Authority: Supreme Court of India

Order Date: August 25, 2026

Case Overview

  • Parties: Appellant – M/s Circar Paper Mills Ltd (Company in liquidation) represented by the Official Liquidator (O.L); Respondents – District Collector, Nellore District & others (State). Additional appellants include Sundaramma & others (individuals in possession of adjacent lands) and J.K. Sugar Mills Ltd (purchaser in public auction).
  • Background: The disputed property comprises 65.94 acres (survey numbers 445‑A1, 445‑A5, 445‑A6, 521, 525, 527, 529) in Kodurupadu village, Nellore Mandal. Of this, 40.65 acres are claimed by the State as “assigned lands” under the Andhra Pradesh Assigned Land (Prohibition of Transfers) Act, 1977. The remaining 25.29 acres were acquired for APIIC Limited.
  • Ownership History: Title traced to Balasada Jagannada Rao (B.J. Rao) via a series of transfers dating back to 1920. B.J. Rao sold the land in three lots (17.73 acres, 18.39 acres, 46.23 acres). The 46.23‑acre lot was purchased by Circar Paper Mills Ltd in 1980. The company operated a factory on the land until it entered liquidation.
  • Liquidation & Auction: The Company Court appointed an Official Liquidator who took possession on 27‑03‑2001. The High Court (Company Judge) ordered the land to be auctioned, fixing the upset price. The auction was conducted on 13‑07‑2004; J.K. Sugar Mills Ltd emerged as the highest bidder, paying Rs 7 crore 80 lakhs in August 2004.
  • State Objection: After the auction publication, the Mandal Revenue Officer issued a telegram (16‑08‑2024) asserting that 40.65 acres were assigned lands and could not be alienated. The O.L filed a report; the Company Judge noted the objection but deemed it belated, directing the O.L to pay the Government Rs 1.5 lakh per acre for the 40.65 acres (total Rs 7.68 crore).
  • Legal Proceedings: The State appealed the auction confirmation; the Single Judge of the High Court upheld the auction, but the Supreme Court set aside that decision. Parallel civil appeals (Nos. 807‑808, 809‑810, 699 of 2017) involved Sundaramma & others claiming title over adjacent lands and challenging the State’s assigned‑land claim.
  • Key Observations: The Court noted that the lands had been privately held for decades, with continuous mutation in revenue records and industrial use. No substantive proof was produced to establish that the 40.65 acres were assigned under the 1977 Act. The Court emphasized that summary eviction under the Assigned Land Act cannot be invoked where a bona‑fide title dispute exists.

Final Outcome

  • The Supreme Court allowed the civil appeals, setting aside the Company Court’s order that had upheld the State’s objection.
  • Possession of the 65.94‑acre parcel is to be handed over to J.K. Sugar Mills Ltd, the successful auction purchaser.
  • The amount directed to be deposited with the Government (Rs 7.68 crore) is to be restored to the liquidation estate of Circar Paper Mills Ltd.
  • The writ petition filed by Sundaramma & others is revived; the High Court will reconsider it afresh, particularly the validity of the summary eviction proceedings.
  • All pending applications in the civil appeals stand disposed of.

Topics: Land Dispute, Assigned Land Act, Auction Litigation