HYDERABAD: The Telangana High Court has issued a three-week stay on all proceedings regarding the recent auction of a 6.2-acre land parcel in Knowledge City, Raidurg. The land was purchased by Gowra Ventures Pvt Ltd for a staggering Rs 237 crore per acre (totaling Rs 1,490 crore) on May 28.
Justice NV Shravan Kumar made this ruling while addressing a series of petitions from the State Bank of India, which asserted that 5 acres of the auctioned land had been allotted to it in 2010 and has remained in its possession ever since.
The state contended that it proposed a 2.5-acre alternative site in Knowledge City, which SBI officials had accepted and even visited. SBI countered, claiming the state was spreading misinformation. The bank argued that the allotment had not been canceled and that the state had not reimbursed the amount initially paid for the land, yet still proceeded with the auction on a public holiday—Bakrid.
Senior counsel S. Niranjan Reddy, representing the Telangana Industrial Infrastructure Corporation Ltd, stated that the land was initially given to SBI at a significantly reduced rate of Rs 13.33 crore per acre, despite the market price exceeding Rs 100 crore per acre at the time. He noted that SBI had failed to execute the project.
Niranjan also accused SBI of omitting the fact that the government had offered another plot in its petition. “Furthermore, they have not responded to any email communications, nor are they disputing these facts,” he remarked.
When the judge requested documentation proving SBI’s acceptance of the offer, the TGIIC counsel stated that SBI officials had verbally agreed during a meeting on May 4, affirming the state’s offer of property valued at over Rs 500 crore to the bank.
Additional Advocate General T. Rajnikanth Reddy, representing the state, informed the court that the auction was initiated to fund public projects and criticized SBI for its 16-year inaction on the land. “These auctions are validated by the Supreme Court, provided they are conducted fairly and transparently. Nothing was concealed in the process,” he emphasized.
Rajnikanth further argued that after 16 years, SBI had only established three ATMs and had made no real progress on construction. “According to the allotment agreement, they were required to finalize payments, secure permissions, and start construction within six months, and complete it within two years,” he argued.
He refuted claims that the TGIIC and the state government failed to assist SBI in obtaining permissions, stating that all necessary approvals had been granted. The Greater Hyderabad Municipal Corporation had issued permissions in 2015, with extended timelines, but SBI did not commence construction. “The agreement stipulates that any breach would result in the cancellation of the allotment without notice back to the allottee,” Rajnikanth explained.
Senior counsel B. S. Prasad, representing SBI, alleged that the TGIIC and the state had not acted fairly. He insisted that SBI’s possession of the land was undisputed. “The state acknowledges that three ATMs are operational on the land, and security is in place along with a compound wall,” he noted.
Prasad continued that delays in construction stemmed from the land’s historical ownership by the State Bank of Hyderabad—now merged with SBI—and interruptions caused by the Covid-19 pandemic. He argued that the delays could not solely be attributed to SBI.
“In 2021, the government granted a two-year extension to all allottees who hadn’t started construction, including Ikea, Phoenix, Deloitte, and Infosys. This extension was denied to SBI, which is a violation of natural justice and contrary to what was reasonably expected. The state canceled the land allotment twice; SBI disputed these cancellations, and the court nullified the actions both times. The decision to auction the land was made without following due process,” he asserted, adding that SBI had rejected the state’s offer of alternative land.
In his rebuttal, Niranjan contended that funds from the auction could be utilized for public welfare initiatives and emphasized that Gowra Ventures could use the land as they deemed fit, even suggesting construction of recreational facilities.
N. Venkataraman, Additional Solicitor General of India, representing SBI, argued that the Supreme Court had previously dismissed such claims unless they served a public interest. “It is astounding that financial gain is viewed as a legal substitute for public interest. How can wealth replace actual public value?” he questioned.
“You (the state) did not invalidate the allotment, nor did you refund the bank’s initial payment. How can you issue auction notices under such circumstances?” he asserted, emphasizing that delays primarily stemmed from the state’s protracted process in granting permissions.
