Once Land Vests in the State, There’s No Going Back: Karnataka High Court Quashes De-notification of Slum Land, Upholds Property Owners’ Right to Compensation

“The Slum Act does not contemplate de-notification; Section 21 of the General Clauses Act cannot override specific acquisition statutes” — Justice M. Nagaprasanna declares withdrawal of acquisition illegal, directs State to pay compensation within 12 weeks. In a landmark judgment Karnataka High Court (Dharwad Bench) held that once land is acquired under Section 17 of the Karnataka Slum Areas (Improvement and Clearance) Act, 1973 and vests under Section 18, it cannot be de-notified or withdrawn under the guise of general statutory powers. The Court quashed the government’s de-notification dated April 22, 2022, and directed the State to compute and pay compensation within 12 weeks with statutory interest.

Justice M. Nagaprasanna observed, “Once the possession has been taken, the same cannot be withdrawn. The issuance of de-notification is unlawful, that too without affording any opportunity and only based on a report of the Assistant Commissioner and Deputy Commissioner.”

“No statute allows the State to snatch land and walk away without compensation” — High Court asserts Article 300-A and 21 override bureaucratic excuses

The case revolved around the petitioner’s land in Hubballi, declared as a slum area as early as 1976. Despite no acquisition proceedings under Section 17 of the Slum Act being initiated for decades, slum rehabilitation was carried out, and possession certificates were issued to families settled there. Following repeated petitions and directions from the Court, acquisition proceedings were finally initiated in 2018, only to be withdrawn in 2022 citing financial burden and lack of prior Finance Department approval.

Rejecting this justification outright, the Court declared, “Financial constraints cannot be cited as a justification to abdicate such responsibility. The State is duty-bound to protect the right to life, which includes the right to shelter, and equally to protect the right to property under Article 300-A.”

The Bench referred extensively to Supreme Court precedents including Lt. Governor of H.P. v. Avinash Sharma (1970) 2 SCC 149, Suraj Lamp & Industries v. State of Haryana (2012) 1 SCC 656, and K.T. Plantation Pvt. Ltd. v. State of Karnataka, AIR 2011 SC 3430 to fortify the principle that “once possession is taken, there is no provision by which land statutorily vested in the Government reverts to the original owner by mere cancellation.”

“The de-notification is not only illegal, it is unconstitutional” — Court rebukes arbitrary withdrawal of acquisition

Justice Nagaprasanna ruled that the General Clauses Act, 1897 cannot be used to “undo what has been done under a special enactment like the Slum Act.” He stressed that “Section 21 of the General Clauses Act cannot override specific acquisition provisions under the Karnataka Slum Areas Act,” rejecting the State’s argument that withdrawal of acquisition is permissible under general powers.

The State’s claim that the landowners had already sold their rights via Power of Attorney and sale agreements was also flatly rejected. Relying on Suraj Lamp, the Court reiterated that “Power of Attorney and Agreement to Sell do not convey title. Only a registered sale deed can.”

Thus, it held that the petitioner remains the legal owner and is entitled to full compensation under Section 20 of the Slum Act. The Court added, “Even assuming sale agreements existed, they don’t extinguish the right of the true owner to receive compensation for land acquired and utilised for public purpose.”

“Public interest and slum dwellers’ welfare can’t be used to deny constitutional rights of private citizens” — Division Bench upholds Single Judge’s order, affirms illegality of de-notification

The Court highlighted a significant constitutional paradox — while the State claimed to be working in the interest of the slum dwellers, it also attempted to absolve itself from liability by arbitrarily withdrawing the acquisition.

This duality was firmly denounced by the Division Bench in W.A. No.100107/2025, which had earlier affirmed the Single Judge’s view that such de-notifications are “illegal, arbitrary, and violative of Article 300-A.” The Division Bench noted:

“The Slum Act contains no provision for de-notification of land once a notification under Section 17 has been issued. Financial burden cannot override the constitutional duty to protect the right to life or property.”

The Bench stressed that the State’s omission to cancel the possession certificates — which conferred permanent rights to beneficiaries — while trying to revoke acquisition, renders the withdrawal ineffective in law.

“Once the land vests with the State, it does so free from all encumbrances” — Court directs compensation to be paid within 12 weeks

Ultimately, the Court allowed the writ petition and ordered:“The impugned de-notification dated 22.04.2022 issued by Respondent No.1 stands quashed. The compensation shall be determined as ordered by the Co-ordinate Bench within an outer limit of 12 weeks from the date of receipt of a copy of this order along with all statutory or applicable interest.”

The judgment stands as a sharp rebuke to the misuse of executive discretion and a forceful endorsement of the principle that government acquisition must respect legal and constitutional safeguards.

Date of Decision: November 19, 2025