Judicial Review of Land Revocation Limited to Ensuring Procedural Fairness: SC

The Supreme Court has ruled that judicial scrutiny in cases of land allotment revocation should be confined to verifying procedural safeguards, while recognising the inherent authority of allotment bodies to cancel allocations when stipulated conditions are breached.

A bench comprising Justices Surya Kant and N. Kotiswar Singh upheld the Uttar Pradesh State Industrial Development Corporation’s (UPSIDC) cancellation of a 2003 land allotment of 125 acres in Utelwa Industrial Area, Jagdishpur, Sultanpur district, to the Kamla Nehru Memorial Trust (KNMT) and another entity, citing chronic defaults in payment and failure to meet contractual obligations.

Invoking the public trust doctrine, the Court observed that allocation of significant public resources like industrial land must be preceded by a robust evaluation of the public benefit, the credentials of the beneficiary, and mechanisms for ensuring continued compliance.

“The doctrine requires that allocation decisions be preceded by a thorough assessment of public benefits, beneficiary credentials, and safeguards ensuring continued compliance with stated purposes,” the bench said.

The Court rejected KNMT’s claim that non-demarcation or non-delivery of possession frustrated performance of the allotment terms, noting instead that UPSIDC had adhered to its procedural obligations, while KNMT failed to submit required documentation for lease execution and repeatedly defaulted on payments.

Addressing the legality of the cancellation, the bench held that the issue must be assessed through the lens of administrative law and the contractual powers of the State, balancing institutional autonomy with procedural fairness to the allottee.

Despite repeated notices, the dues for the land remained unpaid over several years, the Court observed.

“KNMT not only failed to make timely payments but also sought unwarranted concessions, including waiver of interest and rescheduling of dues. This persistent non-compliance establishes KNMT as a chronic defaulter,” the bench remarked.

The Court found UPSIDC’s action to be “justified and necessary to preserve the integrity of the allotment process.” It warned that tolerating such conduct would erode public confidence and disrupt land allocation frameworks.

Significantly, the bench noted that KNMT received the land allotment within two months of applying, without any competitive process—a clear violation of the public trust doctrine. Moreover, while the dispute remained sub judice, UPSIDC moved swiftly to offer the same land to M/s Jagdishpur Paper Mills Ltd, which the Court annulled for being contrary to public policy.

“The hasty allotment followed by years of litigation exemplifies systemic deficiencies in the allocation process. This necessitates comprehensive directions to ensure that future allocations uphold principles of transparency and accountability,” the Court held.

Accordingly, the Court directed the Uttar Pradesh government and UPSIDC to ensure all future industrial land allotments are made transparently and fairly, in a manner that maximises public revenue and aligns with broader policy goals, including industrial development, environmental sustainability, and regional economic growth.

Case Title: Kamla Nehru Memorial Trust & Anr v. UP State Industrial Development Corporation Ltd & Ors.