A) ABSTRACT / HEADNOTE

The Supreme Court in M/s A.P. Electrical Equipment Corporation v. The Tahsildar & Ors. (Civil Appeal Nos. 4526–4527 of 2024; judgment dated 27 February 2025) addressed whether the State had taken actual physical possession of land declared surplus under the Urban Land (Ceiling & Regulation) Act, 1976 before the State adopted the Urban Land (Ceiling & Regulation) Repeal Act, 1999. The appellant (now ECE Industries Ltd.) owned extensive holdings in Fatehnagar, Hyderabad, portions of which were declared excess.

The Competent Authority issued notices under s.10(5) and purportedly an order under s.10(6), and a panchnama dated 08.02.2008 recorded possession taken by officials. The State adopted the Repeal Act effective 27.03.2008 (state adoption notified 22.04.2008), raising the critical question whether possession had in fact been taken prior to repeal so as to deprive the landholder of the remedial protection provided by s.3 of the Repeal Act. The Single Judge of the Telangana High Court held the s.10(6) order and panchnama to be void  finding dates and service defective and reliance on paper entries insufficient  and granted relief to the company.

A Division Bench reversed. The Supreme Court restored the Single Judge: reiterating that vesting under s.10(3) is de jure and does not itself effect de facto possession; that the statutory procedure under s.10(5) (notice to surrender within 30 days) and, if necessary, s.10(6) (taking possession) must be strictly respected; that mere paper entries or post-repeal fabricated documentation cannot defeat the landholder’s right under s.3 of the Repeal Act; and that the onus lies on the State to prove cogently that physical possession was taken before repeal. The Court emphasised that where two reasonable views exist, a Single Judge’s considered view should normally prevail in intra-court appeals.

Keywords: s.10(5) ULC Act; s.10(6) ULC Act; s.3 Repeal Act, 1999; actual physical possession; panchnama.

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGMENT

The dispute concerns land originally owned by the appellant company for industrial use; parts were later processed under the ULC Act and identified as surplus after exemptions/grants and their subsequent withdrawal. The Competent Authority published declarations and, by notification under s.10(3) dated 03.10.2007, declared an extent as vested with the State from 12.07.2007. Thereafter a s.10(5) notice dated 05.01.2008 (affixed on factory gate on 08.01.2008 per respondents) purportedly directed surrender within 30 days.

The State issued an order under s.10(6) dated 05.02.2008 authorising forcible takeover and officials prepared a panchnama on 08.02.2008 recording possession. The State then adopted the Repeal Act with retrospective effect from 27.03.2008 (state notification 22.04.2008), thereby triggering s.3 questions: if no de facto possession existed before repeal, proceedings abate and the landholder’s rights revive. The Single Judge found the notices and panchnama fabricated/back-dated and relied on photographic and documentary evidence showing continued occupation (factory operations, apartments, compound walls, security) and deficiencies in service, dated anomalies and non-production of panchas’ affidavits.

The Division Bench disagreed on procedural expectations regarding panchnama and accepted taking possession by recorded panchnama; it read s.10(6) as not requiring a fresh personal notice and treated panchanama as an accepted mode of taking possession. The Supreme Court analysed the statutory scheme and evidence and restored the Single Judge’s reasoning on burden, de jure vs de facto vesting and mandatory procedure.

D) FACTS OF THE CASE

The appellant purchased 1,63,679 sq. m. in multiple survey numbers in Fatehnagar and obtained exemptions under G.O.Ms. No. 1729 (1982) and permissions under s.21(1) for housing (subject to construction conditions). The exemption for some land was later withdrawn (G.O.Ms. No. 303 dated 07.04.1990). The Special Officer computed surplus and issued a final statement under s.8(4) and s.9 (revised order 20.03.2007) determining surplus at 46,538.43 sq. m. Notification under s.10(3) published on 03.10.2007 (vesting deemed from 12.07.2007).

Respondents state a s.10(5) notice dated 05.01.2008 (affixed 08.01.2008) and s.10(6) order dated 05.02.2008, with a panchnama dated 08.02.2008 recording possession in presence of three panchas. Appellant contended factory was operational, physical possession never lost, panchnama and notices first shown only on 14.09.2010, dates inconsistent (e.g., inexplicable “01.10.2008” entry), panchanama printed with lacunae, no affidavits of panchas filed and panchnama lacked owner signature. State adopted Repeal Act on 22.04.2008 (effective 27.03.2008). The High Court Single Judge held notices and panchanama void, Division Bench reversed; Supreme Court restored Single Judge.

E) LEGAL ISSUES RAISED

i. Whether de jure vesting under s.10(3) operates to divest de facto possession absent strict compliance with ss.10(5)–(6)?
ii. Whether the State discharged the onus of proving that actual physical possession of the surplus land was taken prior to the Repeal Act?
iii. Whether procedural infirmities in notices (service, dates) and deficiencies in panchnama invalidate the purported taking of possession?
iv. Whether an intra-court (Division Bench) appeal may lightly overturn a Single Judge’s factual-legal findings where two reasonable views exist?

