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Dipak Babaria and another v. State of Gujarat and others

Special Leave Petition (Civil) · Neutral citation not assigned (Special Leave Petition (Civil) No. 36738 of 2012)Decided 23 Jan 2014
Special Leave Petition (Civil) No. 36738 of 2012
Justice H.L. Gokhale · Justice J. Chelameswar

Background

A company bought agricultural land for industry but did not start the required industrial activity. Instead of resuming the land through the statutory process, Gujarat authorities permitted its direct sale to another company following ministerial directions. A public-interest challenge alleged that the procedure bypassed the Collector's duties and harmed the public exchequer.

Decision Breakdown

The Supreme Court partly allowed the appeal, set aside the High Court's dismissal and declared the government permission and direct sale unlawful. The statute assigned the relevant decision to the Collector, and a minister could not bypass the required process or justify the order later with new reasons. The land was held to vest in the State, with the Rs. 1.20 crore already received by the original purchaser treated as compensation. As tailored relief, the Court allowed the new company to obtain a State allotment if it paid an additional Rs. 3.15 crore within three months, accounting for its investment and government commitments. Otherwise the State was to take further disposal steps, and industrial activity could not proceed before payment.

Lesson Learnt

Political approval does not dispense with statutory safeguards for changing agricultural land use. A person investing in a project should verify that permission comes from the proper authority through the required procedure, even when the government supports the development.

Official source (sci.gov.in)View Judgment (PDF)

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