Supreme Court of India

YADAIAH AND ANR.versusSTATE OF TELANGANA AND OTHERS

Citation: 2023 INSC 664
Decided: 1 August 2023
Disposal: Dismissed
Bench: SURYA KANT

Holding

The Supreme Court held that the second show‑cause notice and the consequent resumption order were valid, the land was non‑alienable under the 1977 Act, the transfer violated that Act, and no compensation is payable to the appellants.

Summary

The case concerned land allotted in the 1960s to landless Scheduled Caste/Tribe persons in Manchirevula village, which the assignees later transferred through a General Power of Attorney to a third party who sold the land. The State of Telangana issued a second show‑cause notice (SCN) alleging violation of the Andhra Pradesh Assigned Land (Prohibition of Transfer) Act, 1977 and subsequently passed a resumption order in 2007. The appellants challenged the validity of the second SCN and the resumption order on grounds of res judicata, improper exercise of suo‑motu revisionary powers, the applicable law governing the assignment, and entitlement to compensation. The Supreme Court held that the second SCN was not barred by res judicata or constructive res judicata, that the suo‑motu power could be exercised despite the delay, and that the land was non‑alienable under the 1977 Act, making the transfer a prohibited ‘transfer’ and the resumption order valid. Consequently, the appellants were not entitled to any compensation, and the land vested in the State for the Greyhounds Commando Force. The appeals were dismissed.

Issues considered

The applicability of the doctrine of res judicata and constructive res judicata to the second show‑cause notice and resumption proceedings
Whether the exercise of suo‑motu revisionary powers by the revenue authorities was lawful despite the lapse of time
The law governing the assignment of the subject land and whether it imposed a bar on alienation
Whether the subject land falls within the definition of ‘assigned land’ under the Andhra Pradesh Assigned Land (Prohibition of Transfer) Act, 1977
The extent of the violation of the 1977 Act – whether the entire land or only part thereof was transferred illegally
Whether the appellants are entitled to compensation under Article 300A of the Constitution

Legislation cited

Andhra Pradesh Assigned Land (Prohibition of Transfer) Act, 1977s. 2, s. 3, s. 4
Andhra Pradesh Assigned Lands (Prohibition of Transfers) (Amendment) Act, 2007s. 4(1)(c)
Andhra Pradesh Assigned Lands (Prohibition of Transfers) (Amendment) Ordinance, 2006
Telangana Land Revenue Act of 1317 (Fasli)s. 166B, s. 54, s. 58, s. 58A
Transfer of Property Act, 1882

Subjects

res judicataconstructive res judicatasuo motu revisionary powerassigned landnon‑alienabilityAndhra Pradesh Assigned Land (Prohibition of Transfer) Act 1977Telangana Land Revenue Act 1317compensationland resumptionpublic purposeArticle 142Article 300AGreyhounds Commando Forceland mafia

Judgment

[2023] 12 S.C.R. 601 : 2023 INSC 664

CASE DETAILS

YADAIAH AND ANR.
v.
STATE OF TELANGANA AND OTHERS
(Civil Appeal No. 4835 of 2023)
AUGUST 01, 2023
[SURYA KANT AND J. K. MAHESHWARI, JJ.]
HEADNOTES
Issue for consideration: In the instant appeal, the resumption order
concerning the assignment of non-occupied land in the 1960s to landless
scheduled caste/scheduled tribe persons for the purpose of cultivation which
was upheld by the Division Bench of the High Court is challenged; as also
pertains to the issues of law concerning res judicata, nature of assignment
and violation of conditions of assignment.
Andhra Pradesh Assigned Land (Prohibition of Transfer) Act,
1977 – Assignment/Alienation of government land – Assignment
of non-occupied land to landless scheduled caste/scheduled tribe
persons – Assignees alienated the land to one through General Power
of Attorney, who in turn sold the land to subsequent purchasers –
Resumption order, resuming the subject land in favour of the State
since assignees sold the land in contravention of the conditions of
the assignment – High Court set aside resumption order as well the
ﬁrst SCN issued to assignees by the Collector proposing to cancel
the assignment of land – Issuance of second SCN that the assigned
land could not be sold as per the 1977 Act, thus, the land be resumed
into government possession – Second SCN culminated into another
resumption order – Single Judge of the High Court held that the
proceedings emanating from the Second SCN barred by the principle
of res judicata and abuse of process of law and that the assignments
were governed by the Laoni Rules of 1950 instead by the GOM 1122
– However, the Division Bench allowed in favour of State upholding
the second resumption order – Correctness:

601
602 SUPREME COURT REPORTS [2023] 12 S.C.R.

Held: Proceedings emanating out of the Second SCN were valid –
Subject Land was non-alienable and hence was subject to the provisions
of the 1977 Act – Appellants-assignees had transferred the subject land in
contravention to the provisions of 1977 Act and thus, the resultant resumption
order is valid – Appellants not entitled to any compensation on account of
the requisition of the assigned land – Furthermore, an important security
agency currently occupies the subject land, thus, invocation of powers u/
Art. 142 and certain directions issued – Subject land in its entirety declared
to have vested in the State Government – Constitution of India – Art. 142
- Telengana Land Revenue Act of 1317 – ss. 54, 58, 58A and 166B. [Paras
40-42,
Andhra Pradesh Assigned Land (Prohibition of Transfer) Act,
1977 – Assignment of government land – Applicability of doctrine res
judicata or constructive res judicata – Proceedings emanating out of the
Second SCN, if barred by the doctrine of res judicata or constructive res
judicata as said issues already decided by the prior judgment of High
Court emanating from the First SCN – Plea that the substratum of both
the ﬁrst Show cause notice (SCN) and second SCN essentially identical:
Held: Only such determinations which are fundamental would result in
the application of the doctrine of res judicata – Only those ﬁndings, without
which the Court cannot adjudicate a dispute and also form the vital cog
in the reasoning of a deﬁnite conclusion on an issue on merits, constitute
res judicata between the same set of parties in subsequent proceedings –
However, in the process of arriving at a ﬁnal conclusion, if the Court makes
any incidental, supplemental or non–essential observations which are not
foundational to the ﬁnal determination, the same would not tie down the
hands of courts in future – On a plain reading of the High Court’s order in
conjugation with the application of the test formulated for distinguishing
between a fundamental or collateral determination, it is found that the
observation in respect of General Power of Attorney in the said order was
indeed a mere collateral ﬁnding – Doctrine of constructive res judicata will
also not be applicable as the issues raised in the Second SCN were never
adjudicated upon in the ﬁrst place – Thus, the proceedings emanating out
of the Second SCN are not barred by the doctrine of res judicata or the
extended doctrine of constructive res judicata – Doctrines/Principles –
YADAIAH AND ANR. v. STATE OF TELANGANA AND 603
OTHERS

Telengana Land Revenue Act of 1317 – ss. 54, 58, 58A and 166B. [Paras
40-42, 43, 45, 47 and 48]
Andhra Pradesh Assigned Land (Prohibition of Transfer) Act, 1977
– ss. 2 and 3 – Prohibition of transfer of assigned land – Assignment
of the land to landless scheduled caste/ scheduled tribe persons in the
year 1961 and in the year 1991 assignees alienating the land through
the General Power of attorney, and thereafter, a resumption order
passed – Application of the 1977 Act:
Held: Provisions of the 1977 Act attracted to regulate the said land –
Subject land was non-alienable and comes under the deﬁnition of ‘assigned
land’ as provided u/s 2(1) – General Power of Attorney executed in favour
of the attorney holder by the assignees constitutes a ‘transfer’ under the
1977 Act which was intended to save the landless poor persons from the
clutches of the rich and the resourceful, who deprived them of the precious
title assigned to them by the Government for their occupation and the
source of livelihood – Thus, the appellants transferred the subject land in
contravention to the provisions of 1977 Act and thus, resulted in violation
of s.3 and the resultant resumption order is valid – Telengana Land Revenue
Act of 1317 – ss. 54, 58, 58A and 166B. [Paras 60, 64, 65 and 68-70]
Andhra Pradesh Assigned Land (Prohibition of Transfer) Act, 1977
– Assignment of government land to assignees – Suo motu revisionary
powers – Exercise of, while issuing the Second Show cause notice –
Correctness:
Held: Second SCN pertains to alleged violation of assignment
conditions by transferring the ownership rights through sale deeds executed
in the year 1992 – However, the period till 2006 could not be counted
because the parties were engaged in litigation pursuant to the First SCN and
it was only after the liberty was accorded by the High Court in its order in
2006 that the Second SCN could be issued – Thus, the exercise of suo motu
revisionary power while issuing the Second SCN not vitiated on account of
inordinate delay – Telengana Land Revenue Act of 1317 – ss. 54, 58, 58A
and 166B. [Para 50]
Andhra Pradesh Assigned Land (Prohibition of Transfer) Act,
1977 – Assignment of government land to assignees – Applicability of
604 SUPREME COURT REPORTS [2023] 12 S.C.R.

law governing the assignment of the land and if it contained any bar
in respect of alienation:
Held: Actual assignment took place only on the issuance of temporary
pattas on 21.10.1961 – 1958 Circular as well as GOM 1122 being in force
in the year 1961, are clearly applicable to the Subject Land – There was a
conditional bar on alienation of the Subject Land as provided in the 1958
Circular and the GOM 1122 – Thus, the subject land was governed by
the provision of the 1958 circular which included the condition of non-
alienability – Telengana Land Revenue Act of 1317 – ss. 54, 58, 58A and
166B. [Paras 51-55, 57-59]
Andhra Pradesh Assigned Land (Prohibition of Transfer) Act, 1977
– Resumption of land – Entitlement to compensation – Assignment of
non-occupied land to landless scheduled caste/ scheduled tribe persons –
Assignees alienated the land to one through General Power of Attorney,
who inturn sold the land to subsequent purchasers – Resumption order,
resuming the subject land since transactions in contravention of the 1977
Act – Legal heirs of assignees, if entitled to compensation on account
of the resumption order:
Held: Assignees not entitled to any compensation on account of the
resumption order of the assigned land – Resumption denotes a punitive
action by the State to take back the right or an interest in a property which
was granted by it – Term ‘resumption’ must not be conﬂated with the term
‘acquisition’ as employed within the meaning of Art. 300-A so as to create
a right to compensation – Also allegations against the assignees for being
involved with the land maﬁa to usurp the subject land for private interest
– Constitution of India – Art. 300 A – Compensation – Telengana Land
Revenue Act of 1317 – ss. 54, 58, 58A and 166B. [Paras 73 and 74]
Property Laws – Term ‘acquisition’ and ‘resumption’ – Diﬀerence
between:
Held: Acquisition denotes a positive act on behalf of the State to
deprive an individual’s enjoyment of a pre-existing right in a property in
furtherance of its policy whereas resumption denotes a punitive action
by the State to take back the right or an interest in a property which was
granted by it in the ﬁrst place – Term ‘resumption’ must not be conﬂated
YADAIAH AND ANR. v. STATE OF TELANGANA AND 605
OTHERS

with the term ‘acquisition’ as employed within the meaning of Art. 300-A
of the Constitution so as to create a right to compensation – Constitution
of India – Art. 300 A. [Paras 73]
Doctrines/Principles – Doctrine of res judicata – Application of –
Eﬀective test to determine:
Held: Effective test to distinguish between a fundamental or
collateral determination is hinged on the inquiry of whether the concerned
determination was so vital to the decision that without which the decision
itself cannot stand independently – Any determination, despite being
deliberate or formal, cannot give rise to application of the doctrine of res
judicata if they are not fundamental in nature. [Paras 45]
Doctrines/Principles – Doctrine of res judicata or the extended
doctrine of constructive res judicata – Application of – Stated. [Paras
40-48]

LIST OF CITATIONS AND OTHER REFERENCES

Govt. of A.P. v. Gudepu Sailoo (2000) 4 SCC 625 : [2000] 3 SCR
791; Parvant Nagar v. the Collector and District Magistrate 2008 SCC
OnLine AP 477; G.V.K. Rama Rao vs Bakelite Hylam Employees Co-
Op. 1997 SCC OnLine AP 200; S. Santhanam v State of A.P. 2006 SCC
OnLine AP 145; LAO cum Revenue Divisional Oﬃcer, Chevella Division
v Mekala Pandu 2004 SCC OnLine AP 217; Yeshwant Deorao Deshmukh
v Walchand Ramchand Kothari (1950) SCC 766; Dharama Reddy v
Sub-Collector, Bodhan 1986 SCC OnLine AP 141; A. Jithendernath v.
Jubilee Hills Coop. House Building Society (2006) 10 SCC 96 : [2006]
1 Suppl. SCR 702; Pawan Kumar Gupta v. Rochi Ram Nag Deo (1999)
4 SCC 243 : [1999] 2 SCR 767; Sajjadanashin Sayed Md. B.E. Edr.
v. Musa Dadabhai Ummer (2000) 3 SCC 350 : [2000] 1 SCR 1095;
State of UP v. Nawab Hussain (1977) 2 SCC 806 : [1977] 3 SCR 428;
Ibrahimpatnam Taluk Vyavasaya Coolie Sangham v. K. Suresh Reddy
(2003) 7 SCC 667 : [2003] 2 Suppl. SCR 698; Mahadeo v. Sovan Devi
2022 SCC OnLine SC 1118; Bachhittar Singh v. State of Punjab AIR
1963 SC 395 : [1962] Suppl. SCR 713; Suraj Lamp and Industries
Private Limited v. State of Haryana (2012) 1 SCC 656 : [2011] 11 SCR
606 SUPREME COURT REPORTS [2023] 12 S.C.R.

848; Dharma Naika v. Rama Naika (2008) 14 SCC 517 : [2008] 2 SCR
451; Manchegowda v. State of Karnataka (1984) 3 SCC 301 : [1984] 3
SCR 502; A.P. Industrial Infrastructure Corporation Ltd v Ramesh Singh
and other connected appeals Civil Appeal No. 7904-7912 of 2012, 4
August 2014 – referred to.

The Doctrine of Res judicata by Justice KR Handley, Spencer
Bower, Turner and Handley: (3rd edn, LexisNexis Butterworths, 1996)
pages 103-107 – referred to.

OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4835
of 2023.

From the Judgment and Order dated 31.12.2021 of the High Court
for the State of Telangana at Hyderabad in WA No.202 of 2010.

With

Civil Appeal Nos.4836, 4837, 4838, 4839 and 4840 of 2023.

