Authority: Supreme Court of India

Order Date: 12 August 2026

Case Overview

  • Parties: Appellant – AsseST Reconstruction Company (India) Ltd; Respondent – State of Gujarat & others. Additional parties include Bank of India (original mortgagee), Asset Reconstruction Company (assignee of the Bank), Mangalkrupa Cooperative Housing Society (highest bidder in Bank's auction), and various employees and unions.
  • Background: The disputed land originally belonged to Indequip Engineering Company, which filed a statement under Section 6 of the Urban Land (Ceiling and Regulation) Act, 1976. The company mortgaged the land to Bank of India. The Bank sued for recovery of dues of ₹11.50 crore. A Competent Authority declared 47,374 sq m as excess vacant land under Section 8(4) of the Act. Appeals by the Company and the Bank under Section 33 were dismissed by the Urban Land Tribunal.
  • Subsequent actions: A notification under Section 10(3) and a notice under Section 10(5) were issued for possession of the excess land. Possession was allegedly taken via a panchanama. The Company filed a Special Civil Application in the High Court, which ordered status‑quo. The Receiver in the Bank’s suit was impleaded as petitioner No. 2. The Special Civil Application was dismissed; intra‑court appeals by the Receiver and the Bank were also dismissed.
  • Transfer of rights: The Bank assigned its rights to the Asset Reconstruction Company (the main appellant). The main appellant was impleaded as a respondent in the Special Civil Application and later filed the present civil appeals (Nos. 8437‑38/2013, 8439/2013, 8435‑36/2013) along with the Company and Mangalkrupa Cooperative Housing Society.
  • Submissions: The appellant argued that possession had not been taken, that Section 10(6) required a separate notice, and cited several precedents. The respondent argued that the appellant is only a mortgagee‑assignee, that possession was duly taken, and that the earlier Tribunal order was res judicata.

Court Reasoning

  • The Court held that Section 10(6) does not per se mandate a fresh notice; the notice under Section 10(5) was comprehensive and was duly served.
  • The statutory scheme envisages possession of excess vacant land, which the Court found had been effected.
  • The appellant’s right is restricted to that of a mortgagee; permission to create the mortgage does not confer benefits under Sections 3 and 4 of the Act.
  • The predecessor‑in‑interest (Bank) did not file a Special Civil Application and therefore the Tribunal’s order is binding on the appellant as res judicata.
  • The Court noted the Company’s abandonment of litigation and its liquidation status, emphasizing that only the erstwhile landowner can claim benefits.
  • The panchnama’s lack of explicit possession note is irrelevant because possession was already established under the notice.

Final Outcome

  • The appeals (Civil Appeal Nos. 8437‑38/2013, 8439/2013, 8435‑36/2013) are dismissed.
  • No costs are awarded.
  • The Court grants liberty to the main appellant, the Company, and its erstwhile employees (including Rashtriya Majdoor Sangh) to make a representation to the State of Gujarat seeking release of the specific surplus land portion, which may include any constructed part.
  • The Court makes no comment on the Bank’s separate action of selling the property.
  • Any pending applications, if any, stand disposed of.

Topics: Land Regulation, Mortgage Rights