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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

CWP No. 1182 of 2026

Decided on: 26.02.2026

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State of Himachal Pradesh …..Petitioner

Versus

M/s Noble House Creation Pvt. Ltd. .....Respondent

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Coram

Ms. Justice Jyotsna Rewal Dua

Whether approved for reporting?

1

Yes

For the Petitioner: Mr. Y.P.S. Dhaulta, Additional Advocate

General.

For the Respondent: Mr. Anuj Gupta & Mr. Surjeet Kumar,

Advocates.

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Jyotsna Rewal Dua, Judge

Notice. Mr. Anuj Gupta, learned counsel,appears

and waives service of notice on behalf of respondent.

2. The Case

Learned District Collector, Solan on 20.01.2017

ordered vestment of respondent’s/petitioner’s land with the

State government on the ground that the respondent failed

to put the land to use within two years from the date of

execution of sale deed, the respondent could not start

construction of the resort over land in question within two

years in accordance with the permission granted to it under

Section 118 of H.P. Tenancy and Land Reforms Act, 1972

(hereinafter referred to as the Act). The operative portion of

the order passed by the learned District Collector, Solan

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Whether reporters of print and electronic media may be allowed to see the order? Yes.

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ordering vesting of respondent's land with the petitioner is

as under:-

“17. In this case, Respondent purchased 150 bigha land

and then did not put it to use for which it was

purchased even after 7 years after the Sale Deed. The

record available on the case file shows clearly that the

Respondent did not do anything to set up the resort

within the stipulated perod of two years from the date

of Sale Deed. He did not even apply for further

extension one year after the expiry of two years’ time

limit. His plea that he could not start the construction

due to economic recession is too general and vague in

the absence of specific documentary evidence. There is

nothing specific on record that the Respondent was

prevented from starting the construction because of

economic downturn. It is evident that the failure of

Respondent is due to his own acts of commission and

omission. As has been pointed out by the Hon’ble High

Court in Judgment delivered in the case titled Som Kirti

versus State of H.P. quoted above the intention of Act is

prevent land grab by moneyed people. By not putting

the land to use for which permission was granted the

Respondent has blocked the land from being used for

any other gainful purpose. Therefore this is a clear case

of violation of Section 118 of the Act. I answer this point

in affirmative and hold it in favour of the State.

18. On the basis of the discussion above, it is clear that

the respondent has violated the provision contained in

the Act. Therefore, land measuring 150-00 bigha,

located in revenue Village Rahed, Tehsil Kandaghat,

District Solan and comprised in Khewat No.54 min,

Khatauni No.79 and Khewat No.55, Khatauni No.81,

Khasra Nos. 1030/697, 1035/696, 1036/696 purchased

vide Sale Deed No.80/2008 dated 18.03.2008 shall vest

with the State of Himachal Praedesh free from all

encumbrances as provided in the Act. Copy of this

Order be sent to the SDO (C), Kandaghat and the

Tehsildar, Kandaghat for information and compliance.

No order as to the cost. File after due completion be

consigned to the General Record Room.”

Statutory appeal preferred by the respondent

against the above order was allowed by the learned

Divisional Commissioner, Shimla Division, H.P. on

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21.12.2017. While allowing the appeal, learned Divisional

Commissioner relied upon Ravinder Chauhan and

others versus State of H.P.

2

as also Sanjay Dutt versus

State through CBI

3

and Tola Ram Relumal versus

State of Bombay

4

. Learned Divisional Commissioner

interpreted the provisions of Section 118(2) of the Act and

returned the findings that default on the part of the

respondent in raising the construction of resort over the

land in question within stipulated period of two years in the

facts and circumstances of the case cannot be considered

as “conscious default, negligence or refusal”. Operative

portion from the order passed by the learned Divisional

Commissioner is as under:-

“17.In view of the above, by no stretch of imagination

the default on the part of appellant can be considered a

“conscious default negligence or refusal ” on the

part of a person concerned within the scope defined by

the Hon’ble High Court in the matter of Ravinder

Chauhan & others versus State of H.P. as cited above. It

can certainly be covered within the scope of words for

“reasons beyond his control ” since the promoter

wanted to develop a major health resort, spa with

convention facilities involving a total investment of ₹72

crores. He initiated the construction work also

constructing 1.5 K.m road (which has also been

acknowledged by the Collector in his order at page-18).

