Bona fide allottees cannot be penalized for procedural errors in land disposal after long-term settled possession.

Land bearing Block No. 30, admeasuring Acre 19–18 Guntha of Mouje Mandkol, Taluka Olpad, District Surat ("subject land") was originally held by Respondent No. 4, Lakhiben, who sold it to non-agriculturists by registered sale deed.

Finding a breach of Section 63 of the Bombay Tenancy and Agricultural Lands Act, 1948 ("the Act"), the Deputy Collector suo motu cancelled the mutation entry and directed initiation of proceedings under Section 84C.

By order dated 11.05.1988, the Additional Mamlatdar vested the subject land in the Government, granting 90 days to restore the land to its original status; upon non-compliance, the land stood forfeited and vested in the Government (entry No. 929 mutated on 24.01.1990).

The Mamlatdar, Olpad then initiated disposal proceedings under Section 32P of the Act, publishing a public notice in Form XI under Rule 21(1) of the Bombay Tenancy and Agricultural Lands Rules, 1956, and by order dated 13.06.1990 allotted 10 Acres to a Dalit Co-operative Society and the remaining Acre 9–18 Gunthas to the petitioners.

Respondent No. 4 appealed (without joining the petitioners) to the Special Secretary, Revenue Department, who remanded the matter on 03.07.1990.

By order dated 14.06.1994, the Collector, Surat rejected Lakhiben's appeal and upheld the Section 84C vesting order, but quashed the Mamlatdar's Section 32P order and directed fresh disposal proceedings by re-issuing public notice under Section 32P.

The Gujarat Revenue Tribunal ("GRT") dismissed the petitioners' Revision Applications (Nos. TEN:BS:149/94 and 153/94) on 10.07.1997 and their Review Application under Section 17 of the Bombay Revenue Tribunal Act, 1957 on 08.10.1999.

During pendency, a Court-directed Panchnama confirmed the petitioners' possession of the allotted land since 1990.

1. Whether the Collector was justified in quashing the Mamlatdar's order dated 13.06.1990 passed under Section 32P of the Act and remanding the matter for de novo proceedings under the very same provision, in the absence of any finding that the original proceedings contravened the statute.

2. Whether land vested in the Government upon completion of Section 84C proceedings could lawfully be disposed of under Section 32P, or only as per the priority mechanism in Section 84C(4) of the Act.

3. Whether bona fide purchasers, in uninterrupted possession for over 36 years without breach of any allotment condition, can be penalised at a belated stage for procedural defects attributable solely to the revenue authorities.

4. Whether the SSRD's remand order, passed without affording the petitioners (non-parties) an opportunity of hearing, violated principles of natural justice.

Section 63 of the Bombay Tenancy and Agricultural Lands Act, 1948 which prohibits transfer of agricultural land to non-agriculturists without prior sanction.

Section 84C of the Bombay Tenancy and Agricultural Lands Act, 1948 which empowers forfeiture and vesting of such lands in the Government.

Section 84C(4) of the Act which prescribes a priority list for disposal of lands so vested.

Section 32P of the Act, read with Rule 21(1) of the 1956 Rules and Form XI, governing disposal of vested lands by the Mamlatdar after public notice.

Principles of natural justice (audi alteram partem).

Equitable doctrine that bona fide purchasers ought not to be prejudiced by procedural lapses of authorities when they themselves are faultless.

The Court first noted that the Collector's order qua rejection of Respondent No. 4's appeal attained finality, as she never assailed it before any higher forum.

Examining the operative portion of the Collector's order, the Court found no recorded finding that the Mamlatdar's Section 32P proceedings were contrary to statute, and was "unable to discern" any reason for directing the Mamlatdar to redo the identical exercise already duly undertaken.

The Court further exposed an internal inconsistency in the GRT's order: while the GRT observed that Section 32P was inapplicable (as the land was not tenancy land) and that disposal must follow Section 84C(4), it nonetheless confirmed the Collector's remand directing fresh Section 32P proceedings, without modifying the operative part.

Critically, the learned AGP fairly conceded that the Mamlatdar had duly complied with all statutory requirements under Section 32P and that the petitioners bore no fault.

Weighing these factors with the petitioners' established possession since 1990 (over 36 years, confirmed by Panchnama), the Court held that bona fide purchasers cannot be punished at this belated stage for alleged defects in proceedings initiated by the revenue authorities themselves, and that no purpose would be served by directing repetition of an exercise already completed in accordance with law.

The petition was allowed and the Rule was made absolute. The Court quashed and set aside: (i) the GRT's order dated 08.10.1999; (ii) the GRT's order dated 16.07.1999; and (iii) the Collector's order dated 14.06.1994, to the extent it quashed the Mamlatdar's order dated 13.06.1990 and remanded the matter for fresh disposal proceedings under Section 32P.