Dr. A.M. Singhvi, S. Niranjan Reddy, Huzefa Ahmadi, Muralidhar
Rao Unnam, Jaideep Gupta, Sr. Advs., G. N. Reddy, Tripurari Ray,
Yatish Mohan, Vivek Gupta, Vinayak Mohan, Anirudh Ray, Nidhiram,
Vishnoo Chandra, Sughosh Subramanyam, Krishna Dev Jagarlamudi,
Sumanth Nookala, Ms. Shahrukh Alam, Divyesh Pratap Singh, Ms.
Shivangi Singh, Ms. Ishita Bedi, Ms. Ranjana Singh, G.N. Reddy,
Nidhiram, Vishnoo Chandra, Ravi Shankar, Advs. for the Appellants.

C.S. Vaidyanathan, V. Giri, Sr. Advs., Sriharsha Peechara,
Rajiv Kumar Choudhry, Ms. Pallavi, Duvvuri Subrahmanya Bhanu,
Ms. Harshita Gupta, Ms. Ankita Gupta, for M/s. Venkat Palwai Law
Associates, Advs. for the Respondents.
YADAIAH AND ANR. v. STATE OF TELANGANA AND 607
OTHERS

JUDGMENT / ORDER OF THE SUPREME COURT

JUDGMENT
SURYA KANT, J.
1. Leave granted.
2. These appeals are directed against the common judgment dated
31.12.2021 passed by a Division Bench of the High Court of Telengana
whereby the intra-court appeal preferred by the State of Telengana and its
revenue authorities has been allowed, reversing the decision of the learned
Single Judge. Consequently, the resumption order dated 27.01.2007, which
forms the core of the present disputes concerning the assignment of non-
occupied land in the 1960s to landless Scheduled Caste/Scheduled Tribe
persons [Hereinafter, ‘Assignees’] for the purpose of cultivation, has been
conﬁrmed.
3. Since these appeals arise out of a long-drawn saga wherein multiple
rounds of litigation occurred between the parties before various forums,
including this Court, it would be appropriate to discuss the same at length
before delving into the issues of law raised before us concerning res judicata,
nature of assignment and violation of conditions of assignment. It may also
be mentioned before embarking into the factual matrix that this Court vide
order dated 06.09.2022 had impleaded the Greyhounds Commando Force
through the Additional Director General of Police as a Party-Respondent
for eﬀective adjudication since the land in dispute has been statedly allotted
and is being used for training its forces.
A. FACTS
4. The genesis of these disputes began on 28.10.1953 when the
Revenue Department of the then undivided State of Andhra Pradesh took a
policy decision and communicated the sanction granted for the assignment
of ‘Astabl Kanchi’1 land measuring 200 Acres comprising the revenue
estate of Manchirevula village situated in the Ranga Reddy District to the
Assignees. The relevant part of the said policy decision stated that:–

1 ‘Kancha’ is the term employed for land which absolutely vests in favour of the
government.
608 SUPREME COURT REPORTS [2023] 12 S.C.R.

“……I am directed to communicate Government sanction for
the assignment of culturable area to the extent of 200 acres out
of Astabl Kanchi situated in Manchirral village to the landless
Harijans under special laoni Rules after regular phodi work by the
land Record and Settlement Department. The remaining area of
the Kancha may be kept in fact and auctioned every year….” (sic)
5. The Collector after this communication, vide letter dated 07.11.1959,
ﬁnally submitted a report of eligible individuals and directed that ‘phodi’
or sub-division of the Subject Land be conducted before its assignment.
However, after further inspection by revenue authorities, the Collector
noted in a subsequent letter dated 04.06.1960 that land measuring 142
Acres 39 Guntas was ﬁt for cultivation instead of the initially proposed area
of 200 Acres. Accordingly, the Revenue Divisional Oﬃcer vide his letter
dated 16.08.1960, directed the concerned Tehsildar to initiate assignment
proceedings for land measuring 142 Acres 39 Guntas in Survey No. 393
of Village Manchirevula [Hereinafter, ‘Subject Land’] and directed that
process be initiated for grant of special Laoni2 Patta to the eligible persons.
6. It is to be noted that before any kind of patta could be granted, the
State Government issued an order dated 29.06.1961 [Hereinafter, ‘GOM
1122’] overriding all previous orders which governed assignment and
alienation. The said order provided exhaustive guidelines for assignment
and alienation of Government lands, the relevant part whereof as applicable
to the Subject Land reads as follows:–
“5. The Government further direct that no vacant land in the
Greater Hyderabad city or within a belt of 10 miles around the
city should be assigned or otherwise disposed of until Government
have assessed the requirements of various Department for building
accommodation in the city.”
7. It was only after GOM 1122 was brought into eﬀect, that the State
Government issued temporary pattas dated 21.10.1961 [Hereinafter,
‘Temporary Pattas’] to each of the selected Assignees. It would be

2 During the course of hearing, it has been brought into our attention that term ‘Laoni’
loosely means to ‘bring into cultivation’.
YADAIAH AND ANR. v. STATE OF TELANGANA AND 609
OTHERS [SURYA KANT, J.]

appropriate for proper analysis of the controversy to reproduce the contents
of one such Temporary Patta dated 21.10.1961 granted to an Assignee which
is as follows:–
“FORM-G
(Under Rule 9 (g)
Written permission to occupy land
(to be given by the Tahsildar under Loani Rules)
Temporary patta is granted to Shri Mylarapu Pedda Gandaiah
S/o. Venkaiah, resident of Manchirevula village, Tahsil Hyderabad
West, Hyderabad District, to occupy the following land and to
cultivate the same, till the phodi work is completed.
1. Village Name : Manchirevula
2. Taluk : Hyderabad West
3. Sy. No. : 393
4. Total extent : 326.28
5. Extent given under patta : Ac. 7.06 gts.
6. Cess : Rs. 7.15
7. Nature of land : Kancha
8. Classiﬁcation : Dry
Sri Mylarapu Pedda Gandaiah has to pay Rs. 7.15 per year
from 1961-1962 for the land granted for occupation under this
permit as assessment.
After the podhi is completed, the area and assessment are
both ﬁxed by the Dept. of Land Records (Survey and Settlement).
The Pattadar is bound to pay the assessment so ﬁxed, but this
change will take eﬀect only form the year following in which such
change has been made as a result of the compk1jon of phodi work
by the Dept. of land Record.
(In the case of land granted as not Transferable)
610 SUPREME COURT REPORTS [2023] 12 S.C.R.

The Grantee is not empowered to transfer the occupancy
without the sanction previously obtained from the Collector. This
permission to occupy shall not confer the right to mine on the land
or collect minerals therefrom. The right on the toddy trees will
vest with the Government.
Sd/-Tehsildar
24.10.1961
Hyderabad West” (sic)
(Emphasis Applied)
There are some other policy decisions also that have brought in
restrictions regarding transfer of Subject Land which we would deal in the
later part of this judgement. However, it is pertinent to note that afterwards,
permanent pattas were granted to the Assignees within a few years of the
issuance of Temporary Pattas. The Appellants are now claiming devolution
of interest and ownership rights over diﬀerent parcels of the Subject Land
through the original Assignees.
8. After the grant of these pattas, the situation remained dormant
for almost three decades. Meanwhile, with the passage of time, the city
of Hyderabad, like all other capital cities across the nation, ﬂourished on
account of rapid urbanisation and swift economic development, making
land a scarce and valuable resource. Consequently, the Subject Land also
rose in value. On 14.08.1991, all the Assignees are stated to have executed
a general power of attorney [Hereinafter, ‘GPA’] in favour of one M.A.
Baksh. The GPA gave M.A. Baksh the following amongst other powers in
respect of the Subject Land:–
“5. To negotiate, enter into agreements for and/or let lease or
licence the said property or any portion thereof to such person(s)
or body and for such consideration and upon such terms and
conditions and for such purpose(s) as my said attorney may in his
absolute discretion deem ﬁt.
6. To negotiate and agree to and/or to enter into agreement, to
sell/develop/lease/ mortgage the said property or to sell, convey,
lease, mortgage, assign or to otherwise transfer the said property
YADAIAH AND ANR. v. STATE OF TELANGANA AND 611
OTHERS [SURYA KANT, J.]

or any portion thereof to such person(s) or body and for such
consideration arid upon such terms and conditions and for such
purpose(s) as the said attorney may in his absolute discretion deem
ﬁt and to collect and receive the considerations thereof and to give
a valid receipts therefor.
7. To enter into agreement(s) to develop the said property by laying
roads, drainage, water connections, Electricity connection etc.
and or erecting individual/ multistoreyed, residential/ commercial
buildings thereon with any person(s), ﬁrms, company/ companies
or society/ societies upon such terms and conditions as my said
attorney may in his absolute discretion deem ﬁt.”
(Emphasis Applied)
9. Thereafter, acting upon the abovementioned GPA, M.A. Baksh
sold a part of the Subject Land to private individuals between the period
of January 1992 to October 1992 as brought to our notice by the parties
through sale deeds placed on record. On perusal of these sale deeds, one
crucial feature which is to be noted is that M.A. Baksh envisaged to divide
the Subject Land into smaller plots akin to a residential colony as each sale
deed has been allotted a unique plot number along with roads earmarked
in the site plans attached thereto.
10. It seems that at the time M.A. Baksh was carrying out the process
of the sale of the Subject Land as a residential colony, he came across the
provisions of Andhra Pradesh Assigned Lands (Prohibition of Transfers)
Act of 1977 [Hereinafter, ‘1977 Act’] which prohibited transfer of land
assigned to landless poor by the Government. Realizing the potential pitfall
in carrying out the sales, he applied for clariﬁcation through a letter dated
18.09.1992 to the concerned Mandal Revenue Oﬃcer and enquired about
the applicability of the 1977 Act. The Mandal Revenue Oﬃcer vide a memo
dated 23.09.1992, responded to M.A. Baksh’s query saying that:–
“The petitioner Sri M.A. Baksh, G.P.A. Holder of Mr. Mylaram
Jangaiah and others is informed that as per written permission
issued by the Tahsildar, Hyderabad West vide reference
No.A6/8524/80 to occupy an extent of 143-00 acres out of Sy. No.
393 of Manchirevulu village in form (G) under rule 9(g) of Laouni
612 SUPREME COURT REPORTS [2023] 12 S.C.R.

rules, 1950 to Sri Mylaram Jangaiah and (19) others, Harijans of
same village. Subsequently in 1965 the said land was made Laouni
patta.in the name of the above 20 persons, and subdivided as Sy.
No. 393/1 to 393/20 Ac.7-06gts., each individual.
As per rule 9(g) of the Laouni rules 1950 the written permission
in form (G) is issued only after conﬁrmation of sale; The sale of
such lands is not hit by the provision of A.P. Assignment lands
(Prohibition of Transfer) Act 1977.” (sic)
(Emphasis Applied)
11. Notwithstanding this clariﬁcation by the Mandal Revenue Oﬃcer,
some of the Assignees cancelled the GPA executed in favor of M.A. Baksh
in October 1992, probably fearing that the state authorities would cancel
the allotment of the Subject Land. They also issued a public notice wherein
they declared that any sale entered into by M.A. Baksh on their behalf was
not binding.
12. Fast forward a year and somewhere in November 1993, the Police
Department sent a requisition for land in Manchirevula village to set up
operational headquarters and training centres for its special forces, now
known as ‘Greyhounds Commando Force’. It was only when the revenue
authorities analysed their records that their attention was drawn towards the
Subject Land and the legal inﬁrmities associated with it, starting the saga
of present legal tussle between the parties.
13. After that the oﬃce of the Collector, Ranga Reddy District issued a
show cause notice dated 28.03.1994 [Hereinafter, ‘First SCN’] proposing
to cancel the assignment of Subject Land. The relevant extracts of the First
SCN containing the grounds of cancellation are to the following eﬀect:–
“The issue was examined in details with reference in rule position
and other aspect and found that the alleged assignment is irregular,
illegal and liable to be cancelled on the basis of following grounds:
(i) The Form-G Certiﬁcate issued are for temporary occupation
and thereby implementation in Falsalpatti 1961-62 is illegal.
(ii) The alleged assignment ought to have been processed under
Assignment Rule, 1958 instead of Laoni Rules, 1950.
YADAIAH AND ANR. v. STATE OF TELANGANA AND 613
OTHERS [SURYA KANT, J.]

(iii) The alleged assignment is in contravention of the ban order of
assignment issued in G.O. Ms. No. 1222, dated 29.06.1961.
(iv) After issue of Form-G Certiﬁcate for temporary occupation
there is no Sub-Division took place and supplementary Sethwar
issued, therefore the alleged assignment is not ﬁnal and temporary
occupation certiﬁcates cannot be treated assignment pattas.
(v) That the land is unﬁt for cultivation and thereby the alleged
assignment is irregular and indicate malaﬁde intention.
(vi) The alleged assignees have not put the land for cultivation and
kept in fallow and thereby they have violated the condition laid
down in Rule 19 of Laoni Rules, 1950.
(vii) The alleged assignees while violating the condition of
assignment have executed a G.P.A. in favour of Sri M.A. Baksh
authorizing him to sell the land.”
(Emphasis Applied)
14. The Assignees fearing consequential dispossession, approached
the High Court which vide its order dated 03.05.1994, held that the writ
petition was premature and directed them to ﬁle an explanation within one
week, but protected them from dispossession in light of the pending show
cause proceedings. The Assignees in turn ﬁled their explanation before
the Collector wherein they submitted that assignment was valid as per the
applicable law and that there was no bar on sale of the Subject Land.
15. Strangely, instead of the District Collector, proceedings were
entrusted to the District Revenue Oﬃcer who vide his order dated 15.09.1994
held that the First SCN was unsustainable. On account of this development,
the District Collector through an order dated 03.01.1995, exercised his
suo motu revisionary powers under Section 166-B of the Telangana Land
Revenue Act of 1317 Fasli [Hereinafter, ‘1317 Fasli Act’] and suspended
the order dated 15.09.1994 passed by the District Revenue Oﬃcer pending
further examination/orders. Thereafter, the Collector sent a letter to the
Secretary, Revenue Department for ratiﬁcation of the order dated 03.01.1995,
but since no notice was given to Assignees as required under Section 166-
B of 1317 Fasli Act, the Government declined the request for ratiﬁcation
614 SUPREME COURT REPORTS [2023] 12 S.C.R.

of the said order. Ultimately, notices were issued to the Assignees and
the Government vide its memo dated 24.01.1996 ratiﬁed the order dated
03.01.1995. It further directed that ﬁnal orders be passed after completion
of the inquiry.
16. The Assignees ﬁled separate writ petitions against the Collector’s
order dated 03.01.1995 as well as the memo dated 24.01.1996, both of
which were decided vide a common order of the Learned Single Judge
dated 01.09.1997 wherein the court set aside the orders on the ground that
the initiation of revisional power under Section 166-B of 1317 Fasli Act
was an unreasonable and arbitrary attempt to invalidate the assignment after
an undue delay of more than 34 years. It must be noted that the intra-court
appeal against the order dated 01.09.1997 was also dismissed by a Division
Bench of the High Court through its order dated 14.09.1998.
17. The State Government assailed the High Court order dated
14.09.1998 before this Court and vide judgement dated 28.04.2000 reported
as Govt. of A.P. v. Gudepu Sailoo3, the State’s appeal was allowed to
the extent that the proceedings conducted before the District Revenue
Oﬃcer which culminated into the order dated 15.09.1994, were held to be
unsustainable. It was further held that the proceedings should have taken
place before the Collector, particularly in view of the directions given by the
High Court in its order dated 03.05.1994. Hence, the Collector was directed
to complete the proceedings initiated vide his order dated 03.01.1995 which
was later on ratiﬁed by the memo dated 24.01.1996. The relevant part of the
judgement dated 28.04.2000 of this Court reads as follows:–
“We cannot subscribe to the view expressed by the High Court
in so far as the order passed by the District Revenue Oﬃcer
is concerned. Since a mandamus was issued to the Collector,
Rangareddy District, to hear and dispose of the explanation, which
was required to be submitted by the respondents in reply to the
show cause notice issued to them, the District Revenue Oﬃcer had
no jurisdiction to consider the matter in violation of the direction
of the High Court. As a matter of fact, the explanation to the show
cause notice had to be submitted before the Collector and the

3 Govt. of A.P. v. Gudepu Sailoo (2000) 4 SCC 625.
YADAIAH AND ANR. v. STATE OF TELANGANA AND 615
OTHERS [SURYA KANT, J.]

