Sriharikota Rehabilitees Are Assignees, Not Owners: Andhra Pradesh HC Sets Aside Order Directing Land Acquisition for SEZ

The Andhra Pradesh High Court held that SHAR project rehabilitees whose lands were resumed for an APIIC Special Economic Zone are DKT assignees, not landowners, and cannot demand fresh acquisition proceedings under the Land Acquisition Act.

A Division Bench of the High Court of Andhra Pradesh, comprising Justice Ravi Nath Tilhari and Justice Maheswara Rao Kuncheam, on 11 May 2026 set aside a 2013 Single Judge order that had directed the State to initiate land acquisition proceedings under the Land Acquisition Act, 1894 before taking possession of lands in Thondur Village, Varadaiahpalem Mandal, Chittoor District. The lands had been resumed by the Revenue Divisional Officer, Tirupati in 2008 for transfer to the Andhra Pradesh Industrial Infrastructure Corporation Limited (APIICL) to establish a Special Economic Zone being developed by M/s. Sri City Private Limited. The bench held that the writ petitioners were DKT assignees of government land, not owners, that the resumption order of 23 September 2008 had attained finality through earlier unchallenged proceedings, and that the Single Judge could not have set aside that order in a subsequent writ petition that did not even challenge it.

The Dispute Before the High Court

The writ petitioners' families had originally been displaced from Sriharikota, Nellore District, when the Government of India established a Rocket Launching Station there. Under G.O.Ms.No.1024, Industries and Commerce Department, dated 2 November 1970, the State of Andhra Pradesh provided rehabilitation facilities, including grants of government land for cultivation — up to five acres of dry land or two acres of wet land per displaced family — in Thondur Village.

Decades later, the State sought to use those same lands for an industrial zone. APIICL requisitioned the area, and acquisition notifications under Section 4(1) and Section 6 of the Land Acquisition Act, 1894 were published in 2006 for patta lands in the surrounding villages. The writ petitioners' DKT/CJFS lands, however, were not covered by those notifications. Instead, the Revenue Divisional Officer, Tirupati, acting as Chairman of the Thondur Cooperative Joint Forming Society, cancelled the CJFS lease pattas and resumed the lands vide order dated 23 September 2008, offering compensation at Rs. 2,50,000 per acre for dry land and Rs. 3,00,000 per acre for wet land in terms of G.O.Ms.No.1307, Revenue (Assignment-I) Department, dated 23 December 1993.

G.O.Ms.No.1307 is the State's policy instrument for payment of ex-gratia to assignees of government land when such land is resumed for public purposes. It provides for payment equivalent to market value on par with patta lands, but expressly treats the amount as ex-gratia and bars the assignees from making references under Section 18 and Section 28-A of the Land Acquisition Act or claiming interest or additional market value under that Act.

The Litigation Trail Before the Fourth Writ Petition

Three rounds of writ litigation preceded the petition that gave rise to the present appeals.

In W.P.No.561 of 2007, filed when the petitioners apprehended dispossession, the Single Judge disposed of the matter on 17 July 2008 directing the respondents to determine compensation in terms of G.O.Ms.No.1307. The court proceeded on the footing that the petitioners were assignees, not owners, but held they could not be denied ex-gratia payable to DKT patta holders. Notably, M/s. Sri City Private Limited, which had impleaded itself, conceded in its counter affidavit that ex-gratia was payable to the assignees.

After the resumption order of 23 September 2008, the petitioners filed W.P.No.26439 of 2008 challenging that order and the compensation offered. The Single Judge disposed of that petition on 15 December 2008, holding — applying the Full Bench judgment in LAO-cum-RDO, Chevella Division v. Mekala Pandu — that assignees of government land are entitled to compensation equivalent to the full market value on par with owners, and that no condition in the patta can restrict that right. The court directed the Revenue Divisional Officer to conduct an enquiry and determine compensation in accordance with the Land Acquisition Act. Critically, the resumption order itself was not set aside. Neither side challenged either the 2008 judgment or the 2008 resumption order.

Pursuant to the direction in W.P.No.26439 of 2008, the Revenue Divisional Officer passed proceedings dated 21 July 2010 (ROC.SEZ/881/2010) determining compensation at Rs. 3,00,000 per acre for wet land and Rs. 2,50,000 per acre for dry land, inclusive of solatium, additional market value, and the enhancement percentage agreed in the Negotiation Committee — on par with the consent award passed for patta lands in the same area.

The Single Judge's 2013 Order and Why the Division Bench Disagreed

The petitioners challenged the 21 July 2010 compensation proceedings in W.P.No.23208 of 2010. The Single Judge allowed that petition on 4 November 2013, setting aside both the compensation proceedings and the resumption order, and directed the State to issue a Section 4(1) notification within four weeks, a Section 6 declaration within two weeks thereafter, and to complete the entire acquisition process within the time stipulated.