The default on the part of the developer, therefor,e

essentially arises due to recession in the financial

markets and not due to his own fault. As such, he is

covered within the scope of the judgment of the Hon’ble

High Court of H.P. as cited above.

18.As can be seen from the discussions above, it is

clear that the case of appellant does not fall within the

2

AIR 1999 HP 43

3

1994 (5) SCC 410

4

AIR 1954 SCC 496

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purview of default defined by the Hon’ble High Court in

Ravinder Chauhan judgment cited above as conscious

default negligence or refusal on the part of a

person concerned since the appellant has taken all

possible steps within the period of two years but could

not secure funding due to recession. The fact of

recession being there in the financial markets cannot be

disputed since the recession was a global phenomenon

and it affected the Indian Economy also. Therefore, it

also needs to be appreciated here that the appellant

could not have been expected to secure finances before

getting permission of land since no financial institution

would agree to fund a project without land especially in

H.P. where permission of the Govt. is required before

purchase of land. Therefore, the inability to start

construction and complete within two hears has been

for reasons beyond his control and as such, the default

does not fall within the scope of provision of Section

118(2) of the Act.”

Petitioner carried the matter further by

preferring Revision Petition before the learned Financial

Commissioner (Appeals). The appeal was dismissed on

27.09.2021 as under:-

“9. Record of the trial court further suggest that the

proceedings for non-utilization of land were initiated

against the respondent in the year 2014 i.e. after lapse

of about six years of time period. In reply to the notice,

issued by the Ld. Collector, the respondent could not

clearly rebut the notice by stating the fact that the

land in dispute has been fully utilized. However,

submissions are there that due to certain litigation

arisen during partition of land and financial constraints

faced by the respondent as a result of severe global

recession, the project could not be completed. The

record further reveals that the respondent was making

efforts to utilize the land and a huge investment has

already been made by the respondent for leveling of

the land and construction of internal road. While

accepting the appeal of the present respondent, the ld.

Commissioner has relied upon the law laid down by the

Hon’ble High Court vide its judgment dated 18.09.1998,

delivered in RSA No.254 of 1995 titled as Ravinder

Chauhan & Ors. vs., State of H.P & Ors. And has rightly

concluded that by no stretch of imagination the default

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on the part of present respondent can be considered as

a conscious default, negligence or refusal in putting the

land to use. The ld. Commissioner has further observed

that the respondent initiated the construction work also

by constructing 1.5 K.M road. The ld. Counsel for the

respondent has categorically stated that the respondent

has also started construction of five cottages on the

spot, but due to proceedings the same could not be

completed. The statements of the officials during cross-

examination before the Ld. Collector also corroborate

this fact. This prima -facie shows that the petitioner has

taken bonafide steps to utilize the land in dispute for

the purpose for which permission was granted. Thus,

keeping in view the law laid down by the Hon’ble High

Court, vide judgment dated 18.09.1995 in the above

referred matter, it would be appropriate that the

present petition be dismissed in view of the merits of

the case and the orders of the ld. Divisional

Commissioner are hereby upheld.”

It is in the above circumstances, State has

preferred the present writ petition feeling aggrieved against

the order dated 21.12.2017 passed by learned Divisional

Commissioner, Shimla and the order dated 27.09.2021

passed by learned Financial Commissioner (Appeals),

Shimla, H.P. whereby vestment of respondent’s land in

petitioner’s favour was held to be illegal.

3. Heard learned counsel for the parties and

considered the case file.

4. Section 118 of the H.P. Tenancy and Land

Reforms Act pertains to transfer of land to non-

agriculturists and is as follows:-

118. Transfer of land to non-agriculturist barred.

(1) Notwithstanding anything to the contrary

contained in any law, contract, agreement, custom or

usage for the time being in force, but save as otherwise

provided in this chapter, no transfer of land (including

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sales in execution of a decree of a civil court or for

recovery of arrears of land revenue) by way of sale, gift,

will, exchange, lease, mortgage with possession,

creation of a tenancy or in any other manner shall be

valid in favour of a person who is not an agriculturist.

