2025 INSC 679 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5321 OF 2025

(Arising out of Special Leave Petition (C) No. 25818 of 2023)

THE STATE OF TELANGANA & ORS. …. APPELLANTS

VERSUS

DR. PASUPULETI NIRMALA HANUMANTHA RAO

CHARITABLE TRUST ….RESPONDENT

JUDGMENT

MANMOHAN, J

1. Present Appeal has been filed challenging the impugned judgment and final

order dated 05th July, 2022 passed by the High Court for the State of Telangana at

Hyderabad in Writ Appeal No.1328 of 2014, whereby the High Court dismissed

the Writ Appeal filed by the Appellants herein and upheld the judgment and order

dated 24th June, 2014 passed in W.P.(C) 28980/2013 passed by the learned Single

Judge. It is pertinent to mention that both the Courts below held that the

Respondent-Trust is the absolute owner of the land to the extent of Ac.3.01 gts.in

Sy. No.72/31 situated at Chinnathimmapur village, Mulugu Mandal, Medak

District, as the Appellant-State having sold the land on payment of market value

could not have placed any condition restricting the enjoyment of the land and

such restrictions were void under Section 10 of the Transfer of Property Act, 1882

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(hereinafter referred to as ‘TPA’). The relevant portion of the impugned order

passed by the Division Bench is reproduced hereinbelow: -

“7. Thus, learned Single Judge noted that respondent had purchased
the subject land on payment of market value from the Government. On
such purchase, respondent became the owner of the subject land
whereafter, the same ceased to be a Government land or an assignable
land. Having sold the land on payment of market value, the
Government could not have placed any condition restricting the
enjoyment of the land by the land owner.

8. We do not find any error or infirmity in the view taken by the

learned Single Judge. No case for interference is made out.”

ARGUMENTS ON BEHALF OF APPELLANT

2. Mr. S. Niranjan Reddy, learned senior counsel for the Appellant-State,

submitted that the impugned judgments of the High Court were untenable in law,

inasmuch as, they did not consider the statutory scheme under which the

Appellant-State had allotted land to the Respondent-Trust. He pointed out that

under Section 25 of Telangana Land Revenue Act (hereinafter referred to as

‘Act’), the Commissioner/Collector can assign/set apart any land for the purpose

of public benefit. He stated that to facilitate alienation of land, the State of

Telangana has framed Telangana Alienation of State Lands and Land Revenue

Rules 1975 (for short ‘Rules 1975’) under Section 172 of the Act. The relevant

portion of Rules 5 and 6 of the said Rules 1975 are reproduced herein below: -

“5. (a) For every alienation of land requiring the sanction of the
Board of Revenue or the State Government there shall be made an
application by the Collector in the prescribed in Appendix I to these
rules…….

Civil Appeal No.5321 of 2025 Page 2 of 13

 6.(a) Every grant of Alienation of State land whether for religious
Educational or any other public purpose always be subject to the
following conditions:-
(1) The land shall be used …………..and for no other purpose.
(2) The Government may resume the land wholly or in part with any
buildings thereon, in the event of the infringement of any of the
conditions of the grant. In the event of such resumption, no
compensation shall be payable for any improvements that may
have been effected, or other works that may have been executed
on the land by the grantee and the grantee shall not be entitled to
the repayment of any amount that may have been paid to the
Government for the grant. If there are buildings on the land the
Government may direct the grantee to remove them.”

3. He further stated that G.O.Ms. No.635 dated 02nd July, 1990 empowers the

Commissioner, Land Revenue/ District Collectors to dispense Government lands

by alienation on payment of market value. The relevant portion of the aforesaid

G.O.Ms. is reproduced hereinbelow: -

“REVENUE DEPARTMENT
G.O.Ms. No.635 Dated 2-7-1990

1. G.O.Ms. No.73, Revenue dated 20.01.1975.

2. From the Commissioner of land Revenue, Hyderabad D.G. Letter
No.B1/653/90, dated 27.02.1990.

ORDER:-
The Andhra Pradesh (Telangana Area) Alienation of State lands and
land Revenue Rules 1975, empower the Commissioner, Land Revenue
land the District Collectors to dispense of Government lands by
alienation to local Mediums and private institutions, Companies,
Associations and private individuals on payment of market value.
Illegible within certain limitations. Similar provisions is also
available in B.S.O. 24 (empowering the Commissioner, land Revenue
and District Collectors to dispose of Government land by
alienation…..”

Civil Appeal No.5321 of 2025 Page 3 of 13

4. The relevant portion of the Board Standing Order 24 referred to in G.O.Ms.

No.635 is reproduced hereinbelow:-

“6. Condition for the grant of State land:- (i) Lands at the
disposal of Government:- A grant of State land whether for religious,
educational or other public purpose should always contain the
following conditions:-

(1) The land shall be used ………………….and for no other

purpose.

