In a detailed and sharply worded judgment, the Supreme Court has pulled up Haryana government authorities and a real estate developer over what it called a deeply flawed approval process in the Ambience Lagoon housing project at Gurugram. The court found serious irregularities in how land meant for residential use was later converted for commercial exploitation, raising concerns of collusion, misuse of power, and violation of buyers’ rights.
The ruling came in a batch of civil appeals led by Raj Singh Gehlot & Ors. vs Amitabha Sen & Ors., arising from a long-running dispute over land use, approvals, and environmental compliance.
Background of the Case
The dispute traces back to the early 1990s when M/s HLF Ltd. (later Ambience Developers) obtained a licence to develop a residential colony over 18.98 acres in Nathupur village, Gurugram. The project, later marketed as Ambience Lagoon, was promoted as a premium group housing complex with large open areas and community facilities.
However, in 2001, the developer sought to “de-license” eight acres from the approved residential layout and convert it into a commercial complex. This land eventually housed a large mall and commercial buildings.
Flat buyers later alleged that:
- The original layout never allowed commercial use,
- Mandatory open areas were reduced,
- Authorities approved changes without legal backing,
- The move directly affected residents’ rights under the Haryana Apartment Ownership Act.
These grievances reached the Punjab and Haryana High Court, which in 2020 ruled against the developer and government authorities. The matter then travelled to the Supreme Court.
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The Supreme Court examined:
- Whether the “de-licensing” of land was legally permissible,
- Whether approvals were granted in violation of planning laws,
- Whether the rights of apartment buyers were compromised,
- The role of state authorities in approving the changes.
The court closely scrutinised the original licence documents, layout plans, and the manner in which permissions were granted.
Court’s Observations
The bench made strong observations on procedural lapses and administrative conduct.
“The concept of ‘de-licensing’ does not exist under the Haryana Development and Regulation of Urban Areas Act,” the court noted, rejecting the government’s justification that it had an implied power to allow such changes.
The court found that:
- The original layout plan was never properly submitted.
- Mandatory disclosures under planning rules were bypassed.
- Commercial construction was permitted even before land was legally de-licensed.
- Authorities failed to protect the interests of apartment buyers.
In a sharp remark, the bench observed that the manner in which approvals were granted “points towards active connivance” between officials and the developer.
It also held that once buyers acquire rights in common areas, those rights cannot be diluted without their consent, as mandated under the Haryana Apartment Ownership Act.
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Environmental and Regulatory Violations
The case also involved proceedings before the National Green Tribunal (NGT), which found environmental violations and ordered compensation.
A Joint Expert Committee later recommended:
- Environmental compensation running into crores,
- Possible demolition of unauthorised structures,
- Action against officials involved in illegal approvals.
The Supreme Court took note of these findings while assessing the legality of the project.
Final Decision
Upholding the High Court’s judgment, the Supreme Court ruled that:
- The de-licensing of residential land for commercial use was illegal,
- Government authorities acted beyond their powers,
- The developer benefited from approvals granted without legal basis,
- Buyers’ statutory rights were violated.
The court dismissed the appeals filed by the developer and related parties, effectively affirming the findings against the project and the manner in which permissions were granted.
Case Title: Raj Singh Gehlot & Ors. vs Amitabha Sen & Ors.
Case No.: Civil Appeal arising out of SLP (C) No. 11480 of 2020 & connected matters
Decision Date: 20-Jan-2026
