Acquisition of Land Already Vested in the State and Fraudulent Conversion of Land Use are Void.

Land admeasuring 21,314 sq. mtrs. across two contiguous plots—Survey No. 785 (owned by Raghavjibhai Devjibhai) and Survey No. 786 (owned by Karsanbhai Patel)—was acquired by the National Highways Authority of India (NHAI) for the Ahmedabad-Dholera Expressway via notifications in 2018 and 2020.

Awards were passed and compensation deposited.

Subsequent to the acquisition, the owners applied to the District Inspector of Land Records (DILR) alleging "resurvey errors." The DILR flipped the geographical locations and boundaries of the two plots in the village map.

Taking advantage of this, the owner of Survey No. 786 obtained Non-Agricultural (NA) conversion for a purported "remaining" area of 11,385 sq. mtrs. within 12 days and sold it to the private petitioners.

Under pressure and alleged collusion, NHAI officials initiated fresh acquisition proceedings for the same land (now labeled as "additional" land) at significantly higher NA rates.

The private petitioners sought a writ to compel disbursement of this additional compensation, while NHAI eventually challenged the resurvey and NA conversion.

The court applied Section 3D of the National Highways Act, 1956, stipulates that once a declaration is published, the land vests absolutely in the Central Government free from all encumbrances.

The court invoked the principle of Fraud vitiates everything, noting that a concerted effort to siphon public money through artificial value escalation constitutes a fraud on the power of eminent domain.

It also considered the Gujarat Land Revenue Code, 1879, regarding NA conversion, emphasizing that such permissions cannot be granted for land already vested in the State or subject to pending acquisition.

The Court observed that the road alignment for the Expressway was static; thus, the total land required (21,314 sq. mtrs.) was already legally acquired and vested in the Central Government via the 2019 and 2021 awards.

The DILR’s "flipping" of plots 785 and 786 was a mere mapping correction that did not create "new" land or change the NHAI's physical requirement.

The Court found the Collector’s grant of NA permission for 11,385 sq. mtrs. to be "mala fide" because that area was not actually available to the owner after the initial acquisition and resurvey adjustments.

It characterized the 3rd and 4th acquisition proposals by NHAI officials as a "fraudulent exercise" to pay for land already owned by the Government, likely prompted by collusion to ensure private enrichment from public funds.

The Court criticized the Additional Chief Secretary’s inquiry for being "casual" and failing to acknowledge that the total acquired area remained constant despite the locational swap.

It also quashed the Collector’s NA conversion order dated 14.02.2022.

The Court held that landowners/purchasers are only entitled to compensation for the original 21,314 sq. mtrs.

NHAI is directed to take physical possession of the entire 21,314 sq. mtrs. and correct revenue records within 8 weeks; compensation deposited for the cancelled notifications must be refunded to NHAI; the Chairman, NHAI, and the Chief Secretary of Gujarat must initiate fresh, high-level inquiries into the conduct of their respective erring officials; the private petitions for disbursement (SCA 8785 & 8804) were dismissed.