(2) The Government may resume the land wholly or in part with
any buildings thereon, in the event of the infringement of
any of the conditions of the grant. In the event of such
resumption no compensation shall be payable for any
improvements that may have been effected, or other works
that may have been executed on the land by the grantee and
the grantee shall not be entitled to the repayment of any
amount that may have been paid to the Government for the
grant. If there are buildings on the land the Government
may direct the grantee to remove them…..”

5. He pointed out that in the present case, the District Collector, Medak vide

order dated 08th February 2001, had allotted the subject land in exercise of the

powers conferred under G.O.Ms. No. 635 (Revenue) dated 2nd July 1990. He

emphasised that the only document on which the Respondent-Trust had relied

upon to prove its title/ownership was the allotment letter issued under a statutory

Scheme and not a sale deed.

6. He further stated that the allotment was made subject to certain conditions,

and it was specifically stated that any deviation from the said conditions would

result in the land being resumed back by the revenue authorities.

Civil Appeal No.5321 of 2025 Page 4 of 13

7. He contended that in the present case, the Appellant-State was not

intending to sell the land but to allot the same to charitable trust for a charitable

purpose for the benefit of public at large.

8. Additionally, Mr. Reddy drew the attention of this Court to the General

Power of Attorney dated 18th June 2011 (“GPA”) executed by the Respondent-

Trust, qua the subject land. He contended that the Respondent-Trust had

fraudulently executed a GPA without making any reference to the allotment letter

dated 08th February, 2001 or the conditions on which the allotment of said land

had been made. The relevant portion of GPA relied upon by him is reproduced

hereinbelow: -

“GENERAL POWER OF ATTORNEY

KNOWN ALL MEN BY THE PRESENTS, THAT I Dr. P.
HANUMANTH RAO S/O Dr. P. RAMA RAO, aged about 66
years…….

DO HEREBY NOMINATE, CONSTITUTE, APPOINT AND RETAIN

SYED JAVED…….AS MY TRUE AND LAWFUL ATTORNEY…..

WHEREAS I am the lawful owner, Pottedar and possessor of

Agricultural Land bearing Sy.No.72/31, admeasuring Ac.3-01
Gts……having acquired the same from Smt. S. SHREE SUDHA W/O
SRI SANGARAJU MANOHAR RAJU through a Regd. Sale Deed Vide
Document No.859/1988, Dt: 09-03-1938 Regd. at SRO Gajwel,
Medak District. Thereafter the Revenue officials have issued the Title
Deed and Pattedar Passbooks vide title deed No.674409 and the Patta
No.143 respectively.
WHEREAS, the said Smt. S. SHREE SUDHA W/O SRI
SANGARAJU MANOHAR RAJU has purchased the said property
from Shri MURTHY MURRAY S/O Late S.S. MURRAY through a
Regd. Sale Deed vide Document No.695/1981, Dt. 03-07.1981 Regd.
at SRO Gajwel, Medak District.

Civil Appeal No.5321 of 2025 Page 5 of 13

 AND WHEREAS, I am intending to hand over the above
property agricultural land bearing Sy.No. 72/31 an extend of Ac.3-01
gts., situated at CHINNA THIMMAPUR Village, Mulugu Mandal,
Siddipet Revenue Division, Medak District A.P. (hereinafter called the
SCHEDULE OF PROPERTY) which is more fully described in the
schedule of property but due to personal work I am not looking after
the affairs of the said property personally as such I am not in position
to deal with the intending purchase, as such I hereby empower and
authorize my Attorney Mr. SYED JAVED S/o late S.G. MOHIUDDIN
to deal with all the matters contained to him with the following
powers……”

9. Mr. Reddy lastly stated that the Power of Attorney holder had cut a colony

by the name ‘Eden Orchard’ on the land allotted to the Respondent-Trust and

even some of the plots had been sold to third parties without disclosing the

conditions on which the initial allotment had been made.

ARGUMENTS ON BEHALF OF RESPONDENT

10. Per contra, Mr. Gaurav Agrawal, learned senior counsel for the

Respondent-Trust contended that the subject land was sold by the State

Government after following the due procedure stipulated in G.O.Ms. No. 635

dated 02nd July, 1990, wherein the District Collector, Medak in consultation with

the Commissioner of Land Revenue sold the land to the Respondent-Trust on

payment of market value. He emphasised that the said sale was made at market

value and the same was not an allotment at any concessional rate.

