A bench headed by Chief Justice K G Balakrishnan held that the state Assembly had no power to expel Singh and others for what was their executive action. The court also restored the seat of Singh which was declared vacant by the Assembly consequent to his expulsion.

The apex court said the appropriate remedy was to set the criminal law in motion as there was no breach of privilege of the Assembly for invoking its power under Article 194(3) of the Constitution.

The bench also comprising R V Raveendran, P Sathasivam, J M Panchal and R M Lodha said the Assembly had acted erroneously as the alleged act of irregularities was committed during the 12th Assemblt whereas the act of expulsion was carried out by the 13th Assembly.

The apex court also expressed disapproval of the Punjab Assembly's action, saying it would set a bad precedent for every new government or Assembly to sit over the alleged criminal actions of the previous incumbent and resort to expulsions. However, the bench said its order quashing the expulsion would not in anyway interfere with the ongoing criminal probe pending against the former Chief Minister.

The former chief minister was expelled from the House on September 3, 2008, for "breach of privilege" after a resolution was passed on the basis of the report of a special committee appointed by the Punjab Assembly on the alleged irregularities. The report alleged he had granted illegal exemption to certain developers causing a loss of over several crores of rupees to the exchequer.

The scam relates to grant of exemption on 32.5 acres of land in a prime area by Singh as the Chief Minister to certain land developers allegedly in violation of the rules. The special committee held that Singh, the then Chief Minister and two other Congress leaders, Jagjit Singh Chaudhary and Jugal Kishore Sharma, were guilty in the scam and recommended registration of an FIR and their custodial interrogation.

Singh was expelled for the remaining term of the 13th Assembly and the Election Commission was asked to declare his seat vacant for enabling a by-poll to Patiala constituency represented by the 67-year-old Congress leader. However, the apex court had earlier stayed the committee's recommendation to the Election Commission for declaring the seat vacant.

Article 194 deals with the powers, privileges and immunities relating to the Assembly and House committees constituted by it. Singh had approached the apex court challenging his expulsion from the House as unconstitutional, saying the Assembly has no power under the Constitution to expel him for his executive decision.