Mohammadali Ansarahmad Khan vs The State Of Gujarat

Non-Reportable
2026 INSC 750
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal Nos. 9729-9731 of 2026
(@ Special Leave Petition (Civil) Nos.16387-89 of 2024)
Mohammadali Ansarahmad Khan …. Appellant
Versus
The State of Gujarat & Ors. …. Respondents
O R D E R
Leave granted.
2. A land scam of huge magnitude was unearthed in a Public
Interest Litigation. The Gujarat Industrial Development
Corporation (for short, ‘GIDC’) was alleged to have transferred
twenty fully developed industrial plots in exchange for the
agricultural lands owned by the appellant herein. The appellant,
‘pari delicto’ is in appeal from the judgment of the High Court of
Gujarat which reversed the transfer made to the appellant,
claiming compensation for the lands taken by the GIDC without
any acquisition proceedings.
Signature Not Verified
Digitally signed by
VISHAL ANAND
Date: 2026.07.28
17:37:22 IST
Reason:
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3. We heard Mr. Naveen Pahwa, learned Senior Counsel
appearing for the appellant and Mr. K.M. Nataraj, learned
Additional Solicitor General appearing for the State.
4. The facts, as discernible from the records, are that, for
establishing an industrial estate by name of ‘Sarigam Industrial
Estate’ as conceived by the GIDC in the year 1980, 34,743 Sq.
mtrs. of land along with other lands, both private and
government, were taken over and developed. The subject land
admeasuring 34,743 sq. meters was understood as belonging to
the government, vesting having occurred as per the ceiling
proceedings under the Gujarat Land Ceiling Act, 1960, initiated
against the original owner, by name Narhari Sukhanand Joshi.
5. The ceiling proceedings were challenged by the owner
before the Collector and then before the Gujarat Revenue
Tribunal. Eventually, the matter was remanded for fresh
adjudication as per the Act and the Agricultural Land Ceiling
Authorities held in favour of the original owner in the year 2014.
The appellant is alleged to have actively participated in the
contest mounted by the original owner against the ceiling
proceedings. The appellant purchased the lands in question by
way of sale deeds dated 24.06.2016 and 30.07.2016 for a
consideration of little more than Rs. 30 lakhs. The properties
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were mutated in his favour as per entry no. 9014. However, the
land having been taken over by the GIDC and developed,
relying on the original vesting the appellant claimed for
restitution or compensation in lieu of acquisition as per the Right
to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 (for short, “Act of
2013”) which had superseded the Land Acquisition Act of 1894
(for short, “Act of 1894”). The scramble commenced then and
the appellant rested content when the issue moved from desk to
desk and eventually it was decided by the GIDC, taking cue
from two earlier instances, that 20 fully developed industrial
plots will be transferred in the name of the appellant, as
compensation.
6. The High Court by the impugned order concluded that the
allotment of industrial plots admeasuring 30,000 square meters
by way of an exchange deed dated 22.03.2022 in favour of the
appellant by the then Vice Chairman and the Managing Director
of the GIDC, suffers from grave error of law and smacks of
mala fides . The illegal allotments made were cancelled by the
Division Bench with an observation that the claim of the
appellant, respondent no. 5 therein, for compensation shall be
dealt with strictly in accordance with the observations made in
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the judgment, reckoning all relevant factors. A three-Judge
Bench of this Court after hearing all parties to the Special Leave
Petition on 05.08.2024, passed an order agreeing with the first
part of the conclusions, i.e. with respect to the mala fide action of
the GIDC and the cancellation of the sale deed, holding that to
be not liable to be interfered with under Article 136. Notice was
issued confined to the aspect of compensation for the
agricultural plots.
7. By Order dated 20.08.2025, a Coordinate Bench of this
Court directed the Collector to determine the compensation;
while noticing the reservation of the appellant in making such
determination under the provisions of the Act of 1894, when the
Act of 2013 had come into place. This Court refused to comment
on the same and directed compensation to be first determined,
leaving the issue, as to under which enactment payment should
be made, to be later considered. In the order dated 06.11.2025,
it was noticed that the Collector had determined compensation
as Rs. 5.85 Crore under the Act of 1894 and Rs. 24.72 Crore
under the Act of 2013, reckoning the subject land as agricultural;
which was objected to by the appellant claiming it to be non-
agricultural. Clarification was sought on the nature of the land
from the learned Additional Solicitor General. Further, by Order
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dated 28.04.2026, another Coordinate Bench of this Court had
ruled that restitution was out of question and what falls for
consideration is only fixation of a reasonable amount as
compensation.
