Divisional Commissioner Has No Jurisdiction to Cancel Sale Permission Once Conveyance Is Complete: Bombay High Court Rules in Landmark Land Transfer Case

"Statutory Authority Becomes Functus Officio Once Permission Is Acted Upon Through Sale Deed" – In a major ruling on the limits of administrative power under special statutes, the Bombay High Court quashed an order of the Divisional Commissioner, Pune, which had revoked a sale permission granted under the Maharashtra Project Affected Persons Rehabilitation Act, 1999, long after the transaction had culminated in a registered sale deed and possession transfer.

In Uday Bhanudas Gujar v. Madan Yeshwant Diwan & Ors., Justice Amit Borkar declared that the Divisional Commissioner acted wholly without jurisdiction, and that once the permission under Section 12 of the Rehabilitation Act was granted and acted upon, “the statutory authority became functus officio and had no power of recall or review.”

“Jurisdiction is not a matter of convenience. It is a matter of law,” the Court held, categorically rejecting the idea that an authority can cancel a statutory permission after the transaction is complete.

“Rehabilitation Act Is a Self-Contained Code – Land Revenue Code Has No Role in Cancellation of Sale Permissions”

The controversy arose when the Divisional Commissioner, invoking Sections 247 and 257 of the Maharashtra Land Revenue Code, set aside a sale permission granted under the Rehabilitation Act on the ground that the seller had failed to disclose a prior agreement to sell executed in 1995.

The High Court, however, dismantled this reasoning with clarity, holding:

“The authority granting permission under the Rehabilitation Act does not act as a revenue officer under the Maharashtra Land Revenue Code. The two operate in distinct statutory domains.”

Relying on the Supreme Court’s decision in Fulchand Bhagwandas Gugale v. State of Maharashtra (2005) 1 SCC 193, the Court reiterated:

“When an officer functions under a special statute, his powers are circumscribed by that statute alone. Orders passed under such statute are not amenable to appeal or revision under the Land Revenue Code.”

The Court found that Section 12 of the Rehabilitation Act does not confer any appellate or revisional powers, nor does it incorporate the appeal provisions of the Land Revenue Code.

"Appeal Filed Without Condoning Delay Was Itself Incompetent" – Jurisdiction Must Precede Adjudication, Not Follow It

Even procedurally, the Divisional Commissioner’s action failed the test of legality. The appeal was filed with delay, and the application for condonation was never decided, yet the authority proceeded to cancel the permission on merits.

The Court held this to be a jurisdictional error:

“An authority cannot assume jurisdiction first and decide limitation later. Jurisdiction must be established before adjudication.”

“This alone vitiates the impugned order.”

“Agreement to Sell Does Not Confer Title – No Locus Without Suit for Specific Performance”

The respondents had claimed a right to object to the sale permission on the basis of a 1995 agreement to sell, executed in their favour by a third party. However, that agreement was never enforced through a suit for specific performance, even after 15 years.

The Court held:

“Existence of an agreement to sell does not create any right, title or interest in the property. A person without title cannot clothe another with title.”

Therefore, the respondents had no locus and were not aggrieved persons under Section 12 of the Act, as their rights—if any—remained in the realm of unenforced private contracts.

“Statutory Permission Once Acted Upon Cannot Be Cancelled – Authority Becomes Functus Officio”

The sale permission was granted in December 2010, followed by a registered sale deed in March 2011, and mutation in revenue records in April 2011. By then, the statutory process had reached its conclusion.

The Court held: “Once the permission was acted upon and a registered sale deed came into existence, the statutory authority became functus officio. The Act does not confer any power of review or recall.”

Therefore, the Divisional Commissioner had no legal basis to revisit or undo the permission.

“Alleged Non-Disclosure of an Old Agreement Is Not Fraud” – No Statutory Obligation to Disclose Irrelevant Private Arrangements

On the issue of fraud, the respondents argued that the earlier agreement to sell had been concealed, justifying cancellation. The Court rejected this outright: “Nondisclosure of a legally irrelevant fact cannot amount to fraud. Fraud must relate to a material fact which the law mandates to be disclosed.”

The 1995 agreement had no bearing on the statutory criteria under Section 12(2), which allows refusal of permission only if the proposed transfer defeats the object of the Rehabilitation Act. The Court clarified that adjudicating civil disputes is beyond the scope of the authority’s powers under the Act.

Alternative Remedy No Bar Where Jurisdiction Is Lacking – Writ Jurisdiction Maintained

Respondents argued that the petitioner should have exhausted statutory remedies under Sections 248 or 257 of the Land Revenue Code.

But the Court made it clear: “When the very assumption of jurisdiction is challenged, availability of an alternative remedy does not operate as a bar.”

“The petitioner cannot be driven to a statutory remedy which itself is founded on an erroneous assumption of jurisdiction.”

Jurisdictional Discipline Must Prevail Over Administrative Overreach

The Bombay High Court’s judgment is a strong assertion of the boundaries of statutory power, especially where special statutes like the Maharashtra Rehabilitation Act are concerned. It reaffirms that officials cannot rely on general provisions of the Land Revenue Code to cancel permissions granted under a self-contained code—especially after such permissions have been acted upon and completed.

“Upholding such an order would amount to permitting authorities to exercise powers not conferred by law. That course is impermissible,” Justice Borkar concluded.

Date of Decision: 19 December 2025