Public Interest Thwart Allottee Rights: Supreme Court Upholds Allotment Of Land For IIT, Rejects Claim Over Industrial Plot

The Court further emphasised that writ jurisdiction under Article 226 of the Constitution of India is discretionary and equitable, and relief can be refused even where a legal infirmity exists, if interference would harm public interest.

Accordingly, a bench of Justice Dipankar Datta and Justice Augustine George Masih observed, “…the absence of any perversity in the order of the learned Single Judge, the larger public interest involved owing to involvement of an educational institution, and the availability of an alternate prayer for compensation – interference in the exercise of writ jurisdiction in the present case would hinder a project of undeniable national importance and, in our opinion, thwart public interest”.

“Beyond doubt, institutes such as the IITs not only cater to a large number of students but also play a critical role in the development of individuals, society, and the nation at large. Suffice it to observe, their importance cannot be measured merely in quantitative terms. For their effective functioning and sustained growth, the availability of adequate resources, including land, is indispensable”, the bench further noted in the judgment.

However, the bench also clarified that it is not “unmindful of the rights of the individual allottee”, however, “…it cannot be placed on a pedestal higher than the collective public interest. Where the two come into conflict, individual interest must necessarily yield to the larger public good”.

Abhay Kumar, AOR appeared for the appellants, and Arun K. Sinha, AOR appeared for the respondents.

In the pertinent matter, in the year 2007, the Bihar Industrial Area Development Authority (BIADA) allotted an industrial plot in Patna to Scope Sales for setting up a multiplex-cum-shopping mall. Subsequent to which, the possession was delivered, and thereafter the construction also commenced.

Subsequently, the State decided to establish IIT Patna temporarily at the adjacent Government Polytechnic campus. As the allotted plot was contiguous to the IIT campus and required for its future expansion, BIADA issued show-cause notices and eventually cancelled the allotment in the year 2009, refunding the land cost with interest.

Now Scope challenged the cancellation before the Patna High Court where the single judge bench upheld the cancellation citing compelling public interest, however, the division bench reversed the decision, holding that BIADA lacked statutory power to cancel the allotment once third-party rights were created and that such cancellation violated Article 300A of the Constitution of India.

The Supreme Court, therefore, reaffirmed that courts will not exercise writ powers to undo State action taken bona fide for larger public good, and that intra-court appellate review cannot dilute judicial discipline by substituting discretion with preference, especially when national educational infrastructure is at stake.

Consequentially, allowing the appeals filed by BIADA and the State of Bihar, the bench set aside the division bench judgment, restored the single judge’s order dismissing the writ petition.

Further directed refund of the allotment amount with 7% interest (if not already paid) and mandated that the land shall be used strictly for educational purposes, with no commercial exploitation.

Cause Title: Bihar Industrial Area Development Authority & Ors. v. M/S Scope Sales Pvt. Ltd. & Anr. [Neutral Citation: 2026 INSC 89]

Appearances:

Appellants: Abhay Kumar, AOR, Shagun Ruhil, Kusum Pandey, Shreenivash, Rakesh Kumar, Karan Chopra, Azmat Hayat Amanullah, AOR, Rebecca Mishra, Vanshita Gupta, Advocates.

Respondents: Arun K. Sinha, AOR, Manish Kumar, AOR, Abhay Kumar, AOR, Advocates.

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