U.P. Avas Evam Vikas Parishad through Housing Commissioner v. Noor Mohammad
Background
Land had been acquired decades earlier by a state housing authority for a residential scheme. In 2003, the government issued a notification releasing part of that land from acquisition, after the landowners claimed the land held ancestral cemeteries and was their only source of livelihood. Within two years, the government cancelled that release, after an inquiry revealed the landowners had instead been selling off the land commercially to third parties: directly contradicting the representations that had won them the release. The Allahabad High Court set aside the cancellation, holding the government could only reclaim released land by starting a completely fresh acquisition process.
Decision Breakdown
The Supreme Court held that the general power to issue a notification (here, to release land) includes the power to rescind it, under Section 21 of the General Clauses Act, since this kind of release is an administrative act rather than a quasi-judicial order creating an irreversible vested right. More importantly, the Court found that the original release notification had itself been obtained by fraud and misrepresentation: the landowners had promised to preserve cemeteries and use the land for their livelihood, then promptly sold large portions to third parties. An order obtained by fraud cannot confer any vested right. The Court allowed the appeals, set aside the High Court's judgment, and dismissed the landowners' writ petitions, leaving the housing authority free to proceed with the original public housing purpose.
Lesson Learnt
A government benefit, such as a notification releasing land from acquisition, obtained by making false representations can be cancelled by the government itself without having to start a fresh legal process, because fraud vitiates any right that would otherwise have been "vested" by the original order.