The authority to withdraw land acquisition ceases once possession is taken, necessitating fair hearing protections.

1. Leave granted. Heard the parties.

2. On 15.3.1990, a preliminary Notification under S.17 of the Karnataka Urban Development Authorities Act, 1987 ('KUDA Act' for short) was issued by the Mysore Urban Development Authority the appellant herein ('MUDA' for short), proposing to acquire certain lands for development of Kuvempunagar residential layout and formation of a double Road. This was followed by a final declaration dated 24.5.1991 under S.19(1) of the KUDA Act by the state government stating that it had granted sanction of the scheme and that the land proposed to be acquired by MUDA for the purposes of the scheme is required for a public purpose. The said final declaration was challenged and quashed by the High Court with liberty to proceed afresh from the stage of consideration of representations. After considering the representations, a fresh final declaration was issued on 4.10.1999. In pursuance of it, an Award was made on 16.10.2000 and possession of the lands was taken on 8th / 9th December 2000. A notification dated 14.12.2000 was issued under S.16(2) of the Land Acquisition Act, 1894 ('LA Act' for short) confirming that possession of the lands had been taken over. In view of the above, MUDA claims that the acquired lands vested in the government and later in MUDA.

3. Acting on the applications of some land owners, the state government issued a notification dated 15.9.2001 under S.19(7) of the KUDA Act read with S.48(1) of LA Act dropping the acquisition proceedings, in regard to 17 acres 21 guntas of the lands described therein. Immediately thereafter, on 28.9.2001, the land owners sold the denotified lands to the first respondent. When MUDA came to know about the denotification, it represented to the government that the lands could not have been denotified as the lands had vested in it, on possession being taken. It was also submitted that the acquired lands could not be denotified without hearing it. In view of it, the state government issued another notification dated 22.7.2002 under S.21 of the Karnataka General Clauses Act, withdrawing the notification dated 15.9.2001.

4. In this background, the first respondent, purchaser of the denotified lands from the previous land owners filed a writ petition (WP No. 30425/2002) before the Karnataka High Court, challenging the notification dated 22.7.2002 on the ground that the owners of the lands were not heard before withdrawing the notification dated 15.9.2001. It was also contended that once a notification was issued under S.48(1) of LA Act, it could not be withdrawn under any circumstances and S.21 of General Clauses Act does not empower such withdrawal. A learned Single Judge, by judgment dated 28.8.2007, allowed the writ petition filed by the first respondent. He held that when a notification under S.48(1) is issued, a valuable right relating to property was acquired by the land owner in regard to the denotified land, and therefore, a notification under S.48(1) of LA Act cannot be withdrawn without hearing the concerned land owner. The learned Single Judge therefore quashing the cancellation notification dated 22.7.2002, but reserved liberty to the state government to consider the request of MUDA to withdraw the notification dated 15.9.2001, after hearing the then land owners and their transferee (the first respondent). Feeling aggrieved, MUDA filed a writ appeal which was dismissed by a Division Bench of the High Court on 14.12.2007. The said order is under challenge in this appeal by special leave.

5. The question for consideration is whether the order of withdrawal dated 22.7.2002 is valid; and what would be the appropriate relief