State Of H.P vs M/S Nova Precision Pvt. Ltd on 22 April, 2026

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.
rt
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

.

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
rt
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

.

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

of
the land in question had not been utilized for the purpose for

which it was purchased. That industrial unit did not exist on
rt
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

of
alongwith its objections filed before the Court of learned

District Collector in form of letter issued by the Ministry of
rt
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 on

2
AIR 1999 HP 43

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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 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 6th respondent, he should be

of
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
rt
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
rt
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

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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 reasons

and 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 of

second 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 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 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
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

.

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
rt
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

.

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
rt
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

.

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

of
the permission holder has put the land to such use for which

the permission was granted. In the instant case, the
rt
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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