1. Dispute over land claimed as assigned lands reverting to State upon unauthorised transfer; auction by Official Liquidator of company in liquidation challenged by State. (Para 1 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 )
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2026 Supreme(SC) 1043
SUPREME COURT OF INDIA
J. B. PARDIWALA, K. VINOD CHANDRAN, JJ.
M/s Circar Paper Mills Ltd. – Appellant
Versus
District Collector, Nellore Distt. & Ors. – Respondents
Civil Appeal No.699 of 2017 With Civil Appeal Nos. 807-808 of 2017 Civil Appeal Nos. 809-810 of 2017
Decided On : 25-08-2026
Important Points
Summary proceedings under the Andhra Pradesh Assigned Lands (Prohibition of Transfers) Act, 1977 for eviction cannot be invoked when there is a bona fide dispute regarding title, especially where possession is long-standing and based on registered deeds. The proper remedy is a civil suit.
Subject
Property Law - Land Assignment and Summary Eviction
Act Referred
Headnote
(A) Andhra Pradesh Assigned Lands (Prohibition of Transfers) Act, 1977 - Sections 3 and 4 - Andhra Pradesh Land Encroachment Act, 1905 - Sections 2, 3, 6 - Companies Act, 1956 - Summary proceedings for eviction - Bona fide dispute of title - Auction sale by Official Liquidator in liquidation proceedings - Interference by appellate court.
(B) Summary proceedings under the Act of 1977 cannot be invoked where there is a bona fide dispute as to the title of the Government, especially when the land has been in long possession of the person claiming title under registered deeds and mutation entries. The principle laid down in the decision of this Court regarding the Land Encroachment Act applies equally to the Assigned Lands Act. The Government cannot unilaterally decide title in its own favour and evict summarily. The Company Court has custody of properties of a company in liquidation; any claim by the State must be raised before that court. The appellate court ought not to interfere with auction proceedings confirmed by the Company Court in a summary manner.
Facts of the case:
The lands in question were originally owned by a predecessor-in-interest who sold portions to various purchasers including the Company in liquidation. The Company operated an industry on the lands and later went into liquidation. The Official Liquidator took possession and conducted a public auction of the properties, which was confirmed by the Company Court. The State claimed that 40.65 acres out of the total were assigned lands which could not be alienated and thus reverted to the Government. The revenue officer raised objections only after the auction was published. The Company Court confirmed the sale and directed payment of a sum to the Government. The District Collector appealed successfully before the Division Bench of the High Court, which set aside the confirmation. The auction purchaser and the Company in liquidation appealed to the Supreme Court. Additionally, individual appellants claimed title over adjacent lands and sought pattadar passbooks, which were denied following the same reasoning.
Findings of Court:
The Supreme Court held that the State's claim of assignment was not substantiated; the assertion that a large portion was assigned to the original owner himself was contradictory as he was not landless. The lands were privately held for decades with registered deeds and mutation entries. The Government's belated objection after the auction publication, without approaching the Company Court, could not be countenanced. The summary proceedings under the Assigned Lands Act were not appropriate given the bona fide dispute over title. The Appellate Court erred in interfering with the auction. The order of the learned Single Judge was revived.
Issues: (i) Whether the lands were assigned lands under the Act of 1977? (ii) Whether the State could resort to summary eviction proceedings without establishing its title in a properly constituted suit? (iii) Whether the Company Court's confirmation of auction sale could be set aside in appeal?
Ratio Decidendi: The court ruled that when there is a genuine dispute as to the title of the Government over the land, summary proceedings for eviction under the Assigned Lands Act cannot be resorted to; the proper remedy is to file a suit. The long and uninterrupted possession of the Company and its predecessors, coupled with registered title deeds and revenue records, raised a bona fide claim of title. The Government's failure to take timely action and its inability to prove assignment in a summary proceeding before the Company Court vitiated its claim.
Result: Civil appeals allowed; the order of the Division Bench of the High Court set aside; the order of the learned Single Judge confirming the auction sale revived; possession to be handed over to the auction purchaser, if not already; the writ petitions of the individual appellants revived for fresh consideration by the High Court; the amounts deposited to the Government to be restored to the Official Liquidator for distribution in the liquidation of the Company.
(B) Summary proceedings under the Act of 1977 cannot be invoked where there is a bona fide dispute as to the title of the Government, especially when the land has been in long possession of the person claiming title under registered deeds and mutation entries. The principle laid down in the decision of this Court regarding the Land Encroachment Act applies equally to the Assigned Lands Act. The Government cannot unilaterally decide title in its own favour and evict summarily. The Company Court has custody of properties of a company in liquidation; any claim by the State must be raised before that court. The appellate court ought not to interfere with auction proceedings confirmed by the Company Court in a summary manner.
