Is it permissible to sell land that was discovered to be state property after being purchased under the assumption that it was private property, knowing that the seller had taken possession of it, that the entire area is under de facto possession, and that the judiciary does not provide justice in recovering the money?

It is not permissible to sell land owned by another person, because the seller does not own it. The Messenger of Allah, peace and blessings be upon him, said: "It is not lawful to sell what you do not possess." The buyer must seek to recover the price paid from the seller. If the buyer is unable to reclaim the money, then he must seek reward from Allah and be patient, for, "And give good tidings to the patient, who, when adversity strikes them, say, 'Indeed we belong to Allah, and indeed to Him we will return.' Those are the ones upon whom are blessings from their Lord and mercy. And it is those who are the [rightly] guided." Forgiving the seller is better: "And that you pardon is nearer to righteousness. And do not forget graciousness among yourselves. Indeed, Allah is Seeing of what you do."