11. He further stated that the said alienation contained a general condition that

“the land would be utilised only for the purpose for which it is allotted” without

actually specifying the exact purpose for the allotment. Therefore, he submitted

that there was no restriction/condition imposed on the usage of the land by the

Civil Appeal No.5321 of 2025 Page 6 of 13

Respondent-Trust herein and in any event, any such condition on usage would be

violative of Section 10 of the TPA – as held by the High Court. Since Section 10

of the TPA was heavily relied upon by learned senior counsel for the Respondent-

Trust, the same is reproduced herein below:-

“10. Condition restraining alienation.—Where property is

transferred subject to a condition or limitation absolutely
restraining the transferee or any person claiming under him from
parting with or disposing of his interest in the property, the
condition or limitation is void, except in the case of a lease where
the condition is for the benefit of the lessor or those claiming under
him: provided that property may be transferred to or for the benefit
of a woman (not being a Hindu, Muhammadan or Buddhist), so that
she shall not have power during her marriage to transfer or charge
the same or her beneficial interest therein.”

12. He further submitted that the resumption order dated 19th January 2012 was

passed in violation of the principle of natural justice. He, however, stated that the

said aspect was not considered by the learned Single Judge and the Division

Bench, and therefore, if this Court was inclined to set aside the impugned orders,

it should remand the matter back to the High Court for fresh adjudication on

merits.

REJOINDER

13. In rejoinder, learned senior counsel for the Appellant-State submitted that

Section 10 of the TPA operates in a completely different sphere as it applies in a

case of inter vivos transfer, whereas allotment by the Appellant-State is different

from a private party engaging in inter vivos transfers. He contended that the

Civil Appeal No.5321 of 2025 Page 7 of 13

learned Single Judge and the Division Bench had erred in not making a distinction

between sale and allotment of the subject land.

ISSUES

14. Having heard learned counsel for the parties and having perused the paper

book, this Court is of the view that the following issues arise for consideration in

the present proceedings, namely: -

i. Whether alienation of land by the District Collector, Medak,

Government of Andhra Pradesh vide order dated 8th February 2001
was a sale or alienation/allotment?
ii. Whether any condition was imposed pursuant to the alienation of
land by the Government of Andhra Pradesh? and
iii. Whether any condition/restriction imposed by the State Government
would be violative of Section 10 of the TPA?

REASONING

ALIENATION OF LAND BY APPELLANT-STATE WAS NOT A SALE BUT AN

ALLOTMENT UNDER A STATUTORY SCHEME

15. Before answering the aforesaid issues, this Court is of the view that it is

essential to outline the relevant facts. The land in question to the extent of Ac.

3.01 gts., falls under Sy. No.72/31 and is Government land as per entries of record

and was declared as Government (Poramboke) land in the year 1989.

16. Further, the Respondent, being a charitable trust, had applied for allotment

of land. A charitable trust can use land for charitable purposes only.

Civil Appeal No.5321 of 2025 Page 8 of 13

17. The request of the Respondent-Trust was processed as per the instructions

laid down in G.O.Ms. No.635 dated 02nd July, 1990 and the land in question was

conditionally allotted by the District Collector, Medak, Government of Andhra

Pradesh vide order dated 8th February 2001 by virtue of the power conferred under

the Telangana Alienation of State Lands and Land Revenue Rules, 1975 framed

under Sections 25 and 172 of the Act and G.O.Ms.No.635 dated 2nd July 1990

read with Board Standing Order 24. The said fact is apparent from the alienation

letter dated 8th February 2001 issued by the District Collector, Medak, which

specifically records that sanction is accorded to alienation of Government land

subject to payment of market value and subject to the following three conditions.

It was made clear that in case of deviation of the said three conditions, the land

shall be resumed back by the Revenue authorities. The relevant portion of the

alienation order dated 08th February 2001 is reproduced hereinbelow:

“1. That the above land should be utilized only for the purpose for which
it is allotted.

2. That the construction work should be completed within (2) years from
the date of handing over possession of the land.

3. That the trees should be planted in the open place.”

In case of any deviation of the above conditions the land shall be
resumed back by the Revenue authorities….”

18. Consequently, alienation of land by the District Collector, Medak,

Government of Andhra Pradesh vide order dated 8 th February, 2001 was not a

sale, but an allotment under a statutory Scheme.