Collector alone had to consider and take a ﬁnal decision in the
matter. The action initiated by the Collector and the ratiﬁcation·of
his order by the State Government are matters which should have
been allowed to take ﬁnal shape instead of being challenged at the
interlocutory stage by the respondents. That being so, there is no
necessity of going into the merits of the submissions made by the
learned counsel for the parties with regard to the provisions of
Section 166-B and 166-C of the Andhra Pradesh (Telangana Area)
Land Revenue Act, 1317 Fasli.
We, therefore, dispose of this appeal ﬁnally with the direction to
the Collector to complete the proceedings, initiated by him by his
order dated 3rd of January, 1995 as ratiﬁed by the Government
by its,order dated 24th of January, 1996, at an early date in
accordance with law.”
(Emphasis Applied)
18. Consequently, proceedings pursuant to the First SCN were
initiated afresh by the Collector by issuing notice dated 17.08.2001
to the Assignees, many among whom were now represented by the
Appellants, informing that the proceedings would be taken up by
the Joint Collector in exercise of powers delegated by the Collector.
The Appellants furnished fresh explanation(s) on 27.08.2001 and
consequently the office of the Joint Collector passed a resumption
order dated 22.12.2001 in favour of the State noticing that:–
“In view of the circumstances explained above and since
the assignment itself is irregular and the assignees sold the
land in conttavention of the conditions of assignment and
also the assigned land has become urbanized and no longer
subserves the purpose of cultivation, I find no reason either
to upheld the orders of the District Revenue Officer, Ranga
Reddy passed in Procds.No. D1/275/94 Dated:15.9.1994 or
to revert back the land in Sy.No.393/ 1 to 393/20 totally
measuring an extent of Ac.142·39 of Mancllerevula village
of Rajendranagar Mandal to the assignees. The land should
be remained as Government land. Acoordingly the case is
disposed off duly setting aside the orders of District Revenue
616 SUPREME COURT REPORTS [2023] 12 S.C.R.

Oflicer, Ranga Reddy District passed in proceedings No.
Dl/275/94 Dated:l5-9-1994.” (sic)
(Emphasis Applied)
19. The Joint Collector’s order dated 22.12.2001 came to be challenged
before the High Court, which vide its order dated 04.04.2002 opined that
in view of this Court’s judgement in Gudepu Sailoo4, the Joint Collector
had no jurisdiction to adjudicate the First SCN and directed the District
Collector to conduct the proceedings and pass appropriate orders after notice
to all parties. Resultantly, proceedings were conducted before the District
Collector wherein again resumption order dated 15.03.2003 was passed
in favour of the State. It must be noted that the reasoning provided in the
resumption orders dated 22.12.2001 and 15.03.2003 is more or less identical.
20. The Appellants laid a challenge to the resumption order dated
15.03.2003 and vide its order dated 21.04.2006, the High Court set aside
the same as well the First SCN, primarily for the reasons as are summed up
in the following paragraphs of its judgment:–
“14. The principal ground on which the assignments soμght
to be cancelled by invoking the review powers under section
166-B of the Act is execution of GPA by the assignees in favour
of the predecessor in interest. As on this day, the GPA holder
is not alive and even if any power of attorney exists, it ceases
with his death. Therefore, no cause survives for the District
Revenue Oﬃcer to take suo motu review. The other question
is whether the assignments made in favour of the petitioners
and their predecessor interest is contrary to the Rules then in
existence. That issue is into requircd to be examined after a lapse
of nearly 40 years. The Laoni patta certiﬁcates came to be issued
in accordance with the provisions of Laoni, Rules, 1950. Merely
because those rules came to be amended by substituting some
other rules cannot be a ground to exercise suo mo to review by
the District Revenue Oﬃcer or the District Collector under Sec.
166-B of the Act.

4 ibid.
YADAIAH AND ANR. v. STATE OF TELANGANA AND 617
OTHERS [SURYA KANT, J.]

15. In view of the above discussion, I ﬁnd that the show cause
notice issued by the District Revenue Oﬃcer, R.R. District is not
legal dnd proper. When once the show cause notice is set aside,
the basis for passing the order impugned in the writ· petitions
by the Joint Collector canriot be said to be well founded. Before
parting the case, I deem it appropriate to observe that If there Is
any contravention of the conditions imposed in the assignment
order, the Government is always at liberty to cancel the same In
accordance with the provisions of law.” (sic)
(Emphasis Applied)
21. Taking note of the above-reproduced liberty granted by the High
Court, the Deputy Collector-cum-Mandal Revenue Oﬃcer issued a fresh
show cause notice dated 11.12.2006 [Hereinafter, ‘Second SCN’] wherein
the factum of the sale deeds entered by M.A. Baksh in the capacity of GPA
holder of the Assignees was duly noticed and it was asserted that the Subject
Land was liable to be resumed under the 1977 Act. The relevant part of the
Second SCN is as follows:–
“The Sale transaction above shown are impermissible and void
as same are in contravention of the provision of sub-section (2)
of section-3 of the Andhra Pradesh assigned land (Prohibition
of Transfer) Act, 1977. As per the prohibitions of the said Act
there is prohibition to sell the land assigned to you and hence sale
transaction above referred are invalid.
As per the Section 4 of A.P. assigned land (Prohibition of
transfer) Act, 1977, satisﬁed that the assignees are contravened
the provision of Sub-sectio (1) of section 3 in respect of assigned
lands bearing Sy. No. 393/l to 393/20 of Manchirevula Village.
Hence you are hereby show cause as to why the scheduled land
should not be resumed into Govt. Possession as in such manner
as prescribed by law.” (sic)
Post the issuance of Second SCN, the Appellants tendered explanation
and proceedings took place pursuant thereto.
22. Eventually, the Second SCN culminated into the resumption order
dated 27.01.2007, wherein it was noted that the Assignees had alienated the
618 SUPREME COURT REPORTS [2023] 12 S.C.R.

land to M.A. Baksh through GPA, who in turn sold the land to subsequent
purchasers in the form of smaller plots. These transaction(s) were held to
be in contravention of Section 3(1), 3(2), 3(3) and 3(4) of the 1977 Act and
accordingly, the Subject Land was ordered to be resumed under Section 4
thereof. It would also be relevant to mention that the resumption order dated
27.01.2007 also noticed that most of the Subject Land was still fallow and
unsuitable for cultivation as it was covered by large boulders/rocks.
23. The Appellants assailed the resumption order dated 27.01.2007
before the High Court in a writ petition which came to be decided in their
favour by a learned Single Judge vide judgment dated 05.02.2010 primarily
on two grounds – ﬁrstly that the Second SCN and the resumption order dated
27.01.2007 raised the identical issues in respect of Subject Land which stood
already decided by the High Court vide its order dated 21.04.2006. Hence,
proceedings emanating from the Second SCN were barred by the principle
of res judicata and an abuse of process of law; secondly that the assignments
were governed by the Laoni Rules of 1950 instead by the subsequent GOM
1122, as possession stood granted way back in 1940 much earlier than the
date GOM 1122 came into force. It is also useful to mention that accordingly
to the learned Single Judge, the liberty granted in the previous High Court
order dated 21.04.2006 regarding cancellation of Subject Land was only
concerned with `future contravention’ of the assignment conditions.
24. Being piqued on account of the order of the learned Single Judge,
the State preferred an intra-court appeal before the Division Bench of the
High Court. The said writ appeal has been allowed in the Respondents’
favour via the impugned judgement whereby the resumption order dated
27.01.2007 stands upheld for the following reasons: –
a) The proceedings under the Second SCN were not hit by the doctrine
of res judicata or constructive res judicata, as the same concerned
the sale deeds executed by M.A. Baksh and the consequent action
under the 1977 Act, which was not an issue decided by the High
Court vide its order dated 21.04.2006 whereby the First SCN was
set aside.
b) The learned Single Judge had erroneously construed the
liberty granted in the order dated 21.04.2006 in respect of
fresh cancellation proceedings to be only for future violation
YADAIAH AND ANR. v. STATE OF TELANGANA AND 619
OTHERS [SURYA KANT, J.]

of assignment conditions as no such inference could be drawn
from the wording of the said order. It was also held that this
interpretation virtually amounted to re-writing the order dated
21.04.2006, especially in view of the fact that the review petition
against the same, seeking to delete the relevant part granting liberty
was speciﬁcally dismissed by the High Court.
c) The Subject Land was not alienable either under the Laoni Rules of
1950 or under the revised land assignment rules of 1958 and hence
it comes under the deﬁnition of ‘assigned land’ as provided in the
1977 Act. The issue of applicability of regulatory regime on the
assigned land stood settled by this Court’s judgement in Gudepu
Sailoo5 whose relevant part in this context reads as follows:–
“….Thus, under the original Laoni Rules, 1950 as also under
the Revised Policy published in 1958, the alienation of the
assigned land was prohibited. While under the Laoni Rules,
1950, the alienation or transfer without the previous sanction
of the Collector was prohibited, under the Revised Policy, it
was clearly provided that though the assigned lands would
be heritable, they would not be transferred…”
d) The Division Bench also distinguished the decision of a co-ordinate
bench of the High Court in Letter sent from Plot No.338, Parvant
Nagar v. the Collector and District Magistrate 6 wherein it was
held that land assigned under Rule 9 of Laoni Rules of 1950 by way
of market value collection would not be hit by the provisions of the
1977 Act whereunder alienation of assigned land was prohibited.
It was speciﬁcally noted that the Subject Land was granted free
of cost to the Assignees without any action or payment of market
value as envisaged under Form 9(G) of the Laoni Rules of 1950
which was relied upon by the Appellants. The Division Bench,
therefore, upheld the condition mentioned in the assignment itself
which barred transfer without the consent of the Collector.

5 Gudepu Sailoo (n 3).
6 Letter sent from Plot No.338, Parvant Nagar v. the Collector and District Magistrate
2008 SCC OnLine AP 477.
620 SUPREME COURT REPORTS [2023] 12 S.C.R.

e) It was noted that the 1977 Act was in force when the GPA in favor
of M.A. Baksh was executed by the Assignees as well as when
M.A. Baksh executed the sale deeds in favour of subsequent
purchasers for the small plots of land. Furthermore, it was held
that subsequent cancellation of the GPA in favor of M.A. Baksh by
some of the Assignees was immaterial as the sale deeds executed
by him by then already constituted violation of the assignment
condition.
25. The aggrieved Appellants are now before this Court.
B. CONTENTIONS
26. We have heard an array of learned senior counsels representing
different parties and perused the documents produced on record. Their
written submissions have also been duly considered.
27. Leading the arguments on behalf of the Appellants, Mr. Jaideep
Gupta, learned senior counsel made the following contentions- First,
that the Single Judge Order was correct in concluding that the Second
SCN was barred by the doctrine of res judicata. He argued that the
substratum of both the First SCN and Second SCN is essentially
identical, i.e. violation in respect of the bar on the alienability of Subject
Land. Secondly, he argued that when unoccupied land is permanently
granted or assigned under Section 54 of the 1317 Fasli Act as done in
the present case, then Section 58 of the said Act expressly provided
that the resultant occupancy right shall be ‘deemed to be heritable and
transferable’. Even otherwise, he contended that for any restriction
on the transfer of Subject Land under the Special Laoni Rules to be
applicable, a separate notification under Section 58-A of 1317 Fasli
Act was a necessary prerequisite as mentioned in the rules itself. For
ease of analysis, the relevant provisions of the 1317 Fasli Act are
reproduced below:–
“54. Procedure for acquiring unoccupied land:
(1) When any person is desirous of taking unoccupied land he shall
before occupying the land submit a petition to the Tahsildar and
obtain his permission in writing.
YADAIAH AND ANR. v. STATE OF TELANGANA AND 621
OTHERS [SURYA KANT, J.]

