1 ( 2026:HHC:13209-DB ) IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No. 2659 of 2022 Decided on: 23.04.2026 M/s Himland Real Estates Private Limited …..Petitioner Versus State of H.P and others .....Respondents ------------------------------------------------------------------------- Coram Ms. Justice Jyotsna Rewal Dua Whether approved for reporting?1 For the Petitioner: Mr. Suneet Goel, Senior Advocate with Mr. Udit Shaurya Kaushik, Advocate. For the Respondents: Mr. L.N.Sharma, Additional Advocate General & Mr. Rajrat Choudhry, Assistant Advocate General, for respondents No. 1 to 3 and 5 & 6. Mr. Piyush, Advocate vice Mr. Amit Singh Chandel, Advocate. ------------------------------------------------------------------------- Jyotsna Rewal Dua, Judge The genesis of this writ petition lies in proceedings instituted against the petitioner under Section 118 of the H.P. Tenancy and Land Reforms Act, 1972 (hereinafter referred to as the Act) on account if its alleged failure in putting the land in question to use within the stipulated period in terms of the permission granted to it and in terms of the provisions of the Act. The main grievance of the petitioner at present is against the order passed by respondent No.1 on 25.03.2022 1Whether reporters of print and electronic media may be allowed to see the order? Yes. 2 ( 2026:HHC:13209-DB ) (Annexure P-23) declining to grant any relaxation to the petitioner by extending the period for setting up its project. 2. Facts relevant for the purpose of this writ petition: 2(i). Registration certificate was issued by respondent No.4 in favour of the petitioner as promoter on 15.10.2005 with validity period of 05 years. Essentiality certificate was issued in petitioner’s favour for purchasing 151-05 bighas of land in Village Jharmajri, Tehsil Nalagarh, District Solan, H.P. on 10.05.2006. The respondent- State granted permission to the petitioner under Section 118 of the Act on 10.05.2006 for purchasing the land for setting up a residential colony. Separate sale deeds for different parcels of land were executed and registered in petitioner’s favour during the years 2006 & 2007. 2(ii) On 10.08.2007, respondent No.4 directed the petitioner to furnish different bank guarantees for different parcels of land. The petitioner did not furnish the bank guarantees. It raised an issue about its liability to furnish the bank guarantees. Consequently, respondent No.4 did not issue licence in petitioner’s favour rather notices were issued to it on different dates in the year 3 ( 2026:HHC:13209-DB ) 2008. Petitioner responded on 28.12.2008 that in lieu of bank guarantees demanded from it the title deeds of certain other properties belonging to it be kept as security. The dispute was not resolved. The petitioner instituted Civil Writ Petition No. 7318/2010 before this Court. The writ petition was finally withdrawn on 19.08.2015. The petitioner, thereafter, furnished the requisite bank guarantees to respondent No.4. 2(iii). The concerned Tehsildar on 10.02.2015 informed respondent No.5- Collector, District Solan that though the petitioner had fenced the land in question, constructed approach road, had obtained electricity and water connections, raised foundation of the building and also planted trees over some part of land in form of park but no other construction had been carried out. The above was followed by a notice issued to the petitioner under Section 118 of the Act. The District Collector, Solan on 08.04.2016 ordered vestment of entire land purchased by the petitioner i.e. measuring 151-05 bighas with the State Government on the ground that petitioner had not raised the residential colony on the land i.e. the purpose for which the permission to purchase the land was granted to it under Section 118 of the Act and the time period stipulated in the permission letter had lapsed. The 4 ( 2026:HHC:13209-DB ) appeal preferred by the petitioner against the aforesaid order was decided by the Divisional Commissioner on 04.09.2018. The Divisional Commissioner remanded the case to the Collector for afresh decision in light of instructions dated 05.02.2016 issued by the Additional Chief Secretary (Revenue) Govt. of H.P which provided for exclusion of the period during which the concerned person was prevented from putting the land into use due to statutory hindrances on account of certain actions of the Government. 2(iv). Feeling aggrieved against the order dated 04.09.2018 passed by the Divisional Commissioner, the petitioner as well as respondent- State preferred their revision petitions before the Financial Commissioner (Appeals), H.P. The revision petitions were decided on 22.07.2019. The petition filed by the respondent- State was dismissed whereas the petition filed by the present petitioner was allowed to the extent that petitioner was directed to apply to respondent No.1 for considering its case in view of instructions dated 05.02.2016. 2(v). The respondent- State preferred Civil Writ Petition No.727/2020 feeling aggrieved against dismissal of its revision petition by the Financial Commissioner 5 ( 2026:HHC:13209-DB ) (Appeals), H.P. The writ petition was dismissed on 25.02.2020. 