Yadaiah and Another vs The State of Telangana and Others
Background
In the early 1960s, the government assigned about 143 acres of land near Hyderabad to landless Scheduled Caste/Scheduled Tribe persons ("Assignees") for cultivation, on condition the land could not be sold without official permission. Decades later, in 1991, the Assignees gave a power of attorney to one M.A. Baksh, who sold parcels of the land to private buyers as if it were an ordinary residential colony, in violation of the assignment conditions and a special 1977 law banning transfer of such assigned land. When the government later needed the land for the "Greyhounds" police commando force, it discovered the illegal sales and, after fresh proceedings, passed a resumption order in 2007 taking the land back. The buyers/Assignees' heirs argued this second round of proceedings was barred by "res judicata" because an earlier, similar attempt to cancel the assignment had failed decades before.
Decision Breakdown
The Supreme Court held that the land was indeed non-alienable "assigned land" covered by the 1977 Act, that the sales through the power of attorney violated the assignment conditions, and that the fresh (second) show-cause proceedings were not barred by res judicata because the earlier round had been thrown out on technical/procedural grounds rather than decided on the merits. The Court therefore upheld the validity of the 2007 resumption order and denied any compensation to the appellants. Using its special constitutional power under Article 142 to do complete justice, the Court went further and declared the land finally and conclusively vested in the State Government for allotment to the Greyhounds force, barring any future litigation over the title by the assignees, their representatives, or the private buyers.
Lesson Learnt
Land given free by the government to landless and poor beneficiaries under welfare assignment schemes typically cannot be legally sold, even through a power of attorney, and buyers who purchase such land, however long ago, risk losing it entirely without compensation once the violation comes to light.