42 years after Operation Blue Star, Punjab HC orders shop allotments to displaced traders at Rs 1,000 per sq yd with Galiara Scheme benefits

The petitioners were shopkeepers or tenants conducting business around the Golden Temple Complex, Amritsar, whose shops were destroyed and who were displaced during Operation Blue Star in June 1984.

The State subsequently formulated the Galiara Scheme in 1988 for planned clearance and beautification of the area. Under that Scheme, commercial tenants were offered alternate sites at Rs.1,000 per square yard, together with instalment facilities and a 50% construction subsidy.

Government communications in 1991 and 1992 recorded a decision to rehabilitate the Operation Blue Star oustees on the same lines as the Galiara Scheme. The same policy was reiterated in a 2006 meeting, where the Improvement Trust was directed to prepare a rehabilitation scheme for the affected tenants.

In 2012, however, the State approved allotment of 133 booths to the affected tenants at the Collector’s rate of Rs.38,400 per square yard.

The petitioners’ earlier writ petitions were disposed of on the basis of that allotment decision, but the Supreme Court remanded the matters to the High Court to determine the appropriate rate of allotment.

Of the 122 persons whose names were processed, 18 had paid the entire amount at Rs.38,400 per square yard, 27 had received allotment letters after depositing part of the amount, 35 had deposited 10%, and 42 had deposited Rs.10,000 per square yard pursuant to the Supreme Court’s interim order.

Five eligible persons had not been considered because no booths were available at the designated site.

Whether the petitioners, being persons displaced during Operation Blue Star, were entitled to allotment of alternate commercial sites at the same rate and on the same terms as the oustees under the Galiara Scheme, rather than at Rs.38,400 per square yard.

Whether the State’s decision in 2012 to charge Rs.38,400 per square yard was arbitrary, discriminatory and inconsistent with its earlier decisions to rehabilitate the petitioners on the lines of the Galiara Scheme.

Whether the five eligible persons who had not been included in the allotment process due to non-availability of space were entitled to consideration for alternate sites.

What directions should be issued concerning persons who had already accepted allotment or deposited amounts pursuant to the earlier rate.

The Court exercised its jurisdiction under Articles 226 and 227 of the Constitution and applied the constitutional guarantees of equality, non-arbitrariness and protection of life and personal liberty under Articles 14, 19 and 21.

It relied on the doctrine of promissory estoppel and the broader principles of fairness, equity and good conscience stated in M/s Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh, 1979 (2) SCC 409, namely that the Government cannot ordinarily resile from a clear representation made to citizens.

It also relied on Union of India v. M/s Unicorn Industries, 2019 (10) SCC 575, which recognises that promissory estoppel must be applied having regard to equity and public interest.

State of Himachal Pradesh v. M/s Kundlas Loh Udyog, 2026 AIR Supreme Court 3191, reiterates that State action must be fair, non-arbitrary and consistent and that governmental assurances may be affirmatively enforced to prevent manifest injustice.

The Court further applied the State’s own Galiara Scheme, under which eligible commercial tenants were to receive sites at Rs.1,000 per square yard with allied benefits.

The Court found that the petitioners were displaced involuntarily and immediately during Operation Blue Star in 1984, whereas the Galiara oustees were displaced later, through a planned and phased beautification scheme in 1988.

The petitioners were therefore at least as deserving of rehabilitation as the Galiara oustees.

The State had repeatedly recorded, in 1991, 1992 and 2006, that the Operation Blue Star oustees would be rehabilitated on the same terms as the Galiara beneficiaries.

In those circumstances, fixing the rate at Rs.38,400 per square yard in 2012, without addressing the earlier policy decisions, was held to be unfair, discriminatory and arbitrary.

The Court treated the underlying rationale of promissory estoppel—fairness, consistency and prevention of manifest injustice—as applicable even though the petitioners had not demonstrated a conventional alteration of position in reliance upon the promise.

The Court also held that the five persons excluded merely because of lack of space could not be discriminated against and had to be offered alternate sites.

However, the 18 persons who had already paid the full amount at the earlier rate were not disturbed, thereby preserving completed or substantially completed transactions.

The 18 persons who had already paid the full amount at Rs.38,400 per square yard were not to be disturbed.

The five eligible persons who had not previously been considered were to be offered alternate sites at Rs.1,000 per square yard with the corresponding Galiara benefits.

Amounts deposited at Rs.10,000 per square yard before the Supreme Court were to be adjusted towards the total cost, with any excess refunded.

The allotment, execution and registration of sale deeds, delivery of possession and other consequential formalities were directed to be completed within two months.