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Prevents Under Assigned Lands Act:
The has ruled that the cannot resort to proceedings under the when there exists a genuine and longstanding dispute over title to land. The judgment, delivered on , by a bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran , restores the auction of 40.65 acres of land to and emphasises that such matters must be resolved through a properly constituted suit, not .
The Long History of the Disputed Nellore Lands
The dispute revolves around 65.94 acres in Kodurupadu village, Nellore district, of which the State claimed 40.65 acres as “assigned lands” that had allegedly been alienated in violation of the 1977 Act. The title to the larger property was traced back to Balasada Jagannada Rao (B.J. Rao) , whose predecessors had held the land since . B.J. Rao sold different portions, including 46.23 acres to M/s in . The company mutated its name in revenue records, converted the land to industrial use, and operated a factory until it went into liquidation.
Following the liquidation, the took possession of the land on , under orders of the (a division of the ). With court permission, the property was put to public auction, and J.K. Sugar Mills emerged as the successful bidder for ₹7.80 crore. The auction was confirmed by the Company Judge, who also directed payment of ₹1.50 lakh per acre to the Government for the disputed portion—a move aimed at protecting any eventual State interest.
State's Claim of Government Assignment Falls Short
The State objected only at the stage of the auction, claiming that 40.65 acres were originally assigned to landless persons and thus could not be transferred. However, the found the State's evidence woefully lacking. “The very statement of assignment of lands to B.J. Rao, on the face of it demolishes the plea of the State,” the bench observed, noting that B.J. Rao was a substantial landholder and not a landless person—contradicting the very basis of the Act.
The Court also pointed out that the Government had slept on its rights for decades. “The Government, for whatever reason, woke up from a long slumber, when the auction was published by the O.L.,” the judgment noted. Despite having full notice of the court-supervised auction, the State merely sent a telegram and did not approach the to press its claim.
Auction Restored, Government's Objection Too Late
The held that the High Court’s appellate bench erred in setting aside the auction confirmation. “We are of the opinion that Appellate Court ought not to have interfered with the auction proceedings in a summary manner,” the bench wrote. The properties were in the custody of the , and any challenge should have been properly adjudicated there.
Reliance was placed on the precedent of , where the held that under the cannot be used when a exists. The Court extended this principle to the , which it described as concerning summary proceedings.
“The long possession itself restrains this Court from accepting any summary proceedings for eviction,” the Court declared, noting that the land had been in private hands since , with registered deeds and mutation entries supporting the claim. The government could not plead ignorance of the permissions and sanctions it had itself granted for industrial use.
Key Observations from the Apex Court
- “The Government cannot plead ignorance of either the sanctions and permissions granted or of the mutation entries made.”
- “The assignment of lands also has not been established unequivocally, nor can it be done in a or in a before the .”
- “The landlords also claim title on the strength of registered deeds as also mutation entries carried out in accordance with sale deeds.”
- “Neither the Mandal Revenue Officer nor the Collector can review the under the , which as against B.J. Rao stands concluded by the order of the .”
Final Decision and Its Implications
The allowed all three civil appeals. The order of the appellate court was set aside, and the ’s confirmation of the auction was revived. The Court directed that possession, if not already handed over, be given to J.K. Sugar Mills; if already in possession, it shall not be interfered with. The amounts earlier directed to be paid to the Government must be restored to the for application in the liquidation of Circar Paper Mills.
In the connected appeals by Sundaramma and others (concerning adjacent 17.73 acres), the Court set aside the impugned order and restored their writ petition before the High Court for fresh consideration. The High Court was told to give “precedential weightage” to the observations on and the Thummala Krishna Rao precedent, but otherwise to decide the matter on its own merits.
The decision reaffirms that coupled with a bona fide claim of title cannot be displaced through and that the State must pursue a properly constituted suit when genuine disputes over land ownership arise.