2(vi). The petitioner thereafter, moved respondent No.1 for exclusion of the period spent in obtaining statutory clearances in view of instructions dated 05.02.2016. The petitioner’s representation was recommended by a duly constituted committee under the Chairmanship of respondent No.3- Director, Town and Country Planning Department, H.P. for excluding time period of 02 years 01 month and 21 days as under:- “In view of the foregoing submissions, the Committee on the basis of the aforesaid instructions of the Revenue Department is of the view that the permission under Section 118 of the H.P. Tenancy & land Reforms Act, 1972 was issued in favour of the project proponent on 10.05.2006. The Project proponent was under a statutory duty to utilize the land within two years i.e. upto 09.05.2008 (extendable by another one year) for the purpose of construction of residential colony. However, a time period of two years, one month & twenty one days elapsed due to statutory hindrances within the first three years of grant of permission under Section 118 which can be considered for exclusion from the computation of time period of aforesaid two years (extendable by another one year) defined under Section 118 ibid.” The matter finally went to respondent No.1 who vide his impugned order dated 25.03.2022 held that petitioner does not qualify for any relaxation on the 6 ( 2026:HHC:13209-DB ) strength of instructions dated 05.02.2016. The operative part of impugned order reads as under:- “13. Therefore, after considering the instant case in light of the instructions of Government dated 05.02.2016, the stipulated period for putting the land to use comes out to be upto 30.06.2011 in which the relaxation of one year extension after lapse of first two years have also been added despite the fact that company never applied for it. The company has failed to put the land to use upto this deadline as well. Thus there is no merit in the case and the stipulated period can not be extended beyond 30.06.2011. The company does not qualify for any relaxation to allow it for putting the land to use on the strength of provisions of instruction dated 05.02.2016. Accordingly, the case is rejected. Let the copy of this order be provided to the company and further be circulated to District Collector, Solan for necessary action as per law.” 2(vii). It is in the above background that the petitioner has preferred this writ petition seeking following substantive reliefs: i. Issue a writ in the nature of certiorari to quash and strike down the impugned orders dated 25.03.2022 being patently arbitrary, discriminatory, unfair, unjust and illegal. ii. Issue of writ in the nature of mandamus directing the respondents to act as per instructions dated 05.02.2016 of the State. iii. Issue a writ in the nature of mandamus to direct the respondents to exclude the time during which the applications of the petitioner company for mandatory approvals remained pending in different departments as well as before the adjudicatory authorities/Courts which was wrongly calculated the time and application of which is sought from the wrong date. Issue a writ in nature mandamus to direct the respondent No.1 to grant a period of 7 ( 2026:HHC:13209-DB ) 2 year 1 month & 21 days (as recommended by respondent No.2) to the petitioner to utilize the land, to be counted from date of such relief is granted. iv. Further direct the respondent authorities to exclude the time spent in litigation as the matter remained sub-judice. Issue a writ in the nature of mandamus to direct the respondents to renew/ re-validate the permission under Section 118 of Himachal Pradesh Tenancy and Land Reforms Act, 1972 and any further approvals in favour of the petitioner company to facilitate further development and sale of the land measuring 151.05 bighas situated in Mauja Jharmajri, Tehsil Nalagarh, District Solan, Himachal Pradesh.” Learned Senior Counsel for the petitioner submitted that relief No. (iv) be treated as given up at this stage. 3. Heard learned counsel on both sides & considered the case file. Following order was passed in this matter on 14.08.2025:- “Heard for sometime. List for continuation on 21.08.2025. Parties to apprise the Court of the status of the activity, if any, undertaken by the petitioner on the spot by the said date.” The above order was followed by directions issued on 01.09.2025, which reads as under:- “Learned Counsel for the parties are directed to place on record the documents relating to the present status of the activities ought to have been undertaken by the petitioner within two weeks from today.” 8 ( 2026:HHC:13209-DB ) Pursuant to above orders, the respondent- State through District Collector, Solan placed on record instructions on 01.11.2025 inter alia conveying as under:- “According to the report of Field Revenue Agency, the present status is as under:- 1. Road exists on the spot for the entire piece of land and cement tiles have been laid through. 2. Two water tanks have been constructed on its spot. 3. Sewerage pipe line has been laid. 4. Borewell and water pipe lines exist on the spot. 5. Plantation has been done on the road side and park facility has been provided. 6. The plots have been fenced. 7. Foundation of 240 plots in Block-A has been laid. 8. 