Why Punjab and Haryana High Court discharged Hooda and AJL in Panchkula land allotment case

Former Haryana Chief Minister Bhupinder Singh Hooda and the Associated Journals Ltd (AJL), the company that publishes the National Herald newspaper, were discharged on Wednesday (February 25) by the Punjab and Haryana High Court in a corruption and cheating case regarding the allotment of a plot in Panchkula to AJL, bringing to an end the nearly decade-long legal case. Justice Tribhuvan Dahiya set aside the April 2021 order of a special Central Bureau of Investigation (CBI) judge that had framed charges against Hooda and AJL, terming the continuation of the prosecution an “abuse of the process of Court”. Allotment, resumption and re-allotment The case stems from the decision of the Haryana Urban Development Authority (HUDA) – now known as Haryana Shehri Vikas Pradhikaran – to allot a 3,500-square-meter plot in Sector 6, Panchkula, to AJL in 1982 for publishing a Hindi daily, Nav Jiwan. However, AJL failed to complete construction on the plot within the stipulated two-year period – a condition for HUDA’s allotment. Consequently, in October 1992, HUDA “resumed” – that is, took back ownership – of the plot. AJL’s subsequent appeals to regain the plot were dismissed by the HUDA administrator in 1995 and then by the Financial Commissioner and Secretary of the Haryana government’s Town and Country Planning Department in 1996. The controversy arose in 2005, after the Congress party returned to power in Haryana with Hooda as CM. Following a representation by AJL, Hooda – who was also the Chairman of HUDA – ordered the re-allotment of the plot to AJL on August 28, 2005, at the original 1982 rate, along with interest, rather than the market rates prevalent in 2005. CBI’s case: ‘wrongful loss’ and ‘colorable exercise of power’ The CBI registered an FIR in April 2017, alleging that the re-allotment caused a wrongful loss to the tune of Rs. 63 lakhs to the state exchequer and a corresponding wrongful gain to AJL. The agency contended that Hooda ignored the advice of HUDA officials and legal opinions from government officers stating that once a plot is resumed and the resumption attains finality, it cannot be re-allotted to the same entity. It claimed that by allotting the land at 1982 rates, Hooda abused his official position, causing a loss of Rs 63 lakh to the authority – calculated as the difference between the market value of the land in 2005 and what AJL ultimately paid for it. The CBI charged Hooda and AJL with criminal conspiracy and cheating under the Indian Penal Code and criminal misconduct by a public servant under the Prevention of Corruption Act. In an order dated April 16, 2021, a special CBI judge framed charges against Hooda and AJL, sanctioning a trial against them. Both appealed against the order before the High Court. High Court’s reasoning: Why the charges didn’t stick The High Court found the Special Judge’s order framing charges to be “perverse” and based on “sheer imagination” rather than evidence, and discharged both the accused, holding that there weren’t sufficient grounds to proceed with a trial. The High Court found that the CBI failed to prove any actual loss to HUDA. Hence, there was no “wrongful loss” or “wrongful gain”, which is an essential element of a cheating or corruption charge. The judgment noted that while an audit objection was raised against the re-allotment in 2007, claiming a loss of Rs 63.08 lakh, this objection was formally dropped by the Accountant General (Audit) in 2009 after HUDA explained that the re-allotment was done in “public interest” that a Hindi daily would serve. Justice Dahiya observed that since the AJL paid the price for the land demanded by HUDA with interest, “to claim on this premise that the re-allotment caused any loss to the Authority, is fictional which cannot afford any ground to frame charge.” Another critical factor in the High Court’s decision-making was that while Hooda passed the initial order in 2005, the decision was unanimously ratified by the entire HUDA in a meeting on May 16, 2006. The court criticised the CBI for singling out Hooda while ignoring the other members of the authority who approved the decision. The CBI had argued that the other officers were “innocent” because they claimed in subsequent statements that they weren’t fully aware of the facts. The High Court dismissed this argument, stating that a “[c]onscious decision taken by the Authority cannot be termed inconsequential and fake based upon subsequent statements of its members who, undisputedly, concurred with it without demur. It is manifestly illegal, and defies all logic.” The court noted that ignoring other members who ratified the decision “raises doubts about [the CBI’s] bona fides and the nature of investigation carried out.” The court also held that even if Hooda went against the advice of bureaucrats, that alone does not constitute a crime unless there is evidence of dishonest intention. In doing so, the court distinguished between violating administrative rules and having criminal intent. Citing multiple Supreme Court judgements, the High Court held that a public servant can only be accused of criminal misconduct if they obtain a pecuniary advantage through corrupt means. Since Hooda did not take any money and the “loss” to the state was non-existent, his decision could at worst be an error of judgment, not a criminal conspiracy. “[P]assing an order against the policies, guidelines or opinions and in ignorance of any fact cannot be a basis to attribute dishonest intention to the accused,” the judgment stated. The High Court also pointed out a fundamental flaw in the prosecution’s logic: the re-allotment order of 2005 has never been challenged or declared illegal by any civil court. The allotment remains valid, AJL paid the money, constructed the building and even received an occupation certificate in 2014. “It is unfathomable as to how the investigating agency can consider the re-allotment of plot unlawful on its own, and proceed to register a criminal case on that basis,” Justice Dahiya wrote. The High Court concluded that the material on record did “not even prima facie disclose the existence of” cheating or corruption and “there is no ground to proceed against them”.