In a significant judgment, the Punjab & Haryana High Court held that a property sold through a registered sale deed cannot be taken back through resumption proceedings, as such action would violate the constitutional right to property under Article 300A.
The Division Bench of Justice Sureshwar Thakur and Justice Vikas Suri emphasized:
“The invocation of resumption power based on a breach in the agreement to sell, which was not part of the registered conveyance deed, is arbitrary and violates the Right to Property enshrined under Article 300A of the Constitution.”
The case was filed by M/s Penguin Enterprises Pvt. Ltd., which was allotted an industrial shed in Gurgaon in 1997. A registered conveyance deed was issued in 2006. However, after internal disputes following a director's death in 2007, operations paused. By 2016, the company resolved its internal issues and attempted to resume activities—only to find that the authorities had resumed possession of the property.
An RTI query revealed that the resumption notices were not properly served to the directors or the company’s registered office. A representation was submitted in 2019 but remains undecided.
The petitioner argued that the resumption and eviction notices were issued without due process or adherence to natural justice. Furthermore, the State alone holds the power of resumption—not the respondent company under the Companies Act, 1956.
Agreeing with the petitioner, the Court declared:
“The power to cancel a registered deed lies solely with a competent Civil Court, and not with the respondents. Such a deed can only be rescinded through a civil suit.”
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The Bench further clarified that arbitration or contractual terms cannot override this rule:
“Even if arbitration has some relevance, it cannot authorize resumption. It may help settle disputes but cannot empower a party to resume property already sold.”
Mr. B.B.Bagga, Advocate for the petitioner.
Mr. Ankur Mittal, Addl. A.G., Haryana, Ms. Svaneel Jaswal, Addl. A.G. Haryana,
Mr. Pardeep Prakash Chahar, Sr. DAG, Haryana. Mr. Saurabh Mago, DAG, Haryana,
Mr. Gaurav Bansal, DAG, Haryana and Mr. Karan Jindal, AAG, Haryana for the respondent-State.
Mr. Pankaj Gupta, Advocate and Mr. Vaibhav Gupta, Advocate for respondents No. 2 and 3
Title: M/s Penguin Enterprises Pvt. Ltd.
State of Haryana and others v. State of Haryana and others
