V.V.S. RAO, J.

1. The land admeasuring Acs.1.12 guntas in S.No.1005/KK situated at Gadwal is Government land (hereafter, subject land). It was part of the jagir known as Gadwal Samsthan. It was taken over by the Government in 1952 under Jagir Abolition Regulations. Smt.Lakshmidevamma, Maharani of Gadwal, had granted the land to M/s.Mahanandi and Lakshman Goud, the predecessors of the respondents (hereafter, the petitioners) for construction of a rice mill, namely, Mahanandeswara factory. The Tahsildar, Gadwal (the MRO) initiated eviction proceedings under the Andhra Pradesh Land Encroachment Act, 1905 (the Act). The notice dated 23.3.1984 was issued under Section 7 of the Act directing Lakshman Goud, husband of the second petitioner to show cause as to why he should not be evicted from the land and buildings constructed thereon. A month thereafter, on 22.4.1984, the Tahsildar issued order/notice under Section 6 of the Act directing eviction.

2. The petitioners filed appeal under Section 10(2) of the Act before the Sub-Collector. They contended that the original allottees raised structures six decades ago; after their death, successors have been in continuous occupation of the land which was also leased out to third parties; the land is not Government land; there is no record showing the land as Khariz Khata; the factory was assigned Municipal number and that the ownership is recorded in the name of the petitioners; and that the eviction proceedings are unsustainable. The Sub-Collector, Gadwal conducted fresh enquiry and dismissed the appeal. They then filed a revision before the Joint Collector urging that notice under Section 7 of the Act was not served on the petitioners; and due to long occupation the petitioners perfected title to the land by adverse possession. Not impressed with any of the submissions and taking into consideration the absence of any Muntakab or any other document conferring title on the petitioners, the Joint Collector dismissed the revision on 14.8.1987. The petitioners’ revision to the Commissioner of Land Revenue (CLR) was also dismissed on 17.11.1989, aggrieved by which they filed yet another revision petition before the Government.

3. It was contended before the Government that having been in occupation for over six decades and having raised structures on the land, the petitioners perfected their title by adverse possession. The Government, therefore, allowed the revision petition, and directed regularization in favour of the petitioners on payment of market value, “to meet the ends of natural justice”. The petitioners were directed to pay the market value as fixed by the District Collector.

4. After issue of the orders in G.O.Ms.No.1062, dated 23.10.1992, the first petitioner made a representation to the Hon’ble Minister for Panchayat Raj on 17.2.1993 seeking directions to the Collector to fix the market value of the subject land at the rates prevailing in 1336 Fasli when they occupied the land and constructed the factory. It is not clear from the record as to what happened thereafter. But on 01.2.1996, the District Collector issued a notice informing that the market value is fixed at Rs.250/- per Sq.yard and advised the petitioners to pay a sum of Rs.15,73,000/- within fifteen (15) days from the date of receipt of the said notice. At that stage, in July, 1996, the petitioners filed W.P.No.13497 of 1996 seeking declaration that G.O.Ms.No.1062, dated 23.10.1992 is arbitrary, illegal and for a consequential direction to quash the said order as well as the orders passed by the other authorities. Pending the said writ petition, the petitioners filed revision petition before the Government praying to set aside the notice dated 01.2.1996 issued by the District Collector. The Government issued orders in G.O.Ms.No.721, dated 07.10.1999 dismissing the same, aggrieved by which the petitioners filed W.P.No.25566 of 1999 seeking its invalidation.

5. The learned Single Judge heard the writ peti