Himachal Pradesh High Court
State Of H.P vs M/S Nova Precision Pvt. Ltd on 22 April, 2026
Author: Jyotsna Rewal Dua
Bench: Jyotsna Rewal Dua
( 2026:HHC:12511-DB )
IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
CWP No.2448 of 2020
Decided on: 21.04.2026
_________________________________________________________________
.
State of H.P. ....Petitioner
Versus
M/s Nova Precision Pvt. Ltd. ...Respondent
_________________________________________________________________
Coram
Ms. Justice Jyotsna Rewal Dua
of
1 Whether approved for reporting?
_________________________________________________________________
For the petitioner:
rt Mr. Y.P.S.Dhaulta, Additional
Advocate General.
For the respondent: Mr. Avinash Sharma, Advocate.
Jyotsna Rewal Dua, Judge
The District Collector, Solan, H.P. on 07.10.2017,
passed an order of vestment of land in question in the State
of Himachal Pradesh on account of respondent’s failure in
putting the land to use within the period prescribed under
Section 118 of the Himachal Pradesh Tenancy and Land
Reforms Act, 1972 (The Act in short). Respondent’s appeal
against this order was allowed by the Divisional
Commissioner, Shimla Division, on 06.03.2019. Revision
Petition preferred by the State was dismissed by the Financial
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes
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Commissioner (Appeals), H.P. on 02.12.2019.
Feeling aggrieved, State of Himachal Pradesh has
now preferred this writ petition, assailing the orders passed
.
by the Divisional Commissioner, Shimla Division dated
06.03.2019 as also dated 02.12.2019, passed by the
Financial Commissioner (Appeals).
of
2. Heard learned counsel for the parties and
considered the case file.
3.
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The Case.
3(i). Proceedings under Section 118 of the Act for non-
utilization of the land in question within the stipulated period
were initiated against the respondent. Petitioner’s case was
that respondent purchased the land for establishing the
industrial unit in accordance with the Government
permission letter dated 21.11.2003. The land had not been
utilized by the respondent for above purpose within the period
mentioned in the permission letter as also in terms of Section
118 of the Act. Respondent’s defence was that it had not
violated the provisions of the Act, but had taken various steps
for utilizing the land. It had obtained permission from Town
& Country Planning Department, H.P., State Pollution
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Control Board, Irrigation & Public Health Department,
Industries Department etc. It had also taken approval like
Environment Protection etc. Respondent further projected
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that it had already constructed the boundary wall with gate,
bore well, security room, store room and had fenced the land
for the purpose of construction of building as per plan. It had
also obtained electricity and water connections. Respondent
of
stated that it was in the process of setting up the industrial
unit. Keeping the stand of the respondent in view, the
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District Collector Solan, on 12.05.2015, discharged the
respondent from notice issued to it under Section 118 of the
Act, with direction to it to utilize the land by establishing the
industrial unit within one year. The order was with the rider
that in case new fact is brought to the notice of the Court,
proceedings under Section 118 of the Act would be re-
instituted against the respondent.
3(ii) Proceedings under Section 118 of the Act were re-
instituted against the respondent on 06.02.2017. The
respondent contested the proceedings, however the District
Collector Solan, on 07.10.2017, ordered for vestment of land
in the State Government on the ground that Naib Tehsildar
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Baddi, District Solan had reported on 14.12.2016 that the
land in question was visited by the concerned Patwari
01.10.2016 and he had reported non utilization of land in
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question by the respondent for establishing the industrial
unit. During pendency of proceedings, the spot was also
visited by the Sub Divisional Magistrate Nalagarh, H.P, The
SDM furnished his report dated 03.10.2017, mentioning that
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the land in question had not been utilized for the purpose for
which it was purchased. That industrial unit did not exist on
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the site.
3(iii) While allowing respondent’s appeal against the
above order passed by the District Collector, the Divisional
Commissioner, held that the District Collector had merely
relied upon the report of Patwari and of Sub Divisional
Magistrate Nalagarh. No statement of any witness was
recorded by the reporting authority at the time of spot visit.