(2) On such petition being submitted, the Tahsildar may,
in accordance with the rules made by the Government in
this behalf from time to time, give permission in writing for
occupation.
58. Occupancy right is heritable and transferable: An occupancy
right to land shall be deemed to be heritable and transferable.
58-A. Sanction of Collector for transfer of occupied land
compulsory in certain cases:
(1) Notwithstanding anything contained in the preceding section
the Government may by Oﬃcial Gazette notify in respect of
any village or tract of the area to which this Act extends that
the right of occupation of any land under section 54 given after
the date of the notiﬁcation shall not be transferable without
obtaining the previous sanction of the Collector.
(2) The Government may also at its discretion from time to
time notify by Oﬃcial Gazette, that any part or person or class
of persons of such village or tract of the area to which this Act
extends to which the provisions of sub-section (1) have been
made applicable shall be exempt from the said provisions.”
Similarly, we may also refer to the relevant rules regarding ‘Special
Laoni’ as mentioned in the Laoni Rules of 1950 which are as follows:–
“ Special Laoni
15. No lands in the special area notiﬁed under Section 58-Aof A.P.
(Telangana Area) Land Revenue Act, shall be assigned except in
accordance the the following rules:-
(a) The object of the special laoni is to make land available in
certain areas to such landless persons of agricultural and backward
classes as may be notiﬁed from time to time, and who have not
suﬃcient means to purchase land either at the ordinary laoni
auctions or otherwise. The selection of the most deserving applicant
should be made by Tahsildar after due publicity in the village or
at the place ﬁxed for the allotment proceedings.
622 SUPREME COURT REPORTS [2023] 12 S.C.R.

(b) Special laoni, proceedings may ordinarily take place twice a
year in the months of April and September, and may also take
place at other times when the Tahsildar is visiting the locality.
16. In making selection for special laoni preference shall be
given to persons who reside in the village, but do not possess any
patta or shikmi rights in any land in the village or elsewhere or
who have insuﬃcient land but possess bullocks and agricultural
implements. Persons who are already cultivating lands are
“asamis” or “bataidars” shall be given preference over other
labourers.
x-x-x-x
19. The allottee of the land shall prepare the land for cultivation
within three years of being placed in possession and commerce
cultivation of the land thereafter. The pattadar may be rejected
by the order of the Collector for breach of any of the above
conditions:
Provided that he has been served with a notice calling upon
him to comply with the conditions which he has violated and
he fails to comply with it within three months of the date of
service thereof. If lands has been transferred in contravention,
the conditions, the Collector may eject the transferee.”
28. Thirdly, Mr. Gupta, learned senior counsel drew our attention
to this Court’s judgement in Gudepu Sailoo 7 which we have already
reproduced at Para 17 above, to contend that the impugned decision
erroneously concluded that this Court had already decided the issue of
alienability. He strenuously argued that the decision was not on merit
as this Court held that the challenge was premature and remanded the
dispute back to the District Collector. Fourthly, by relying on the decision
of the High Court in G.V.K. Rama Rao vs Bakelite Hylam Employees
Co-Op.8, it was contended that since the Subject Land was governed

7 Gudepu Sailoo (n 3).
8 G.V.K. Rama Rao vs Bakelite Hylam Employees Co-Op.1997 SCC OnLine AP 200,
para 18.
YADAIAH AND ANR. v. STATE OF TELANGANA AND 623
OTHERS [SURYA KANT, J.]

by Laoni Rules of 1950, which stipulated no condition regarding non-
alienability, the same would not come under the deﬁ nition of ‘assigned
land’ as given under the 1977 Act. In other words, it was submitted
that the 1977 Act has no application over the Subject Land. Fifthly, it
was urged that evoking suo motu revisionary powers by the revenue
authorities as done in the present case is illegal as the same must be
exercised within a reasonable time or else it would render the exercise
of such power arbitrary. Reliance in this regard was placed on another
decision of the High Court in S. Santhanam v State of A.P. 9, pointing
out that the Special Leave Petition against the aforecited decision was
rejected by this court vide order dated 19.08.2011 passed in SLP (C)
No. 16545 of 2006. Finally, Mr. Gupta submitted that the Subject Land
has been in possession with the Assignees from 1953 as noted in the
High Court’s order dated 21.04.2006 as well as the documents which
have been brought on record and therefore even if the Temporary Pattas
were given in 1961, the applicable law vis-à-vis the assignment should
relate back to 1953 itself.
29. Turning up next for the Appellants was learned senior counsel,
Mr. Huzefa Ahmadi who while reiterating the arguments made by
Mr. Gupta, made the following additional submissions – Firstly that
requirements for application of Section 58-A of the 1317 Fasli Act
were not met, which are as follows – (a) there must be a notiﬁ cation in
the oﬃcial gazette; (b) the said notiﬁcation must be in respect of ‘any
village or tract’ to which the 1317 Fasli Act was extended and (c) such
land can be transferred with the permission of the Collector. Hence, it
was contended that for any bar in respect of alienability to be applicable
through any policy, the requirements of Section 58-A are sine qua non.
Secondly, he argued that even the policies which are stated to have
prohibited alienation are not applicable independently. With reference
to the Circular dated 08.11.1954 [Hereinafter 1954 Circular], it was
submitted that the same was not retrospectively applicable and in any
event, it referred to Section 58-A only in respect of lands which were
granted for ‘Eksala’ (one year) cultivation or to lands which have been

9 S. Santhanam v State of A.P. 2006 SCC OnLine AP 145.
624 SUPREME COURT REPORTS [2023] 12 S.C.R.

set apart as provided in Paragraph 8 of the 1954 Circular. It would thus
be appropriate to reproduce the relevant contents of the 1954 Circular
which are to the following eﬀect:–
“…..The following Circulars regarding the assignment and
grant of Patta of unoccupied Government Lands to the Harijans,
Backward Classes and Landless poor persons have been issued
from time to time.
x-x-x-x
As the orders issued through various circulars were creating
confusion in their proper implementation, the following
consolidated orders are hereby issued after reconsidering the
various orders issued through the aforesaid circulars.
x-x-x-x
A. Lands under Cultivation on the Basis of Permission for Eksala
Cultivation
1. In case of occupation by the Harijans, Scheduled Castes,
Backward Classes, of poor landless persons, patta shall, subject
to the provisions contained in Section 58-A of the A.P. (Telangana
Area) Land Revenue Act, be granted free of cost to the extent of one
family holding inclusive of the land already owned by occupants
and where the land is in excess thereof, they shall be evicted from
the excess area
x-x-x-x
8. Village-wise statements of all Porampoke, Gut, Kharjkata,
Gairan lands excluding ten percent, ﬁt for grazing and lands
excised from forest, shall be prepared and all such lands shall ﬁrst
be set apart as are required for public or Government purposes or
on which, there arc Sendhi, Toddy or Gulmohwa trees or which
are required to be to be set apart for such purposes or on which
there is a Kancha, the grass of which is auctioned every year. The
remaining lands including those from which occupants have been
evicted under para 3 shall under special Laoni be assigned on patta
to the Scheduled Castes, Harijans, Backward Classes and poor
YADAIAH AND ANR. v. STATE OF TELANGANA AND 625
OTHERS [SURYA KANT, J.]

landless persons who are bonaﬁde agriculturists at the rate of one
family holding per family, subject to the provisions contained in
Section 58-A of the A.P. (Telangana Area) Land Revenue Act. As
far as possible each family shall be entitled to patta shall primarily
be assigned lands which were being cultivated by them…..”
In the same breadth, Mr. Ahmadi contended that all remaining policies
regarding assignments, namely, G.O. dated 25.07.1958 [Hereinafter, ‘1958
Circular’] which was subsequently clariﬁed by G.O. dated 26.08.1958
[Hereinafter, ‘1958 Clarification’] would not be attracted, for the
assignment being of 1953 itself, these policies would have no retrospective
eﬀect and/or these circulars themselves excluded the Subject Land. The
relevant extracts of the 1958 Circular are as follows:–
“6. Terms and conditions of assignment –
(i) The assignment of lands shall be free of market value;
(ii) Land assigned shall be heritable but not alienable;
(iii) Lands assigned shall be brought under cultivation within
three years;
(iv) No land tax shall be collected for the ﬁrst three years except
for the extent, if any, which has already been brought under
cultivation. Water rate shall, however, be charged if the lands are
irrigated with Government water; and
(v) Cultivation should be by the assignee or the members of his
family or with hired labour under the supervision of himself or a
member of his family.
x-x-x-x
15. Pending assignments:- All assignment proceedings now pending
or arising here after shall be disposed of in accordance with these
rules.”
(Emphasis Applied)
Similarly, the relevant part of the 1958 Clariﬁcation is to the following
eﬀect:-
626 SUPREME COURT REPORTS [2023] 12 S.C.R.

“7. Pending cases:-
(a) lands to which Circular No. 14, dated 8th November, 1954 issued
by the erstwhile Hyderabad Government and the other Circulars
issued in clariﬁcation of it were applicable should be dealt with
under those circulars but not under the new rules of assignment
Issued in G.O. Ms. No. 1406, Rev, Dt. 25th July, 1958:
Provided that the extent of land to be assigned in all such
cases shall not exceed the limits of 6 acres of dry or 2-1/2 acres of
wet land inclusive of the land already passed
(b) Cases in which the right of patta was given to the occupants
according to Circular No. 14, and other circulars issued in
clariﬁcation of it and cases in respect to which there is evidence
in Government Records either of application presented by the
encroacher for grant of patta or of his possession of the lands
should not be treated as pending cases but should be decided under
Circular No. 14 and other circulars issued in clariﬁcation of it.”
(Emphasis Applied)
It was, thus, submitted that provisions of 1958 Circular introducing
the twin conditions in respect of alienation and cultivation, would not be
applicable to the Subject Land on account of the 1958 Clariﬁcation which
purportedly brought the Subject Land within the purview of the 1954
Circular.
30. Thirdly, Mr. Ahmadi argued that Section 4 of the 1977 Act provided
for re-assignment of the land in case of contravention of Section 3 of the
1977 Act instead of resumption as was ordered by the revenue authorities in
this case. Fourthly, it was submitted that evocation of suo motu revisionary
powers through the Second SCN was not permissible as the sale deeds were
of 1992 while Second SCN was of 2006, which would violate the temporal
aspects as argued by Mr. Gupta, and, thus, the action was ex facie illegal.
31. Learned senior counsel, Mr. Niranjan Reddy assisted by learned
counsel Mr. Krishna Dev Jagarlamudi also appeared on behalf of the
Appellants. While lending his support to the abovementioned arguments,
he made the following submissions – Firstly, that the issue of applicable
YADAIAH AND ANR. v. STATE OF TELANGANA AND 627
OTHERS [SURYA KANT, J.]

law over the Subject Land can no longer be opened in light of the High
Court’s order dated 21.04.2006 wherein it was categorically held that the
State could not agitate over the applicability of correct regulatory regime
after a gap of 30 years post assignment. According to him, the Laoni Rules
of 1950 were held to be applicable over the Subject Land. In support of
this, he also referred to the Mandal Revenue Oﬃcer’s clariﬁcation vide his
memo dated 23.09.1992. Secondly, he took pains to go through the entirety
of sale deeds executed by M.A. Baksh to point out that out of the originally
assigned area measuring 142 Acres 39 Guntas, only about 10 Acres land
was sold through these sale deeds. In other words, the contravention of
provisions of 1977 Act was limited to this area and an order of resumption
could not have been passed in respect of the entire Subject Land. Lastly,
he submitted that even if the Subject Land is resumed, the Appellants are
entitled to compensation as per the Seven-Judge bench decision of the High
Court in LAO cum Revenue Divisional Oﬃcer, Chevella Division v Mekala
Pandu10, read with the right to property duly protected under Article 300A
of the Constitution.
32. Supplementing the Appellants, Mr. Ranjit Kumar, learned senior
counsel raised the following contentions – Firstly, that in the counter aﬃdavit
ﬁled by the impleaded Respondent, i.e. Greyhounds, a plea has been taken
that they have taken possession of the Subject Land in 2003 itself. If this
was the case, then where was the need to issue the Second SCN in 2006
and to take this contrary stance by them. Secondly, he contended that in all
the sale deeds entered by M.A. Baksh as a GPA holder, he is mentioned as
the vendee which showcases that the Appellants were unaware or were not
actively involved in carrying out sale of the Subject Land.
33. In the end, Mr. Tripurari Ray learned counsel appearing on behalf
of the Appellants raised a contention for the ﬁrst time at this stage by relying
on the decision of this Court in Yeshwant Deorao Deshmukh v Walchand
Ramchand Kothari11. He contended that the Laoni Rules of 1950 created
an artiﬁcial classiﬁcation among two classes – namely those who were

10 LAO cum Revenue Divisional Oﬃcer, Chevella Division v Mekala Pandu 2004 SCC
OnLine AP 217.
11 Yeshwant Deorao Deshmukh v Walchand Ramchand Kothari 1950 SCC 766.
628 SUPREME COURT REPORTS [2023] 12 S.C.R.

granted regular patta under Rule 2 to 14 of these Rules through the bidding
process which was alienable and the landless or poor people who were
granted special patta under Rule 15 to 24 of Laoni Rules of 1950 with a
bar on the alienability and obligation of an Assignee to cultivate the land.
He contended that this amounted to ‘class legislation’ which discriminated
against the Assignees and violated their fundamental rights under Article
14 of the Constitution.
34. Repelling the combined submissions made on behalf of the
Appellants, Mr. K.K. Venugopal, learned senior counsel for the Respondent-
Greyhounds, has raised the following contentions – Firstly, that the
Temporary Pattas granted only a limited occupancy right to the Assignees
in the form of a temporary license to occupy and, it was not a permanent
assignment per se. Secondly, the claim of the Appellants that they were
cultivating the land is baseless as they were never interested in even holding
the possession over the Subject Land itself. In this respect, he referred to the
Panchnama conducted by the revenue oﬃcials in the years 2003 and 2007
wherein it was noted that no cultivation was going on at the Subject Land.
Thirdly, he contended that under the regular assignment as per Laoni Rules
of 1950, an auction mechanism was in place, and it was only through this
process that an alienable right could be granted in respect of the assigned
land. In this regard, he relied upon Form 9(G) under which the Subject
Land was granted to Assignees and invited our attention to the relevant part
indicative of the auction mechanism. He further submitted that the grant
of Subject Land was under the Special Loani, which included the valid
condition of non-alienability. Fourthly, he submitted that the ﬁnding of
possession as well as the Appellants’ claim that applicable rules in respect
of assignment should be that of 1953 is completely unsustainable. Learned
senior counsel has taken us through the documents on record to showcase
that the assignment only happened on 21.10.1961, i.e., when Temporary
Pattas were granted. He further maintained that all other documents only
discussed the grant of sanction of the Subject Land and the procedure
pending before any kind of assignment could take place. Fifthly, he submitted
that Mr. Reddy’s argument concerning limited contravention of the 1977
Act is factually incorrect in light of the language employed in the GPA
executed in favour of M.A. Baksh, which categorically noted that the said
GPA was in respect of the entirety of Subject Land. Finally, he argued that
YADAIAH AND ANR. v. STATE OF TELANGANA AND 629
OTHERS [SURYA KANT, J.]

