The Punjab and Haryana High Court Tuesday stayed Bollywood filmmaker Subhash Ghai's Mukta Arts from performing any activity on a 20-acre plot purchased from a gram panchayat in Haryana, a lawyer said.

Ghai planned to set up a film institute on the land bought in October 2010 in Badhsa village in Jhajjar district, some 25 km from here.

Hearing a plea filed by Nafe Singh and others from the village, Acting Chief Justice M.M. Kumar ordered status quo on the land and the execution of the sale deed by the gram panchayat.

The petitioners' lawyer Deepak Balyan told: "We told the court that according to the Punjab Village Common Lands (Regulation) Rules, the government could only auction such land."

The petitioners claimed that the land belonged to the village community and the gram panchayat and the state government had no right to sell it to a private firm.

The Badhsa Gram Panchayat had sent a resolution to the Haryana government Jan 6, 2010 to permit them to sell land to Mukta Arts. On Sep 22, 2010, the government allowed the panchayat to sell 20 acres of land at the rate of Rs.2, 409, 000 per acre. The deal was sealed Oct 11, 2010.

A court at Bahadurgarh in Jhajjar district earlier dismissed a public suit filed by villagers against Ghai acquiring the land.