Statement of the reporting authority was also not recorded by
the vesting authority. The reports on the basis of which
proceedings had initiated against the respondent, were not
even exhibited in accordance with law. No evidence was led
whatsoever. That evidence of prosecution witnesses would be
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admissible only after it passes through the test of cross-
examination. Such evidence against the respondent for
establishing the alleged factum of non-utilization of land
.
could not have been used unless the same had passed
through the test of procedure established by law. The
Divisional Commissioner also recorded findings that in view
of documentary evidence produced by the respondent
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alongwith its objections filed before the Court of learned
District Collector in form of letter issued by the Ministry of
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Micro, Small and Medium Enterprises, it was apparent that
industrial unit was in running condition and no proper
opportunity was provided to the respondent. While allowing
respondent’s appeal, the Divisional Commissioner also
deliberated over the meaning assigned to the words ‘shall put
the land to use’ figuring in Section 118 of the Act in
contradiction to the word ‘shall use the land’, by placing
reliance upon following para of Ravinder Chauhan and
others Vs. State of H.P.2:-
“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 on2
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account of the conscious default, negligence or refusal on the
part of the person 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 fauit, it is not permissible forthe respondents or for that matter anybody from public
including the petitioners to insist or assert that despite the
obvious and for no fault of the 6th respondent, he should beof
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.”
rt
3(iv) The order passed by the Divisional Commissioner
on 06.03.2019 was affirmed by the Financial Commissioner
(Appeals) on 02.12.2019. The Financial Commissioner
(Appeals) also concurred with the reasoning of the Divisional
Commissioner that intention of the Legislature is not to
confiscate the legally purchased property only for the non-
completion of work within stipulated period despite bonafide
efforts from the purchaser to utilize the land for the purpose
for which it is allowed to be purchased.
4. Consideration.
4(i) Learned Divisional Commissioner as also learned
Financial Commissioner have justly interpreted Ravinder
Chauhan2 drawing out following conclusion:-
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“10. The present case revolves around the interpretation of
the words “shall put the land to such use” as implied in
second proviso to sub section (2) of Section 118 of the
Act. The words “shall put the land to such use” as used
.
in second proviso to sub section (2) of section 118 have
not been defined in the Act. The meaning to these words
has to be assigned by following the settled principles of
statutory interpretation. A plain and precise meaning
has to be assigned to these words to give effect to the
provision of second proviso to sub section (2) of section
of
118 of the Act. In Oxford dictionary the word “put” has
been assigned a meaning as “move something to”.
Further the word “to” has been assigned a meaning as
“in the direction so as to reach a particular state”. Thus
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the words “put the land to use” as used in the second
proviso can only mean to move in the direction to use
the land so as to reach a particular stage i.e. to
establish the project. From the above, it is clear that
from the precise and plain words used in the second
proviso, the legislative intention is that within statutory
period of two years or within extended period of one
year, the purchaser has to move in the direction to use
the land for the purpose for which it was purchased so
as to form an opinion in the mind the State Govt. who
had granted permission to purchase land to the effect
that the purchaser is ready and willing to put the land
to such use for which permission was granted. This
proviso nowhere provides for bringing into existence and
to make the project operational within statutory period
of two years on the land. The words “put to use” cannot
be given the extended meaning to bring into operation
the project within a period of two years. Within two
years, the purchaser has to take steps in the direction of
utilizing the land to disclose its intent that he is ready
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and willing to establish the project. Had the legislative
intent been that the land has to be used completely for
the purpose for which permission was given within
statutory period then in place of words “shall put the
.
land to such use” the words “shall use the land” should
have been employed in the said proviso. There is
substantial distinction in the meaning of words “shall
put the land to use” and the words “shall use the land”.
The legislative while enacting second proviso to sub
section (2) of Section 118 has intentionally used the
of
words “shall put the land to use” instead of words” shall
use the land” because Legislative was aware of the fact
that after permission to purchase the land is given there
are number of procedural formalities which are to be
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completed before steps are taken to establish the
project/industry such as preparation of building plans,
various no objection certificates from concerned
departments of the State, Essentiality certificate,
sanction of building plans from the competent
authorities etc. These procedural formalities take a long
time, may be, due to official delay or some other
reasons which may not be under the control of the
person establishing the project which may also be due
to statutory impediments including operation of other
laws.
