Deemed vesting alone does not confer possession; Repeal Act bars acquisitions where State lacked de facto control

A bench of Justices J.B. Pardiwala and R. Mahadevan heard appeals by M/s A.P. Electrical Equipment Corporation against a Division Bench judgment of the Telangana High Court that had set aside a Single Judge’s order which had allowed writ petitions challenging purported acquisition steps under the Urban Land (Ceiling and Regulation) Act, 1976. The appeals raised the narrow issue whether the State had taken actual physical possession of surplus vacant land under Sections 10(5) and 10(6) of the ULC Act prior to the operative date of the Repeal Act, 1999 (as adopted by the State), so as to exclude the landholder from the benefit of the Repeal Act’s savings.

The Supreme Court allowed the appeals, set aside the Division Bench order and restored the Single Judge’s judgment. The Court held that statutory vesting under Section 10(3) did not automatically effect de facto possession and that the Repeal Act preserved rights where the State failed to take physical possession before repeal. The Court emphasised that the procedure in Sections 10(5) and 10(6) must be complied with in substance and that mere paper vesting was not enough. The Court, in its reasoning, observed: “The mere vesting of the land under sub-section (3) of Section 10 would not confer any right on the State Government to have de facto possession of the vacant land unless there has been a voluntary surrender of vacant land before 18-3-1999. The State has to establish that there has been a voluntary surrender of vacant land or surrender and delivery of peaceful possession under sub-section (5) of Section 10 or forceful dispossession under sub-section (6) of Section 10.” The judgment also accepted the Single Judge’s finding that, on the record, the contested notices and the panchnama were irregular and that “both the Section 10(6) notice and the panchanama have to be taken as a bogus and fabricated one, prepared after the Repeal Act come into force,” and held that the State did not discharge the onus of proving de facto possession.

Background The dispute concerned roughly 46,538.43 sq. metres of land in Rangareddy District purchased by the appellant company for a transformer factory. The company had filed statutory declarations under the ULC Act and obtained exemptions by government orders; some exemptions were later withdrawn and the competent authority issued a final statement declaring surplus land. The State published notifications and purportedly served a Section 10(5) notice (dated 05.01.2008, allegedly affixed on 08.01.2008) directing surrender within 30 days, and a Section 10(6) order (dated 05.02.2008) authorising taking of possession; a panchnama dated 08.02.2008 recorded alleged handover. The appellant contended it first saw the Section 10 papers and panchnama only in September 2010, that the factory and residential construction remained in its physical control, and that service and time‑line irregularities rendered Section 10 steps void. The Repeal Act was brought into force for Andhra Pradesh w.e.f. 27.03.2008.

The Single Judge found the Section 10(5)/10(6) process defective, noted date discrepancies and absence of proper service, found the panchnama untrustworthy and recorded that actual physical possession remained with the company; he held the acquisition steps to be “bogus and fabricated” and allowed the writs. A Division Bench reversed, treating panchnama as an acceptable mode of taking possession for large tracts and holding that the Single Judge had erred in scrutinising procedural notings and treating some entries as clerical. On appeal to the Supreme Court, the Court reviewed precedent including Hari Ram and Gajanan Kamlya Patil, reaffirmed that vesting under Section 10(3) did not itself effect de facto possession and that the State bore the onus of proving actual physical takeover before repeal. The Court held that disputed factual issues of possession could be examined in writ jurisdiction where the record showed fabrication or paper‑possession and that the Division Bench had erred in overturning the Single Judge. The appeals were allowed; the Division Bench judgment was set aside and the Single Judge’s order restored. No interim directions were required; pending applications stood disposed.

Case Details: Case No.: 2025 INSC 274; Civil Appeal Nos. 4526-4527 of 2024 Case Title: M/s A.P. Electrical Equipment Corporation v. The Tahsildar & Ors. Appearances: For the Petitioner(s): Mr. Raju Ramachandran, Senior Counsel (for M/s A.P. Electrical Equipment Corporation) For the Respondent(s): Mr. Kapoor (State counsel / Special Government Pleader)