The Single Judge's reasoning rested on Government Memo No.9734A/Asn.II(3)9 dated 16 September 2000, by which the Principal Secretary, Revenue Department, had directed the Collector, Nellore to issue regular pattas to the Sriharikota repatriates with all rights, after concluding that the assignees were “very much entitled for the rights of alienation of land assigned to them” under G.O.Ms.No.1024. The Single Judge held that once alienation rights were recognised, the petitioners stood as owners, and that the resumption by executive order without following the Land Acquisition Act violated Article 300-A of the Constitution of India, relying on M/s. Bishambar Dayal Chandra Mohan v. State of U.P. (AIR 1982 SC 32).

The Division Bench found this reasoning unsustainable on multiple grounds.

The bench held that the memo dated 16 September 2000 is an administrative document and does not have statutory force. G.O.Ms.No.1024 dated 2 November 1970, which was issued in the name of the Governor, is the operative instrument governing the rehabilitation grant. An administrative memo issued by the Principal Secretary cannot override a Government Order issued in the name of the Governor. The bench noted that even under the memo, the Collector was directed to issue regular pattas — and there was no material on record to show that such regular pattas with full alienation rights were in fact issued to all the writ petitioners.

The bench also held that the question of whether the memo changed the petitioners' status from assignees to owners was not a new discovery in 2010. The memo dated 16 September 2000 was already in existence when W.P.No.26439 of 2008 was decided on 15 December 2008. That judgment, which treated the petitioners as assignees and directed compensation in accordance with the Land Acquisition Act without disturbing the resumption order, was never challenged by the petitioners. It attained finality. A co-ordinate bench in a subsequent writ petition by the same parties could not arrive at a contrary conclusion on the same facts.

The bench further held that the prayer in W.P.No.23208 of 2010 challenged only the compensation proceedings dated 21 July 2010 — not the resumption order dated 23 September 2008. The resumption order had been challenged in W.P.No.26439 of 2008 but was not interfered with. Setting it aside in a subsequent writ petition in which it was not even under challenge was impermissible.

On the Distinction Between Resumption and Acquisition

The Division Bench examined the Full Bench judgment in Mekala Pandu and the Supreme Court's subsequent consideration of it in Yadaiah v. State of Telangana [(2022) 7 SCC 508]. The bench noted that Mekala Pandu addressed the validity of “no compensation” clauses in assignment pattas and held such clauses unconstitutional, entitling assignees to full market value compensation on par with owners. However, the Supreme Court in Yadaiah had observed that the constitutional right to compensation asserted in Mekala Pandu was disapproved in A.P. Industrial Infrastructure Corpn. Ltd. v. Ramesh Singh, and that where resumption is valid, assignees may not be entitled to compensation at all.

The bench drew a clear distinction: the question of acquisition under the Land Acquisition Act arises only if the person is the owner of the land. In a case of resumption of assigned land, there is no legal requirement to issue a Section 4(1) notification. The only question is what compensation, if any, the assignees are entitled to receive.

On compensation, the bench held that since the earlier judgments in W.P.Nos.561/2007 and 26439/2008 — which directed payment of compensation in terms of Mekala Pandu — had attained finality without challenge by the writ appellants, the appellants could not now deny compensation to the writ petitioners. Whatever remained unpaid under those earlier orders must be paid.

The bench also addressed the pattadar passbooks produced by the petitioners. Referring to the Supreme Court's approach in Yerikala Sunkalamma [(2026) 2 SCC 182], the bench noted that even where pattadar passbooks existed, the Supreme Court in that case had not directed the State to issue acquisition notifications; it had itself granted compensation. The issuance of a pattadar passbook alone was not the sole basis for treating a holder as an owner entitled to demand acquisition proceedings.

W.P.No.26568 of 2014: Dismissed for Laches

W.P.No.26568 of 2014 was filed by T. Chengaiah and 60 others — persons other than the petitioners in W.P.No.23208 of 2010 — challenging a resumption order dated 26 July 2007 and seeking a direction to the State to resort to acquisition proceedings under the Land Acquisition Act. The petition was filed with a delay of approximately seven years. The petitioners explained that they came to know of their status only after the judgment in W.P.No.23208 of 2010.

The bench rejected this explanation as an afterthought. The resumption in their case had taken place in 2007, and the petitioners could not credibly claim ignorance for seven years. Since the judgment in W.P.No.23208 of 2010 had itself been set aside, the petitioners could derive no benefit from it. The writ petition was dismissed.

Outcome

The Division Bench set aside the judgment and order dated 4 November 2013 passed by the Single Judge in W.P.No.23208 of 2010. W.A.Nos.205 and 259 of 2014 and 848 of 2022, filed respectively by M/s. Sri City Private Limited, APIICL, and the Government of Andhra Pradesh, were allowed. The bench clarified that compensation determined and directed to be paid under the earlier orders dated 17 July 2008 and 15 December 2008 in W.P.Nos.561/2007 and 26439/2008 must be paid to the writ petitioners to the extent it remains unpaid. W.P.No.26568 of 2014 was dismissed. Pending miscellaneous petitions, if any, were closed in consequence.