(Civil Appeal No. 5321 of 2025), delivered on 14 May 20251.
2025 7 SCR 1
Background of the Case The case involved a dispute over land alienated by the District Collector, Medak, Government of Andhra Pradesh, to the Dr. Pasupuleti Nirmala Hanumantha Rao Charitable Trust on 8 February 200112. The High Court had ruled that the alienation was a sale, making the Trust the absolute owner, and that any conditions restricting the enjoyment of the land were void under Section 10 of the Transfer of Property Act, 1882 (TPA)34. The State of Telangana appealed this decision3.
Key Issues for Consideration by the Supreme Court The Supreme Court examined three main issues1…:
• Whether the alienation of land was a sale or an allotment1.
• Whether any condition was imposed pursuant to the alienation1.
• Whether any condition/restriction would violate Section 10 of the TPA1.
Supreme Court’s Findings and Reasoning
1. Alienation was an Allotment, Not a Sale: The Supreme Court concluded that the alienation of land by the State was not a sale but an allotment under a statutory scheme27. The land was Government land, and the Trust, being a charitable organisation, had applied for its allotment28. The process followed instructions laid down in G.O.Ms. No.635 dated 02.07.1990 and the Telangana Alienation of State Lands and Land Revenue Rules, 19752…. The alienation letter explicitly stated that sanction was accorded subject to payment of market value and three specific conditions, with a clear warning that deviation would lead to the land being resumed by revenue authorities2…. The Court emphasized that the government, when distributing state resources, must generally aim for maximum value unless a social, economic, or welfare policy justifies otherwise, which was not the case here11.
2. Allotment was Conditional and Known to the Trust: The Court found that the allotment was conditional to the Trust’s knowledge1213. Although no specific purpose was mentioned in the alienation order, the Court inferred that as it was for a charitable trust, it was for a charitable purpose only813. The Trust’s own correspondence and writ petition admitted to the conditions and affirmed that the land was being utilised for the purpose it was allotted12….
3. Section 10 of TPA Not Violated/Applicable: The Supreme Court held that Section 10 of the TPA does not apply to this situation1617. The land was allotted by the State to a public trust for a public purpose, differentiating it from a normal inter vivos transfer between private parties. In such cases, public interest is supreme and must prevail1617. The Telangana Alienation of State Lands and Land Revenue Rules, 1975, and the Board of Revenue Standing Orders operate in a distinct legal space and are not “eclipsed” by Section 10 of the TPA1718. The High Court erred in concluding it was a sale16….
Fraud on Statute and Malafides The Court further observed that the Trust, despite accepting the conditions of the grant, violated these conditions1821. Instead of using the land for charitable purposes, the Trust cut a colony (Eden Orchard), subdivided it into plots, and sold some to third parties via sale deeds, in direct violation of the allotment terms18…. The execution of a General Power of Attorney (GPA) by the Trust in 2011, without disclosing the allotment conditions, demonstrated its malafides (bad faith)9…. This action was termed a “fraud on the statute”1821.
Conclusion The Supreme Court set aside the judgments of the High Court and allowed the appeal, thereby upholding the conditional nature of the land allotment and finding the Trust in violation of those conditions
