On May 14, the Supreme Court of India clarified that Section 10 of the Transfer of Property Act, 1882 (TPA), which invalidates absolute restraints on the transfer of property, does not apply to government land allotments. The Court emphasized that such allotments are not commercial transactions but are made in the public interest.
The judgment came while the Court set aside a Telangana High Court ruling that treated a government land allotment as a sale under TPA. The Supreme Court maintained that Section 10 of the TPA is relevant for inter vivos transfers (between living persons) but does not extend to government allotments that come with specific conditions.
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Background of the Case
A bench of Justice Dipankar Datta and Justice Manmohan heard the case involving the Telangana government’s allotment of 3.01 acres of land in Medak district to a trust in 2001. The land was given for charitable purposes, with clear conditions:
- The land must be used exclusively for charitable activities.
- Construction must be completed within two years.
However, instead of following these conditions, the trust subdivided the land and sold it to private parties using a fraudulent General Power of Attorney (GPA) in 2011. When the Telangana government discovered this misuse, it issued a resumption order in 2012. But the High Court struck down the resumption order in 2022, citing that it violated Section 10 of the TPA.
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Aggrieved by the High Court’s decision, the Telangana government approached the Supreme Court. The apex court overturned the High Court’s ruling, stating that government allotments are distinct from private sales and are aimed at serving the public interest.
The Court, through Justice Manmohan's judgment, noted:
"This Court is of the view that the Appellant-State had allotted land to a 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."
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It further clarified that the 1975 Rules and Board of Revenue Standing Orders, which govern such government allotments, are not affected by Section 10 of the TPA.
Case Title: THE STATE OF TELANGANA & ORS. VERSUS DR. PASUPULETI NIRMALA HANUMANTHA RAO CHARITABLE TRUST
Appearances:
For Petitioner(s) :Mr. S. Niranjan Reddy, Sr. Adv. Ms. Devina Sehgal, AOR Ms. Palak Arora, Adv. Mr. S.day Bhanu, Adv.
For Respondent(s) :Mr. Gaurav Agrawal, Sr. Adv. Mr. D. Abhinav Rao, AOR Mr. Abhisek Das, Adv. Ms. Megha Shaw, Adv. Mr. Raghav Bherwani, Adv.