the Subject Land is resumed for a ‘public purpose’, i.e. training of the elite
commando force, which has been instrumental in suppressing the Naxalite
movement in the region. He also submitted that the Assignees were hand in
glove with the land maﬁa as well as the corrupt revenue oﬃcers, who had
set their sights on the Subject Land.
35. Mr. C.S. Vaidyanathan, learned senior counsel appearing on behalf
of Respondent State of Telangana, supported the contentions made by Mr.
Venugopal and has supplemented the same by highlighting the following
additional points – Firstly that the High Court order dated 21.04.2006 only
discusses the issue of raising the objection of irregularity in assignment
and doesn’t decide the issue of applicable law per se. To say it diﬀerently,
it only bars the government from resuming the land after thirty years on
the ground that the Subject Land was assigned under an incorrect law, but
it nowhere resolves the legal regime under which the conditions applicable
on the assignment are to be governed. He supported the reasoning assigned
in the impugned judgment of the Division Bench that the doctrine of res
judicata or constructive res judicata does not bar the Second SCN and the
consequent proceedings. Secondly, he argued that the assignment of Subject
Land was still governed by the twin condition of non-alienability as well as
the obligation of cultivation by the Assignees.
36. Mr. V. Giri, learned senior counsel appearing on behalf of the State
of Telangana, has wrapped the arguments by reiterating the stance taken by
both Mr. Venugopal and Mr. Vaidyanathan. Before noting his submissions,
it would be pertinent to note that Mr. Giri has taken a contrary stance in
respect of Mr. Venugopal’s submission that only temporary occupancy right
had been created in favour of the Assignees. Mr. Giri has fairly admitted
that the pattas issued in 1961 were in furtherance of an assignment only.
Thereafter, he has argued - Firstly that the Subject Land was governed by the
G.O. dated 25.07.1958 as well as the GOM 1122, which barred alienation
by the Assignees as noted above. He submitted that even otherwise, the
assignment was in the nature of Special Laoni and was governed by the
condition of bar on sale without Collector’s permission as well as cultivation
of the land. Both these conditions were incorporated in the Temporary Pattas
issued under Form 9(G), which also reproduced Rule 19 as applicable to
Special Laoni. He submitted that even though the applicable law changed,
630 SUPREME COURT REPORTS [2023] 12 S.C.R.

the format under which assignments were granted to landless individuals
remained the same, i.e. Form 9(G). In other words, he argued that though the
Temporary Pattas granted in the present case to the Assignees erroneously
mentioned that the form was issued under Laoni Rules of 1950, the pattas
were in fact, governed by the revised legal regime. Secondly, he urged that
the prohibition on alienability as introduced by the 1977 Act was retroactive
in eﬀect, and the same has been upheld in a full bench decision of the High
Court in Dharma Reddy v Sub-Collector, Bodhan 12. Finally, building on
the arguments of Mr. Venugopal in respect of the involvement of the alleged
land maﬁa, he referred to a Memorandum of Understanding entered into
between some of the Appellants and a private real estate company for the
sale of the Subject Land and also informed that a First Investigation Report
has also been ﬁled on this behalf by the revenue authorities against the
accused which include some of the Appellants.
37. During rebuttals, Dr. Abhishek Manu Singhvi, learned senior
counsel on behalf of the Appellants reiterated the arguments made in respect
of Section 58-A of the 1317 Fasli Act. He furthermore submitted that even
if there is a restriction on the transfer of land independent of Section 58-A
of the 1317 Fasli Act, as contained in the Temporary Pattas regarding need
of permission of the Collector, then such restriction indicates a permissive
regime instead of a prohibitory regime which is a necessary corollary for
invoking the provisions of 1977 Act. He vehemently reiterated that the
Subject Land doesn’t come under the ambit of the term ‘assigned land’ as
deﬁned under the 1977 Act.
C. ANALYSIS
38. Before we analyse the rival contentions raised by the parties, it
would be appropriate to broadly highlight the issues which arise for our
consideration:–
a) Whether the proceedings emanating out of the Second SCN are
barred by the doctrine of res judicata or constructive res judicata?
b) Whether the exercise of suo motu revisionary powers while
issuing the Second SCN is bad in law?

12 Dharama Reddy v Sub-Collector, Bodhan 1986 SCC OnLine AP 141.
YADAIAH AND ANR. v. STATE OF TELANGANA AND 631
OTHERS [SURYA KANT, J.]

c) What is the law governing the assignment of the Subject Land
and whether the same contained any bar in respect of alienation?
d) Whether the assignment of Subject Land comes under the
purview of 1977 Act?
e) If question No.(d) is answered in positive, would the entirety of
Subject Land or only a part thereof be considered to have violated
the 1977 Act in light of the sale deeds executed by M.A. Baksh
as the GPA holder?
f) Whether the Appellants are entitled to any compensation on account
of the resumption order dated 27.01.2007?
C.1 THE APPLICATION OF DOCTRINE OF RES JUDICATA
39. At the outset, we would like to highlight that since the Second
SCN doesn’t speak about the violation of assignment condition regarding
cultivation, it would not be expedient to adjudicate or comment on the
same. Coming back to the issue of res judicata based upon the allegation
of alienability and its legal consequences, it would be prudent to reproduce
the reasoning contained in the impugned judgement which is as follows:–
“17. In the considered opinion of this Court, the issues involved in
W.P.Nos.13165 and 23639 of 2003 and the proceedings involved in
the present writ petition are diﬀerent. In W.P.Nos.13165 and L.3639
of 2003, the issues raised therein pertained to the legality of the
assignment orders issued in favour of the respondents/assignees and
the execution of the GPA in favour of one M.A.Baksh to transfer
the lands and consequent violation of the assignment orders. The
proceedings in the aforesaid cases were by way of suo motu revision
under Section 166-B of the Land Revenue Act, 1317F and the High
Court has answered that the legality of the assignment orders need
not be gone into after forty years and the cause of action regarding
the execution of GPA does not survive since the GPA holder is· not
alive. On the contrary, the issue involved in the present writ petition
deals with the proceedings issued by the Mandal Revenue Oﬃcer
(W.P.No.3634 of 2007) relates to the execution of sale deeds by GPA
holder in favour of. several persons and the action taken under Act
632 SUPREME COURT REPORTS [2023] 12 S.C.R.

No.9 of 1977. As many as 71 sale deeds were executed in respect of
the assigned lands…..
x-x-x-x
18. Meaning thereby in respect of assigned lands, sale deeds were
executed which were impermissible in law. The aforesaid issue was
never the subject matter of earlier litigation and therefore, by no
stretch of imagination, it could have been held by the learned Single
Judge that the proceedings dated 27.01.2007 are hit by res judicata.”
40. The reasoning assigned by the Division Bench of the High Court
is, thus, founded on the premise that the cause of action in the Second SCN
is diﬀerent from the First SCN. In response to the same, Appellants have
extensively referred to the resumption order dated 10.05.2003 which was
passed in furtherance of the proceedings conducted in First SCN to state that
the same actively considered the issue of the sale deeds executed by M.A.
Baksh as well the contravention of 1977 Act. It was urged that since the First
SCN was set aside by the High Court through its order dated 21.04.2006,
the observations in the resumption order dated 10.05.2003 would eﬀectively
merge with the ﬁndings of the High Court order dated 21.04.2006 and
therefore the Second SCN alleging identical violations should be held to
be barred by the doctrine of res judicata.
41. However, we do not ﬁnd ourselves in agreement with this line
of thought for the precise reason that the High Court in its order dated
21.04.2006 had emphatically held that the First SCN was issued without
jurisdiction and set the same aside, instead of dealing with resumption order
dated 10.05.2003 on merits. In eﬀect, the resumption order dated 10.05.2003
was held to be a nullity. Therefore in light of the settled law as expounded
by this Court in A. Jithendernath v. Jubilee Hills Coop. House Building
Society13, doctrine of res judicata would not be applicable as an order being
a nullity never existed in the eyes of the law.
42. Coming to the issue of the ﬁnding in High Court’s order dated
21.04.2006 with respect to the demise of M.A. Baksh making the GPA
redundant, it is may be noticed that the same is materially diﬀerent from the

13 A. Jithendernath v. Jubilee Hills Coop. House Building Society (2006) 10 SCC 96.
YADAIAH AND ANR. v. STATE OF TELANGANA AND 633
OTHERS [SURYA KANT, J.]

violations as alleged in the Second SCN and held in the impugned order. On
closer scrutiny, we may point out that the aforesaid observation regarding the
GPA executed in favour of M.A. Baksh was not a fundamental determination
but only a collateral determination. In this context, the decision of this Court
in Pawan Kumar Gupta v. Rochi Ram Nag Deo14 may be usefully cited
which observes that:–
“16. The rule of res judicata incorporated in section 11 of the
Code of Civil Procedure (CPC) prohibits the Court from trying
an issue which “has been directly and substantially in issue in a
former suit between the same parties”, and has been heard and
ﬁnally decided by that Court. It is the decision on an issue, and not
a mere ﬁnding on any Incidental question to reach such decision,
which operates as res judicata….”
(Emphasis Applied)
43. By now it’s a globally settled principle of common law
jurisprudence that only determinations which are fundamental would result
in the application of the doctrine of res judicata.15 Only those ﬁndings,
without which the Court cannot adjudicate a dispute and also form the vital
cog in the reasoning of a deﬁnite conclusion on an issue on merits, constitute
res judicata between the same set of parties in subsequent proceedings.
However, in the process of arriving at a ﬁnal conclusion, if the Court makes
any incidental, supplemental or non-essential observations which are not
foundational to the ﬁnal determination, the same would not tie down the
hands of courts in future.
44. The principle in respect of fundamental determination has been
explicitly discussed by this Court in Sajjadanashin Sayed Md. B.E. Edr.
v. Musa Dadabhai Ummer16 through the following paragraph:–
“16. Spencer Bower and Turner on The Doctrine of Res judicata
(2nd Edn., 1969, p. 181) refer to the English and Australian

14 Pawan Kumar Gupta v. Rochi Ram Nag Deo (1999) 4 SCC 243.D
15 Justice KR Handley, Spencer Bower, Turner and Handley: The Doctrine of Res
judicata (3rd edn, LexisNexis Butterworths, 1996) pages 103-107.
16 Sajjadanashin Sayed Md. B.E. Edr. v. Musa Dadabhai Ummer (2000) 3 SCC 350.
634 SUPREME COURT REPORTS [2023] 12 S.C.R.

experience and quote Dixon, J. of the Australian High Court in
Blair v. Curran [(1939) 62 CLR 464, 553 (Aus HC)] CLR at p.
553 to say:
“The diﬃculty in the actual application of these conceptions is
to distinguish the matters fundamental or cardinal to the prior
decision on judgment, or necessarily involved in it as its legal
justiﬁcation or foundation, from matters which, even though
actually raised and decided as being in the circumstances of
the case the determining considerations, yet are not in point of
law the essential foundation of a groundwork of the judgment.”
The authors say that in order to understand this essential
distinction, one has always to inquire with unrelenting severity —
is the determination upon which it is sought to ﬁnd an estoppel so
fundamental to the substantive decision that the latter cannot stand
without the former. Nothing less than this will do. It is suggested
by Dixon, J. that even where this inquiry is answered satisfactorily,
there is still another test to pass: viz. whether the determination is
the “immediate foundation” of the decision as opposed to merely
“a proposition collateral or subsidiary only, i.e. not more than part
of the reasoning supporting the conclusion”. It is well settled, say
the above authors, “that a mere step in reasoning is insuﬃcient.
What is required is no less than the determination of law, or fact
or both, fundamental to the substantive decision”.
(Emphasis Applied)
45. The effective test to distinguish between a fundamental or
collateral determination is hinged on the inquiry of whether the concerned
determination was so vital to the decision that without which the decision
itself cannot stand independently. Any determination, despite being
deliberate or formal, cannot give rise to application of the doctrine of res
judicata if they are not fundamental in nature. On a plain reading of the
High Court’s order dated 21.04.2006 in conjugation with the application of
the test formulated above, we ﬁnd that the observation in respect of GPA
in the said order was indeed a mere collateral ﬁnding. We say so for the
reason that the order dated 21.04.2006 primarily dealt with the evocation
of suo motu revisionary powers under Section 166-B of the 1317 Fasli
YADAIAH AND ANR. v. STATE OF TELANGANA AND 635
OTHERS [SURYA KANT, J.]

