Kiran Raj

The Supreme Court of India Division Bench of Justice B.V. Nagarathna and Justice R. Mahadevan has allowed an appeal by Surat-based sub-plot holders and set aside the Gujarat High Court’s 2014 decision that had treated them as unauthorised occupiers and declined relief. The dispute arose after the State refused to grant clearances for further sale of industrial sub-plots, asserting that a portion of the land stood declared surplus under the Urban Land (Ceiling and Regulation) Act, 1976 and had vested in the Government. The Court held that proceedings would lapse under the 1999 Repeal Act where the State did not lawfully secure actual physical possession, including by serving the mandatory notice on the persons in possession under Section 10(5), and held the appellants entitled to consequential relief.

The dispute concerned land admeasuring 9303 square metres situated at Village Katargam, Surat, Gujarat. Proceedings under the Urban Land (Ceiling and Regulation) Act, 1976 were initiated against the original landholder after the Act came into force. Initially, the competent authority held that the land was either exempt or within ceiling limits. Subsequently, the State exercised revisional powers and declared 662.18 square metres as excess vacant land.

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In the meantime, the land had been purchased in a public auction by a cooperative society, which developed industrial units and allotted sub-plots to several unit holders who entered into possession and carried on industrial activities. After cancellation of the auction, the original landholder executed agreements of sale in favour of the sub-plot holders, who continued in possession.

A notice under Section 10(5) of the ULC Act was issued only to the original landholder. Possession was claimed to have been taken by drawing a panchnama. Years later, when the sub-plot holders sought No Objection Certificates for further transactions, they were informed that the land had vested in the State. Their writ petitions before the High Court were dismissed, leading to the present civil appeal.

The Court examined the scheme of Section 10 of the ULC Act and the distinction between vesting and possession. It recorded that “Section 10 of the ULC Act categorically distinguishes between the vesting of land in the State Government and taking possession of the vested land.”

Relying on prior precedent, State of Uttar Pradesh v. Hari Ram and AP Electrical Equipment Corporation v. Tahsildar, the Court observed that “what is vested under Section 10(3) is de jure possession and not de facto possession.” It reiterated that acquisition of title does not automatically result in transfer of physical possession.

On the requirement of notice, the Court stated that “the requirement of issuance of notice under Section 10(5) is mandatory and must be issued to the person(s) actually in possession of the concerned land.” It further recorded that “mere issuance of notice without service thereof cannot be said to be due compliance with the provisions of the statute.”

The Court noted that possession can be transferred only by voluntary surrender, peaceful dispossession after notice under Section 10(5), or forcible dispossession under Section 10(6). It observed that “paper possession would not save the situation for the State Government unless actual physical possession is established.”

Applying these principles, the Court found that the appellants were in actual possession and no notice under Section 10(5) was served upon them. It held that “the omission to issue notice violated the mandatory requirement of serving notice under Section 10(5).” Consequently, the proceedings remained pending at the time of repeal, attracting abatement under Section 4 of the Repeal Act.

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The Court directed that “the impugned orders of the High Court in LPA No.2024/2010 and Special Civil Application No.533/2009 are set aside. This appeal is allowed” and “the appellants are entitled to all consequential reliefs pursuant to the abatement of the proceedings under Section 4 of the Repealing Act.”

Case Title: Dalsukhbhai Bachubhai Satasia & Others v. State of Gujarat & Others
Neutral Citation: 2026 INSC 21
Case Number: Civil Appeal No. 6130 of 2016
Bench: Justice B.V. Nagarathna, Justice R. Mahadevan