Facts of the case:
The lands in question were originally owned by a predecessor-in-interest who sold portions to various purchasers including the Company in liquidation. The Company operated an industry on the lands and later went into liquidation. The Official Liquidator took possession and conducted a public auction of the properties, which was confirmed by the Company Court. The State claimed that 40.65 acres out of the total were assigned lands which could not be alienated and thus reverted to the Government. The revenue officer raised objections only after the auction was published. The Company Court confirmed the sale and directed payment of a sum to the Government. The District Collector appealed successfully before the Division Bench of the High Court, which set aside the confirmation. The auction purchaser and the Company in liquidation appealed to the Supreme Court. Additionally, individual appellants claimed title over adjacent lands and sought pattadar passbooks, which were denied following the same reasoning.
Findings of Court:
The Supreme Court held that the State's claim of assignment was not substantiated; the assertion that a large portion was assigned to the original owner himself was contradictory as he was not landless. The lands were privately held for decades with registered deeds and mutation entries. The Government's belated objection after the auction publication, without approaching the Company Court, could not be countenanced. The summary proceedings under the Assigned Lands Act were not appropriate given the bona fide dispute over title. The Appellate Court erred in interfering with the auction. The order of the learned Single Judge was revived.
Issues: (i) Whether the lands were assigned lands under the Act of 1977? (ii) Whether the State could resort to summary eviction proceedings without establishing its title in a properly constituted suit? (iii) Whether the Company Court's confirmation of auction sale could be set aside in appeal?
Ratio Decidendi: The court ruled that when there is a genuine dispute as to the title of the Government over the land, summary proceedings for eviction under the Assigned Lands Act cannot be resorted to; the proper remedy is to file a suit. The long and uninterrupted possession of the Company and its predecessors, coupled with registered title deeds and revenue records, raised a bona fide claim of title. The Government's failure to take timely action and its inability to prove assignment in a summary proceeding before the Company Court vitiated its claim.
Result: Civil appeals allowed; the order of the Division Bench of the High Court set aside; the order of the learned Single Judge confirming the auction sale revived; possession to be handed over to the auction purchaser, if not already; the writ petitions of the individual appellants revived for fresh consideration by the High Court; the amounts deposited to the Government to be restored to the Official Liquidator for distribution in the liquidation of the Company.
Legal Category Hierarchy
- property law
- administrative law
- company law
- civil procedure
-
land reforms
-
ceiling proceedings
- finality (Para 18)
-
ceiling proceedings
Advocates appeared:
For the Appellant(s) : Mr. K.m. Nataraj, A.S.G. Mr. M Srinivas R Rao, Adv. Mr. Abid Ali Beeran P, Adv. Mr. Saswat Adhyapak, Adv. Ms. Namita Kumari, Adv. Mr. S Subramaniam, Adv. Mrs. Sudha Gupta, AOR Mr. Y. Raja Gopala Rao, AOR Mr. Y. Ramesh, Adv. Mr. Dhuli Gopi Krishna, Adv. Mr. Akshay Singh, Adv. Mr. Sadineni Ravi Kumar, AOR Mr. B. Adinarayana Rao, Sr. Adv. Mr. Parnam Prabhakar, Adv. Ms. Susmita Devi, Adv.
For the Respondent(s): Ms. Sujata Kurdukar, AOR Mr. Guntur Prabhakar, AOR Ms. Prerna Singh, Adv. Mr. Guntur Pramod Kumar, AOR Mr. Arijeet Shukla, Adv. Ms. Vanshikha Singh, Adv. Mr. G. N. Reddy, AOR Mr. Siddharth Sangal, AOR Ms. Richa Mishra, Adv. Ms. Kashish Tewatia, Adv. Ms. Mrinalini Tandon, Adv.
For the Appellant(s) : Mr. K.m. Nataraj, A.S.G. Mr. M Srinivas R Rao, Adv. Mr. Abid Ali Beeran P, Adv. Mr. Saswat Adhyapak, Adv. Ms. Namita Kumari, Adv. Mr. S Subramaniam, Adv. Mrs. Sudha Gupta, AOR Mr. Y. Raja Gopala Rao, AOR Mr. Y. Ramesh, Adv. Mr. Dhuli Gopi Krishna, Adv. Mr. Akshay Singh, Adv. Mr. Sadineni Ravi Kumar, AOR Mr. B. Adinarayana Rao, Sr. Adv. Mr. Parnam Prabhakar, Adv. Ms. Susmita Devi, Adv.
For the Respondent(s): Ms. Sujata Kurdukar, AOR Mr. Guntur Prabhakar, AOR Ms. Prerna Singh, Adv. Mr. Guntur Pramod Kumar, AOR Mr. Arijeet Shukla, Adv. Ms. Vanshikha Singh, Adv. Mr. G. N. Reddy, AOR Mr. Siddharth Sangal, AOR Ms. Richa Mishra, Adv. Ms. Kashish Tewatia, Adv. Ms. Mrinalini Tandon, Adv.