Act for issuing the First SCN and not the allegations regarding violation
of assignment conditions. In fact, the First SCN was held to be bad in law
and without jurisdiction because it was primarily issued on the ground of
irregularity by stating that the Subject Land was erroneously assigned under
the old rules and that it sought to disturb the assignment after a period of
more than thirty years. This was held to be in contravention to the settled
law for evoking suo motu revisionary powers under Section 166-B of the
1317 Fasli Act which is the sole fundamental determination by the High
Court in its order dated 21.04.2006. Resultantly, the ﬁnding that the GPA
was rendered redundant on account of the demise of M.A. Baksh was only
collateral in nature and is not hit by the doctrine of res judicata.
46. The other aspect which needs our attention is whether the second
SCN would be barred by the extended doctrine of constructive res judicata.
The said doctrine has been formulated over the time by courts as a part of
public policy to prevent abuse of process of courts and to bring ﬁnality to
the judicial pronouncements. This court in State of UP v. Nawab Hussain17
eloquently explained this principle:–
“3. The principle of estoppel per rem judicatam is a rule of
evidence. As has been stated in Marginson v. Blackburn Borough
Council [(1939) 2 KB 426 at p. 437], it may be said to be “the
broader rule of evidence which prohibits the reassertion of a cause
of action”. This doctrine is based on two theories: (i) the ﬁnality
and conclusiveness of judicial decisions for the ﬁnal termination
of disputes in the general interest of the community as a matter of
public policy, and (ii) the interest of the individual that he should
be protected from multiplication of litigation. It therefore serves
not only a public but also a private purpose by obstructing the
reopening of matters which have once been adjudicated upon.
It is thus not permissible to obtain a second judgment for the
same civil relief on the same cause of action, for otherwise the
spirit of contentiousness may give rise to conﬂicting judgments
of equal authority, lead to multiplicity of actions and bring the
administration of justice into disrepute. It is the cause of action

17 State of UP v. Nawab Hussain (1977) 2 SCC 806.
636 SUPREME COURT REPORTS [2023] 12 S.C.R.

which gives rise to an action, and that is why it is necessary for
the courts to recognise that a cause of action which results in
a judgment must lose its identity and vitality and merge in the
judgment when pronounced. It cannot therefore survive the
judgment, or give rise to another cause of action on the same facts.
This is what is known as the general principle of res judicata.
4. But it may be that the same set of facts may give rise to two or
more causes of action. If in such a case a person is allowed to choose
and sue upon one cause of action at one time and to reserve the
other for subsequent litigation, that would aggravate the burden
of litigation. Courts have therefore treated such a course of action
as an abuse of its process and Somervell, L.J., has answered it as
follows in Greenhalgh v. Mallard [(1947) All ER 255 at p. 257] :
“I think that on the authorities to which I will refer it would
be accurate to say that res judicata for this purpose is not
conﬁned to the issues which the court is actually asked to
decide, but that it covers issues or facts which are so clearly
part of the subject-matter of the litigation and so clearly could
have been raised that it would be an abuse of the process of
the court to allow a new proceeding to be started in respect
of them.”
This is therefore another and an equally necessary and eﬃcacious
aspect of the same principle, for it helps in raising the bar of res
judicata by suitably construing the general principle of subduing
a cantankerous litigant. That is why this other rule has some times
been referred to as constructive res judicata which, in reality, is
an aspect or ampliﬁcation of the general principle.”
(Emphasis Applied)
47. The doctrine of constructive res judicata will not be applicable in
the present case for the simple reason that the issues raised in the Second
SCN were never adjudicated upon in the ﬁrst place as explained above. The
plea that the same should have been raised in the earlier proceedings, is
irrelevant in light of the liberty granted by the High Court in its order dated
21.04.2006 whereby the Revenue authorities were expressly permitted
YADAIAH AND ANR. v. STATE OF TELANGANA AND 637
OTHERS [SURYA KANT, J.]

to initiate fresh proceedings for violation of assignment conditions. The
Division Bench of the High Court is therefore right in holding that this
liberty was not for ‘future contraventions only’ as perceived by the Single
Judge in his order dated 05.02.2010, for it would render the liberty granted
in order dated 21.04.2006 as obsolete. We thus hold that in light of the
liberty granted by the High Court vide order dated 21.04.2006, the Second
SCN would neither constitute an abuse of process of court nor will attract
the doctrine of constructive res judicata.
48. In light of the above discussion and observations, we hold that
the proceedings emanating out of the Second SCN are not barred by
the doctrine of res judicata or the extended doctrine of constructive res
judicata.
C.2 THE EXERCISE OF SUO MOTU REVISIONARY POWERS
49. The Appellants have strenuously contended that evocating suo
motu revisionary powers and issuing the Second SCN was bad in law as
the same was initiated after more than 45 years when the Subject Land was
initially assigned and about more than 15 years after the sale deeds were
executed. At this stage, we ﬁrstly refer to the following observations made
by this Court in Ibrahimpatnam Taluk Vyavasaya Coolie Sangham v. K.
Suresh Reddy18 in respect of exercise of suo motu revisionary powers:–
“9. …… Exercise of suo motu power depended on facts and
circumstances of each case. In cases of fraud, this power could be
exercised within a reasonable time from the date of detection or
discovery of fraud. While exercising such power, several factors
need to be kept in mind such as eﬀect on the rights of the third
parties over the immovable property due to passage of considerable
time, change of hands by subsequent bona ﬁde transfers, the orders
attaining ﬁnality under the provisions of other Acts (such as the
Land Ceiling Act). Hence, it appears that without stating from
what date the period of limitation starts and within what period
the suo motu power is to be exercised, in sub-section (4) of Section

18 Ibrahimpatnam Taluk Vyavasaya Coolie Sangham v. K. Suresh Reddy (2003) 7 SCC
667.
638 SUPREME COURT REPORTS [2023] 12 S.C.R.

50-B of the Act, the words “at any time” are used so that the suo
motu power could be exercised within reasonable period from the
date of discovery of fraud depending on facts and circumstances
of each case in the context of the statute and nature of rights of
the parties. Use of the words “at any time” in sub-section (4) of
Section 50-B of the Act cannot be rigidly read letter by letter. It
must be read and construed contextually and reasonably. If one
has to simply proceed on the basis of the dictionary meaning of
the words “at any time”, the suo motu power under sub-section
(4) of Section 50-B of the Act could be exercised even after
decades and then it would lead to anomalous position leading to
uncertainty and complications seriously aﬀecting the rights of the
parties, that too, over immovable properties. Orders attaining
ﬁnality and certainty of the rights of the parties accrued in the
light of the orders passed must have sanctity. Exercise of suo motu
power “at any time” only means that no speciﬁc period such as
days, months or years are not (sic) prescribed reckoning from a
particular date. But that does not mean that “at any time” should
be unguided and arbitrary. In this view, “at any time” must be
understood as within a reasonable time depending on the facts
and circumstances of each case in the absence of prescribed
period of limitation.”
(Emphasis Applied)
50. It is a matter of record that the Second SCN pertains to alleged
violation of assignment conditions by transferring the ownership rights
through sale deeds executed in the year 1992. However, the period till
2006, in our considered opinion, could not be counted because the parties
were engaged in litigation pursuant to the First SCN and it was only after
the liberty was accorded by the High Court in its order dated 21.04.2006
that the Second SCN could be issued. We have already discussed in great
detail the reasons behind the grant of said liberty and the same need not
be reiterated. In the facts and circumstances of this case and taking note
of the chronological events, we are satisﬁed that the exercise of suo motu
revisionary power while issuing the Second SCN was not vitiated on
account of inordinate delay as claimed by the Appellants.
YADAIAH AND ANR. v. STATE OF TELANGANA AND 639
OTHERS [SURYA KANT, J.]

C.3 THE APPLICABLE LAW ON ASSIGNED LANDS
51. Once we have determined the validity of the Second SCN in
aﬃrmative, the next question that falls for our consideration is whether the
subject land was assigned in the year 1953 as claimed by the Appellants or
in 1961 when the Temporary Pattas were issued. However, before examining
the said point, we express our inability to accept the contention made by
Mr. Venugopal, learned senior counsel in respect of the nature of occupancy
rights granted to the Assignees. On a plain reading of the recitals contained in
the relevant documents, particularly the Temporary Pattas, First and Second
SCNs and also the stand taken by Mr. Giri, we have no reason to doubt that
the grant of Subject Land was in the nature of an assignment and not in any
form of limited occupancy right.
52. Coming now to the issue of the date of assignment, we agree
entirely with the Respondent’s stance that the actual assignment took place
only at the time of issuance of Temporary Pattas and not at any point prior
thereto. On perusal of the documents brought on record, which are merely
collection of inter-departmental correspondence before the issuance of
Temporary Pattas, we ﬁnd that the assignment process was still underway.
The Appellant’s reliance on the document dated 28.10.1953 is unfounded
as the same only communicated the sanction by the executive and nothing
else. In fact, the letter dated 04.06.1960 brings out the fact that the area of
the sanctioned land was to be reduced to 142 Acres and 39 Guntas and then
only was to be assigned. In this regard, this Court has repeatedly held and
recently reiterated again in Mahadeo v. Sovan Devi19 that:–
“14. It is well settled that inter-departmental communications are
in the process of consideration for appropriate decision and cannot
be relied upon as a basis to claim any right. This Court examined
the said question in a judgment reported as Omkar Sinha v.
Sahadat Khan3. Reliance was placed on Bachhittar Singh v. State
of Punjab4 to hold that merely writing something on the ﬁle does
not amount to an order. Before something amounts to an order of
the State Government, two things are necessary. First, the order
has to be expressed in the name of the Governor as required by

19 Mahadeo v. Sovan Devi 2022 SCC OnLine SC 1118.
640 SUPREME COURT REPORTS [2023] 12 S.C.R.

clause (1) of Article 166 and second, it has to be communicated.
As already indicated, no formal order modifying the decision of the
Revenue Secretary was ever made. Until such an order is drawn
up, the State Government cannot, in our opinion, be regarded as
bound by what was stated in the ﬁle.”
Similarly, the decision of this Court in Bachhittar Singh v. State of
Punjab20 which is cited in the above reproduced paragraph notes:–
“9. The question, therefore, is whether he did in fact make such
an order. Merely writing something on the ﬁle does not amount
to an order. Before something amounts to an order of the State
Government two things are necessary. The order has to be expressed
in the name of the Governor as required by clause (1) of Article
166 and then it has to be communicated. As already indicated, no
formal order modifying the decision of the Revenue Secretary was
ever made. Until such an order is drawn up the State Government
cannot, in our opinion, be regarded as bound by what was stated in
the ﬁle. As long as the matter rested with him the Revenue Minister
could well score out his remarks or minutes on the ﬁle and write
fresh ones.”
53. We, therefore, have no reason to doubt that the assignment took place
only on 21.10.1961, i.e. when the Temporary Pattas were issued. We also wish
to highlight that the observation in the High Court order dated 21.04.2006, that
the Assignees were in possession since 1953 is an ex-facie mistake of fact in
light of the documents brought on record as none of them supports this stance,
including the explanations submitted in response to the SCNs wherein the
Assignees themselves have stated that possession was given to them in 1960.
However, we hasten to add that since the assignment would be governed by
the legal regime as applicable on 21.10.1961, the aforementioned factually
incorrect observation made by the High Court in respect of the date of taking
possession of the Subject Land by Assignees is inconsequential.
54. Once it is determined that the regulatory regime which was in
vogue and held the ﬁeld as on 21.10.1961 will govern the assignments,

20 Bachhittar Singh v. State of Punjab AIR 1963 SC 395.
YADAIAH AND ANR. v. STATE OF TELANGANA AND 641
OTHERS [SURYA KANT, J.]

then it also stands crystalised that the 1958 Circular as well as GOM 1122
being in force at that time, are clearly applicable to the Subject Land. The
1958 Clariﬁcation which discounts the application of 1958 Circular is not
attracted in view of proviso to Rule 7(a) as each of the Assignees in the
present case was granted around 7 Acres 6 Guntas of land for cultivation
which is much is more than the limit of “6 acres of dry or 2-1/2 acres of
wet land” being the perquisite for application of the 1958 Clariﬁcation. As
a necessary corollary, we hold that there was a conditional bar on alienation
of the Subject Land as provided in the 1958 Circular and the GOM 1122.
The question whether the lands were assigned under ‘regular’ or ‘special
laoni’ under the Laoni Rules of 1950 consequently becomes academic and
we do not deem it necessary to express our opinion in relation thereto.
55. Finally, attention must be paid to the Appellant’s argument
concerning non-compliance with the mandatory requirement of notiﬁcation
as contemplated under Section 58-A of 1317 Fasli Act for invoking any
condition in respect of alienability. Heavy reliance in this regard has been
placed on the following paragraph of Letter sent from Plot No.33821, stating
inter-alia that no notiﬁcation under Section 58-A was published for the
district in which the Subject Land lies:–
“45. Section 58-A of the Telangana Area Land Revenue Act puts
a restriction for transfer of occupied land notiﬁed in respect of
any village or tract of the area to which Act extends that the
right of occupation of any land under Sec. 54 given after the date
of the notiﬁcation shall not be transferable without obtaining
the previous sanction of the Collector. The Advocate General
representing the State Government admitted that no notiﬁcation by
the State Government under Sec. 58-A was published prohibiting
transfer of the occupied land granted patta under Sec. 54. The same
has been recorded by this court in WP No. 144/75 dt. 6-12-1976.
x-x-x-x
55. For the aforesaid reasons, we are inclined to hold that though
the Government framed rules and notiﬁed the same cannot be

21 Letter sent from Plot No.338 (n 6).
642 SUPREME COURT REPORTS [2023] 12 S.C.R.

treated as notiﬁcation as contemplated under Sec. 58-A of the
Telangana Area Land Revenue Act where State Government has
to notify any village or tract of the area, to which this Act extends,
for obtaining previous sanction of the Collector. Therefore, Rule
VI (ii) of the Revised Assignment Policy issued in G.O.Ms. No.
1406 dt. 25-7-1958 cannot be given eﬀect to until such notiﬁcation
is issued.”
(Emphasis Applied)
56. However, it is pertinent to mention here that the decision in Letter
sent from Plot No.33822 in its later part clariﬁes the application of compliance
with Section 58-A when it says that:-
“56. Even if the rules are framed in exercise of rule making power
unless notiﬁcation is issued as contemplated under Sec. 58-A
notifying any village or tract of the area where sanction of the
Collector for transfer of land is necessary, rules cannot be enforced.
As already observed, the condition, if any imposed for sale of
unoccupied land on payment of market value under Form-G is till
the sale is conﬁrmed by the Collector, but not otherwise, as Sec.
58-A itself envisages sanction of right of occupation of land under
Sec. 54 given after the date of the notiﬁcation, but the same does not
cover the occupancy rights granted under Sec. 58 of the Telangana
Land Revenue Act. Point No. 1 is answered accordingly.”
(Emphasis Applied)
57. The abovementioned decision thus envisages the application of
Section 58-A of the 1317 Fasli Act only in cases where the assignment
is within the ambit of Section 54 of the 1317 Fasli Act. In other words,
Assignments such as those under Section 58 of the 1317 Fasli Act are free
from the rigours speciﬁed under Section 58-A of the 1317 Fasli Act. It
goes without saying that the assignment of the Subject Land was not under
Section 54 of the 1317 Fasli Act as may be seen from the contents of the
1958 Circular which draws a clear distinction between- (a) Land assigned
on payment of market value after making an application to the Collector

22 Letter sent from Plot No.338 (n 6).
YADAIAH AND ANR. v. STATE OF TELANGANA AND 643
OTHERS [SURYA KANT, J.]

and (b) Land Assigned to the Landless poor persons. The former is the
case of assignment under Section 54 of the 1317 Fasli Act and the latter is
covered within the ambit of Section 58 of the 1317 Fasli Act. The instant
case unambiguously falls in the latter category, i.e. ‘Land Assigned to the
Landless poor persons’.
58. Additionally, Section 58 of the 1317 Fasli Act is a deeming
provision wherein an occupancy right is presumed to be heritable as well
as transferable, until an indication to the contrary is proved. In this regard,
1958 Circular issued in exercise of the rule-making power vested under
Section 172 of 1317 Fasli Act, read with an independent statutory bar
created under Section 3 of the 1977 Act, portrays an explicit legislative
intention to curtail the legal ﬁction created under Section 58 of the 1317
Fasli Act. This is the precise reason because of which the decision in
Letter sent from Plot No.33823 concludes that 1977 Act was applicable
in respect of the land assigned to landless individuals and the same was
governed by the conditions of non-alienability as incorporated in the 1958
Circular. The precise part of the decision in Letter sent from Plot No.33824
as relied upon by the Division Bench of the High Court in the impugned
decision, states that:–
“60. We are of the view that provisions of Act No. 9 of 1977 will
not be applicable to the cases where assignments were made on
collection of market value or under Circular 14 except it were
granted to the landless poor persons free of market value. Point
No. 2 is answered accordingly.”
59. We have, therefore, no doubt in our mind that the Subject Land
was governed by the provision of the 1958 Circular which included the
condition of non-alienability. We, however, clarify that since the Laoni Rules
of 1950 were inapplicable on the Subject Land, the contention raised by
Mr. Ray regarding violation of Article 14 in respect of ‘regular assignment’
and ‘special laoni assignment’ becomes irrelevant and out of context and
the same need not be gone into by us.

