Allahabad HC quashes order stalling Ayodhya hotel project, directs govt decision in 6 weeks

The Allahabad High Court's Lucknow bench on Tuesday, August 18, set aside an order that had stalled a proposed hotel project in Ayodhya on grounds of land acquisition, observing that government departments must honour commitments made under the state's investment and tourism policies.

A bench of Justices Alok Mathur and Amitabh Kumar Rai quashed the order passed by the Housing Commissioner on May 29, 2024, holding it illegal, and directed the state government to decide within six weeks whether the land could be exempted from acquisition in accordance with law.

The case concerns 2,530 square metres of land in Kudakeshavpur Uparhar village in Ayodhya, where petitioner Kalpana Nigam had proposed a hotel project called "Ramakulam Regency," according to the court's order.

The Ayodhya Development Authority had approved the hotel map on July 17, 2023, while the Housing Development Council published the land acquisition notification on August 19, 2023. The court noted that the hotel plan had been approved before the acquisition notification was issued, and that construction had also commenced earlier.

The bench observed that government departments must respect promises and decisions made under policies aimed at promoting investment in the state, and noted that Invest UP meetings had already considered the issue, deciding that hotel projects with maps approved before acquisition notifications should be excluded from the acquisition process. Invest UP is an investment promotion and facilitation agency backed by the state government.

The court said state investment policies create a legitimate expectation among investors, and government authorities cannot arbitrarily depart from commitments arising from such policies.

The bench also took note of the petitioner's contention that the project was being developed under the state's investment and tourism promotion framework, and that authorities had initially recognised it as eligible for exemption from acquisition.

The court accordingly quashed the Housing Commissioner's May 29, 2024 order and directed the state government to reconsider the matter under Section 49 of the Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam, with a decision on the land's exemption from acquisition to be made within six weeks.

(Inputs from PTI)