The Punjab and Haryana High Court has dismissed a public interest litigation challenging the Punjab Government’s approval allowing the Punjab Urban Planning and Development Authority (PUDA) to borrow Rs 2,500 crore from multiple sources. The Bench ruled that the Punjab Regional and Town Planning and Development Act empowered the authority to raise funds from “sources of widest import”.
Refusing to interfere with the government communication dated April 1, the Division Bench of Chief Justice Sheel Nagu and Justice Sanjiv Berry held that no violation of the Act was made out, so long as statutory safeguards and mandatory conditions were complied with.
The matter was placed before the Bench after the petitioner sought directions to quash letter/communication dated April 1 issued by the Authority directing the Chief Administrators of PUDA, GLADA, and other development authorities to provide an amount of Rs 2500 crore as loan to GMADA on certain terms and conditions. The decision was conveyed with the Chief Secretary’s approval
The petitioner contended that the State government exercised its extra ordinary powers to issue the direction “without any authority of law under the Punjab Regional and Town Planning and Development Act”.
The Bench made it clear that the statute itself envisaged generation of funds through multiple legitimate avenues, including rent, profits and “any other source”, while also permitting borrowing from sources other than the State Government.
“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,” the court observed. Punjab was represented in the matter by Advocate-General Maninderjit Singh Bedi, along with Additional Advocate-General Vipin Pal Yadav.
The Bench added that Section 49(1)(e) specifically provided that all money received by the authority “by way of rent and profits or in any other manner or from any other source” constituted one of the heads for creation of the authority’s fund.
Referring to the statutory framework, the court said Section 28 of the 1995 Act dealt with the objects and functions of the authority; Section 40 prescribed State Government control over the authority; Section 49 provided for creation of funds; while Section 51 dealt with the power to borrow or advance money from the State Government as well as other sources.
The court asserted a conjoint reading of Sections 49 and 51 made it “obvious” that the authority had the power to borrow money from sources beyond the State Government.
Testing the impugned communication on the “anvil” of Sections 49 and 51, the court held that the April 1 6 communication was merely an approval by the Punjab Government enabling the authority to borrow Rs 2,500 crore from different sources specified in tabular form.
“We do not find any transgression of any statutory provision u/s 49 or 51 of the Act of 1995, provided, of course, that the terms and conditions contained in Section 49(3), (4) and (5), including other mandatory provisions of the Act of 1995, are complied with,” the Bench ruled. Dismissing the PIL, the High Court concluded: “We see no reason to interfere in the present petition.”
