Supremacy of Registered Conveyance and Limits on Administrative Resumption: Protection of Property Rights Under Article 300-A

Introduction

M/S Penguin Enterprises Private Limited (“the Petitioner”) challenged the State of Haryana’s resumption and eviction of Industrial Shed No. 61, Type-A, Electronic City, Sector-18, Gurgaon. The petitioner had acquired the shed by registered deed of conveyance dated 28.09.2006 after executing an earlier agreement to sell. Respondents resumed and evicted the petitioner on the ground of non-implementation of the project within the stipulated one-year period. Primary issues before the Punjab & Haryana High Court were:

Whether administrative resumption could override a duly executed registered conveyance;
Whether the power to rescind a registered deed of conveyance lies exclusively with the civil court;
Whether any arbitration clause in the conveyance or agreement empowers administrative authorities to resume property;
Whether the impugned actions violated the petitioner’s rights under Article 300-A of the Constitution.

Summary of the Judgment

Delivered on 08 April 2025 by Justices Sureshwar Thakur and Vikas Suri, the Court quashed the resumption notice dated 24.10.2016 and eviction order dated 06.08.2019. It held that:

A registered deed of conveyance confers an absolute right, title and interest in property which cannot be annulled by administrative fiat.
The power to rescind or cancel a registered conveyance rests solely with a civil court through civil suit and decree.
An arbitration clause cannot supply administrative authorities with jurisdiction to resume property or override conveyance.
The State’s resumption action without invoking eminent-domain statutes or civil adjudication violated Article 300-A (right to property).

The petition was allowed, the impugned notices were set aside, and respondents were directed to pay exemplary compensation of ₹5 lakhs to the petitioner.

Analysis

1. Precedents Cited

Trimurti Rice Mills v. Commissioner of Customs (1983): Administrative action cannot override rights under a registered instrument.
Sant Lal Chopra v. Union of India (1980): Eminent domain power must be exercised via statute and public purpose; mere policy conditions are insufficient.
Katha v. State of Haryana (2019): Right to property under Article 300-A requires lawful acquisition and due process.

These precedents underscore that statutory resumption or resumption clauses in unregistered agreements cannot impair rights secured by a registered conveyance.

2. Legal Reasoning

The Court’s reasoning unfolded in three main strands:

Finality of Registered Conveyance
A registered conveyance executed under Sections 17–18, Registration Act, 1908 confers indefeasible title. Only a civil court, through a suit for rescission, can set aside such instrument (Registration Act, Section 49). Administrative bodies lack jurisdiction to unilaterally annul conveyance.
Limitations on Administrative Resumption
Resumption of property is an aspect of eminent domain. Article 300-A safeguards private property, permitting deprivation only under law for a public purpose with compensation. Here, no acquisition statute was invoked; the action rested on an unincorporated clause in the conveyance and earlier notices that were never served. Hence, the State acted ultra vires.
Non-Applicability of Arbitration Clause
Arbitration clauses are common in commercial contracts but not instruments conferring proprietary rights. Even if arbitrability of disputes is accepted, it does not confer jurisdiction on administrative authorities to resume or evict; it only provides a forum for dispute resolution between parties. Thus, the arbitration clause could not validate the resumption exercise.

3. Impact on Future Cases and the Law

Affirms the primacy of registered conveyance: Administrative or executive actions cannot override or annul conveyances.
Clarifies the scope of resumption: Eminent domain power must follow statutory acquisition procedures; policy-based conditional reversion clauses are unenforceable against registered title.
Restricts arbitration clauses: Arbitration cannot be used as a backdoor to grant administrative bodies resumption powers.
Reinforces Article 300-A: Private property rights demand due legal process and compensation before deprivation by the State.

Complex Concepts Simplified

Registered Conveyance: A legal document, registered under the Registration Act, that transfers full ownership of immovable property from vendor to purchaser. It confers an indefeasible title and can be set aside only by a civil suit.
Agreement to Sell vs. Conveyance: An agreement to sell is a preliminary contract to transfer property in the future; a deed of conveyance effectuates the transfer immediately and confers full rights.
Eminent Domain and Article 300-A: The State’s power to acquire private property for public purpose. Article 300-A ensures no one is deprived of property except by law, requiring proper legislative procedure and compensation.
Arbitration Clause: A contractual provision referring disputes to arbitration. It cannot expand the jurisdiction of administrative bodies or substitute for statutory procedures to acquire or resume property.

Conclusion

The High Court’s decision in M/S Penguin Enterprises Pvt. Ltd. v. State of Haryana establishes a landmark principle: a registered deed of conveyance creates an indefeasible proprietary right, immune from administrative resumption absent statutory acquisition. It reaffirms that only civil courts can rescind or cancel a conveyance, that arbitration clauses do not empower executive resumption, and that deprivation of property must comply with Article 300-A. This ruling will guide authorities and litigants to respect registered titles and will shape future property-law litigation by prioritizing due process and constitutional property guarantees.