State Can't Bypass Procedural Safeguards: Patna High Court Quashes Order Revoking 50-Yr Land Lease, Evicting 'Bonafide' Flat-Owners

The Patna High Court has set aside the Bihar government's 2004 order cancelling a Khas Mahal lease directing resumption of possession of land along with multi-storey apartments constructed over it including initiation of eviction process of flat-owners, terming the action prima facie illegal.In doing so, the court held that the State could not bypass the mandatory procedure under the Transfer of Property Act, by cancelling the 50-year lease granted in 1966 and evicting bona fide flat owners of Midway Apartment Co-operative Housing Society Limited.On the rights of the apartment owners who were not given a hearing before cancellation of lease, Justice Alok Kumar Sinha, in his order said:"Given that valuable rights had accrued in favour of the society and its members through registered sale deeds, recognized allotments, and long-standing possession, it was incumbent upon the respondents to follow the principles of audi alteram partem before taking any adverse action. The omission to do so renders the action procedurally unfair and violative of Article 14 of the Constitution of India. The petitioners, being central to the Cooperative Housing society's execution of rights over decades, were never afforded any hearing before lease cancellation. This breaches audi alteram partem, a cardinal principle of natural justice". Finding the permission granted by the State Government in its 08.12.1989 letter for transfer and construction of apartments to be valid, the court restrained the respondent authorities from "interfering with the peaceful possession of the petitioners, except in accordance with due process of law".The above ruling came in a writ petition instituted by a group of 25 flat allottees and members of Patna's Midway Apartment Cooperative Housing Society Limited challenging the validity of the purported cancellation of a lease in respect of a 'Khas Mahal' land.The petitioners further sought appropriate directions for considering the petitioners' case for renewal of the lease and protection of their right to peaceful possession and enjoyment of their residential flats, constructed pursuant to express government permission. For context, Khas mahal land refers to land under the direct management of a government, often leased to individuals for various purposes. It essentially means "Government land under direct management". The government retains ownership while individuals or entities lease the land for a defined period, subject to certain conditions.The petitioners had challenged two orders by which the Department of Revenue and Land Reforms had cancelled the lease and ordered the Collector to take possession. They argued that they were bona fide purchasers who had relied on the State's 1989 permission to transfer the land and construct apartments, and had been paying taxes and occupying the property for decades.The State contended that the original lease conditions were violated, the 1989 permission was kept in abeyance, and the petitioners had no legal title or privity of contract.Rejecting this stand, the Court noted that the 1989 permission was never lawfully revoked and the State had acquiesced by registering sale deeds, approving building plans and accepting taxes."In the absence of any formal revocation, the permission granted in 1989 must be deemed to be valid and subsisting at the time the sale deeds were executed in 1991 and the construction was commenced," the court said. The Court further noted that the cancellation in 2004 was unilateral, without notice or hearing to the lessees, the co-operative society, or the flat owners, making it violative of natural justice.The court said that the 1966 lease was a renewed lease granted for 50 years commencing from 01.04.1966, which recognized the rights of the lessees over 0.234 acres of Khas Mahal land. "The lease deed contained clear conditions regarding transfer and construction, requiring prior written permission from the Collector. It is not in dispute, rather admitted that vide letter dated 08.12.1989, permission for sale and construction of multistoried apartment by Midway Apartment Co-operative Housing Society Limited, Patna was granted by the competent authority," it said. The court said that the subsequent cancellation vide 2004 order was passed without following the due process of law i.e, by approaching the Civil Court of competent jurisdiction.The Court held that the State's action bypassed the mandatory procedure for determination of a lease under Section 111 of the Transfer of Property Act, 1882, which requires approaching a civil court for possession. It clarified that even an expired lease creates juridical possession that cannot be disturbed except by due process.It thus said that the cancellation and resumption of the land in question along with the structure present over was "prima facie" illegal, arbitrary and unsustainable in law.The Court concluded by ruling, “The eviction proceeding which was ordered to be initiated… under ...

State Can't Bypass Procedural Safeguards: Patna High Court Quashes Order Revoking 50-Yr Land Lease, Evicting 'Bonafide' Flat-Owners

Bhavya Singh

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