(Explanation. For the purpose of this sub-Section, the

expression “transfer of land” shall not include-

i) transfer by way of inheritance;

ii) transfer by way of gift made or will executed, in

favour of any or all legal heirs of the donor or the

testator, as the case may be;

iii) transfer by way of lease of land or building in a

municipal area;

but shall not include-

(a) a benami transaction in which land is transferred to

an agriculturist of a consideration paid or provided by a

non-agriculturist; and

(b) an authorization made by the owner by way of

special or general power of attorney or by an

agreement with the intention to put a non-agriculturist

in possession of the land and allow him to deal with the

land in the like manner as if he is a real owner of that

land.

“(2) Nothing in sub-Section (1) shall be deemed

to prohibit the transfer of land by any person in

favour of-

(a) a landless laborer; or

(b) a landless person belonging to a scheduled caste or

scheduled tribe; or

(c) a village artisan; or

(d) a landless person carrying on an allied pursuit; or

(dd) a person who, on commencement of this Act,

worked and a continues to work for gain in a estate

situated in Himachal Pradesh; for the construction of a

dwelling house, shop or commercial establishment in a

municipal area, subject to the condition that the land to

be transferred does not exceed-

(i) in case of a dwelling house-500 square

Meters; and

(ii) in the case of a shop or commercial

establishment- 300square meters:

Provided that such person does not own any

vacant land or a dwelling house in a municipal area in

the state.

(e) the State Government or Central Government, or a

Government Company as defined in section 617 of the

Companies Act, 1956, or a Company incorporated under

the Companies Act, 1956, for which land is acquired

through the State Government under the Land

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Acquisition Act, 1894 or a statutory body or a

corporation or a board established by or under a statute

and owned and controlled by the State of Central

Government; or

(f) a person who has become non-agriculturist on

account of-

(i) acquisition of his land for any public purpose

under the Land Acquisition Act, 1894; or

(ii) vestment of his land in the tenants under this

Act; or

(g) a non-agriculturist who purchases or intends to

purchases land for the construction of a house or shop,

or purchases a built up house or shop, from the

Himachal Pradesh Housing and Urban Development

Authority, established under the Himachal Praedesh

Housing and Urban Development Authority Act 2004,

or from the Development Authority constituted under

the Himachal Pradesh Town and Country Planning Act,

1977 or from any other statutory Corporation set up for

framing and execution of house accommodation

schemes in the State under any State of Central

enactment; or

(h) a non-agriculturist with the permission of the State

Government for the purposes that may be prescribed:

Provided that a person who is non-agriculturist

but purchase land either under (Clause (dd) or clause

(g) or with the permission granted under clause (h) of

this sub-Section, shall, irrespective of such purchase of

land, continue to be a non-agriculturist for the purpose

of the Act.

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 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

the 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 user for

any other purpose or transfer by way sale, gift or

otherwise, the land so purchased by him shall, in the

prescribed manner, vest in the State Government free

from all encumbrances.”

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Learned Additional Advocate General highlighted

the second proviso to sub-Section 118(2) to submit that

same placed an obligation upon the respondent to put to

use the property/land within two years or further such

period not extending one year as may be allowed by the

State government for the reasons to be recorded in writing

from the date on which the sale deed of the land was

registered and in case the respondent failed to do so or

diverted without the permission of the State government,

the land so purchased by it was to vest in the State

Government from all encumbrances. The order dated

20.01.2017 passed by learned District Collector wherein

contentions of the State to the effect that the respondent

had not started construction of resort within two years from

the date of execution of sale deed, was highlighted.

Appreciation of evidence as recorded therein was also

emphasized. Learned Additional Advocate General

submitted that factual pleas taken by the respondent of

being not in position to put the land in use on ground of

alleged global economic recession were negated.

