The Telangana High Court on Thursday issued a three-week stay on all proceedings related to the recently concluded auction of a 6.2-acre parcel of land at Knowledge City in Raidurg. Real estate firm Gowra Ventures Pvt Ltd had acquired the land for a record Rs 237 crore per acre, totaling Rs 1,490 crore, on May 28.
Court Proceedings
Justice NV Shravan Kumar passed the direction while hearing a batch of petitions filed by the State Bank of India (SBI), which claimed that 5 acres of the auctioned land were allotted to it in 2010 and remained in its possession since then.
The state contended that it had offered a 2.5-acre alternate plot in Knowledge City, and that SBI officials had accepted the offer and even visited the proposed site. SBI, however, refuted these claims, stating that the allotment had not been cancelled, the state had not repaid the amount paid for the land, and the auction was conducted on a public holiday—Bakrid.
Arguments from TGIIC
Senior counsel S Niranjan Reddy, representing the Telangana Industrial Infrastructure Corporation Ltd (TGIIC), submitted that the government had initially allotted the land to SBI at a concessional price of Rs 13.33 crore per acre, while the actual market price at that time was over Rs 100 crore per acre. Despite this, SBI did not execute the project. He accused the bank of concealing in its petition the fact that the government had offered an alternate plot. “Moreover, they did not reply to any of the email communications and are not disputing these facts,” he added. When the judge asked for documents showing that the bank had accepted the offer, the TGIIC counsel said it was an oral concurrence by SBI officials during a meeting on May 4. He further stated that the state was offering a property worth over Rs 500 crore to the bank.
State's Stand
Additional advocate general T Rajnikanth Reddy, appearing for the state, informed the court that the auction was held to raise money for public purposes and that SBI had been sitting on the land for 16 years without completing construction. “Such auctions are affirmed even by the apex court only with a condition that it should be in a fair and transparent manner. Nothing was secret in the entire process,” he submitted. He further added that after 16 years, the bank was operating only three ATMs from the land and had no real construction to show. “As per the agreement at the time of allotment, they have to complete all payments, get permissions and commence construction within six months, complete within two years and commence operations,” Rajnikanth contended. He also denied allegations that TGIIC and the state government did not cooperate with the bank in granting permissions, saying all permissions had been granted. The Greater Hyderabad Municipal Corporation had granted permissions in 2015 and timelines had been extended, but the bank did not start construction. “The agreement clearly says any violation of the allotment agreement would lead to the allotment being cancelled and the allottee can resume the said land without any notice,” Rajnikanth said.
SBI's Response
Appearing for SBI, senior counsel B S Prasad alleged that TGIIC and the state government had not been fair in their dealings. He argued that the bank's possession of the land was undisputed. “Even according to the state, three ATMs are functioning from the land now. Moreover, security is deployed and there is a compound wall.” Prasad further added that the construction was delayed because the land originally belonged to the State Bank of Hyderabad, which merged into SBI, and also because of the Covid-19 pandemic. He argued that delays could not be attributed to SBI alone. “Moreover, in 2021 the government extended a two-year timeline to all the allottees who had not constructed buildings, including Ikea, Phoenix, Deloitte and Infosys, but the same was refused to SBI. This was a violation of principles of natural justice and contrary to legitimate expectations. The state cancelled the land allotment twice. SBI challenged the cancellation and the high court nullified the action on both occasions. The refusal to accept the SBI request and the decision to proceed with the auction was without due process and rule of law,” he contended, further adding that the state's proposal to allot alternate land was rejected by SBI.
Government's Rebuttal
In response, Niranjan argued that the government may use money from the auction for public purposes like social welfare schemes and that Gowra Ventures was free to use the land as it wished. “They may even construct a swimming pool there and swim every day,” he said.
ASGI's Argument
N Venkataraman, additional solicitor general of India, appearing for SBI, argued that the apex court had in the past dismissed such claims unless there was express public interest. “It is shocking that money substitutes public interest is what they are holding as a legal position. How can wealth substitute public interest?” Venkataraman asked. “You (state) did not cancel the allotment, nor did you return the bank's amount. Without these, how dare you issue auction notices,” he said and added that the delay in the project was due to inordinate delays by the state departments in granting permissions.
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About the Author
Pinto Deepak - Legal Correspondent for The Times of India, Hyderabad, covering Telangana High Court and Supreme Court matters related to the state. Formerly reported on crime in Telangana, including high-profile and violent cases in Hyderabad. Now focused on legal developments, constitutional issues, and judicial accountability in the state’s top courts.