11. The Instructions regarding excluding the period for
which a person was prevented from putting the land
into use due to statutory hindrance of some action of the
Government, from two/three years as stipulated in the
H.P. Tenancy and Land Reforms Act, 1972 issued by
the Govt. of H.P dated 5th February 2016 which
provides as under:-
” However, certain cases have been brought to notice
of this Department where permission have been
granted under Section-118 of H.P. Tenancy and::: Downloaded on – 24/04/2026 11:17:29 :::CIS
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Land Reforms Act, 1972 but the buyers have failed
to put the land into use as provided under proviso
mentioned above due to some statutory hindrances
or operation of other provisions of law in force or a
policy or any other action on the part of Government
itself. Due to this reason, the prescribed time period
these cases has expired. Such affected.
firms/applicants have represented to the
Government through concerned Departments). who
have issued essentiality certificates in their favour.
The relevant departments have also recommended
these cases for consideration, with cogent reasonsand justification to consider these sympathetically
and allow them to utilize the land for the purpose for
which permission was granted as there was no fault
on their part in its non utilization.
of
A Division Bench of the Hon’ble High Court of Himachal
Pradesh in CWP No. 254 of 1995 (AIR 1993 H.P. 43),
titled “Ravinder Chauhan and others Vs. State of
rt
Himachal Pradsh and others” decided on 18-09-1998,
while considering and interpreting the provision ofsecond proviso sub section (2) of section 118 of the Act
ibid has held as under:-
“In our view when the statute contemplated the
failure on the part of the person, who has beengranted 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 concerned andwhere the non compliance was for reasons beyond
his control or due to the fact that it was incapable orimpossible 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 compliedwith and performed and were equally at fault, it is
not permissible for the respondents or for that matter
anybody from public including the petitioners to
insist or assert that despite the obvious and for no
fault of the 6″‘ 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.”
12. The findings recorded by the Ld. District Collector that
the land has not been used for the purpose for which
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permission was given within statutory period is
erroneous and wrong. The Ld. District Collector while
passing the impugned order has not understood the real
legislative intent behind second proviso to sub section
.
(2) of Section 118 and particularly the purpose of
permitting a non-agriculturist to purchase land. The real
legislative intent is that the land must be used for the
purpose for which permission was given and vestment
of land is not automatic on the expiry of two years or
the extended period as may be granted by the State
of
Govt.
13. The suit land was allotted to M/s Nova Precision (P)
Ltd., for the construction of an industrial unit. The
objective
rt was to support and encourage
industrialization in the State of H.P. which, in turn,
would generate employment and revenue for the State
Government. The appellant has invested considerable
amount to purchase the land as well is to make
operational the unit for which purpose the permission
has been granted by the State Govt. The impugned
order overlooks the fact that as on date there indeed
has been set up an industrial unit which is providing
employment to the State of H.P. and generating revenue
for the State of H.P. The fact that various state and or
Central Government agencies have recognized and
accepted the existence of the industrial unit on the said
land has also been clearly overlooked in the passing of
the impugned order.
14. The provisions of Act are Penal and very stringent and
every caution should have been exercised while
initiating the proceedings under Section 118 of the Act.
The provisions in the Act are for the confiscation of the
land along with the semi built/built structures or any
running business/residence on the said land in dispute,
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which is purchased by the individual persons/company
by spending their own money under this Act. The
confiscation of the movable/immovable property of the
said land owned by the individual is without any
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compensation. Therefore, the District Collector has to
take utmost due care while considering all the aspects
of information related to the case, providing proper
opportunity and appreciation of evidences of the case.
In view of the concurrent findings of facts returned
of
by the two revenue authorities below which do not call for any
interference, the default on the part of the respondent could
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not be held to be conscious negligence so as to order
vestment of the land in the State. Reliance upon Ravinder
Chauhan2 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 of Himachal Pradesh & Others3 wherein while
relying upon Ravinder Chauhan2 it was observed that the
words “shall put the land to such use for which the
3
CWP No.3363/2025, decided on 26.09.2025
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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
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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
of
is granted before the expiry of the period prescribed in the
Statute. The Court also took judicial notice of the fact that
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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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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
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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
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the permission holder has put the land to such use for which
the permission was granted. In the instant case, the
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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. In fact, respondent has placed on
record certain documents in support of his stand that
industrial unit has been set up. The Divisional Commissioner
had justiciably did not give credence to some reports relied
upon by the District Collector which had neither been put to
the respondent nor placed on record in accordance with law.
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 industrial unit within
period of two years was rightly set-aside by the higher
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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 Chauhan2.
The impugned orders therefore do not call for any
interference. Petition is dismissed.
Pending miscellaneous application(s), if any, also
of
to stand disposed of.
rt Jyotsna Rewal Dua
Judge
April 21, 2026
R.Atal
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