Respondent’s failure to put the land to use for the purpose,

it was granted within the time limit of two years in terms of

the sanction/permission, was urged to be sufficient to

attract consequent vesting provisions of Section 118(2) of

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the Act. Hence, prayer was made for allowing the writ

petition.

Learned counsel for the respondent reiterated

the observations recorded in the orders passed by learned

Divisional Commissioner as also the learned Financial

Commissioner.

5. Consideration.

5(i) First and foremost, it needs to be noticed that

impugned order was passed by the learned Financial

Commissioner (Appeals) H.P. on 27.09.2021. Present writ

petition assailing the same was filed on 06.01.2026. More

than four years have gone by. Petitioner has not explained

in the writ petition the reasons for not assailing the

impugned order within a reasonable period. In case, the

order conclusively determining the lis between the parties

is not agitated within close proximity of the time that sets

down rights and obligations of the parties, it has to be given

a quietus. The respondent in the instant case during the

period of more than four years from the date of passing of

impugned order might have taken consequential steps

based upon the said order. In fact, during hearing of the

case, learned counsel for the respondent apprised that

respondent has already moved application for deletion of

red entry in the revenue record & for deletion of vestment

orders reflected therein. The writ petition gives the

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impression that petitioner had earlier preferred CWP No.

8576 of 2022 assailing the order passed by learned Financial

Commissioner. Though fate of said writ petition is not

discernible from the record, however, during hearing of the

instant petition, learned counsel for the respondent placed

on record copy of judgment dated 16.10.2023 passed in

CWP 8576/2022 which also acknowledges objection of delay

and laches taken by the respondent. The writ petition was

dismissed as withdrawn on 16.10.2023 with following

observation:-

“Faced with the query raised by the Court as to

how the petition was maintainable having been filed

through District Collector, when the 1st Authority, who

had passed the order in the case, was the District

Collector itself, learned Additional Advocate General

prays for and is permitted to withdraw this petition,

with liberty to file a fresh writ petition on the same

cause, if so advised.

2. At this stage, learned counsel appearing for the

respondent submits that the petition is otherwise also

hit by delay and laches. This issue is left open in case

the petitioner does choose to file a fresh petition.”

It was more than two years after the disposal of

CWP No. 8576/2022 that the petitioner woke up from its

slumber and filed fresh writ petition on 06.01.2026 assailing

the order passed on 27.09.2021. The petition is certainly hit

by unexplained delay and laches.

5(ii). Be that as it may, even on merits of the case,

learned Divisional Commissioner as also learned Financial

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Commissioner have justly interpreted Ravinder Chauhan

2

drawing out following three conclusion therefrom as under:-

“(i) That the vestment could not be automatic and

due and proper enquiry adhering to the principles of

natural justice had to be carried out;

(ii) The failure has been defined to be on account of

“conscious default, negligence or refusal on the

part of a person concerned ”;

(iii) The circumstances of non-compliance have also

been defined as “reasons beyond his control or

due to the fact that it was capable or impossible

of performance due to operation of the other

provisions of law in force and the authorities who

accorded such permission are also equally at

fault,”

After going through the facts of the case, it was

observed by the Divisional Commissioner as under:-

“11. Coming to the facts of this case, as per record of

the case maintained by the District Collector, the

registry was executed on 18-03-2008. However, while

the case for grant of permission was under process, the

appellant started taking steps towards the construction

and execution of project by signing an agreement with

M/S Fourth Dimension Project Management Private

Limited (Annexure R-5) wherein the work of Survey,

Landscaping Architectural and services drawings of the

site etc. were outsourced to M/S Fourth Dimension

Project Management Private Limited. A perusal of the

case record also transpires that the appellant also took

initial steps to get the land partitioned since it was in

the joint ownership of so many other co-sharers. This

fact also came on record in the statement of Shri Anil

Verma who appeared before the District Collector as a

witness RW-1.In between as per the Annexure R-6, the

Company also started getting some remittances from

abroad towards funding the project.

12.The Company executed another M.O.U with M/S

Shiv Shakti Steel, Sadhu Singh Building, Mashobra,

Tehsil & District Shimla, whereby, the contract of

construction of building and obtaining necessary

permissions thereof was given to M/S Shiv Shakti Steel.

