SHC declares state land’s disposal for commercial purpose without open auction illegal

The Sindh High Court (SHC) on Monday declared that any disposal of public or state land for commercial purposes must be conducted through an open auction, at least at the base price market value or above such market value, and any grant made outside this procedure would be considered illegal and void.

Issuing its judgment on a petition against non-regularisation of 10 acres of land in Baldia Town Deh Mowach, a division bench of the high court headed by Justice Salahuddin Panhwar observed that the chief executive (chief minister) was not a competent authority to finally grant land at the only recommendation of revenue and land utilisation department for the use of residential/commercial purposes while bypassing an open auction competition.

The SHC observed that the chief executive would be competent for only leasing out for the period of 30 years with regard to industrial purposes in industrial zones defined/declared through a policy and such lease would not be converted in 99 years.

The bench observed that the lease granted for farming and industrial purposes, shall be used only for such purpose, wherefrom such purpose can be achieved, and in case of violation thereof such lease would be considered cancelled/void even without any declaration.

The SHC observed that the chief executive would be competent to approve or allot land for cooperative societies and farming for the persons living below the poverty line and for the uplift of the marginalised communities like scheduled castes, women, haris or labourers by establishing their economic societies funded by the government.

The high court observed that the Cooperative Societies Act 2020 and relevant orders mandated the uplift of individuals living below the poverty line and directed the government to ensure strict compliance with the Act, in its true sense by forming high-level committees to monitor its implementation.

The bench observed that the Supreme Court’s rulings and other relevant cases stated that public authorities, regardless of their status, could not dispose of public property without following a due process and protecting public interest and any such violations violated the Articles 3, 25 and 31 of the Constitution, which asserted elimination of exploitation and equality before the law.

The SHC observed that any lease or grant must serve the intended public purpose, and the leasing authority must continuously monitor compliance with the lease terms and in cases of deviation or breach, the authorities must cancel the lease and retrieve the land forthwith.

The bench observed that the Board of Revenue shall continue grant of land on a harap basis in agricultural areas through open auction and such process shall be linked with the National Database & Registration Authority to ensure transparency.

The SHC observed that the land utilisation department shall issue a fresh statement of conditions within two months for grant of land in view of the 2024 land grant policy 2024, and also in consonance with the judgements passed by the court in land grant proceedings.

The high court directed the government to ensure that industrial leases were utilised for their intended purpose of generating employment and revenue and any deviation, particularly converting industrial leases for commercial use, shall render the lease void and subject to immediate cancellation.

The SHC observed that public land was a national asset, and the government, as its custodian, must ensure that it was disposed of in a transparent manner, safeguarding the public interest at all times and this included generating maximum revenue through fair and open competition, as directed by the Supreme Court in multiple rulings.

The high court observed that the government could allocate available state-owned land in urban and peri-urban areas specifically for low-cost housing projects and that could be done through community land trusts to ensure that the land was used exclusively for affordable housing and preventing future speculation or privatisation.

The SHC also pointed out that a public land grant policy should encourage a mix of housing, small businesses and public spaces providing residents not only with homes but also with opportunities for employment.