2025 (2) TMI 1231 - SC - Indian Laws

Physical possession required under Section 10(6) for valid land acquisition; restoration allowed under Section 3 of Repeal Act

M/s A.P. ELECTRICAL EQUIPMENT CORPORATION Versus THE TAHSILDAR & ORS.

M/s A.P. ELECTRICAL EQUIPMENT CORPORATION Versus THE TAHSILDAR & ORS. - 2025 INSC 274 1. ISSUES PRESENTED and CONSIDERED 1. Whether the State Government validly took physical possession of the surplus vacant land under Sections 10(5) and 10(6) of the Urban Land (Ceiling and Regulation) Act, 1976 ('ULC Act') prior to the commencement of the Urban Land (Ceiling and Regulation) Repeal Act, 1999 ('Repeal Act').2. Whether the notices issued under Sections 10(5) and 10(6) of the ULC Act and the panchnama evidencing possession comply with statutory requirements and are legally valid.3. Whether the mandatory 30-day period between issuance of notice under Section 10(5) and order under Section 10(6) was observed.4. Whether physical possession of the surplus land was actually taken over by the State or only symbolic/paper possession was claimed.5. The legal effect of the Repeal Act, 1999 on acquisition proceedings under the ULC Act, particularly regarding vesting and possession of surplus land.6. Whether disputed questions of fact regarding possession and validity of notices can be adjudicated in writ jurisdiction or require trial in regular civil proceedings.7. Whether the Division Bench of the High Court erred in setting aside the Single Judge's findings on possession and validity of acquisition proceedings. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of Physical Possession Taken Under Sections 10(5) and 10(6) of the ULC ActLegal framework and precedents: Sections 10(5) and 10(6) of the ULC Act mandate that where vacant land is vested in the State under Section 10(3), the competent authority must issue a written notice under Section 10(5) to the person in possession to surrender possession within 30 days. If the person refuses or fails to comply, the authority may take possession under Section 10(6), including use of force if necessary.Precedents emphasize strict compliance with these provisions. The Supreme Court in State of Uttar Pradesh v. Hari Ram held that the requirement of notice under Section 10(5) is mandatory and possession must be actual physical possession, not mere paper possession. The Court further held that mere vesting under Section 10(3) does not amount to possession.Court's interpretation and reasoning: The Single Judge found that the State failed to establish actual physical possession of the surplus land before the Repeal Act came into force. The purported Section 10(5) notice was not served properly but affixed on the factory gate during a claimed lockout, which was disputed. The Section 10(6) order was backdated and contained contradictory dates. The panchnama evidencing possession lacked signatures of the landowner, affidavits of panchas, and did not inspire confidence. Photographic evidence showed the factory operational and residential buildings constructed on the land, indicating possession remained with the appellant.The Division Bench, however, held that the issuance of notice under Section 10(5) by affixation was valid, there was no statutory requirement for a fresh notice under Section 10(6), and that taking possession by panchnama is an accepted mode of possession. It treated the alleged anomalies as clerical errors and held that the Single Judge erred in disbelieving the panchnama and notices.Key evidence and findings: The Single Judge relied on documentary evidence including photographs, absence of proper service, discrepancies in dates of notices, and lack of affidavits from panchas. The Division Bench relied on the statutory provisions, judicial precedents permitting panchnama as mode of possession, and the absence of conclusive proof that possession was not taken.Application of law to facts: The Single Judge applied the principle of strict compliance with statutory procedure and found the State failed to prove actual physical possession. The Division Bench emphasized pragmatic approach and accepted service by affixation and panchnama as possession.Treatment of competing arguments: The Single Judge rejected the State's contention of clerical errors as untenable and found the possession was not taken. The Division Bench treated procedural lapses as minor and held possession was validly taken.Conclusions: The Single Judge concluded possession was not taken over by the State and acquisition proceedings stood abated. The Division Bench reversed this, holding possession was validly taken.Issue 2: Mandatory 30-Day Period Between Section 10(5) Notice and Section 10(6) OrderLegal framework: Section 10(5) requires a 30-day period for surrender of possession after service of notice. Section 10(6) contemplates taking possession only after expiry of this period.Court's reasoning: The Single Judge found the Section 10(6) order dated 05.02.2008 was issued before expiry of 30 days from service of notice dated 08.01.2008 (affixed on gate), rendering the order void and illegal. The Division Bench held there is no statutory requirement for a fresh notice under Section 10(6), and the order dated 05.02.2008 was immaterial; possession was taken on 08.02.2008 after expiry of 30 