The petitioners were assigned various extents of land in Survey Nos.80, 81, 94 and 96, admeasuring Acs.12.21 guntas of Suraram Village, Paloncha Mandal, Khammam District vide proceedings, dated 20.12.1991. They claim to be in possession and enjoyment of land ever since then. Kothagudem Thermal Power Station (K.T.P.S.) wanted the land for expansion of its activities. Since the land was assigned in nature, no proceedings were initiated under the Land Acquisition Act, (for short ‘the Act’). Possession thereof was taken by the respondents on 28.04.2004. The grievance of the petitioners is that no ex gratia was paid for the land.

The Tahsildar, Paloncha, respondent No.4 herein, filed a counter-affidavit. He stated that petitioner Nos.1 and 2, the mother of petitioner Nos.3 and 4 and petitioner No.5 were assigned about Acs.3.00 of land each vide proceedings, dated 20.12.1991. He also admitted that the said land was taken over for the benefit of K.T.P.S. on 24.04.2002. However, it is stated that ex gratia was not paid to the petitioners on the ground that they were not found to be in possession of the land, when it was taken over.

The petitioners filed a reply affidavit denying the allegation of the respondents that they were not in possession of the land. They have narrated the manner in which they continued to exercise the right of possession over the land till it was resumed.

Sri R.Kameswar Rao, learned counsel for the petitioners, submits that even when an assigned land is needed for public purpose, the Government is under obligation to pay ex gratia. He contends that the respondents admitted the existence of assignment in favour of the petitioners, but the ex gratia is denied only on the ground that the petitioners were not in possession. He submits that the revenue records up to the time when the land was taken over disclose that the land is in possession of the assignees and that the averment in the counter-affidavit that the petitioners are not in possession of the land is absolutely without any basis. He further submits that the petitioners have been in effective and legal possession of the land and unless anything to the contrary is proved to the satisfaction of the Court, the legal presumption that possession would follow title, needs to be drawn.

The learned Government Pleader for Land Acquisition, on the other hand, submits that though the petitioners were assigned the land in question, they were not in possession when it was taken over. She contends that the fact that the petitioners were not in possession of the land was noticed when the survey was conducted for taking over the land.

The assertion of the petitioners that they have been assigned the land of Acs.12.21 guntas in the year 1991 is admitted by respondent No.4, who filed counter-affidavit on behalf of all the respondents. The law that exists as of now is that even where an assigned land is taken over by the Government for any public purpose, the assignee is entitled to be paid the ex gratia. A Larger Bench of this Court held that ex gratia payable to an assignee shall represent the market value.

The respondents admit that ex gratia is payable for the assigned land in case it is taken over. The only basis pleaded for denying ex gratia to the petitioners is that they were not in possession of the land. Reference is made to G.O.Ms.No.266 Revenue (ASSN.II) Department, dated 18.03.2004.

Except making an averment to the effect that the petitioners were not in possession of the land, respondent No.4 did not state as to on what basis the said conclusion was arrived at. If an assignee is not in possession of the land, the Government reserves to itself, the right to resume the same, duly cancelling the assignment. Further, if any third parties are found to be in possession on the basis of any transfer from the assignees, the provisions of the Andhra Pradesh Assigned Lands (Prohibition of Transfers) Act, 1977can be invoked. In the absence of any such pro