IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA-2232-1996 (O&M) HUDA and another . . . . Appellants Vs. Dr. Jai Singh . . . . Respondents **** Reserved on: 18.04.2026 Pronounced on: 04.05.2026 Pronounced fully/opera7ve part: Fully **** CORAM: HON’BLE MR JUSTICE DEEPAK GUPTA Argued by:- Ms. Promila Nain, Senior Advocate with Mr. Mohinder Singh Nain, Advocate for the appellants. Mr. Rajesh Sethi, Advocate with Mr. Anshuman Sethi, Advocate for the respondent. **** DEEPAK GUPTA, J. The present Regular Second Appeal has been filed by the defen- dants against the concurrent judgments & decrees passed by the Courts below, whereby the suit for declara)on with consequen)al relief of permanent injunc- )on ins)tuted by the plain)ff was decreed by the learned trial Court vide judg- ment dated 09.08.1995, and the appeal preferred thereagainst was dismissed by the learned Addi)onal District Judge, Karnal on 27.03.1996. 2. To avoid confusion, the par)es are referred to as per their status before the trial Court. 3. The factual matrix, as emerges from the record, is that one Naresh Chand Jain was allo7ed Plot No.5 in Sector-6, Urban Estate, Karnal on 03.05.1982 for a total considera)on of ₹46,335.50, payable in instalments. A<er NEETIKA TUTEJA 2026.05.04 14:57 I attest to the accuracy and integrity of this document RSA-2232-1996 (O&M) obtaining necessary permission from the competent authority, the said allo7ee transferred the plot in favour of the plain)ff in February 1984. It is not in dispute that from )me to )me, the plain)ff was called upon to deposit amounts to- wards enhanced price, which he duly paid. 4. The dispute arose, when the defendants issued a demand no)ce dated 08.02.1990 (Ex.P1), raising an addi)onal demand of ₹20,119.65 towards enhanced compensa)on under Regula)ons 2(b) and 10 of the Haryana Urban Development (Disposal of Land and Buildings) Regula)ons, 1978 read with Con- di)on No.9 of the allotment le7er. The said demand was accompanied by a s)p- ula)on that in case of non-payment within 30 days, interest at the rate of 15% per annum would be charged. 5. Aggrieved by the said demand, the plain)ff ins)tuted the present suit challenging the legality and validity of the demand no)ce on the grounds that the same was vague, arbitrary, contrary to the principles of natural jus)ce and based on an erroneous method of calcula)on. It was specifically pleaded that the enhanced compensa)on determined under the Land Acquisi)on Act was required to be propor)onately distributed over the en)re area of the sec- tor, including both residen)al and commercial components, whereas in the present case, the burden had been unfairly imposed upon a limited class of al- lo7ees. 6. The defendants contested the suit by asser)ng that the demand no)ce had been issued strictly in accordance with the applicable regula)ons and condi)ons of allotment. Preliminary objec)ons regarding maintainability of the suit and bar of jurisdic)on of the Civil Court under Sec)on 50 of the Haryana Urban Development Authority Act, 1977 were also raised. 7. On the basis of the pleadings, the trial Court framed the necessary issues and the par)es led documentary as well as oral evidence. The material evidence included the impugned demand no)ce (Ex.P1), the calcula)on sheet produced by the authority, and the relevant allotment records. Page 2 of 5 NEETIKA TUTEJA 2026.05.04 14:57 I attest to the accuracy and integrity of this document RSA-2232-1996 (O&M) 8. Upon apprecia)on of the evidence, the trial Court returned a cate- gorical finding that the impugned demand no)ce was illegal, arbitrary and dis- criminatory. It was no)ced that the calcula)on of enhanced compensa)on had not been made by spreading the liability over the en)re sector but had been se- lec)vely imposed, thereby viola)ng the principle of propor)onal distribu)on. The trial Court further held that the Civil Court had jurisdic)on to entertain the suit and that the same was not barred under Sec)on 50 of the HUDA Act. Con- sequently, the suit was decreed. 9. The defendants carried the ma7er in appeal. However, the learned First Appellate Court, a<er re-appraisal of the en)re evidence, affirmed the find- ings recorded by the trial Court. The Appellate Court examined the calcula)on sheet in detail and found that while compu)ng the enhanced compensa)on, the authority had excluded certain categories of land, including commercial ar- eas and sector roads, from the distributable pool. It was held that such an ap- proach was contrary to law and resulted in an unjust burden upon a limited class of allo7ees. The appeal was accordingly dismissed. 