TMI Blog1996 (4) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... the multi-storeyed building is constructed. However, the respondent no.4 regretted its inability vide later dated 20.6.1993 to either execute the conveyance for transfer of the petitioner s share of land or to handover possession of the said flat to him be-cause of the order dated 16.6.1993 of the Karnataka High Court. The petitioner was informed that the Karnataka High Court, by the said order, had restrained the State Government from issuing any orders permitting transfer of the excess vacant land and therefore, the respondents were not in a position to comply with the petitioner s demand. The order of the Karnataka High Court is based on the decision of this Court in S.Vasudeva/D.P.Sharma Vs. State of Karnataka and Ors., 1993 (3) scc 467, which prohibits transfer of any part of the exceess vacant land in respect of which exemption is granted under Section 20(1)(b) of Urban Land (Ceiling Regulation) Act, 1976. The decision in S.Vasudeva being the basis of the impugned action, this writ petition has been filed under Article 32 of the Constitution challenging this action; and for that reason, correctness of the decision in S.Vasudeva arises for consideration. No other facts are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age in the revenue records), then, so much extent of the land as has been ordinarily used for the keeping of such cattle immediately before the appointed day shall not be deemed to be vacant land for the purposes of this clause. xxx xxx xxx Chapter III Ceiling on Vacant Land 3. Persons not entitled to hold vacant land in excess of the ceiling limit - Except as otherwise provided in this Act, on and from the commencement of this Act, no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which this Act applies under subsection (2) of Sec.1. 4. Ceiling limit - (1) Subject to the other provisions of this section, in the case of every person, the ceiling limit shall be,- xxx xxx xxx (3) Notwithstanding anything contained in sub-section (1), where in respect of any vacant land any scheme for group housing has been sanctioned by an authority competent in this behalf immediately before the commencement of this Act, then, the person holding such vacant land at such commencement shall be entitled to continue to hold such land for the purpose of group housing ; Provided that not more than one dwelling unit in the group ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwise, that, having regard to the location of such land, the purpose for which such land is being or is proposed to be used and such other relevant factors as the circumstances of the case may require, it is necessary or expedient in the public interest so to do, that Government may, by order, exempt, subject to such conditions, if any, as may be specified in the order, such vacant land from the provisions of this Chapter: (b) where any person holds vacant land in excess of the ceiling limit and the State Government, either on its own motion or otherwise, is satisfied that the application of the provisions of this Chapter would cause undue hardship to such person, that Government may by order, exempt, subject to such conditions, if any, as may be specified in the order, such vacant land from the provisions of this Chapter; Provided that no order under this clause shall be made unless the reasons for doing so are recorded in writing. (2) If at any time the State Government is satisfied that any of the conditions subject to which any exemption under Cl.(a) or Cl.(b) of sub-section (1) is granted is not complied with by any person, it shall be competent for the State Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for industrial use of a granite factory subject to certain conditions which included a condition that the land shall not be transferred in any manner without prior permission of the Government. Later, the State Government permitted sale of the exempted land subject to certain conditions. Thereafter, another application was made by the owner of the remaining excess land for permission to transfer the remaining vacant land on the ground of undue hardship, which too was granted subject to certain conditions. The transaction benefited a close relative of the Chief Minister of the State. On these undisputed facts, writ petitions were filed, inter alia, for quashing the orders granting exemption under Section 20 of the Act and certain consequential reliefs. The questions which arose for decisions in that case related to the validity of the permissions granted by the State Government for transfer of the exempted land. The challenge to validity of the permissions was also on the ground of malafides because of the resulting benefit to a close relative of the Chief Minister of the State. The main judgment in S.Vasudeva is by P.B. Sawant, J. and N.P. Singh, J. in his concurring opinion a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in the pubic interest, while exemption under clause (b) is for relieving the person concerned from any undue hardship which may be caused to him personally, by the withdrawal of the excess land from his possession probable such as when the person may require the land for the expansion of the use to which he has already put it, such as his growing business or activities or to accommodate his growing family. The clause