33 show rooms have been completed on the ground floor of block-B. The Lintel has been casted on the first floor and on the second floor pillars for 33 show rooms have been laid, out of which lintel on 17 pillars has been casted. 9. 5 shops and 4 flats have been completed in Block-B. Therefore, it is requested that the above narrated facts may kindly be brought in the notice of Hon’ble High Court, please.” 4. The instructions placed on record by the respondent-State reflect that instant is not a case where the petitioner had diverted the land in question for purpose other than for which it was granted permission to purchase i.e. construction of residential colony. Rather the instructions are pointer to the fact that petitioner has taken steps in furtherance of the project in question. 9 ( 2026:HHC:13209-DB ) Learned Senior Counsel for the petitioner submitted that the petitioner has not been able to complete the project of constructing the residential colony as sufficiently long period had been consumed in getting several clearances/approvals from different departments; time was also spent in resolving the disputes relating to furnishing of bank guarantees with HIMUDA and thereafter, contesting the proceedings initiated against the petitioner under Section 118 of the Act for vestment of the land with the State Government, which are still going on. Learned counsel further submits that even now there are several clearances which are yet to be received by the petitioner and in view of impugned order having been passed against the petitioner declining to give relaxation in its favour with direction to District Collector to proceed with vestment proceedings under Section 118 of the Act, the petitioner has been prevented from completing the project. The factual situation of instant case attracts Ravinder Chauhan and others versus State of H.P.2 which holds that vestment cannot be automatic merely with lapsing of prescribed period when the statute contemplated the failure on part of the person who has 2AIR 1999 H.P 43 10 ( 2026:HHC:13209-DB ) been granted permission to purchase, as a condition precedent for bringing into force the vesting clause, the failure should be on account of conscious default, negligence or refusal on part of person concerned. Where the non-compliance was for reasons beyond the control or due to the fact that it was incapable or impossible of performance due to operation of other provisions of law in force and that the authorities, who accorded the permissions were equally at fault, it is not permissible for any one to take over the property by enforcing vesting clause. Relevant portion from the decision reads as under:- “19. In the light of the above provisions of the Statute and the Rules in force, it becomes necessary for us to consider as to whether the plea raised on behalf of the petitioners that the vesting envisaged under the second proviso to Clause (i) of Sub-section (2) of Section 118 of the Act is automatic and instant on the expiry of the period or it will depend upon on further adjudication by any competent authority before such vesting could be said to have taken place in a particular case. Rule 38-B inserted as noticed above, with detailed provisions in this regard, which were found finally notified on 24-3-1993 was also earlier notified on 14-12-1992 vide notification No. 10-5/75-RevB-Vol. III dated 3-11-1992. The subsequent rules provide a guideline and assistance of the manner in which a penal provision of the nature engrafted under the second proviso to Clause (i) of Sub-section (2) of Section 118 of the Act has to be construed. That becomes obvious and necessary even de hors the Rule 38-B and in our view the said rule has been really inserted to make the provision in the Act 11 ( 2026:HHC:13209-DB ) more reasonable, to protect the main provision in the Act itself from being rendered vulnerable for a challenge under Article 14 of the Constitution of India. The conditions stipulated for being satisfied in the second proviso to bring into operation the vesting clause or the provisions of the rule itself provide ample basis and guidance as to how the said provision has to be construed. In our view, it is not that on the mere expiry of a period of two years, as may be granted by the Slate Government or a further period not exceeding one year that the vesting will automatically take place. The legislative intention apparently keeping in view of the drastic and penal nature and far reaching consequences of such vesting clause has been thoughtfully, carefully and meticulously expressed in engrafting a condition stipulating 'if he fails to do so', which in our view will operate as a condition precedent for actual vesting. The failure on the part of the person favoured with a permission under the provision, therefore, is the vital and pivotal fact which brings into operation the vesting clause and consequently it is but necessary and essential that some authority must place on record the failure on the part of the persons, who have been favoured with the permission after an objective consideration of the matter and such finding can be recorded only after complying with the principles of natural justice by giving an opportunity to the persons