The Urban Land (Ceiling and Regulation) Act, 1976 cannot be enforced against innocent third parties who have purchased land from the original owner who had excess vacant land, where the Government failed to take action against the original owner under Section 26 of the Act.

JUDGMENT :

1. One B. Rajaiah and others were the original owners of vacant land bearing Survey Nos. 3, 4, 5 and 14 of Yousufguda village, admeasuring 21,847.08 Sq. mtrs. and situated in Urban Agglomeration of Hyderabad. No such vacant land falling under the Urban Land (Ceiling and Regulation) Act, 1976, could be sold without giving a first option to the Government to buy under Section 26 of that Act. Of course, Section 26 will apply only to these vacant lands within the ceiling limits fixed for permissible holdings. The said Rajaiah on the basis that his holding was within those limits gave notice under Section 26 to the Competent Authority in the year 1978 proposing to sell that land. Under Section 26 of the Act, where a notice is given for the transfer of the land by way of sale etc., and the competent authority does not exercise within a period 60 days from the date of that notice its option to purchase that land, it is presumed that the Competent Authority has no intention to purchase the land. Then the Section makes it lawful for the owner of the land to transfer to whomsoever he may like. In this case, the Competent Authority did not give any reply to the notice given by Sri Raja-iah and others in the year 1978. Rajaiah and others had exercised their rights under Section 26 and sold 12,140 Sq. mtrs. of vacant land to Satya Sai Baba Co-operative Society under a registered sale deed dt. 11-1-1979. That society in its turn sold five years thereafter on 24th January, 1984, 167.20 Sq. meters to one Narasimha. The very next year on 21st June, 1985, that Narasimha sold the said land to the present petitioner under another regis-tered deed. The sales by the society and Narasimha are not shown to be inconsistent with the provisions of Section 26 of the Urban Land (Ceiling and Regulation) Act, 1976, Now the petitioner proposes to sell that land to one Nirmala. The petitioner has given a notice to the competent authority under Section 26(1) on 3-7-1986. Within sixty days' period the competent authority did not respond to that notice. In terms of Section 26 and according to the prevailing rule of law the petitioner should be free to sell that land to Nirmala or any one else of his choice. But on 15-10-1986 the Competent Authority refused permission to the petitioner to sell this 167.20 sq. meters to Nirmala. That order of the Competent Authority is not an act at law. Vinograd off would not call it so. It is merely a physical act. Yet the petitioner feels helpless to disregard it. He has, therefore, been forced to question the legality of that illegal order in the present writ petition.

2. The justification of the authorities for refusal of its permission for sale of the petitioner's property is that Rajaiah and others who are the original owners of the land, of which the present land was a part & which was sold to the Satya Sai Baba Co-operative Society in the year 1979, were discovered to have been in possession and ownership of excess vacant land. Rajaiah's sale should therefore, be held contrary to Section 5 sub-section 3, and should be ignored as void. The consequence of such a finding would be to enable to acquire the land of Rajaiah in the hands of the petitioner. Section 5 sub-Sec. (3) reads thus:—

“In any State to which this Act applies in the first instance and in any State which adopts this Act under clause (1) of Art. 252 of the Constitution, no person holding vacant land in excess of the ceiling limit immediately before the commencement of this Act, shall transfer any such laid or part thereof by way of sale, mortgage, gift, lease or otherwise until he has furnished a statement under Section 6 and a notification regarding excess vacant land held by him has been publis-hed under sub-section (1) of Section 10; and any such transfer made in contravention of this provision shall be deemed to be null and void.

3. The two questions that arise are: (a) What is the meaning of Section 5(3) and (b). Is such a pattern of enforcement