A bench of Chief Justice K.G. Balakrishnan and Justice Aftab Alam dismissed the state government plea and said the forgery in the government land records was found to have been committed by local revenue record clerks and not the film star.
The bench also noted that Bachchan had already relinquished his claim over about 70,000 sq ft of farming land in Daulatpur village of Barabanki district and returned it to the village.
In the given circumstances, "no charges survived" against the film star, the bench held.
The apex court also dismissed senior counsel K.K. Venugopal's contention that a thief cannot be absolved of the charge of committing theft when he returns the stolen objects.
The state government had come to the court in appeal against a judgement of the Lucknow bench of the Allahabad High Court which scrapped a June 2006 Faizabad divisional commissioner's order for a probe into the forgery of revenue records.
The Faizabad divisional commissioner had held as valid the Barabanki district magistrate's order of March 24, 2006, that the 1993 Barabanki land transfer in Bachchan's name was illegal.
Bachchan had gone to the high court against the order of the Faizabad divisional commissioner alleging that he was being hounded by the Mayawati administration because of his proximity to former chief minister Mulayam Singh Yadav.