The Himachal Pradesh High Court observed that the mere existence of hotels, guest houses and homestays in the vicinity of a plot could not justify permitting a Change of Land Use (CLU) in a designated Restricted Area.

The Court held that the discretionary power under sub-regulation (vi) of General Regulation 18.1.2 had to be exercised on the basis of public interest or other material and justifiable considerations. In the absence of such reasons, allowing commercial use merely by relying on existing commercial activities would amount to violating the Dalhousie Development Plan.

Division Bench of Chief Justice G.S. Sandhawalia and Justice Jiya Lal Bhardwaj remarked that: “In the absence of any such justifiable reasons, and merely on the ground that the supporting documents showed existing Hotels, Guest Houses, and Home-Stays operating in the vicinity of the plot, this extraordinary power was exercised to violate the 'DPA' issued by the State Government

Background

The case arose from a dispute over 5,594 sq. metres of land in Upper Bakrota, Dalhousie, falling within the Restricted Area under the Dalhousie Development Plan. The landowner had initially obtained permission for residential construction but later sought Change of Land Use (CLU) from residential to commercial use for a hotel and guest house.

The Planning Permission Committee rejected the application, noting that the area was restricted to residential use and that several green trees stood on the site. However, the Appellate Authority subsequently allowed the CLU in 2020, relying on the existence of commercial establishments in the vicinity. The Upper Bakrota Residents Association challenged this permission before the High Court.

The High Court held that the Appellate Authority had wrongly exercised its discretionary power to permit commercial Change of Land Use in the Restricted Area. The Court found the order to be non-speaking and unsupported by valid reasons or public interest, noting that the existence of other hotels and guest houses nearby could not justify overriding the Dalhousie Development Plan. It also emphasized the environmental impact of commercial construction in the green belt and held that Article 14 cannot be invoked to perpetuate an illegality. bakrota bakrota

Accordingly, the Court set aside the 2020 CLU order and all subsequent permissions, while clarifying that the property could continue to be used for residential purposes.

Date of Decision: 30.09.2026