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1984 Supreme(AP) 348
Andhra Pradesh High Court
Judges : P.CHENNAKESAVA REDDY, P.KODANDA RAMAYYA
Katya Co-operative Building Society Limited - Appellant
Versus
Government Of A.P. and Ors. - Respondent
Decided On : 09-18-84
The power conferred on the State Government under Section 20 of the Urban Land (Ceiling and Regulation) Act, 1976 to grant exemption from the ceiling limit is not absolute and must be exercised in accordance with the provisions of the Act and the directions issued by the Central Government.
Headnote:
URBAN LAND (CEILING AND REGULATION) ACT, 1976 - SECTION 20 - EXEMPTION FROM CEILING LIMIT - POWER OF STATE GOVERNMENT - EXTENT AND SCOPE - DIRECTIONS BY CENTRAL GOVERNMENT UNDER ARTICLES 256 AND 257 OF THE CONSTITUTION - BINDING NATURE - INTERPRETATION OF STATUTORY PROVISIONS - HARMONIOUS CONSTRUCTION - DISCRETIONARY POWERS - PRINCIPLES GOVERNING EXERCISE - PROMISSORY ESTOPPEL - APPLICABILITY AGAINST GOVERNMENT - CO-OPERATIVE SOCIETIES - ENCOURAGEMENT AND PROTECTION - SHAM SOCIETIES - IDENTIFICATION AND DISCOURAGEMENT - PUBLIC INTEREST AND COMMON GOOD - PROMOTION - BLANK REFUSAL TO GRANT EXEMPTION - INVALIDITY - INDIVIDUAL CONSIDERATION OF APPLICATIONS - MANDATORY - UNREASONABLE DELAY IN FILING APPLICATIONS - REJECTION - JUSTIFICATION.
Fact of the Case:
The Urban Land (Ceiling and Regulation) Act, 1976 (the Act) was enacted to prevent concentration of urban land in the hands of a few persons and speculation and profiteering therein, and to ensure equitable distribution of land in urban agglomerations. Section 20 of the Act empowers the State Government to exempt vacant land from the provisions of the Act, including the prohibition on transfer of vacant land and the vesting of excess vacant land in the State Government. The Central Government issued directions to the State Government under Articles 256 and 257 of the Constitution to grant exemption under Section 20(1) of the Act in certain cases, including cases where the land is proposed to be transferred to registered housing cooperative societies for the purpose of constructing dwelling units.
Finding of the Court:
1. The power conferred on the State Government under Section 20 of the Act to grant exemption from the ceiling limit is not absolute and must be exercised in accordance with the provisions of the Act and the directions issued by the Central Government. 2. The State Government cannot pass a blanket order refusing to grant exemption in all cases under Section 20(1) of the Act, as this would be contrary to the provisions of the Act and the directions of the Central Government. 3. The State Government is bound to consider each application for exemption on its own merits, taking into account the purpose for which the land is proposed to be used and other relevant factors. 4. The State Government cannot refuse to grant exemption solely on the ground that the applicant is a cooperative housing society, as cooperative societies are entitled to encouragement and protection. 5. The State Government can, however, refuse to grant exemption to sham cooperative societies that are formed for the purpose of evading the provisions of the Act. 6. The State Government should consider applications for exemption even after a declaration under Section 10(3) of the Act has been issued, as Section 20(1) of the Act overrides the provisions of Section 10(3).
Issues: 1. What is the extent and scope of the power of the State Government to exempt vacant land from the ceiling limit under Section 20 of the Urban Land (Ceiling and Regulation) Act, 1976? 2. Are the directions issued by the Central Government under Articles 256 and 257 of the Constitution binding on the State Government? 3. How should statutory provisions be interpreted in order to give effect to the legislative intent and achieve the objects of the Act? 4. What are the principles governing the exercise of discretionary powers by public authorities? 5. Can the doctrine of promissory estoppel be invoked against the Government? 6. Are cooperative societies entitled to encouragement and protection under the Act? 7. How can sham cooperative societies be identified and discouraged? 8. What is the role of public interest and common good in the interpretation and application of the Act? 9. Can the State Government pass a blanket order refusing to grant exemption in all cases under Section 20(1) of the Act? 10. Is the State Government required to consider each application for exemption on its own merits? 11. Can the State Government refuse to grant exemption solely on the ground that the applicant is a cooperative housing society? 12. Can the State Government consider applications for exemption even after a declaration under Section 10(3) of the Act has been issued?
