Authority: Supreme Court of India, Civil Appellate Jurisdiction (Bench of Justices M.M. Sundresh and Prasanna B. Varale)

Order Date: 12 August 2026

Case Overview

  • Parties: Asset Reconstruction Company (India) Ltd (appellant) vs. State of Gujarat & others (respondents); also involved Indequip Engineering Company (original landowner), Bank of India (original mortgagee), Mangalkrupa Cooperative Housing Society (highest bidder), and Rashtriya Majdoor Sangh (employees’ union).
  • Civil Appeal Nos.: 8437‑8438/2013, 8439/2013 (III‑B), 8435‑8436/2013.
  • Background: The disputed land (47,374 sq m) was declared excess vacant land under the Urban Land (Ceiling and Regulation) Act, 1976. The Company obtained permission to mortgage the land to Bank of India, which later sued for recovery of dues amounting to ₹11.50 crore. The Competent Authority, under Section 8(4) of the Act, declared the land excess vacant; the Urban Land Tribunal dismissed appeals under Section 33.
  • Subsequent actions: A notification under Section 10(3) and a notice under Section 10(5) were issued for possession. The authorities took possession by drawing a panchnama. The Company filed a Special Civil Application in the High Court, which was dismissed; intra‑court appeals by the Receiver and the Bank were also dismissed.
  • The Bank assigned its rights to Asset Reconstruction Company, which was impleaded as respondent in the Special Civil Application and later filed the present appeals.
  • Submissions: Appellant argued that possession was not taken, that Section 10(6) requires a separate notice, and cited several precedents. Respondent argued that the appellant is merely a mortgagee‑assignee, that possession had been taken, and that the Section 10(5) notice sufficed.
  • Court’s reasoning: The Court held that the notice under Section 10(5) is comprehensive and sufficient; Section 10(6) does not mandate a fresh notice. It found that possession had been taken as per the panchnama. The appellant’s rights are limited to those of a mortgagee; benefits under Sections 3 and 4 of the Act are available only to the original landowner, not to the assignee. The earlier Tribunal order is binding as res judicata on the appellant.
  • The Court noted lack of due diligence by the predecessor in obtaining permission before mortgaging and the competing interests of employees.

Final Outcome

  • The appeals (Civil Appeals 8437‑8438, 8439, 8435‑8436) are dismissed.
  • No costs awarded.
  • All pending applications, if any, are ordered disposed.
  • The Court grants liberty to the appellant, the Company, its erstwhile employees, and Rashtriya Majdoor Sangh to make a representation to the State of Gujarat seeking release of the specific surplus land portion, including any constructed part.
  • The Court expressly refrains from commenting on the Bank’s separate action of selling the property.

Topics: Court Order, Urban Land Ceiling Act, Mortgagee Rights