F) PETITIONER / APPELLANT’S ARGUMENTS

i. The counsels for Petitioner / Appellant submitted that issuance and valid service of the s.10(5) notice and compliance with the mandatory 30-day period before s.10(6) are statutory mandates; anomalies (multiple dates, backdating) evidence fabrication; the panchnama and s.10(6) order were prepared after repeal; photographs and ongoing operations prove continued possession; the State failed to produce affidavits of panchas or contemporaneous proof of eviction; hence s.3 of the Repeal Act entitles restoration of rights.

G) RESPONDENT’S ARGUMENTS

i. The counsels for Respondent submitted that panchnama is an accepted pragmatic mode of taking possession for large tracts (citing Sita Ram Bhandari Society and Omprakash Verma), service by affixture during lockout was valid, a fresh notice at s.10(6) stage is not statutorily required, and documentation (orders, revenue records, pahanis) establishes the State’s possession; alleged clerical errors do not destroy the record.

H) JUDGMENT

The Supreme Court examined statutory language, earlier precedents and evidence. It reaffirmed that vesting under s.10(3) is a deeming fiction conferring de jure title but does not ipso facto transfer de facto physical possession; voluntary surrender may effect delivery but otherwise the State must follow ss.10(5)–(6) to achieve possession. The Court held the onus lies on the State to show actual physical possession before repeal; mere paper entries, notifications or revenue entries are insufficient.

The Court scrutinised the s.10(5)/10(6) documents: date anomalies (e.g., “01.10.2008”), service disputes, absence of panchas’ affidavits, late production of panchnama and documentary evidence of ongoing factory operations and constructions — all led to conclusion that the State failed to prove de facto possession before the Repeal Act. The Court also observed that where two views are possible, a considered Single Judge’s decision should not be lightly displaced by a Division Bench in an intra-court appeal; the Division Bench’s departure lacked justification given the Single Judge’s finding on cogent evidence. Result: appeals allowed; Division Bench order set aside; Single Judge’s judgment restored.

a. RATIO DECIDENDI

The controlling principle is that deemed vesting of surplus land under s.10(3) does not, without more, effect physical divestment. The Repeal Act’s s.3 protects landholders who remained in actual physical possession at the time of repeal; therefore the State must demonstrate, by cogent evidence, that it had taken de facto possession in accordance with the statutory process in ss.10(5)–(6) before repeal. Paper vesting, back-dated or fabricated documents, unexplained date anomalies, lack of contemporaneous panchas’ attestations and continuous occupation by owner defeat the State’s claim. Consequently, the landholder retains the benefit of s.3 unless the State proves otherwise.

b. OBITER DICTA

The Court reiterated interpretive guidance on deeming provisions and purposive construction; emphasised the writ court’s competence to probe disputed facts where necessary in interest of justice; cautioned against mechanical reliance on clerical explanations where material inconsistencies exist; and underscored intra-court appeal principles that an appellate bench must respect a reasonable Single Judge view. The Court cited authorities on statutory fiction and possession (e.g., Hari Ram, Sita Ram Bhandari, Omprakash Verma) to clarify approach but did not disturb settled precedent that panchnama can be evidence of possession where reliable.

c. GUIDELINES

• The State must produce contemporaneous, cogent evidence of actual physical possession taken prior to repeal when claiming vesting under s.10.

• Notices under s.10(5) must be validly served; the 30-day period is mandatory before s.10(6) action.

• Panchnama may constitute valid proof of possession but must be credible: legible panchas’ particulars, signatures, site map and contemporaneous record enhance reliability.

• Where documents show material inconsistencies or post-repeal fabrication, courts must treat them with caution and may set them aside.

• In intra-court appeals, a Division Bench should not overturn a Single Judge’s view unless there is patent error or departure from settled principles.

I) CONCLUSION & COMMENTS

The judgment preserves the protective purpose of the Repeal Act: statutory deeming alone cannot oust possessory rights unless the State effectuates physical possession under the Act’s process. The decision draws an important line between paper vesting and tangible dispossession, places the evidentiary burden squarely on the State, and reinforces procedural safeguards for landholders. It is a salutary reminder that administrative convenience cannot substitute statutory compliance; courts will scrutinise date anomalies, service defects and late-produced documents when fundamental property rights are at stake. The ruling also clarifies intra-court appellate discipline: appellate benches must exercise restraint and respect well-reasoned Single Judge findings when two reasonable views exist.

J) REFERENCES

a. Important Cases Referred

1. State of Uttar Pradesh v. Hari Ram, (2013) 4 SCC 280.

2. Gajanan Kamlya Patil v. Additional Collector & Competent Authority (ULC) & Ors., (2014) 12 SCC 523.

3. Sita Ram Bhandari Society v. Lieutenant Governor of NCT of Delhi, (2009) 10 SCC 501.

4. Omprakash Verma v. State of A.P., (2010) 13 SCC 158.

5. Other cases as cited in the judgment: Rajendra Kumar v. Kalyan, Maharaj Singh v. State of U.P., Raghbir Singh Sehrawat v. State of Haryana etc.

b. Important Statutes Referred

1. Urban Land (Ceiling & Regulation) Act, 1976 — ss.10(3), 10(5), 10(6).

2. Urban Land (Ceiling & Regulation) Repeal Act, 1999 — s.3.