Table of Contents
2. State contends lands are assigned and revert on unauthorised transfer; appellants assert title by possession and registered deeds, challenging summary eviction. (Para 1 , 3 , 4 , 6 )
3. Appeals allowed; auction confirmation revived; deposited amounts restored; individual appellants' writ petition revived for fresh consideration. (Para 19 , 20 , 21 )
4. Can summary proceedings under the Andhra Pradesh Assigned Lands Act be used to evict persons in long possession under a bona fide claim of title?
No, summary proceedings are not permissible when there is a genuine dispute regarding title; the proper remedy is a properly constituted suit. (Para 14 , 15 , 16 , 17 )
5. Can a Company Court confirm an auction sale of company assets despite a belated State claim that the lands are assigned?
Yes, the Company Court has jurisdiction, and the State's belated objection, without approaching the court, does not invalidate the auction. (Para 10 , 11 , 12 , 13 )
6. Can revenue authorities reopen ceiling proceedings concluded by the Land Reforms Tribunal?
No, the Ceiling proceedings are final and cannot be reviewed by the Mandal Revenue Officer or Collector. (Para 18 )
JUDGMENT
K. VINOD CHANDRAN, J.
Two of the above set of civil appeals relate to the very same property i.e. 65.94 acres in various survey numbers, of which the actual dispute is with respect to 40.65 acres; whether those are assigned lands, which revert back to the State on unauthorised transfers being made. The appellant in Civil Appeal No.699/2017, the Company in liquidation, represented by the Official Liquidator (for brevity, O.L) was in ownership and possession of such lands and on the Company sliding into liquidation, the said properties were put in auction by the O.L appointed by the Company Court, in which auction the appellant in Civil Appeal Nos.809-810 of 2017 purchased the same. Learned Single Judge confirmed the auction-sale but in appeal by the State, the confirmation was set aside finding the State’s claim to be valid, which is challenged by the Company in liquidation as also the purchaser in public auction. In the other appeal the individual appellants together claimed title over just adjacent properties. They raised a contention that the 17.73 acres in their possession, along with the properties which are the subject matter of the other appeals, were in the ownership and possession of their predecessor-in-interest for long. Therein the denial of revenue passbooks, validating the Patta was declined, which was challenged before the writ court. The writ court followed the judgment in the other appeals to disentitle the claim raised by the appellants therein.
2. Sri Ranjit Kumar and Sri Navin Pahwa learned Senior Counsel appeared for Jeevaka Kandasari Sugar Mills (J.K. Sugar Mills), who purchased the properties in auction and the individual appellants in the other appeals are the persons in possession of the adjacent properties, represented by learned Senior Counsel Sri B. Adinarayana Rao. Sri K.M. Nataraj, learned Additional Solicitor General appeared for the O.L of Circar Paper Mills Limited, the Company in liquidation. Ms. Prerna Singh, learned Counsel appeared for the State. We refer to the parties by their name and the individual appellants as Sundaramma and others, for convenience.
3. Admittedly, the total area of land purchased by J.K. Sugar Mills from the O.L appointed for Circar Paper Mills Limited, admeasures 65.94 acres, comprised in 445-A1, 445-A5, 445-A6, 521, 525, 527 and 529. Out of which, 40.65 acres in the above Survey numbers in Kodurupadu village, Nellore Mandal, District Nellore is the land on which the Government stakes their claim, asserting it to be ‘assigned lands’. The 25.29 acres is stated to be lands acquired for APIIC Limited while the title of the total land of 65.94 acres is traced to one Balasada Jagannada Rao (B.J. Rao; hereinafter), as per the averments in the Civil Appeals.
4. The claim of the appellants, is that the entire lands at one point belonged to B.J. Rao. In fact, 82.35 cents was purchased in the year 1920 by one Perumraju Naidu from Desabhatla Krishnaiah. He was in possession and enjoyment of the said properties till 1932 when he settled the same in the name of his only son B. Janardhana Naidu, whose name was also mutated in the revenue records and the taxes were continuously paid by him. Janardhana Naidu bequeathed the properties to B. J. Rao; his son, on 14.04.1962; who was the husband of Sundaramma and the father of appellant Nos.2 to 6, under a registered Will. B.J. Rao’s name was mutated in the revenue records after his father’s death by proceedings F. Dis. No.49/74 dated 31.03.1965 of Taluk Office Nellore.
5. B.J. Rao sold the entire properties in three lots of different extents; 17.73 acres, 18.39 acres and 46.23 acres. The Government proposed to acquire the land belonging to P. Ramanarayna and P. Kalyana Sundar Rao who had purchased the 17.73 acres from B.J. Rao. The acquisition was intended to establish an industry by name M/s Pennar Steels Limited. The Section 4(1) notification dated 26.06.1976 was challenged successfully before the High Court, wherein liberty was res
