision of Brij Mohan (supra) that they should be allotted plots as oustees only at the price as determined in the 1992 policy.”

Secondly, the Court restricted the oustees’ entitlement strictly to the 2016 policy, stating, “At the most, they can seek the benefit of the 2016 policy for allotment of plots.”

Third, recognising the socio-economic reality of rural litigants, the Court allowed applications both online and offline, observing, “We understand that some of the respondents may be very rustic and illiterate and may not be in a position to apply online; in such circumstances, we permit them to apply by preferring an appropriate application addressed to the competent authority with deposit of the requisite amount.”

Fourth, mindful of the risk of fraud, the Court directed vigilance, warning, “The State of Haryana as well as HUDA shall ensure that land grabbers or any other miscreants may not form a cartel and try to take undue advantage of the allotment of plots.”

Fifth, imposing a restriction on the alienation of plots, the Court ordered, “A condition should be imposed at the time of allotment that the allotee shall not be entitled to transfer the plot to any third party without the permission of the competent authority and in any case not within five years from the date of allotment.”

In a significant public policy observation, the Court remarked, “This litigation is an eye-opener for all States in this country… any beneficial measures taken by the Government should be guided only by humanitarian considerations of fairness and equity towards the landowners.”

Finally, underscoring the legal position on rehabilitation rights, the Court held, “We have made ourselves very explicitly clear that in cases of land acquisition the plea of deprivation of right to livelihood under Article 21 of the Constitution is unsustainable.”

Summing up, the Supreme Court concluded that while oustees cannot enforce allotment under lapsed schemes like the 1992 policy, they could apply under the prevailing 2016 scheme, subject to stringent eligibility checks and within a strictly limited time frame of four weeks from the judgment.

This landmark judgment serves as a cautionary precedent, reinforcing that public policies, especially those concerning discretionary benefits like rehabilitation, cannot be enforced by courts contrary to their terms. It establishes that legal claims must be pursued diligently, within prescribed timelines, and within the contours of statutory schemes.

Date of Decision: 14th July 2025