Supreme Court Quashes Illegal Allotment of 20 GIDC Industrial Plots in Multi-Crore Sarigam Land Scam

The Supreme Court has delivered a landmark verdict in a multi-crore land scam involving the Gujarat Industrial Development Corporation’s (GIDC) Sarigam estate in Valsad district.

A bench comprising Justice J.B. Pardiwala and Justice K. Vinod Chandran upheld a Gujarat High Court ruling, declaring the transfer of 20 developed industrial plots to an applicant illegal and ordered their immediate cancellation.

Rejecting the applicant’s massive ₹24.72 crore compensation demand, the apex court ruled that he is entitled only to basic agricultural land compensation amounting to ₹1.17 crore with 9% annual simple interest, subject to deductions from prior land sales.

Decades-Old Land Dispute Exploded Into 2016 Acquisition Scam

The case dates back to 1980, when GIDC acquired 34,743 square metres of land in Sarigam to set up an industrial area. The parcel was treated as government land and fully developed due to ongoing proceedings against its original owner, Narhari Joshi, under the Gujarat Land Ceiling Act, 1960.

In 2014, the ceiling proceedings were quashed. Exploiting this legal shift, applicant Mahmadali Ansar Ahmad Khan purchased the entire land parcel in 2016 for just over ₹30 lakh—well aware that GIDC had already established a fully functioning industrial estate on the site.

After registering the property under his name, Khan filed claims demanding the return of the land or heavy compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

Bureaucratic Overreach Nullified by Higher Judiciary

The then Vice Chairman and Managing Director of GIDC handed over 20 developed industrial plots spanning 30,000 square metres to Khan on 22 March 2022. The land swap triggered a Public Interest Litigation (PIL) in the Gujarat High Court, which struck down the illegal transfer.

Upholding the High Court’s stance, the Supreme Court pointed out that Khan was an active participant in the wrongdoing and irregularities. The bench noted that when Khan bought the parcel in 2016, he knew full well that the land had already been developed by GIDC without him spending a single rupee on its infrastructure.

SC Orders ₹1.17 Crore Base Compensation With Strict Deductions

The apex court clarified that the applicant has no legal right to claim compensation under the 2013 Act or demand current market rates. Instead, his payout is strictly capped at ₹1.17 crore—the original valuation fixed for agricultural land under the Land Acquisition Act, 1894.

Key conditions laid down in the Supreme Court directive include:

• Interest Accrual: GIDC must pay 9% simple annual interest on the ₹1.17 crore compensation amount, calculated from July 2019 until the date of payment.
• Plot Sale Deductions: Out of the 20 illegally allotted plots, Khan had already sold three (Plot Nos. 0311, 3713, and 3117) to third parties in 2020. The proceeds earned from these sales will be verified and deducted directly from the ₹1.17 crore compensation pool.
• GIDC Ownership: GIDC retains complete ownership and control over the remaining 17 developed industrial plots.