10. Assailing the concurrent findings, learned counsel for the appel- lants has contended that the Courts below have misread the evidence and failed to appreciate that the demand raised was in consonance with the applicable statutory provisions and the terms of allotment. It is argued that the authority was competent to recover enhanced compensa)on and that the calcula)on adopted was jus)fied. 11. Per contra, learned counsel for the respondent-plain)ff has sup- ported the impugned judgments, submiGng that both the Courts below have correctly appreciated the evidence and rightly held the demand no)ce to be ar- bitrary and unsustainable. 12. This Court has considered the rival submissions and perused the record. Page 3 of 5 NEETIKA TUTEJA 2026.05.04 14:57 I attest to the accuracy and integrity of this document RSA-2232-1996 (O&M) 13. A perusal of the calcula)on sheet, as no)ced by the First Appellate Court, reveals that the total land of Sector-6 measured 245.02 acres and the en- hanced compensa)on determined was ₹1,80,31,459/-. However, while calculat- ing the recoverable amount, certain por)ons of land, including commercial ar- eas and sector roads, were treated separately and excluded from the general pool. The remaining amount was then appor)oned only among residen)al plot holders and the Housing Board, resul)ng in a rate of ₹40.30 per square yard be- ing imposed upon them. 14. This method of calcula)on, on the face of it, is inconsistent with the se7led principle that enhanced compensa)on is required to be distributed propor)onately over the en)re developed area of the scheme, including resi- den)al as well as commercial components. 15. In this regard, reliance placed by the Courts below on Subhash Chander Arora v. The Housing Board, Haryana, 1992(1) RRR 223 is well founded, wherein it was categorically held that the burden of enhanced com- pensa)on cannot be imposed solely upon residen)al allo7ees and must be shared propor)onately by all beneficiaries of the scheme, including commercial allo7ees. 16. The approach adopted by the defendants in the present case, therefore, clearly results in an arbitrary and discriminatory imposi)on, offending the principle of equality and fairness. The impugned demand no)ce, being based on such flawed calcula)on, cannot be sustained. 17. The conten)on regarding bar of jurisdic)on of the Civil Court also does not merit acceptance. The issue stands concluded by the judgment of this Court in Sarla Khera and ors. v. HUDA and ors., Law Finder Doc ID # 688599, wherein it was held that where the demand raised is without any factual or legal founda)on and is arbitrary, the jurisdic)on of the Civil Court is not barred. The present case falls squarely within the said principle. Page 4 of 5 NEETIKA TUTEJA 2026.05.04 14:57 I attest to the accuracy and integrity of this document RSA-2232-1996 (O&M) 18. It is also significant to note that during the pendency of the ap- peal, the defendants themselves produced a calcula)on showing that no amount was outstanding against the plain)ff. Further, an affidavit filed by the Estate Officer confirms that there are no dues against the plot and that the property has since been transferred. These subsequent developments reinforce the conclusion that the impugned demand was unsustainable. 19. In view of the above discussion, this Court finds no illegality or perversity in the concurrent findings recorded by the Courts below. The judg- ments under challenge are based on proper apprecia)on of evidence and cor- rect applica)on of law and do not call for interference in exercise of jurisdic)on under Sec)on 100 CPC. 20. Consequently, the appeal is dismissed. However, it is directed that the defendants shall rework the liability of enhanced compensa)on strictly in accordance with law by distribu)ng the burden propor)onately over all cate- gories of allo7ees, including commercial and residen)al. In case any excess amount has been recovered from the plain)ff, the same shall be refunded along with interest @ 9% per annum from the date of deposit )ll realiza)on. 21. The appeal stands disposed of in the aforesaid terms. (DEEPAK GUPTA) JUDGE 04.05.2026 Neeka Tuteja Whether speaking/reasoned? Yes/No Whether reportable? Yes/No Uploaded on.: 04.05.2026 NEETIKA TUTEJA 2026.05.04 14:57 I attest to the accuracy and integrity of this document