This contract was valid for a period of five years. It is

also a matter of fact that the Company constructed an

approach road measuring 1.5 Km. approximately for

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initiating the construction process at the site. This fact

has also been acknowledged in the order of the District

Collector at page 18. With regard to the process of

partition, it has been stated by Shri Anil Verma (RW-1)

who was General Power of Attorney on behalf of other

co-sharers and Shri Sushil Kumar Goenka (RW-2) in

their statements that the process was initiated by

obtaining a copy of tatima from Patwari, however, it

could not be taken to the logical end as some of the co-

sharers expired and their legal heirs were objecting to

it. A copy of Tatima prepared for carving out the share

of the appellant is also appended to the file as Ext. R-1.

15.It is a matter of fact that the world faced great

recession during the period between 2008 and 2013.

This also got reflected in fall of Indian Stock Market

thereby affecting the cash flow to the project. It is

apparent from the communications discussed above

that the developers made all out efforts to source

funding both from the Financial Institutions as well as

from the Stock Markets but due to recession, the

funding was refused to the developers which is proved

from the above communications. This fact has also

been taken into consideration by the Ld. Collector at

page-20 and has observed:

"His plea that he could not start the construction

due to economic recession is too general and

vague in the absence of specific documentary

evidence. There is nothing specific on record that

the respondent was prevented from starting the

construction because of economic downturn."

It appears that at the stage of the case before

the District Collector, the appellant could only produce

the copies of reports of the Stock Market as well as

communications on e-mail with the Stock Market to

prove his point, however, he did not produce any

communication from the banks refusing the grant of

loan to him. He later obtained the copies of

communications sent to him by the banks and

submitted the same at the stage of arguments which go

to prove that he not only approached the banks and

Stock Market but did it well in time i.e. in the year 2009-

10 immediately after getting approval from the State

and within the specified period of two years. The refusal

on the part of the financing agencies has clearly been

on account of recession.

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16. It may also be appropriate to summarize as to

what the appellant has done so far and what else he

could have done.

What he had done:-

 Signed M.O.Us for architectural designs and

construction of the project;

 Approached banks and Stock Market for loans

and share capital;

 Constructed 1.5 km. road;

What else could have been done :

 Informing the Govt. and obtaining extension;

 Obtaining necessary permissions under various

law. (It has been pleaded that TCP permission

was Annexure R-18).

 Getting the land partitioned (though the process

seems to have been initiated but was not taken

to a logical end).”

In view of the concurrent findings of facts

returned by the two revenue authorities below which do not

call for any interference, it was justly concluded that the

default on the part of the respondent could not be held to be

conscious negligence so as to order vestment of the land in

the State. Reliance upon Ravinder Chauhan

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was justly

placed for holding that merely because respondent could

not start the actual construction of the resort within two

years from the date of execution of the sale deed for which

he was granted permission under Section 118 of the Act

would not result in automatic vestment of the land in the

State. Here it would also be pertinent to take note of M/s

Springdale Resorts and Villas Pvt. Ltd. versus State

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of Himachal Pradesh & Others

5

wherein 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 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

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CWP No.3363/2025, decided on 26.09.2025

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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 same has to be construed

and read that the permission holder has put the land to such

use for which the permission was granted. In the instant

case, the respondent has taken steps for putting the land to

use. It is not the case of the petitioner that respondent had

diverted the land for any other use. The mechanical order

passed by the District Collector ordering vesting of

respondent’s land in the State on the ground of it having

failed to construct resort within period of two years was

rightly set-aside by the higher authorities. As observed

earlier, two authorities below on the basis of facts have

concurrently held that respondent cannot be held guilty of

conscious default, negligence by correctly applying the

principles laid down in Ravinder Chauhan .

2

The impugned

orders therefore do not call for any interference. Petition is

dismissed. Pending miscellaneous application(s), if any, shall

also stand disposed of.

Jyotsna Rewal Dua

February 26, 2026 Judge

yogesh