1. Administrative cancellation of an industrial land allotment for a higher public interest purpose, namely to provide land for an educational institution. (Para 1 , 2 )
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2026 Supreme(SC) 96
SUPREME COURT OF INDIA
DIPANKAR DATTA, AUGUSTINE GEORGE MASIH, JJ.
Bihar Industrial Area Development Authority & Ors. – Appellants
VS.
M/s Scope Sales Pvt. Ltd. & Anr. – Respondents
Civil Appeal No. 929 of 2020
With
State of Bihar – Appellant
VS.
M/s Scope Sales Pvt. Ltd. & Ors – Respondents
Civil Appeal No. 930 of 2020
Decided On : 23-01-2026
Important Points
IMPORTANT POINTS
(1) Cancellation of allotment of Industrial Plot – Cancellation of allotment While rights of individual allottee merit due respect and consideration, it cannot be placed on a pedestal higher than collective public interest – Where two come into conflict, individual interest must necessarily yield to larger public good.
(2) Judicial discipline demands due deference to exercise of discretion by court of first instance, particularly when such discretion was exercised on relevant considerations – Intra-court appellate Bench ought not to substitute its own view, merely because such Bench considers its view to be better than the one taken by Single Bench.
(1) Cancellation of allotment of Industrial Plot – Cancellation of allotment While rights of individual allottee merit due respect and consideration, it cannot be placed on a pedestal higher than collective public interest – Where two come into conflict, individual interest must necessarily yield to larger public good.
(2) Judicial discipline demands due deference to exercise of discretion by court of first instance, particularly when such discretion was exercised on relevant considerations – Intra-court appellate Bench ought not to substitute its own view, merely because such Bench considers its view to be better than the one taken by Single Bench.
Subject
Administrative Law - Land Allotment
Act Referred
Headnote
(A) Constitution of India – Article 226 – Writ Jurisdiction – Exercise of – Parameters – Remedy of a writ is discretionary in nature – Even where a writ petition raises a substantial point of law, High Court may decline to entertain it for a variety of reasons – Relief may be denied to suitor notwithstanding existence of a strong legal case should grant of such relief not serve or advance public interest – If interfering with impugned order/decision would result in more harm to society, writ courts may decline to exercise its jurisdiction – High Courts, being custodian of Constitution, carry responsibility to maintain social balance by its interference when justice of case so demands and in not interfering when such interference would affect public interest – Both Single Bench and Division Bench exercise same jurisdiction under Article 226 of Constitution – Exercise of intra-court appellate jurisdiction is warranted only where judgment or order under challenge is demonstrably erroneous or suffers from perversity – Such jurisdiction ought not to be invoked merely because another view is possible on same set of facts, particularly where view adopted by Single Judge is a plausible and reasonable one. (Paras 11 and 13)
(B) Bihar Industrial Area Development Authority Act, 1974 – Section 9(3) – Industrial Plot – Cancellation of allotment – Reversal by Division Bench of High Court – Cancellation of allotment of plot in question was necessitated by requirement of land for setting up and future expansion of institute like IIT, a circumstance which was neither contemplated nor known at the time of original allotment – Decision of BIADA to cancel allotment was taken bona fide and in furtherance of a larger public purpose – BIADA, to demonstrate its bona fide, also offered to allottee an alternate piece of land, which it declined – There is no material on record which suggests that BIADA’s action is infected by any malice in fact – Institutes such as IITs not only cater to a large number of students but also play a critical role in development of individuals, society and nation at large – While rights of individual allottee merit due respect and consideration, it cannot be placed on a pedestal higher than collective public interest – Where two come into conflict, individual interest must necessarily yield to larger public good – Judicial discipline demanded due deference to exercise of discretion by court of first instance, particularly when such discretion was exercised on relevant considerations – Single Judge having refused exercise of discretion on a ground which is valid, Division Bench ought to have been loath to allow writ petition, in exercise of its intra-court appellate jurisdiction – Impugned order of Division Bench set aside and that of Single Judge restored. (Paras 15.1, 15.2, 16, 17 and 18)
Facts of the case:
Bihar Industrial Area Development Authority [BIADA] and State of Bihar are in appeal, by special leave, challenging judgment and order dated 21st October 2014 [impugned order] of a Division Bench of the High Court of Judicature at Patna [High Court] on an intra-court appeal [Letters Patent Appeal No. 335 of 2014] presented by first respondent [M/s. Scope]. Division Bench reversed Single Judge’s judgment and order dated 24th January 2014 of dismissal of M/s. Scope’s writ petition [Civil Writ Jurisdiction Case No. 4532 of 2009] and consequently, allowed writ petition of M/s. Scope.
