Supreme Court Holds That Proceedings Under the Urban Land Ceiling Act Abate Where Actual Physical Possession Was Never Taken and Mandatory Notice Under Section 10(5) Was Not Served on Persons in Possession

Case Name: Dalsukhbhai Bachubhai Satasia & Ors. v. State of Gujarat & Ors.
Citation: 2026 INSC 21
Date of Judgment/Order: 06 January 2026
Bench: Justice B.V. Nagarathna and Justice R. Mahadevan.

Held:
The Supreme Court held that proceedings under the Urban Land (Ceiling and Regulation) Act, 1976 abate under Section 4 of the Repeal Act, 1999 where actual physical possession of the land was never taken by the State and mandatory notice under Section 10(5) was not served on persons who were in actual possession, as vesting under Section 10(3) confers only de jure possession and not de facto possession.

Summary: The appellants were sub-plot holders in long-standing possession of industrial units constructed on land declared as surplus under the ULC Act. Although the State claimed that possession of excess land had been taken through a panchnama, the appellants were never served notice under Section 10(5) despite being in actual possession, and no voluntary surrender or lawful forcible dispossession was established. The Gujarat High Court dismissed their writ petitions treating them as illegal occupants. The Supreme Court undertook an exhaustive analysis of Sections 10(3), 10(5) and 10(6) of the ULC Act, the savings and abatement provisions of the Repeal Act, and binding precedents including State of U.P. v. Hari Ram and AP Electrical Equipment Corporation v. Tahsildar. It held that vesting of land without lawful transfer of physical possession amounts only to paper possession and cannot defeat statutory abatement after repeal.

Decision: The appeal was allowed, the impugned judgment of the Gujarat High Court dated 23.07.2014 was set aside, it was declared that the ULC proceedings stood abated under Section 4 of the Repeal Act, 1999, and the respondents were directed to treat the appellants as continuing owners and possessors of the land, with consequential reliefs to follow in accordance with law and all pending applications disposed of.