unfortunately is completely silent on what it intends to convey by the expression undue hardship . (paras 31, 32 and 33) The examination of the aforesaid relevant provisions of the Act shows a clear intention of the legislature and revels a definite scheme. It has to be admitted that the provisions of the Act as are drafted have not succeeded in translating into words the clear intention of the legislature and to that extent the Act is an inelegant and confused piece of drafting. However, since the intention is clear, a harmonious reading of all the provisions consistent with that intention is necessary to interpret and understand each of the said provisions. The intention of the legislature is to acquire all vacant land in excess of the ceiling limit prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It only provides for exemption of such land from being acquired and vested in the State Government or for non-declaration of it as an excess land or for the retention of the same with the holder and that too subject to certain conditions which may be prescribed, as stated earlier. (paras 46 and 47) The first question that arises is whether the provisions of Section 20(1)(b) permit the State Government to permit the sale of the excess vacant land to a third party. According to us, the answer has to be in the negative for reasons more than one. In the first instance, the central object of the Act, as is evident both from the preamble as well as the statement of objects and reasons, is to acquire vacant land in excess of the ceiling area and to prevent speculation and profiteering in the same and also to distribute the land equitable to subserve the common good. It is, therefore, per se against the said object to permit the sale of the excess vacant land for whatever reasons, including the undue hardship of the landholder. To construe the provision of Section 20(1)(b) so as to read in them the conferment of such power on the State Government for whatever reasons, is to distor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 20(1)(b) with such conditions as the State Government may choose to place and if either the State Government chooses not to place any conditions or to place such conditions as are inconsistent with the provisions of Sections 29 and 30 , it would create two sets of lands - one where no restrictions are applicable to the construction thereon or only such restrictions as the State Government may choose to impose, and the other where the restrictions on constructions as provided by Sections 29 and 30 would be applicable . It is, therefore, more than clear that the provisions of Section 20(1)(b) do not permit the State Government to exempt vacant land in excess of the ceiling limit for the purposes of transfer . (paras 64 and 65) In his concurring opinion, Singh, J, held as under :- I agree with brother Sawant, J. that it is not possible to hold that State Government can grant exemption under Section 20(1)(b) of the Act, to the holder of the excess vacant land, so that he may transfer the same in the winner be desires. The object of the Act being imposition of ceiling on vacant land in urban agglomerations and for acquisition of such land in excess of ceiling limit, with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appointed day, any person has made any transfer by way of sale, mortgage, gift, lease or otherwise (other than a bona fide sale under a registered deed for valuable consideration) of any vacant land held by him and situated in such State to any other person, whether or not for consideration, then, for the purposes of calculating the extent of vacant land held by such person the land so transferred shall be taken into account without prejudice to the rights or interests of the transferee in the land so transferred . Similarly in Section 5 it has been provided that where any person who had held vacant land in excess of the ceiling limit at any time during the period commencing on the appointed day and ending with the commencement of this Act, has transferred such land or part thereof by way of sale, mortgage, gift, lease or otherwise, the extent of the land so transferred shall also be taken into account in calculating the extent of vacant land held by such person . When different provisions take into consideration the lands already transferred by the holder, (i) between the period February 17, 1975 and the appointed day; (ii) as well as between the period commencing from the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion regarding the mala fides on the part of the authorities while granting permission to the firm to sell the land to the builders in question. It is the reconsideration of the decision in S. Vasudeva which is involved in this case. Every learned counsel appearing in the case including the learned Attorney General contended that the view taken in S. Vasudeva is incorrect and requires reconsideration. For this reason, we requested Shri A.N. Jayaram, learned Additional Solicitor General to appear as amicus curiae to support the decision so that every aspect involved would be raised for consideration by us. We are thankful to all the learned counsel including the amicus curiae for the invaluable assistance rendered by each of them. We would first construe Section 20 of the Act to ascertain its meaning. It is obvious that there being no question