JUDGMENT

Y.K. Sabharwal, J.-The respondent, now represented through his legal heirs, is the original plaintiff in a suit for declaration and possession filed against the appellant - State of Maharashtra and others. The suit was filed on 22nd August, 1976. seeking a declaration that the order dated 26th May, 1976 by which the right of pre-emption was exercised by defendants 1 and 2 (State of Maharashtra and Deputy Collector and Competent Authority Urban Land Ceiling, Nagpur respectively) to purchase the property in question and the sale deed dated 23rd August, 1976, obtained from the plaintiff in pursuance of the said order was null and void and do not confer any right title or interest in the property in favour of defendants. A decree for possession was also sought against refund of Rs. 2,60,000/- received by the plaintiff under the sale deed dated 23rd August, 1976. The facts in brief and in respect whereof, there is hardly any dispute are.

2. The Urban Land (Ceiling and Regulation) Act, 1976 (for short, the Act ) came into force for the State of Maharashtra w.e.f. 17th February, 1976. The plaintiff claims that he was not holding any land in excess of the ceiling limit prescribed under the Act and, therefore, was under no obligation to file a return under Section 6(1) of the Act before the competent authority. The plaintiff wanted to sell the suit property to his relations and business acquaintances with whom he entered into an agreement of sale dated 31st March, 1976 for sale of the suit property for consideration of Rs. 2,60,000/-. Section 27(1) of the Act required the plaintiff and the prospective purchaser to obtain permission from the competent authority under the Act to sell the suit property. According to the plaintiff, the application for grant of the said permission to sell the property to prospective purchaser was rejected by the competent authority by order dated 26th May, 1976 and further by the same order, the competent authority exercised option to buy the property on behalf of the State of Maharashtra. The plaintiff was offered the same consideration which was to be paid to the plaintiff by the prospective purchaser, i.e. Rs. 2,60,000/-. Thus, pursuant to the order dated 26th May, 1976, passed under Section 27 of the Act, a sale deed dated 23rd August, 1976 was executed between the plaintiff and the State of Maharashtra and possession was also taken over by defendant No. 3, namely, Deputy Commissioner of Sales Tax, Eastern Division, Nagpur. Since then, the suit property is in possession of defendant No. 3.

3. In Maharao Sahib Shri Bhim Singhji v. Union of India & Ors.1, this Court upheld the validity of the Act except Section 27(1) insofar as the said provision imposed a restriction on transfer of any urban or urbanisable land with a building or a part of on such building, which was within the ceiling limit. Section 27(1) to the extent it sought to affect the right of a person to dispose of his urban property within the ceiling limit was held invalid. In view of this decision, the plaintiff claimed in the suit that the order dated 26th May, 1976 and sale deed executed pursuant thereto on 23rd August, 1976 were null and void since what was sought to be sold to the prospective purchaser was the property within the ceiling limit and the plaintiff was entitled to a decree of declaration that the impugned order and the sale deed are illegal and invalid and do not confer right of ownership on defendants. The possession taken pursuant to above was claimed to be illegal and thus the plaintiff is entitled to recovery of possession besides damages for wrongful use and occupation at the average market rental value of the property. It has also been pleaded that the plaintiff was ready and willing to return the amount of Rs. 2,60,000/- paid to him under the sale deed dated 23rd August, 1976.

4. The suit was dismissed by the trial Court. In the appeal reversing the decision of the trial Court, the High Court has passed a decree