Sole issue before Court is, whether Division Bench of High Court was right in its interference with order of dismissal of writ petition of M/s. Scope passed by Single Judge?
Findings of Court:
Plot in question shall not be put to any commercial use whatsoever by any of appellants and shall be utilized strictly and exclusively for educational purposes and activities incidental thereto.
Result : Appeals allowed.
Judgement Key Points
Certainly. Based on the provided legal document, the key points are as follows:
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The cancellation of the allotment of the industrial plot was justified by the larger public interest, specifically the need for land to establish and expand an educational institution like IIT. The rights of individual allottees, while deserving respect, must be subordinate to collective societal needs. When individual and public interests conflict, the latter takes precedence [p_15.1][p_15.2] (!) (!) (!) .
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The exercise of discretion by the initial court of first instance was exercised on relevant considerations, and judicial discipline requires deference to such discretion. An appellate intra-court bench should not substitute its own view unless the original order was demonstrably erroneous or perverse. The order of the Single Judge was valid, and the appellate division bench should have upheld it (!) (!) .
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The power of the authority (BIADA) to cancel allotments must be construed within the scope of the relevant statutory provisions. The cancellation was based on the bona fide need for the land for public purposes, notably the development of IIT, and was not infected by malice or improper motive [p_15.2] (!) (!) (!) .
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The land was required for a significant public purpose, and the decision to cancel was in furtherance of this larger goal. BIADA offered an alternative plot, which was declined by the allottee, indicating bona fide intent (!) (!) .
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The rights of individual allottees, including proprietary rights, are subordinate to the collective public interest, especially when the land is needed for critical public infrastructure like educational institutions (!) (!) .
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The court emphasized the discretionary nature of writ jurisdiction, which should be exercised to prevent greater harm to society. Interfering with the order would have hindered a project of national importance, thus the order of the Single Judge was restored, and the division bench's interference was set aside (!) (!) (!) .
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The original amount paid by M/s. Scope should be refunded with interest, and the plot must be used exclusively for educational purposes and related activities, not for commercial use (!) (!) .
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The intra-court appellate jurisdiction should be exercised with restraint, only intervening when the original order is demonstrably erroneous or perverse. The appellate bench in this case should have maintained the order of the Single Judge, which was within the bounds of judicial discretion (!) (!) .
These points collectively underscore the primacy of public interest over individual rights in land allotment cases, the importance of respecting judicial discretion, and the need for statutory clarity in exercising powers of cancellation.
Legal Category Hierarchy
Advocates appeared:
For the Appellant(s) : Mr. Abhay Kumar, AOR Mr. Shagun Ruhil, Adv. Ms. Kusum Pandey, Adv. Mr. Shreenivash, Adv. Mr. Rakesh Kumar, Adv. Mr. Karan Chopra, Adv. Mr. Azmat Hayat Amanullah, AOR Ms. Rebecca Mishra, Adv. Ms. Vanshita Gupta, Adv.
For the Respondent(s): Mr. Arun K. Sinha, AOR Mr. Manish Kumar, AOR Mr. Abhay Kumar, AOR
For the Appellant(s) : Mr. Abhay Kumar, AOR Mr. Shagun Ruhil, Adv. Ms. Kusum Pandey, Adv. Mr. Shreenivash, Adv. Mr. Rakesh Kumar, Adv. Mr. Karan Chopra, Adv. Mr. Azmat Hayat Amanullah, AOR Ms. Rebecca Mishra, Adv. Ms. Vanshita Gupta, Adv.
For the Respondent(s): Mr. Arun K. Sinha, AOR Mr. Manish Kumar, AOR Mr. Abhay Kumar, AOR
Table of Contents
2. The authority argued that the cancellation was supported by a general power of cancellation and larger public interest; the allottee contended that no statutory power authorized such summary cancellation. (Para 3 , 4 , 5 )
3. Courts must balance individual property rights against larger public interest when exercising discretionary writ jurisdiction, upholding administrative decisions that serve significant social or developmental goals without perversity. (Para 10 , 11 , 15 , 16 , 17 )
4. A high court, in its intra-court appellate jurisdiction, should not interfere with a reasoned and non-perverse judgment of a single judge that prioritizes overarching public interest over individual claims. (Para 13 , 14 , 15 )
5. The appellate order is set aside, the single judge's decision is restored, the cancellation is upheld, and compensation is ordered to be paid to the allottee. (Para 18 , 19 , 20 )
6. Should a court interfere in an administrative decision to cancel land allotment for a public purpose in writ jurisdiction?
