P&H High Court Dismisses PIL Challenging ₹2500 Crore Transfer To GMADA, Upholds State's Power Under Punjab Town Planning Act

The Punjab and Haryana High Court has dismissed a Public Interest Litigation challenging the State Government's decision directing various development authorities to provide ₹2500 crore to the Greater Mohali Area Development Authority (GMADA), holding that the impugned action does not violate the provisions of the Punjab Regional and Town Planning and Development Act, 1995 (the Act).Chief Justice Sheel Nagu and Justice Sanjiv Berry noted, "A bare perusal of Section 49 (1) (e) of the Act of 1995 reveals that all moneys received by the Authority by way of rent and profits or in any other manner or from any other source is one of the heads by which fund of the Authority is created."The PIL was filed by the Public Action Committee along with six individuals, seeking quashing of a communication dated April 1, 2026 issued by the Punjab Urban Planning and Development Authority (PUDA). The communication directed multiple development authorities, including GMADA, GLADA and others, to transfer funds amounting to ₹2500 crore as a loan to GMADA.The petitioners contended that the direction was without authority of law, it was arbitrary and ultra vires the 1995 Act and Public funds were being diverted unlawfully. They also sought restoration of funds in case any transfer had already been effected.At the outset, the State represented by AG Maninderjit Singh Bedi raised an objection regarding maintainability, arguing that the lead petitioner was an unregistered body and hence incompetent to file a PIL.Rejecting this contention, the Bench held that since six individual petitioners had also approached the Court, the PIL was maintainable.However, the Court examined the statutory framework under the Punjab Regional and Town Planning and Development Act, 1995, particularly Section 28 (functions of the Authority), Section 40 (State control), Section 49 (funds of the Authority) and Section 51 (power to borrow and advance money).From a conjoint reading of Sections 49 and 51 of the Act of 1995, it is obvious that the Authority has the power to borrow money from such sources, other than the State Government, and while stipulating this power, the expression “such other sources” has been used, which is of widest import. Meaning thereby that all the legitimate sources available with the Authority can be source for borrowing money, noted the Court.The bench pointed When the impugned communication is tested on the anvil of the aforesaid statutory provisions of Sections 49 and 51 of the Act of 1995, it is seen that the letter/communication dated 01.04.2026...is an approval by the Government of Punjab, enabling the Authority to borrow a sum of Rs. 2500 crore from different sources, as mentioned in tabular form.The Bench observed that development authorities are empowered to maintain and utilize funds from multiple sources, including “any other source”.The expression “other sources” under Section 51 is of wide import, enabling borrowing from legitimate avenues.The impugned communication was merely an approval by the State Government enabling borrowing of ₹2500 crore and there was no statutory violation under Sections 49 or 51 of the Act.The direction did not amount to illegal diversion of funds, provided statutory safeguards are complied with.The Court clarified that compliance with provisions relating to fund management and investment under Section 49 remains mandatory.Finding no illegality or arbitrariness in the State's decision, the Court refused to interfere and dismissed the PIL.“We do not find any transgression of any statutory provision… the impugned communication is an approval enabling the Authority to borrow,” the Court held.Title: Public Action Committee and others v. State of Punjab and othersMr. Baltej Singh Sidhu, Senior Advocate (arguing counsel) with Mr. Shehbaz Thind, Advocate,Ms. Smile, Advocate, Ms. Shruti, Advocate, and Mr. Sultan Singh, Advocate, for the petitioners.Mr. Maninderjit Singh Bedi, Advocate General, Punjab (arguing counsel), with Mr. Vipin Pal Yadav, Addl. Advocate General, Punjab, for respondents No.1 and 2.Mr. Rajiv Atma Ram, Senior Advocate (arguing counsel), with Ms. Shrya Kaushik, Advocate, andMr. Sumbhav Parmar, Advocate, for respondents No.3 and 4.Mr. Chanchal K. Singla, Addl. Advocate General, Punjab (arguing counsel) withMs. Kavita Joshi, Advocate, and Mr. Sangam Garg, Advocate, for respondents/PUDA and GLADA.Click here to read order

P&H High Court Dismisses PIL Challenging ₹2500 Crore Transfer To GMADA, Upholds State's Power Under Punjab Town Planning Act

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P&H High Court Dismisses PIL Challenging ₹2500 Crore Transfer To GMADA, Upholds State's Power Under Punjab Town Planning Act

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