23 Letter sent from Plot No.338 (n 6).
24 Letter sent from Plot No.338 (n 6).
644 SUPREME COURT REPORTS [2023] 12 S.C.R.

C.4 THE 1977 ACT: EXTENT OF APPLICATION AND
CONSEQUENCES
60. The next issue that arises for consideration hovers around the
applicability of the 1977 Act and its consequences in the event of violations
of the assignment conditions. In this respect, it would be apposite to ﬁrst
note the deﬁnition of ‘assigned land’ which is to the following eﬀect:-
“2. Deﬁnitions -In this Act, unless the context otherwise requires,-
(1) “assigned lands” means lands or house sites assigned by the
Government to the landless or homeless poor persons under the
rules for the time being in force, subject to condition of non-
alienation and includes lands allotted or transferred to landless or
homeless poor persons under the relevant law for the time being
in force relating to land ceilings; and the word “assigned” shall
be construed accordingly”
(Emphasis Applied)
We have already concluded that the Subject Land was governed by
the law which existed on the date of issuance of Temporary Pattas, i.e.
21.10.1961. It has also been held that the applicable law at the relevant
time included the 1958 Circular as well as GOM 1122. Since both these
regulatory measures incorporated the condition of non-alienability, there
can be no escape but to further hold that the Subject Land comes under the
deﬁnition of ‘assigned land’ as provided under Section 2(1) of the 1977 Act.
Resultantly, the provisions of the 1977 Act are fully attracted to regulating
the said land.
61. The other issue that comes up for determination is whether the
entirety of Subject Land would fall within the contravention of Section 3
of the 1977 Act which, inter alia, provides that:-
“Section 3 – Prohibition of transfer of assigned land –
(1) Where, before or after the commencement of this Act any land
has been assigned by the Government to a landless poor person
for purposes of cultivation or as a house-site then, notwithstanding
anything to the contrary in any other law for the time being in
force or in the deed of transfer or other document relating to such
YADAIAH AND ANR. v. STATE OF TELANGANA AND 645
OTHERS [SURYA KANT, J.]

land, it shall not be transferred and shall be deemed never to have
been transferred; and accordingly no right or title in such assigned
land shall vest in any person acquiring the land by such transfer.
(2) No landless poor person shall transfer any assigned land, and
no person shall acquire any assigned land, either by purchase, gift,
Lease (except in the case of Lease to the Andhra Pradesh Green
Energy Corporation Ltd., for use as deemed ﬁt and including
for usage of non-agriculture purpose), mortgage, exchange or
otherwise.
(2A) No assignee shall transfer any assigned house site, and no
person shall acquire any assigned house site, either by purchase,
gift, Lease (except in the case of Lease to the Andhra Pradesh
Green Energy Corporation Ltd., for use as deemed fit and
including for usage of non-agriculture purpose), mortgage,
exchange or otherwise, till completion of the period of 20 years
from the date of assignment.
(2B) Where the assigned House site was alienated by the assignee
as on the date of commencement of this Act, such house site shall
be regularized in favour of the alienee as a one-time measure.
(3) Any transfer or acquisition made in contravention of the
provision of sub-section (1) or sub-section (2) or sub-section (2A)
shall be deemed to be null and void.
(4) The Provisions of this section shall apply to any transaction of
the nature referred to in sub-section (2) in execution of a decree
or order of a civil court or of any award or order of any other
authority.
(5) Nothing in this section shall apply to an assigned land which was
purchased by a landless poor person in good faith and for valuable
consideration from the original assignee or his transferee prior to
the commencement of this Act and which is in the possession of
such person for purposes of cultivation or as a house-site on the
date of such commencement.”
(Emphasis Applied)
646 SUPREME COURT REPORTS [2023] 12 S.C.R.

62. In order to appreciate sub-Section (2) of Section 3 of the 1977 Act
in its correct perspective, the expression ‘landless poor person’ and ‘transfer’
also become important, which are deﬁned in the 1977 Act as follows:–
“Section 2(3) – “landless poor person” means a person who owns
an extent of land not more than 1.011715 hectares (two and half
acres) of wet land or 2.023430 hectares (ﬁve acres) of dry land or
such other extent of land as has been or may be speciﬁed by the
Government in this behalf from time to time and who has no other
means of livelihood.
Explanation: - For the purposes of computing the extent of land
under this clause, 0.404686 hectares (one acre) of wet land shall
be equal to 0.809372 hectares (two acres) of dry land;
x-x-x-x
Section 2(6) – “Transfer” means any sale, gift, exchange, mortgage
with or without possession, lease (except in the case of Lease to
the Andhra Pradesh Green Energy Corporation Ltd., for use as
deemed ﬁt and including for usage of non-agriculture purpose) or
any other transaction with assigned lands, not being a testamentary
disposition and includes a charge on such property or a contract
relating to assigned lands in respect of such sale, gift, exchange,
mortgage, Lease (except in the case of Lease to the Andhra
Pradesh Green Energy Coproration Ltd., for use as deemed ﬁt
and including for usage of non-agriculture purpose) or other
transaction.”
(Emphasis Applied)
63. On a conjoint reading of these statutory expressions, particularly
pertaining to the term ‘transfer’, the question that falls on us to answer is
whether the GPA executed in favour of M.A. Baksh by the Assignees would
result in contravention of Section 3(2) of the 1977 Act. The contention made
by learned senior counsel Mr. Reddy that the contravention could only
be limited to the sale deeds executed in respect of about 10 Acres of the
Subject Land seems to be built on the decision of this Court in Suraj Lamp
YADAIAH AND ANR. v. STATE OF TELANGANA AND 647
OTHERS [SURYA KANT, J.]

and Industries Private Limited v. State of Haryana 25 where the practice of
GPA sales was deprecated and it was noted that the same did not constitute
‘sale’ or ‘transfer’ as contemplated under the Transfer of Property Act, 1882.
64. However, we must note that the term ‘transfer’ as deﬁned under the
1977 Act is much more inclusive than the one employed in the Transfer of
Property Act, 1882. The deﬁnition under the 1977 Act uses the phrase ‘any
other transaction’, which, in our considered opinion, necessarily includes
the GPA executed as an instrument to surrender ownership and possessory
rights in favour of M.A. Baksh. The intent of `transfer’ through the said
GPA by the Assignees authorizing the attorney holder to sell or transfer the
subject Property without any restriction as is evident from its recitals and for
which they admittedly received consideration from M.A. Baksh, is beyond
any doubt. This was precisely the kind of practice deprecated by this Court
in Suraj Lamp and Industries Private Limited26. We have thus no hesitation
in holding that the said GPA falls within the ambit of the term ‘transfer’,
especially in view of the objective of the 1977 Act, which was manifestly
intended to save the landless poor persons from the clutches of the rich and
the resourceful, who deprived them of the precious title assigned to them by
the Government for their occupation and the source of livelihood.
65. Our observations are in continuity with the view previously taken
by this Court in Dharma Naika v. Rama Naika27 wherein an ‘agreement to
sale’ was held to be included within the deﬁnition of ‘transfer’ as provided
under the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition
of Transfer of Certain Lands) Act, 1978. Its pertinent to mention that the
deﬁnition of ‘transfer’ in the aforesaid statute is somewhat similar to the
one employed by the 1977 Act. This Court noted that:–
“12. A bare reading of the deﬁnition of “transfer” as deﬁned in
Section 3(1)(e) of the Act would show that an “agreement for sale”
of any “granted land” is included within the meaning of “transfer”.
That being the position, the word “transfer” as deﬁned under the
Act is an inclusive deﬁnition. That is to say, it includes “sale” as

25 Suraj Lamp and Industries Private Limited v. State of Haryana (2012) 1 SCC 656
26 ibid.
27 Dharma Naika v. Rama Naika (2008) 14 SCC 517.
648 SUPREME COURT REPORTS [2023] 12 S.C.R.

well as “agreement for sale”, although an agreement for sale
under the Transfer of Property Act is not a transfer and the
right, title or interest in the land does not pass until the sale deed
is executed and registered. “Sale” has been deﬁned in Section
54 of the Transfer of Property Act which means “transfer of
ownership in exchange for a price paid or promised or part-paid
and part-promised”. As noted herein earlier, an agreement to
sell does not by itself create any interest of the proposed vendee
in the immovable property but only creates an enforceable right
in the parties. (See Rambhau Namdeo Gajre v. Narayan Bapuji
Dhotra [(2004) 8 SCC 614].) Therefore, it is clear that under
the general law, that is, under the Transfer of Property Act, an
“agreement for sale” is not the same as “sale” and in the case
of an agreement for sale, the title of the property agreed to
be sold still remains with the vendor but in the case of “sale”,
title of the property is vested with the vendee. Therefore, an
agreement for sale is an executory contract whereas sale is an
executed contract.
x-x-x-x
22. As noted hereinearlier, it is true that in this case, admittedly,
the parties had entered into an agreement for sale in respect
of the granted land before the commencement of the Act.
It is also an admitted position that the respondents belong/
belonged to the Scheduled Caste community. As already noted
hereinearlier, for the purposes of this Act, “transfer” has been
deﬁned to include an “agreement for sale” although under the
general law, an “agreement for sale” will not by itself transfer
the granted land automatically to the appellant purchaser. From
an overall consideration of the objects and reasons for which
this Act was introduced viz. to protect the right and interest
of the Scheduled Castes and Scheduled Tribes in respect of
the granted lands and the relevant provisions of the Act, it is
pellucid that the deﬁnition of “transfer” under Section 3(1)(e)
of the Act includes an agreement for sale also and “transfer”
has been so deﬁned to protect the right, title and interest of the
YADAIAH AND ANR. v. STATE OF TELANGANA AND 649
OTHERS [SURYA KANT, J.]

Scheduled Castes and Scheduled Tribes so that possession of
the lands could be restored to them even if they had entered
into an agreement for sale.”
(Emphasis Applied)
We, therefore, hold that the GPA executed in favour of M.A. Baksh in
the instant case constitutes a ‘transfer’ under the 1977 Act and consequently
would also result in violation of Section 3 of the 1977 Act.
66. This leads us to further consider the penal consequences in case
of the violation of Section 3 of the 1977 Act, as is provided in Section 4 of
the 1977 Act. The relevant part of the said provision, as amended from time
to time, reads as follows:–
“Section 4 – Consequence of breach of Section 3 –
(1) If in any case, the District Collector or any other oﬃcer not
below the rank of a Mandal Revenue Oﬃcer, authorised by him
in this behalf; is satisﬁed that the provisions of sub-section (1) of
section 3, have been contravened in respect of any assigned land,
he may, by order-
(a) take possession of the assigned land after evicting the
person in possession after such written notice as the Collector or
Mandal Revenue Oﬃcer may deem reasonable and any crop or
other produce raised on such land shall be liable to forfeiture and
any building or other construction erected or anything deposited,
thereon shall also be forfeited, if not removed by him, after such
notice, as the Collector or the Mandal Revenue Oﬃcer may direct
Forfeitures under this section shall be adjudged by the Collector
or Mandal Revenue Oﬃcer and any property forfeited shall be
disposed of as the Collector or Mandal Revenue Oﬃcer may
direct; and;
(b)(i) reassign the said resumed land, other than those lands/
areas as may be notiﬁed by the Government from time to time
in public interest and for public purpose, to the transferee who
purchased the land in good faith and for valuable consideration
on or before 29th January, 2007, subject to the condition that he/
650 SUPREME COURT REPORTS [2023] 12 S.C.R.

she is landless poor person, and is in occupation of the land by
using the said land for agriculture or as house site, as on the
date of taking possession by eviction:
Provided that the reassignment in case of transferee shall
be limited to only such an extent that the total holding of the
reassignee including any other land held by him/her does not
exceed 5.00 Acres dry land or 2 ½ Acres wet land:
Provided further that where the transferee who has
purchased the land and got reassignment of it, or his legal heir,
transfers the reassigned land, the land shall be resumed for
assignment to the other eligible landless poor:
(ii) restore the said assigned land, other than those lands/
areas as may be notiﬁed by the Government from time to time in
public interest and for public purpose, to the original assignee,
subject to the condition that he or she is landless poor person
as on the date of restoration for one time; or
(iii) assign to other eligible landless poor person: Provided
that the restoration of land shall be limited to only such an
extent that the total holding including any other land held by
him/her does not exceed 5.00 Acres dry land or 2 ½ Acres wet
land:
Provided further that where the original assignee or his
legal heir, after ﬁ rst restoration transfers the assigned land,
the land shall be resumed for assignment to the other eligible
landless poor:
Provided also that if no eligible landless poor persons are
available in the village/area, the resumed land will be utilised
for public purpose.
Explanation: For the purpose of this clause “Public
Interest” and “Public Purpose” shall mean and include,
the Weaker Section Housing, Public Utility, Infrastructure
Development, promotion of industries and Tourism or for any
other public purpose;
YADAIAH AND ANR. v. STATE OF TELANGANA AND 651
OTHERS [SURYA KANT, J.]