8. Today, on our directions, an affidavit has been filed. The
valuation, applying the Act of 1894 without interest, is stated to
be Rs.1,17,16,090/- and under the Act of 2013, it is
Rs.3,30,03,071/-. The valuation of land as on the date of
exchange deed without interest i.e. as on 05.12.2025, is
computed as Rs.16,48,20,980/-. In determining a reasonable
compensation what weighs with us is the fact that the appellant
had actively connived in obtaining the purchase and the
subsequent mala fide exchange from the GIDC. Admittedly,
there was a vesting order under the Land Ceiling Act on
13.10.1970 which was upheld by the Collector in 1973 but
remanded by the Tribunal. Hence, when the project namely
Sarigam Industrial Estate conceived by the GIDC was taken up in
1980, the matter was in a flux. Without noticing the remand order,
the lands were taken over by the GIDC finding that the revenue
records had the name of the government as its rightful owner.
The lands were developed as an industrial estate which before
taking over remained as agricultural lands. The ceiling
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proceedings were dropped in the year 2014 upon which,
despite the lands having been developed as an industrial estate,
the appellant, who is said to have been pursuing the ceiling
proceedings on behalf of the original owner, purchased the
lands; quite obviously in a surreptitious manner. On obtaining
the ownership and after procuring mutation, the claim was set up
for restitution or compensation in accordance with the Act of
2013 since then, it had come into force.
9. We have to notice that if the ceiling proceedings had
concluded prior to the takeover of the lands, what would have
been taken over by the State were the agricultural lands
available with the original owner, the compensation being
eligible to the original owner. The appellant was nowhere in the
picture at that time and surfaced with a claim in 2016 on the basis
of a purchase made in that year relying on an order, dropping
the ceiling proceedings in 2014. Even if we have nothing
substantial to sustain the contention of the GIDC that the
appellant had been shadowboxing, on behalf of the original
owner, in pursuance of his vile intention to appropriate the land
and claim compensation, it cannot be doubted that he was aware
of the development fully carried out in the land when he made
the purchase in 2016. At least, the purchase made and the
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mutation carried out was done surreptitiously, thus disentitling
him from raising claim for compensation under the Act of 2013.
Valuation as on the date of the exchange deed is to be only
noticed to hold that admittedly those were developed lands at
the time of the exchange deed, which were developed by the
GIDC, the appellant having not expended a pie on such
development. The mere statement that the same was converted
as non-agricultural lands at that point of time, does not inure to
the benefit of the appellant since the same was in pursuance of
the establishment of the industrial estate.
10. On the above reasoning, we find that the appellant would
not be entitled to the compensation as determined on the basis
of the valuation as determined by the Collector under the Act of
2013 or as on the date of the exchange deed or even the
compensation under the Act of 1894. At best, the appellant could
claim compensation on the valuation of the lands, that too in the
nature of the agricultural lands under the Act of 1894 which
would be Rs.1,17,16,090/-. The appellant, having come into
possession only in the year 2016, would be entitled to 9%
interest per annum as determined by us and not under the Act of
1894 which could have incurred to the benefit of the original
owner alone. The aforesaid compensation of Rs.1,17,16,090/-
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with simple interest from July 2016 up to the date of payment
shall be disbursed to the appellant after deducting the
consideration received by the appellant for three plots allotted
to the appellant by exchange deed, being plot nos. 3311, 3313
and 3117, which have already been allotted to third parties by
the appellant after remitting the transfer fees to the GIDC. The
GIDC shall verify the consideration obtained by the appellant for
the said allotment made in the year 2020 and deduct the same
from the compensation determined by the Collector. The
interest as ordered by us shall not run on the said amount liable
to be deducted.
11. With the above direction, the appeal stands disposed of
reaffirming the mala fide nature of the transfer carried out by the
GIDC and the cancellation of the exchange deeds. The GIDC
would be entitled to deal with the remaining seventeen
industrial plots as covered in the exchange deed, cancelled by
the High Court and would have rights also in the three plots
covered by the exchange deed and now allotted to third parties,
as they would be enabled under the scheme of allotment of
industrial plots.
12. The Appeals stand disposed of on the above terms.
13. Pending applications, if any, shall also stand disposed of.
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.……………………………... J.
(J. B. PARDIWALA)
..………….…………………. J.
(K. VINOD CHANDRAN)
NEW DELHI;
JULY 24, 2026.
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