A writ court should not interfere where the decision was taken bona fide in larger public interest and where the single judge's exercise of discretion was neither perverse nor demonstrably erroneous. (Para 11 , 12 , 15 )
7. What is the scope of an intra-court appellate bench in reviewing a single judge's decision under Article 226?
An intra-court appellate bench should be loath to interfere unless the single judge's order is perverse, suffers from an error of law, or demonstrates a failure to consider material facts; it should not substitute its own view merely because it considers it better. (Para 13 , 14 , 15 )
8. Does individual interest always prevail over public interest when land is required for a national institution?
No. When individual property rights conflict with collective public interest, individual interest must yield, provided the administrative authority acts without malice and, where appropriate, balances equities through compensation. (Para 16 , 17 )
JUDGMENT :
DIPANKAR DATTA, J.
1. Bihar Industrial Area Development Authority1[BIADA] and the State of Bihar are in appeal, by special leave, challenging the judgment and order dated 21st October 20142[impugned order] of a Division Bench of the High Court of Judicature at Patna3[High Court] on an intra-court appeal4[Letters Patent Appeal No. 335 of 2014] presented by the first respondent5[M/s. Scope]. The Division Bench reversed the Single Judge’s judgment and order dated 24th January 2014 of dismissal of M/s. Scope’s writ petition6[Civil Writ Jurisdiction Case No. 4532 of 2009] and consequently, allowed the writ petition of M/s. Scope.
2. A brief factual conspectus of the appeal is as follows:
a. Pursuant to an advertisement dated 6th June, 2007 issued by BIADA inviting offers for auction of plots, M/s. Scope applied for allotment of a plot. Upon its emergence as the highest bidder, M/s. Scope was allotted Plot No. C-347[plot in question], Patna Industrial Area, Patliputra, Patna, on 9th June, 2007 for a sum of Rs. 2,32,20,000/- (subsequently for a sum of Rs. 3,38,98,000/- due to increase in area). M/s. Scope wanted to construct a multiplex cum shopping mall on the plot, possession whereof was delivered on 9th October, 2007.
b. In the meanwhile, a decision was taken to set up the Indian Institute of Technology8[IIT] at Patna. The campus of a Government Polytechnic was chosen to house the IIT until the IIT developed its own campus. The plot in question is adjacent to the campus of the polytechnic.
c. Five months after delivery of possession of the plot in question in favour of M/s. Scope, BIADA, vide letter dated 29th March, 2008 directed M/s. Scope to stop construction on the plot in question till further notice.
d. Records show that the State decided to reserve the plot in question for future development of the IIT campus and, thus, had directed BIADA to initiate action for cancellation of allotment in favour of M/s. Scope.
e. Consequently, BIADA, on 10th November, 2008, issued a show cause notice to M/s. Scope proposing cancellation of the allotment (with refund and interest) followed by a second notice on 4th March, 2009. The relevant part of the notice reads as follows:
“In reference to the aforesaid subject matter, the Indian Institute of Technology has been opened in the State of Bihar also and is presently running at New Govt Polytechnic, Patliputra, Patna-13. The same is expected to remain in place for another 5 to 7 years, until IIT, Patna develops its own campus and facilities such as Administrative building and hostel etc. The land allotted to you Is contiguous to the present campus of IIT, Patna and in fact has a common boundary wall. Across the land in question, two buildings are also in possession of IIT, which houses the boys and girls hostel.
IIT is a prestigious Institution and its beginning in the State of Bihar is a great contribution to the academic atmosphere of the State. It has to be allowed all facilities which are required in making of an institution of the standard of IIT and therefore, it has been decided to cancel the allotment in greater public interest.
Accordingly, this is to communicate as why not the allotment as made to you be cancelled and possession be resumed by BIADA upon refund of the payment made by you with interest for the period during which money has remained with BIADA. The land is being needed for facilitation of the IIT, Patna and under such circumstances; this greater public interest needs to be addressed. It is requested that you may give your reply to this notice within 30 days of the issuance of this letter.
Thanking you,”
f. Vide its response dated 12th March, 2009, M/s. Scope pointed out that the notice did not cite any legal provision of the Bihar Industrial Area Development Authority Act, 19749[BIADA Act] or the Rules framed thereunder which allowed BIADA to cancel the allotment or to take back possession of the plot in question on the ground of public interest; therefore, the propos