(c) In the areas which may be notiﬁed by Government from
time to time, time, lands resumed under clause 4(a) above, shall
be utilized for public purpose.
x-x-x-x
(5) For the purposes of this section, where any assigned land
is in possession of a person, other than the original assignee or
his legal heir, it shall be presumed, until the contrary is proved,
that there is a contravention of the provisions of sub-section (1)
of section 3.”
(Emphasis Applied)
67. The Appellants have argued that Section 4 of the 1977 Act as it
stood on the date when the resumption orders were passed, i.e. 27.01.2007,
only stipulated that a breach under Section 3 would result in possession
of the land being taken over from the third party to whom the land was
transferred and restored back to the original assignees. In other words, the
Appellants contend that the Subject Land should be re-assigned to them as
they are the legal heirs of the Assignees.
68. We have thoughtfully considered the submission. It is important
at this to draw attention to the provisions of The Andhra Pradesh Assigned
Lands (Prohibition of Transfers) (Amendment) Act, 2007 [Hereinafter,
‘2007 Amendment’] through which Section 4(1)(c) was introduced. The
2007 Amendment Act in its Section 1(3) expressly states that:–
“Section 1 - Short title, extent and commencement –
x-x-x-x
(3) Section 2 shall be deemed to have come into force with eﬀect
on and from 21st, January, 1977 and the remaining provisions
shall come into force from the date as the Government may, by
notiﬁcation, appoint.”
(Emphasis Applied)
It is signiﬁcant to note that Section 4(1)(c) was introduced through
Section 2 of the 2007 Amendment Act. The legislature explicitly gave it
retrospective eﬀect and even introduced an Ordinance on similar lines prior
652 SUPREME COURT REPORTS [2023] 12 S.C.R.

to the said amendment. The legislative intention can be further illuminated
from the relevant part of the Statement of Object and Reasons in the Bill
which introduced the 2007 Amendment and the same reads as follows:–
“x-x-x-x
On account of rapid urbanization in certain areas i.e., Hyderabad,
Visakhapatnam, Ranga Reddy Districts etc., most of the assigned
lands have been alienated by the original assignees and the lands
were converted to non-agricultural use. It is found not possible
to reassign these lands after resumption, either to the original
assignee or his/her legal heir. It is also practically not possible
to assign these lands to other landless poor persons, since the
nature of these lands has been changed and they are not useful
for agriculture purpose.
Keeping in view of the above said position, Government have
decided to amend clause (b) of sub-section (1) of Section 4 of the
said Act empowering the Government to notify certain areas where
the Government can resume the assigned lands and utilize them for
public purposes such as Weaker Sections Housing, Public Utilities,
Infrastructure Development or for any other public purpose in
such areas as may be notiﬁed by it.
The amendment also proposes that in the areas other than
those notiﬁed, the land can be restored once to the original assignee
or it can be assigned to other eligible persons. However, if either the
original assignee or no eligible landless poor are available in the
village, then it gets restored to the Government for public purpose.
As the Legislative Assembly was not then in session and it
has been decided to give eﬀect to the above decision immediately,
the Andhra Pradesh Assigned Lands (Prohibition of Transfers)
(Amendment) Ordinance, 2006 has been promulgated by the
Governor on the 5th November, 2006.”
(Emphasis Applied)
69. It deserves to be mentioned that in the Andhra Pradesh Assigned
Lands (Prohibition of Transfers) (Amendment) Ordinance, 2006
YADAIAH AND ANR. v. STATE OF TELANGANA AND 653
OTHERS [SURYA KANT, J.]

[Hereinafter, ‘2006 Ordinance’] also, a similar provision for resumption
for certain notiﬁed lands akin to what has been provided in the 2007
Amendment Act, was incorporated. The intention of the legislature in
respect of retrospective application of Section 4(1)(c) is thus crystal clear
from the very inception. Furthermore, at the time of rebuttal arguments, the
Respondents have produced a Notiﬁcation dated 11.12.2006 whereby the
village comprising the Subject Land has been notiﬁed as the area liable for
resumption for violation of Section 3 of 1977 Act. Though the notiﬁcation
was purportedly issued for implementation of the 2006 Ordinance, but the
said Ordinance having been substituted by the amendment in Section 4(1)
(c) of the 1977 Act with more or less identical expressions, the Notiﬁcation,
referred to above, caters the legal necessity of requirement of a Notiﬁcation
under the Act. Hence, resumption of the Subject Land and re-transfer of
its ownership rights to the State, does not suﬀer from any legal inﬁrmity.
70. It may also be relevant to mention that the High Court in Dharma
Reddy28 has already upheld the retrospective application of Section 4(1)(c)
of the 1977 Act. Pertinently, this Court too in Manchegowda v. State of
Karnataka29 upheld the constitutional validity of retrospective application
given to Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of
Transfer of Certain Lands) Act of 1978, which is a statute whose scheme
is akin to 1977 Act. These amended provisions are thus deemed to be in
force at the time of violation of assignment conditions in the year 1992. The
only irresistible conclusion would thus be that the resumption order dated
27.01.2007 does not suﬀer from any legal inﬁrmity.
C.5 COMPENSATION FOR RESUMPTION
71. Finally, we consider the aspect of compensation in respect of the Subject
Land, which has been pressed into aid by learned senior counsel Mr. Reddy by
relying on the decision of the High Court in Mekala Pandu30 to contend that in
case any assigned land is resumed for public purpose as sought to be done in the
instant case, then market value of the said land must be paid as compensation. The
relevant paragraphs of the cited decision are extensively reproduced as follows:–

28 Dharma Reddy (n 12).
29 Manchegowda v. State of Karnataka (1984) 3 SCC 301.
30 Mekala Pandu (n 10).
654 SUPREME COURT REPORTS [2023] 12 S.C.R.

“80. The question that falls for consideration is whether the terms
of grant or patta enabling the State to resume the assigned lands
for a public purpose without paying compensation equivalent to
the market value of the land to the assignees are valid in law?
Whether such restrictive conditions or covenants suﬀer from any
constitutional inﬁrmity?
81. The State while directing no compensation be paid equivalent
to the market value of the assigned lands never took into
consideration and had any regard to the length of time the land
held by the grantee or assignee, the social objectives for which
the assignment had been made by the State in discharge of its
constitutional obligation of providing public assistance to the
weaker sections of the society, the improvements or developments
upon the land made by the assignees on any legitimate expectation
of continuance of the assignment, heritable nature of the right
under the grant, etc.
82. The question is whether the ‘no compensation clause’ imposed in
the grant of assignment, in eﬀect, requires the assignee to relinquish
some constitutional right? Whether the conditions imposed at the
time of assignment are “unconstitutional conditions”?
83. The assignees are constitutional claimants. The constitutional
claim cannot be subjected to governmental restrictions or sanctions
except pursuant to the constitutionally valid rule or law. There is
no legislation enacted by the State compelling it to assign the lands
to the weaker sections of the society. The State obviously assigned
and granted pattas as a measure of providing public assistance
to the weaker sections of the society. The proposition is that as a
general rule the State may grant privilege upon such conditions
as it sees ﬁt to impose; but the power of the State in that regard
is not unlimited, and one of the limitations that it may not impose
conditions which require the relinquishment of constitutional
rights. That whenever State is required to make laws, regulations
or policies, it must do so consistently with the directive principles
with a view to securing social and economic freedom so essential
for establishment of an egalitarian society. The Directive Principles
YADAIAH AND ANR. v. STATE OF TELANGANA AND 655
OTHERS [SURYA KANT, J.]

of State Policy reﬂect the hopes and aspirations of people of this
great country. The fact that they are not enforceable by any Court
in no manner reduces their importance. They are nevertheless
fundamental in the governance of the country and the State is
under obligation to apply them in making laws and framing its
policies particularly concerning the weaker sections of the society.
x-x-x-x
92. ‘No compensation’ clause which virtually enables the State
to withdraw the privilege granted without payment of just
compensation is an “unconstitutional condition” imposed by
the State adversely aﬀects the life, liberty, equality and dignity
guaranteed by the Constitution. The assignment of lands to
the exploited and vulnerable sections of the society is neither a
formality nor a gratis. The privilege granted is with a view to
ensure and protect the rights of the exploited sections of the people
to live with human dignity free from exploitation. The privilege or
largesse once granted acquires the status of vested interest. The
policy to assign the government land by the State was obviously
designed to protect the socio-economic status of a vulnerable
citizenry; its deprivation would be universally perceived as a
misfortune.
x-x-x-x
100. The deprivation of the assignee’s right to payment of just
compensation equivalent to the market value of the assigned land
may amount to deprivation of right to livelihood. The denial of
constitutional claim to receive just compensation after depriving
the assignee of his land is impermissible except pursuant to a
constitutionally valid rule or law.
x-x-x-x
110. In the result, we hold that ‘no compensation’ clause, restricting
the right of the assignees to claim full compensation in respect
of the land resumed equivalent to the market value of the land,
is unconstitutional. The ‘no compensation clause’ infringes the
fundamental rights guaranteed by Articles 14 and 31-A of the
656 SUPREME COURT REPORTS [2023] 12 S.C.R.

Constitution. We are conscious that Article 21 essentially deals
with personal liberty. But in cases where deprivation of property
would lead to deprivation of life or liberty or livelihood, Article 21
springs into action and any such deprivation without just payment
of compensation amounts to infringement of the right guaranteed
thereunder. The doctrine of ‘unconstitutional conditions’ applies
in all its force.
111. In the circumstances, we hold that the assignees of the
government lands are entitled to payment of compensation
equivalent to the full market value of the land and other beneﬁts
on par with full owners of the land even in cases where the assigned
lands are taken possession of by the State in accordance with the
terms of grant or patta, though such resumption is for a public
purpose. We further hold that even in cases where the State does
not invoke the covenant of the grant or patta to resume the land
for such public purpose and resorts to acquisition of the land under
the provisions of the Land Acquisition Act, 1894, the assignees shall
be entitled to compensation as owners of the land and for all other
consequential beneﬁts under the provisions of the Land Acquisition
Act, 1894. No condition incorporated in patta/deed of assignment
shall operate as a clog putting any restriction on the right of the
assignee to claim full compensation as owner of the land.
112. In such view of ours, the view taken by this Court in Bondapalli
Sanyasi (2 supra) that whenever the land is taken possession of by
the State invoking the terms of the grant, the right of an assignee to
any compensation may have to be determined in accordance with
the conditions in patta itself is unsustainable. With due respect,
we are unable to agree with the view taken in this regard. We are
also unable to agree with the view taken that the assignee shall
be entitled to compensation in terms of the Land Acquisition Act
not as owner but as an interested person for the interest he held
in the property.”
(Emphasis Applied)
72. A perusal of the above extracts reveals that the real issue in those
cases pertained to ‘no compensation’ clauses in the assignment and not
YADAIAH AND ANR. v. STATE OF TELANGANA AND 657
OTHERS [SURYA KANT, J.]

the non-payment of compensation for violating conditions regarding non-
alienability as involved in the case in hand. That apart, the High Court’s
observation in respect of a constitutional right to compensation were
disapproved by this Court while dismissing the Civil Appeals/Special Leave
Petitions, including against the decision in Mekala Pandu31 as is discernible
from the following order32 : –
“1. Having regard to the peculiar facts and circumstances of the
case. noted in the impugned judgment(s), we are satisﬁed that these
are not ﬁt cases for exercise of our jurisdiction under Article 136
of the Constitution of India.
2. Civil Appeals and Special Leave Petition are, accordingly,
dismissed.
3. No costs.
4. Certain observations made in the impugned order(s) about the
status of claimants as ‘constitutional claimants’ are kept open to
be considered in appropriate case, if necessary.”
(Emphasis Applied)
73. Importantly, we must be cautious of the diﬀerence between the terms
‘acquisition’ and ‘resumption’ in the context of property laws. While both terms
indicate deprivation of a right, there exists a signiﬁcant distinction in their
actual legal connotation. Acquisition denotes a positive act on behalf of the
State to deprive an individual’s enjoyment of a pre-existing right in a property
in furtherance of its policy whereas resumption denotes a punitive action by
the State to take back the right or an interest in a property which was granted
by it in the ﬁrst place. The term ‘resumption’ must not therefore be conﬂated
with the term ‘acquisition’ as employed within the meaning of Article 300-
A of the Constitution so as to create a right to compensation. Keeping this
mark distinction in view, it is not necessary for us to determine whether an
expropriated owner has an impeachable constitutional right to compensation
under Article 300A of the Constitution in lieu of his acquired property.

31 Mekala Pandu (n 10).
32 A.P. Industrial Infrastructure Corporation Ltd v Ramesh Singh and other connected
appeals (Civil Appeal No. 7904-7912 of 2012, 4 August 2014).
658 SUPREME COURT REPORTS [2023] 12 S.C.R.

74. It is also pertinent to note that serious allegations prevail
against the Appellants for being involved with the land maﬁa to usurp
the Subject Land for private interests which was the precise reason for
the Government to introduce legislation in the nature of the 1977 Act.
Resultantly, in the facts and circumstances of this case, we hold that
the Appellants are not entitled to any compensation under the existing
constitutional framework.
D. CONCLUSION
75. In light of the abovementioned discussion, we conclude that the
proceedings emanating out of the Second SCN were valid; the Subject
Land was non-alienable and hence was subject to the provisions of the
1977 Act. We further hold that the Appellants had transferred the Subject
Land in contravention to the provisions of 1977 Act and therefore, the
resultant resumption order dated 27.01.2007 is valid. The Appellants
are also not entitled to any compensation on account of the resumption
of the assigned land.
76. We are not oblivious to the fact that the parties have been
litigating since the year 1994. During these decades, the Subject Land
has acquired enormous value. Some of the documents on record do
indicate that land maﬁa has already ousted the gullible Assignees and
now have vulture’s eyes on the land. Additionally, a security agency of
paramount national importance currently occupies the Subject Land in
public interest. We, therefore, deem it appropriate to invoke our powers
under Article 142 of the Constitution to do complete justice to the parties
and issue the following further directions/declarations:-
a) The Subject Land in its entirety is declared to have vested in
the State Government. On further allotment, its ownership and
possessory rights, free from all encumbrances, stand transferred
in favour of the Greyhounds;
b) No Civil Court or High Court shall entertain any claim
whatsoever on behalf of any Assignee, their legal representative,
GPA holder or any other claimant under any Agreement to sell
or other instruments, claiming direct or indirect interests in the
Subject Land; and
YADAIAH AND ANR. v. STATE OF TELANGANA AND 659
OTHERS [SURYA KANT, J.]

c) There shall be a ﬁnal quietus of title and possessory dispute over
the Subject Land in favour of the Respondent-State and/or the
agency to whom the said land has been allotted.
77. Consequently, these appeals stand dismissed along with any
pending applications in the above terms. No order as to costs.

Headnotes prepared by: Appeals dismissed.
Nidhi Jain

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