Introduction:
In the landmark judgment of Robert Lakra & Ors. v. The State of Bihar & Ors. (Civil Writ Jurisdiction Case No. 11929 of 2016), the Patna High Court, led by Justice Alok Kumar Sinha, struck down the Bihar government’s 2004 order that cancelled a 50-year Khas Mahal lease granted in 1966 and directed eviction of bona fide flat owners residing in multi-storey apartments constructed on the leased land. The dispute arose when the Department of Revenue and Land Reforms abruptly cancelled the lease of 0.234 acres of Khas Mahal land, ordering its resumption and initiation of eviction proceedings against the members of Patna’s Midway Apartment Co-operative Housing Society Limited. The petitioners, comprising 25 flat allottees, challenged the validity of the cancellation and sought protection of their residential flats, constructed lawfully under a 1989 state permission that allowed the transfer of lease rights and the construction of multi-storey apartments. The High Court held that the state’s action was arbitrary, procedurally flawed, and violative of principles of natural justice, particularly the rule of audi alteram partem (right to be heard). The Court observed that the apartment owners had acquired valuable rights through registered sale deeds and long-standing possession, and the state’s unilateral action without notice was prima facie illegal.
Arguments of Both Sides:
The petitioners, who were flat allottees and members of Midway Apartment Co-operative Housing Society Limited, argued that the 2004 cancellation order was arbitrary, illegal, and violative of their rights under Article 14 of the Constitution of India. Represented by counsel, they contended that they were bona fide purchasers who had lawfully acquired flats constructed on the land pursuant to a valid 50-year Khas Mahal lease dated April 1, 1966. They highlighted that in 1989, the government granted express written permission for the transfer and construction of multi-storey apartments by the cooperative society. Acting upon this permission, the petitioners had purchased flats through registered sale deeds, constructed residential apartments, paid taxes, and maintained peaceful possession for decades. The petitioners argued that the state’s unilateral cancellation in 2004, without issuing any notice or providing a hearing to them or the cooperative society, violated the principles of natural justice. They stressed that valuable property rights had vested in them, and no action could be taken without following the due process prescribed under Section 111 of the Transfer of Property Act, 1882.
The petitioners also argued that the 1989 permission was never lawfully revoked. On the contrary, the state had acquiesced by approving building plans, registering sale deeds, and collecting taxes for years. They claimed that the state’s action was not only procedurally unfair but also arbitrary, as it ignored the government’s own consent and approvals granted earlier. Furthermore, they contended that the application of the New Khas Mahal Policy, 2011, to their property was illegal because the policy was not retrospective and did not apply to the lease granted decades before its enactment. They requested the court to quash the cancellation order, protect their peaceful possession, and direct the competent authority to consider renewal of the lease.
The state government, through the Department of Revenue and Land Reforms, defended the cancellation order by alleging that the original lease conditions had been violated by the transfer and construction of multi-storey apartments. The state contended that the permission granted in 1989 was “kept in abeyance” and was not valid at the time the apartments were built. It argued that the petitioners, being purchasers of apartments from the cooperative society, had no direct privity of contract with the state and therefore could not claim any legal title or protection under the original lease. The state further maintained that the 2004 order directing the Collector to take possession was valid, as the government retained ownership of Khas Mahal land and could resume possession in case of breach of lease terms. The state also sought to justify its eviction orders under paragraph 14 of Chapter 4 of the New Khas Mahal Policy, 2011.
Court’s Judgment:
Justice Alok Kumar Sinha, after examining the submissions, documentary evidence, and the legal framework, ruled decisively in favor of the petitioners. The Court observed that the 50-year lease commencing from April 1, 1966, was valid and subsisting when the government granted permission on December 8, 1989, for transfer and construction by the Midway Apartment Co-operative Housing Society Limited. This permission, the Court noted, had never been formally revoked or rescinded. On the contrary, the state’s actions—such as registering sale deeds, approving building plans, and accepting taxes—demonstrated its acquiescence to the construction of apartments. Thus, the 1989 permission was deemed to be valid and operational at the time the cooperative society executed sale deeds and began construction in 1991.
The Court strongly criticized the unilateral nature of the 2004 cancellation order, noting that it was issued without notice or hearing to the lessees, the cooperative society, or the flat owners. Such omission violated the principles of natural justice and procedural fairness. Quoting the maxim audi alteram partem, Justice Sinha emphasized that valuable rights had accrued to the flat owners, and no adverse action could be taken against them without affording them a proper hearing. The Court held that the absence of a show-cause notice rendered the entire action void, arbitrary, and contrary to Article 14 of the Constitution.
The Court also addressed the legal requirement under Section 111 of the Transfer of Property Act, 1882, which stipulates that a lease can only be determined or possession resumed through a competent civil court’s intervention. The state’s attempt to bypass this mandatory procedure and unilaterally cancel the lease was declared illegal. The Court clarified that even if the lease had expired, the flat owners and cooperative society had juridical possession, which could not be disturbed except by due process of law.
Regarding the applicability of the New Khas Mahal Policy, 2011, the Court categorically held that it could not apply retrospectively to the land in question. The 2011 policy, the Court said, was formulated decades after the lease and construction of apartments and therefore could not be used as a basis for eviction. The eviction proceedings initiated under paragraph 14 of Chapter 4 of the 2011 policy were deemed unsustainable in law.
The Court’s findings underscore that the petitioners’ possession, backed by registered sale deeds and state-sanctioned approvals, could not be disturbed arbitrarily. It restrained the respondent authorities from interfering with the peaceful possession of the petitioners, except through lawful procedures. The Court also allowed the petitioners to apply for renewal of the lease, which the competent authority must consider in accordance with law.
Justice Sinha’s ruling is a stern reminder to state authorities that property rights, once vested through lawful transactions, cannot be curtailed by administrative fiat without adherence to legal procedures. The Court quashed the 2004 cancellation orders and the consequential directions for eviction, terming them “prima facie illegal, arbitrary, and unsustainable in law.” The writ petition was allowed in favor of the petitioners, protecting their right to peaceful possession and enjoyment of their flats.
The judgment also highlights the balance between the state’s ownership rights over Khas Mahal land and the rights of bona fide allottees and cooperative societies that have acted in good faith based on government permissions. By quashing the eviction orders, the Court recognized the legitimate expectations of apartment owners who had invested their life savings in purchasing flats with the understanding that the construction and sale were backed by valid government approvals. The judgment strengthens the legal principle that the government cannot act as both the grantor of permissions and the enforcer of arbitrary cancellations to the detriment of innocent purchasers.
In essence, the Court reaffirmed that administrative actions must meet the twin test of legality and fairness. The state’s failure to follow the due process under the Transfer of Property Act and the principles of natural justice invalidated its entire case. This decision is likely to have a significant impact on similar disputes involving Khas Mahal land across Bihar and other states, setting a precedent for the protection of cooperative housing societies and flat owners from arbitrary state actions.