of the constitutional validity of the provision, an attempt has to be made to ascertain the true meaning of every part of Section 20. Section 20 contains the power to exempt. It has two sub-sections. Sub-section (1) begins with the non-obstante clause Notwithstanding anything contained in any of the foregoing provisions of this Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure full compliance of the conditions subject to which the exemption is granted. The restriction on transfer may be imposed by such a condition. In that even, the restriction is by virtue of the condition imposed and not because of any statutory prohibition in Chapter III of the Act. Section 3 contains the restriction against holding any and in excess of the ceiling limit prescribed in Section 4, except as otherwise provided in this Act . Section 20 is a provision in the Act which provides otherwise. It also begins with a non-obstante clause and, therefore, the restriction in Section 3 is subject to Section 20. Section 5 relates to transfer of vacant land in excess of the ceiling limit. Sub-section (3) of Section 5 contains the prohibition against transfer of the excess vacant land indicating that any such transfer make in contravention of the provision shall be deemed to he null and void. For the reason stated, because of the provision made in Section 20, an order of exemption make under Section 20 exempts the vacant land in excess of the ceiling limit from this restriction of transfer because the order of exemption exempts the excess vacant land from the provisions of Chapter II ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances and specifying the conditions attached to the exemption, ensures that the decision is reached for cogent reasons which are placed on record in writing culminating in the making of the written order. There is no scope for the view that exemption can be granted under clause (a) by an order specifying the conditions having regard to the specified relevant factors without recording the reasons for doing so in writing. Every State action must satisfy the rule of non-arbitrariness and, therefore, recording of reasons in writing for granting the exemption under clause (a) indicating that it is necessary or expedient in the public interest so to do, is an essential requirement of valid exercise of power under clause (a). This is how clause (a) must be construed and understood. We now come to clause (b) of sub-section (1) of Section 20 to which the decision in S. Vasudeva directly relates. The State Government s power to grant exemption under clause (b) depends on its satisfaction that the application of the provisions of this Chapter would cause undue hardship to such person . The manner of making the order specifying conditions to which it is subject, is the same as in clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Chapter III of the Act. The direct consequence of the application of the provisions of Chapter III is economic in nature because of the compulsory acquisition of the excess vacant land in lieu of the amount payable under Section 11, apart from deprivation of the benefit of the use of the acquired land. In such a situational, even though mere economic loss could not be intended to fall within the expression undue hardship , yet the expression cannot be construed to exclude every adverse economic impact even if it be so great on that person as to amount to undue hardship to him. This would, however, be a question of fact in each case and unless the impact of economic hardship caused to the owner is so great as to amount to undue hardship resulting from the application of the provisions of Chapter III of the Act, it would not fall within the ambit of clause (b). It appears that the enactment of the proviso in clause (b) is to emphasis the requirement that there must be strong reasons recorded in writing to justify the satisfaction of the State Government that the hardship caused by the application of the provisions of Chapter III to such person amounts to undu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er resulting from the application of the provisions of Chapter III can in no case fall under clause (b) to empower to State Government to grant exemption thereunder subject to appropriate conditions attached to the order of exemption. The facts of the present case have also some relevance. In the present case, the restriction against transfer would operate to the extent of restraining transfer to the individual flat owners of their corresponding share in the land where a multi-storeyed building for group housing has been constructed. One of the objects of the enactment is to promote group housing with a view to provide housing accommodation to more people by promoting group housing schemes instead of the same area of land being utilized to house lesser number of people. A restriction on transfer of the exempted land operating in this manner, depriving the benefit in a group housing scheme to flat owners, does not promote the object of the legislation. This too is a relevant factor. It follows from the above discussion that the conclusion reached in S. Vasudeva (supra), which directly relates to Section 20(1)(b) of the Act, is not based on a correct construction of Section 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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