Ratio Decidendi: 1. The power conferred on the State Government under Section 20 of the Act to grant exemption from the ceiling limit is not absolute and must be exercised in accordance with the provisions of the Act and the directions issued by the Central Government. 2. The State Government cannot pass a blanket order refusing to grant exemption in all cases under Section 20(1) of the Act, as this would be contrary to the provisions of the Act and the directions of the Central Government. 3. The State Government is bound to consider each application for exemption on its own merits, taking into account the purpose for which the land is proposed to be used and other relevant factors. 4. The State Government cannot refuse to grant exemption solely on the ground that the applicant is a cooperative housing society, as cooperative societies are entitled to encouragement and protection. 5. The State Government can, however, refuse to grant exemption to sham cooperative societies that are formed for the purpose of evading the provisions of the Act. 6. The State Government should consider applications for exemption even after a declaration under Section 10(3) of the Act has been issued, as Section 20(1) of the Act overrides the provisions of Section 10(3).
Final Decision: The impugned order of the State Government refusing to grant exemption in all cases under Section 20(1) of the Act was quashed and the State Government was directed to consider each application for exemption on its own merits in accordance with the provisions of the Act and the directions issued by the Central Government.
( 1 ) THE true limit of the power of the State Government to exempt from the ceiling limit any vacant land under S. 20 of the Urban Land (Ceiling and Regulation) Act 1976 (hereinafter referred to as "the Act") as could be gathered from the objects of the Act and the extent of the authority of the Central Government to issue directions to the State Government for the implementation of the Act under Arts. 256 and 257 of the Constitution read with S. 36 of the Act, are the questions of general interest and considerable importance that are evoked in this batch of writ petitions.
( 2 ) THE Act is a Central enactment and provides for the imposition of ceiling on vacant land in urban agglomerations. The reason for the enactment is the necessity to exercise social control over the scarce resource of urban land due to the growth of population and increasing urbanisation. The dominant object sought to be achieved by the Act is to prevent concentration of urban land in the hands of a few persons so as to checkmate speculation and profiteering therein and ensure equitable distribution of land in urban agglomerations to subserve common good. In order to achieve the said object, provisions for the imposition of a ceiling to hold vacant land is made in S. 4 appearing in Chap. III of the Act. S. 5 deals with the transfer of vacant land held in excess of the ceiling limit. "vacant land" is defined under S. 2 (q) of the Act. S. 10 provides for the acquisition of vacant land in excess of the ceiling limit. Sub-sec. (3) of S. 10 lays down that vacant land declared to be in excess under sub-sec. (1) shall vest absolutely in the Sate Government with effect from the date of the notification under sub-sec. (3 ). S. 19 of the Act exempts the provisions of the Act to any vacant land held by the Central or State Government, or any local authority or any corporation established by or under a Central or a State Act or any company as defined in S. 617 of the Companies Act, any military, naval or air force institution, any bank or any public or religious trust or any co-operative society or any educational or cultural institut9ion or club etc. The most relevant section in the context is S. 20 of the Act which gives power to the State Government to exempt vacant land in excess of the ceiling limit from the provisions of Chapter III of the Act. Ss. 25 to 30 appearing in Chapter IV of the Act provide for the regulation of transfer and use of urban property. S. 36 is the next relevant section which confers power on the Central Government to give such directions to the State Government as may appear to the Central Govt. to be necessary for implementation of the provisions of the Act.
( 3 ) THE Act came into force on 17th Feb. 1976. With the growth of population and increasing urbanisation housing problem had become acute in urban areas. It is a matter of common knowledge that in the past two decades the State Government encouraged orderly development of urban areas and construction of houses through co-operative housing societies. Therefore, a number of house building co-operative societies had been registered in the State. The main object of these societies was to acquire land, develop it, devide it into plots and allot the same to their members for the construction of houses. The societies had purchased large extents of land from various vendors and entered into agreements of sale by paying huge amounts as advances. Pursuant to the agreements of sale, the house building co-operative societies had been put in possession of the land. After taking over possession, the societies invested huge amounts in developing these lands, preparing lay-outs, getting the lay-outs approved by the local authorities, dividing the land into plots, laying of roads and providing other public amenities for the benefit of the members to whom the plots were allotted. The sale transactions, however, could not be completed after the Act came into force on
