Cancellation Of License And Prosecution Of Developers For Delayed Urban Project Completion.pdf

Cosmo City Flat Buyers Welfare Society vs. State of Haryana et al. (CWP-2424-2017)

Issue:

The petitioners, Cosmo City Flat Buyers Welfare Society, sought an order from the High Court of Punjab and Haryana directing official respondents to:

1. Cancel a development license (License No. 79/2010) issued to M/s Headway Buildcon Private Limited for a real estate project.
2. Take over the project and complete it in collaboration with allottees, some of whom are members of the petitioner society.
3. Prosecute and register FIRs against M/s Adel Landmarks Limited (formerly Era Landmarks Limited), M/s Headway Buildcon Private Limited, and M/s Desert Moon Realtech Private Limited for alleged illegal activities related to the project.

Background:

- The license was issued in favor of a group company (M/s Headway Buildcon) despite direct involvement of other group companies (M/s Adel Landmarks and M/s Desert Moon).
- The project has been stalled due to non-renewal of the license and several pending legal proceedings against the developers.
- A show cause notice was issued to M/s Adel Landmarks regarding illegal marketing of properties under License No. 79/2010 without prior approval.

Court's Decision:

The High Court:

1. Directed the official respondents (Director General, Town & Country Planning, Haryana) to decide on the show cause notices expeditiously, affording all parties an opportunity to be heard.
2. Allowed the official respondents to consider renewing the license before completing proceedings related to the show cause notice if deemed necessary.
3. Ordered the official respondents to take a consequential decision regarding project takeover if they choose not to renew the license.
4. Postponed consideration of the prayer for initiating prosecution, allowing official respondents to do so on their own initiative.
5. Set deadlines for representations/objections from both parties and for the developers to furnish copies of their replies to the petitioner society.
6. Emphasized the need for expeditious decision-making by the official respondents.