Making it clear that courts must balance the need to facilitate development with requirement to protect the interests of buyers in large real estate projects, the Punjab and Haryana High Court has restrained the developers of a 14.816-acre project in Gurugram’s Sector 58 from making any fresh allotments or creating further third-party rights until Haryana Director, Town and Country Planning (DTCP) decides a pending complaint challenging the project’s licence.

The interim directions came while the High Court was hearing a dispute over the grant and subsequent transfer of a licence relating to the project.

Emphasising the need to strike a balance, the Bench observed: “We are conscious of the fact that whenever development work is to be undertaken either by the State or its instrumentalities or even by the private developers in accordance with law, the same should not be stalled in normal course because that may hamper the development process.”

The Bench added: “This Court is also conscious of the fact that the Court cannot close its eyes to the fact that in the cases of mega projects where thousands of crores of rupees are involved and innocent allottees are sometimes also effected, who had given money to the developers, thus, their rights are also required to be protected. In other words, a balance is required to be maintained by this Court in exercise of its jurisdiction under Article 226 of the Constitution of India.”

The controversy relates to 14.816 acres in Sector 58, Gurugram. The court took note of the petitioner’s submissions the project had received some foreign direct investment and licences had been granted by the Director, Town and Country Planning at different points of time.

Initially, three separate licences were issued for different parcels of the land in favour of respondents comprising IREO group of companies. Thereafter, one of the respondents submitted an application for “grant of licence in the nature of a consolidated licence for migrating the licences into one licence pertaining to the total area”.

The petitioner opposed the proposed migration by filing a representation before the DTCP Director, which was rejected on March 1, 2024. The petitioner challenged that order before the High Court, but later withdrew the petition on May 16, 2025, with liberty to avail the remedy available in accordance with law.

The present writ petition was filed challenging both the grant of the consolidated licence in favour of the respondent and the subsequent approval of its transfer to another respondent through an order dated June 17, 2025. The petitioners were represented by senior advocates R.S. Rai, Chetan Mittal and Nalin Kohli, along with counsel Ritesh Kumar, Rubina Virmani, Shubham Madaan, Abhijeet Chaudhary, Anshul Malik, and Sonam Sharma.

Appearing for the petitioner, senior counsel argued that the licence had been granted in violation of Section 3 of the Haryana Development and Regulation of Urban Areas Act, 1975, which permits grant of a licence only to the owner of land having clear title.

The petitioner further argued that the land had already been transferred in favour of the other respondent on May 7, 2024. As such, the respondent, who had applied for consolidated licence, was not the owner at the relevant time.

After considering the rival submissions, the High Court held that the legality of the licence and its amendment dated June 17, 2025, should first be examined by the competent statutory authority.

”Considering the rival contentions, we are of the considered opinion that this aspect as to whether the licence along with its amendment, which has been made vide order June 17, 2025, is in accordance with law or not, has to be considered and decided by the competent authority, who is the Director of Town and Country Planning.”

Taking note of the State’s submission that the pending complaint would be decided in accordance with law after giving adequate opportunity to all stakeholders, the High Court directed the DTCP Director to decide the complaint on July 20, this year. If the matter remained undecided on that date, the authority was directed to hear it on a day-to-day basis and conclude it within two weeks.

The court further directed that all pleas raised by the parties must be specifically considered and decided through a categorical and reasoned speaking order, which shall be communicated to all concerned.

Pending that decision, the High Court ordered: “Considering the magnitude of the project and the fact that the rights of various allottees/prospective allottees are involved, it is further directed that till the complaint/representation is decided, no further allotment shall be made by the respondents to any further prospective allotee nor shall any further third-party rights be created by them.”