Telangana HC Stays All Proceedings of 6.2 Acres Land Auction at Knowledge City in Raidurg for 3 Weeks

Hyderabad: The Telangana High Court on Thursday stayed for three weeks all proceedings relating to the auction of 6.2 acres of prime land at Knowledge City in Raidurg, Hyderabad, which fetched a record Rs 237 crore per acre in a recent e-auction.

Justice N.V. Shravan Kumar issued the interim order while hearing a batch of writ petitions filed by the State Bank of India (SBI), which claimed that nearly five acres of the auctioned land had been allotted to it in 2010, and that the bank continued to hold possession of the property.

The disputed parcel was auctioned by the Telangana Industrial Infrastructure Corporation (TGIIC) on May 28, with Hyderabad-based Gowra Ventures Pvt. Ltd, emerging as the successful bidder for Rs 1,490.73 crore.

Issuing notices to Gowra Ventures, the state government and TGIIC, the court directed the respondents to file their counters and restrained them from taking any further steps pursuant to the auction.

During the nearly two-hour hearing, Justice Shravan Kumar repeatedly questioned the rationale behind the auction and sought to know whether the government was promoting real estate activity merely to generate revenue. "The bank says it intends to create employment for 5,000 people at the site. What is the proposed use of the land by Gowra Ventures? Are they establishing any industry or generating employment?" the judge questioned.

Appearing for SBI, additional solicitor-general (ASG) N. Venkataraman and senior counsel B.S. Prasad argued that the bank had a subsisting right, title and interest over the property and that the state proceeded with the auction without legally cancelling the allotment or refunding the amount paid by SBI. The bank contended that delays in commencing construction were caused by multiple factors, including the merger of State Bank of Hyderabad with SBI, the Covid-19 pandemic, and delays in obtaining approvals from various government departments.

Senior counsel Prasad said the High Court had earlier set aside two separate attempts by the state to cancel SBI's allotment. He argued that while the government extended construction timelines in 2021 to several allottees, including IKEA, Phoenix, Deloitte and Infosys, a similar benefit was arbitrarily denied to the SBI. The bank also disputed the state's claim that it had agreed to accept an alternative 2.5-acre parcel in Knowledge City. According to the bank, the proposal was expressly rejected.

The bank further alleged that the government conducted the auction despite SBI's continued possession of the property, where it currently operates a branch office and three ATMs, maintains security personnel and has erected a compound wall.

Opposing any interim relief, senior counsel S. Niranjan Reddy, appearing for the TGIIC, argued that the SBI had failed to utilise the land despite obtaining it at a heavily concessional rate of Rs 33 crore per acre when the market value exceeded Rs 100 crore per acre. He submitted that the TGIIC had offered an alternative parcel of land to the SBI and claimed that bank officials had orally agreed to the proposal during discussions held on May 4 this year.

The court questioned the absence of any written acceptance from the SBI. Additional advocate-general T. Rajanikanth Reddy, representing the state government, submitted that the auction was conducted in a transparent manner and that the proceeds would be utilised for public purposes. He argued that SBI had remained inactive for 16 years despite repeated extensions and approvals.

A notable exchange occurred when Niranjan Reddy argued that once the auction was completed, the successful bidder could utilise the property for any lawful purpose. ASG Venkataraman countered that revenue generation alone could not constitute public interest and questioned the state's legal justification for auctioning land already allotted to and in possession of a public sector bank.