Supreme Court Holds That High Courts Must Not Interfere in Writ Jurisdiction Where Cancellation of Industrial Land Allotment Is Bona Fide and Driven by Overriding Public Interest Such as Establishment of an IIT

Case Name: Bihar Industrial Area Development Authority & Ors. v. M/s Scope Sales Pvt. Ltd. & Ors.
Citation: 2026 INSC 89
Date of Judgment/Order: 23 January 2026
Bench: Justice Dipankar Datta and Justice Augustine George Masih

Held: The Supreme Court held that the High Court, in exercise of its writ jurisdiction, ought not to interfere with a bona fide cancellation of an industrial land allotment when such cancellation is necessitated by an overriding public interest, and that an intra-court appellate Bench cannot substitute its own view merely because another interpretation of the statutory provisions is possible, so long as the Single Judge’s view is plausible and not perverse.

Summary: The appeals arose from cancellation of an industrial plot allotted by the Bihar Industrial Area Development Authority to the respondent company, which had planned to construct a multiplex, after the State decided to reserve the adjoining land for the establishment and future expansion of IIT Patna. Although the Single Judge of the Patna High Court upheld the cancellation considering the larger public interest and absence of mala fides, the Division Bench reversed the decision on the ground that BIADA lacked statutory power to cancel the allotment after creation of third-party rights. The Supreme Court examined the scope of writ jurisdiction, the statutory scheme of the BIADA Act, the discretionary nature of equitable relief, and settled principles governing intra-court appeals, and concluded that the Division Bench exceeded its jurisdiction by re-appreciating the matter without finding perversity in the Single Judge’s order.

Decision: The appeals were allowed, the impugned judgment of the Division Bench of the Patna High Court was set aside, the order of the Single Judge dismissing the writ petition was restored, refund of the original consideration with interest at 7% per annum was directed, the land was ordered to be used strictly for educational purposes related to IIT Patna, and all pending applications stood disposed of.