days.Conclusions: The Single Judge held non-compliance of 30-day period vitiated possession. The Division Bench disagreed, holding no fresh notice required and possession valid.Issue 3: Validity and Authenticity of Panchnama as Evidence of PossessionLegal framework: The ULC Act and Rules do not prescribe detailed procedure for panchnama. Supreme Court decisions recognize panchnama as an accepted mode of taking possession of large tracts of land.Court's reasoning: The Single Judge found the panchnama was prepared on a printed form with gaps filled, lacked signatures of landowner, affidavits of panchas, and did not mention addresses or descriptions of panchas, raising doubts about its genuineness. The Division Bench held no statutory requirement exists for landowner's signature or affidavits of panchas and that panchnama is a valid mode of taking possession.Conclusions: The Single Judge declared the panchnama as fabricated and void. The Division Bench upheld its validity.Issue 4: Effect of Urban Land (Ceiling and Regulation) Repeal Act, 1999 on Acquisition ProceedingsLegal framework: Section 3 of the Repeal Act provides that repeal does not affect vesting of vacant land if possession has been taken over by the State before repeal. Section 4 provides that proceedings pending before repeal shall abate except those relating to land possession taken over before repeal.Court's reasoning: The Single Judge held that since actual physical possession was not taken before repeal, proceedings stood abated and land ownership reverted to appellant. The Division Bench did not disturb the factual finding of possession remaining with appellant but held possession was taken by panchnama before repeal.Conclusions: The Single Judge's view that acquisition proceedings abated due to non-taking of physical possession before repeal was correct; the Division Bench erred in ignoring this.Issue 5: Whether Disputed Questions of Fact Regarding Possession and Notices Can Be Adjudicated in Writ JurisdictionLegal framework: Generally, disputed questions of fact are not adjudicated in writ proceedings, but where facts are not complex or where material on record permits, courts may decide mixed questions of law and fact. Supreme Court decisions permit High Courts to probe disputed facts in writ petitions to prevent miscarriage of justice.Court's reasoning: The Division Bench held that disputed facts regarding possession and validity of notices should not be decided in writ jurisdiction and that the challenge to notices was belated and waived. The Single Judge had examined the materials and found the documents to be fabricated or defective, which was within the writ court's jurisdiction.Conclusions: The Court held that the issue of possession involves mixed question of law and fact and the Single Judge rightly examined the evidence in writ jurisdiction. The Division Bench erred in dismissing the challenge on this ground.Issue 6: Whether the Division Bench Erred in Setting Aside the Single Judge's JudgmentLegal framework: An intra-court appeal is not a full rehearing but a review of legality and correctness of the Single Judge's order. Interference is warranted only if there is a patent error or the judgment is against settled principles.Court's reasoning: The Court found the Division Bench gave undue benefit of doubt to the State despite glaring procedural irregularities, discrepancies in notices, and lack of evidence of physical possession. The Division Bench overlooked the principle of strict compliance and the settled law on effect of repeal without possession.Conclusions: The Division Bench committed an egregious error in interfering with the well-reasoned and considered judgment of the Single Judge. The Single Judge's judgment was restored. 3. SUMMARY OF LEGAL PRINCIPLES AND FINDINGS The Urban Land (Ceiling and Regulation) Act, 1976 requires strict compliance with procedural safeguards in acquisition of surplus vacant land, including mandatory service of notice under Section 10(5) and observance of 30-day period before taking possession under Section 10(6).'Vesting' under Section 10(3) is a deeming provision conferring title but does not amount to actual physical possession, which must be taken separately.Physical possession must be actual and de facto, not merely paper or symbolic; absence of physical possession before repeal of the Act leads to abatement of proceedings and restoration of land to original owner.Panchnama is an accepted mode of taking possession of large tracts of land, but must be genuine and credible; absence of signatures of landowner or affidavits of panchas may cast doubt on authenticity.Service of notice by affixation is permissible only in exceptional circumstances and must be established as a last resort; mere affixation without proof of service is insufficient.Disputed questions of fact involving possession and validity of notices may be adjudicated in writ jurisdiction if materials permit; courts must prevent abuse of process and miscarriage of justice.The Repeal Act, 1999 preserves rights of land vested and possessed by the State before repeal; absence of possession leads to abatement of acquisition proceedings.In intra-court appeals, interference with well-reasoned judgments is warranted only on patent error or violation of settled principles.