The Punjab and Haryana High Court has dismissed a public interest litigation challenging the Punjab government’s decision to facilitate a ₹2,500 crore loan arrangement for the Greater Mohali Area Development Authority (GMADA). The court held that the move did not violate the Punjab Regional and Town Planning and Development Act, 1995.
Background of the Case
The petition was filed by Public Action Committee and six individuals challenging a communication dated April 1, 2026, issued by the Punjab Urban Planning and Development Authority (PUDA). According to the petitioners, the communication directed various development authorities in Punjab to arrange a total of ₹2,500 crore as a loan for GMADA.
The petitioners argued that the state government lacked authority under the 1995 Act to issue such directions. They sought cancellation of the communication and also requested return of any transferred amount along with interest.
At the outset, the State raised an objection regarding maintainability, arguing that the Public Action Committee was an unregistered body and therefore could not maintain a PIL.
A bench comprising Justice Sheel Nagu and Justice Sanjiv Berry rejected the preliminary objection, observing that besides the committee, six individual petitioners had also approached the court.
“The aforesaid objection, at the very outset, is rejected,” the bench observed while holding that the petition remained maintainable because of the individual petitioners.
The court then examined Sections 28, 40, 49 and 51 of the Punjab Regional and Town Planning and Development Act, 1995. It noted that the Act grants broad powers to development authorities regarding planning, funding and borrowing.
Referring to Section 51, the bench observed that authorities are empowered to borrow money from “such sources” other than the State Government, and the phrase carried a wide meaning.
The court said,
“All the legitimate sources available with the Authority can be source for borrowing money.”
The judges further noted that Section 49 permits creation of funds from various sources, including income received “from any other source.”
After examining the statutory provisions, the court concluded that the impugned communication merely granted approval for borrowing ₹2,500 crore from different sources and did not breach the law.
“We do not find any transgression of any statutory provision u/s 49 or 51 of the Act of 1995,” the bench held, while adding that all mandatory conditions under the law must still be complied with.
The court ultimately refused to interfere in the matter and dismissed the PIL.
Case Details
Case Title: Public Action Committee and Others vs State of Punjab and Others
Case Number: CWP-PIL-92-2026
Judges: Justice Sheel Nagu and Justice Sanjiv Berry
Decision Date: May 7, 2026