concerned before condemning them. What Rule 38-B has proposed to do is nothing but giving statutory recognition by means of prescription of a rule to the otherwise essential, vital and necessary procedure as a measure of safeguard to be observed in terms of the principles of natural justice, too, before visiting a citizen with such penal and far reaching consequences involving substantial property rights. In our view when the statute contemplated the failure on the part of the person, who has been granted with permission to purchase, as a condition precedent for bringing into the force of the operation of the vesting clause, the failure should be on account of the conscious default, negligence or refusal on the part of the person 12 ( 2026:HHC:13209-DB ) concerned and where the non-compliance was for reasons beyond his control or due to the fact that it was incapable or impossible of performance due to the operation of other provisions of law in force and that the authorities, who accorded the permission with such conditions, which are not capable of being complied with and performed and were equally at fault, it is not permissible for the respondents or for that matter any body from public including the petitioners to insist or assert that despite the obvious and for no fault of the 6th respondent, he should be condemned as having failed to comply with the conditions, that which otherwise he could have complied with, and thereby take over his property by enforcing the vesting clause engrafted in the second proviso.” The aforesaid decision was relied upon in State of Himachal Pradesh versus M/s Barog Resorts Pvt. Limited3, M/s Springdale Resorts and Villas Pvt. Ltd. versus State of Himachal Pradesh & Others4 and State of Himachal Pradesh versus M/s Noble House Creation Pvt. Ltd.5 In M/s Springdale Resorts4 while relying upon Ravinder Chauhan,2 it was observed that the words “shall put the land to such use for which the permission has been granted” are not to be interpreted myopically. Period of two years prescribed in the Statute cannot be construed in myopic manner so as to mean that everything with regard to the project has to be completed before the expiry of the period. The intent 3CWP No.5544/2020, decided on 22.08.2023. 4CWP No.3363/2025, decided on 26.09.2025. 5CWP No.1182/2026, decided on 26.02.2026. 13 ( 2026:HHC:13209-DB ) of legislation behind Section 118(2) was to ensure that steps are taken to put the land to use for the purpose for which the permission is granted before the expiry of the period prescribed in the Statute. The Court also took judicial notice of the fact that various permissions are granted under Section 118 of the Act for big and small projects by the State Government. For coming up of these projects, many further permissions/approvals/ sanction are required from several departments/ authorities. Various other formalities are also needed to be completed. The actual construction work can start only after all the permissions are in place in favour of the proponent. Therefore, if the words “shall put the land to such use for which permission has been granted” are given strict interpretation i.e. the entire project activities shall have to be completed from A to Z within the period mentioned in the second proviso to Section 118(2) of the Act, in such scenario majority of the projects would fall in the trap paving way for vestment of the land in State. Therefore, only meaningful interpretation can be given to these words. That beneficiary of the permission has to demonstrate taking cogent and meaningful steps for putting the land to use for the purpose for which the permission was granted and if this test is satisfied, the 14 ( 2026:HHC:13209-DB ) same has to be construed and read that the permission holder has put the land to such use for which the permission was granted. The impugned order does not take into account principles laid down in Ravinder Chauhan,2 the other decisions though have come subsequent to the passing of impugned order. The impugned order simply considers the case of the petitioner in light of respondents instructions dated 05.02.2016 and declines to grant benefit of the same to the petitioner even though duly constituted committee had recommended petitioner’s case for exclusion of certain period from computation under Section 118 of the Act. In view of the legal position as discussed in the aforesaid decisions and the facts which have come on record including in form of instructions` placed on record by the respondents, reconsideration of the case of the petitioner by the Competent Authority is deemed necessary and would be in furtherance of justice. Accordingly, impugned order dated 25.03.2022 (Annexure P-23) is quashed and set-aside. Respondent No.1- Competent Authority is directed to consider the case of the petitioner afresh in accordance with law keeping in view the factual and legal position as observed above. 15 ( 2026:HHC:13209-DB ) Fresh exercise be undertaken within six weeks. Due opportunity of hearing be given to the parties while considering the case. The writ petition stands disposed of . Pending miscellaneous application(s), if any, shall also stand disposed of. Jyotsna Rewal Dua April 23, 2026 Judge yogesh