Civil Appeal No.5321 of 2025 Page 9 of 13

THE ALLOTMENT OF LAND WAS CONDITIONAL TO THE RESPONDENT-
TRUST’S KNOWLEDGE

19. Though no specific purpose of allotment was mentioned, yet this Court is

of the view that as the allotment was in favour of the Respondent-Trust, the

allotment could be used for a charitable purpose only. Even in the Respondent-

Trust’s understanding, the allotment of land was conditional. This would be

apparent from the fact that not only in the contemporaneous correspondence, but

even in the writ petition filed, there was an admission by the Respondent-Trust

that the allotment was made for a charitable purpose, and the land was being used

for the said purpose. In response to the Appellant’s letter dated 23rd November

2011, the Respondent-Trust had specifically replied that there were no violations

of the conditions laid down in the letter dated 8th February 2001 and the land was

being utilized for the purpose for which it was allotted. The relevant portion of

the Respondent-Trust’s reply dated 29th November 2011 is reproduced herein

below: -

“…I, further state that there are no such violations in the conditions laid
down in the District Collector Medak Proceedings No.E3/7542/98,
Dt.8.2.2001.
After taking the possession the above land is being utilized for the purpose
alienated. Class room, sheds were constructed within two years through
our own funds…”
(emphasis supplied)

20. It was also specifically averred in the writ petition filed by the Respondent-

Trust that as the Appellant-State had offered the land as per G.O.Ms. No.635

dated 2nd July 1990 subject to three conditions vide proceedings No.E3/7542/98

Civil Appeal No.5321 of 2025 Page 10 of 13

dated 08th February 2001, the Respondent-Trust had followed the same

‘scrupulously’. Consequently, the Respondent-Trust’s argument that no specific

purpose of allotment was specified is false to the Respondent-Trust’s knowledge.

HIGH COURT FELL IN ERROR IN MAKING OUT A CASE OF SALE

21. In fact, the case of the Respondent-Trust in its writ petition filed before the

learned Single Judge was not that it was a case of sale, but it had been assured

that, “the alienation of land is amounting to sale…”. Consequently, this Court is

of the view that the High Court fell in error in making out a case of sale, ignoring

the fact that the Appellant-State had allotted land to the Respondent-Trust under

a statutory scheme of alienation/allotment.

22. This Court is further of the view that when the Government decides to sell

its land, as the Respondent-Trust would like this Court to believe, the Government

can neither select a buyer nor can it fix a price unless and until the said decision

is backed by a social or economic or welfare policy/purpose – which is admittedly

absent in the present case. It is a settled law that the Government cannot distribute

State’s largesse and normally the State ‘must’ get the ‘maximum value’ of the

resources, especially when State-owned assets are passed over to private

individuals/entities unless there are good and cogent reasons for doing so in

special circumstances. [See: Ramana Dayaram Shetty vs. The International

Airport Authority of India & Ors., 1979 (3) SCR 1014; Natural Resources

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Allocation, In Re, Special Reference No.1 of 2012, (2012) 10 SCC 1 and

Manohar Lal Sharma vs. Principal Secretary & Ors., (2014) 9 SCC 516].

STATUTORY SCHEME OF ALLOTMENT NOT ECLIPSED BY SECTION 10

23. This Court is of the view that the Appellant-State had allotted land to public

trust for public purpose. In such a situation, the State cannot be put in the normal

classical inter vivos party’s position as public interest is supreme and must

prevail. This Court is also of the opinion that Rules 1975 and the Board of

Revenue Standing Orders operate in a completely distinct space and are not

eclipsed by Section 10 of the TPA.

GPA REFLECTS MALAFIDES OF THE RESPONDENT-TRUST (ALLOTEE)

24. In any event, in 2011, Dr. Pasupuleti Niramala Hanumantha Rao, without

disclosing that he is a Trustee of the Respondent-Trust to whom the land had been

allotted by the State Government, appointed Sri Syed Javed as G.P.A. holder

under the Registration Deed No.148/11 dated 18th June 2011. It is pertinent to

mention that the conditions on which the allotment had been made by the State

Government were not mentioned/disclosed in the G.P.A. which reflects malafides

of the Respondent-Trust (allottee).

DECISION TO CUT A COLONY – A FRAUD ON STATUTE

25. This Court is further of the view that the Respondent-Trust, despite having

accepted the conditions of grant of alienation laid down under Condition No.6 of

the Andhra Pradesh Board Standing Orders, violated these conditions as the said

Civil Appeal No.5321 of 2025 Page 12 of 13

land was not used for the purpose for which it was granted, i.e. for the purpose of

a Charitable Trust. On the contrary, a colony was cut on the said land, which was

sub-divided into plots, some of which have already been sold to third parties vide

different sale deeds in violation of the conditions of allotment. This Court is of

the opinion that the decision to cut a colony in violation of the specific conditions

on which land had been allotted cannot be termed as anything else but fraud on

the statute.

CONCLUSION

26. Keeping in view the aforesaid findings, the impugned judgments dated 24th

June 2014 and 05th July 2022 are set aside and the Appeal, is accordingly allowed.

Pending applications, if any, shall stand disposed of.

...…...……………….J.
[DIPANKAR DATTA]

……………….J.
[MANMOHAN]
New Delhi;
May 14, 2025.

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