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1975 Supreme(All) 36

HIGH COURT OF ALLAHABAD
Yashoda Nandan
GROUP INDUSTRIES PRIVATE LTD
Versus
STATE OF U P
Decided On : 28 January 1975
Civil Misc. Writ Petns. Nos. 1236, 2529, 1887, 2646, 2647, 2656, 2654, 3140, 2578, 2577 and 44 of 1974

Advocates Appeared:
R.Prasad, Sitla Prasad,

Headnote:

Uttar Pradesh Ceiling on Property (Temporary Restrictions on Transfer) Act, 1972 (Act 36 of 1972) - Constitutional validity - Challenge on the ground of violation of Article 14 of the Constitution - Exemptions provided under the Act - Classification of exempted categories - Rational nexus with the object of the Act - Guidelines for exercise of power under Section 4 of the Act - Validity upheld.

Fact of the Case:

The petitioners, who are colonisers, challenged the constitutional validity of the Uttar Pradesh Ceiling on Property (Temporary Restrictions on Transfer) Act, 1972 (Act 36 of 1972) on the ground that it violated Article 14 of the Constitution. They contended that the exemptions provided under the Act were arbitrary and discriminatory, and that the guidelines for exercise of power under Section 4 of the Act were inadequate.

Finding of the Court:

The Court held that the exemptions provided under the Act were not arbitrary or discriminatory, and that they had a rational nexus with the object of the Act. The Court also held that the guidelines for exercise of power under Section 4 of the Act were adequate.

Issues: 1. Whether the exemptions provided under the Act were arbitrary and discriminatory? 2. Whether the guidelines for exercise of power under Section 4 of the Act were adequate?

Ratio Decidendi: 1. The exemptions provided under the Act were not arbitrary or discriminatory because they were based on a rational classification of exempted categories. The exempted categories had a rational nexus with the object of the Act, which was to prevent concentration of wealth and to secure that the ownership and control of urban property were so distributed as best to subserve the common good. 2. The guidelines for exercise of power under Section 4 of the Act were adequate because they provided sufficient guidance to the State Government in exercising its discretion.

Final Decision: The Court dismissed the petitions and upheld the constitutional validity of the Act.

These are eleven connected writ petitions under Article 226 of the Constitution challenging primarily the constitutional validity of the Uttar Pradesh Ceiling on Property (Temporary Restrictions on Transfer) Act, 1972 (U. P. Act 36 of 1972)- hereinafter referred to as the Act.

2. The petitioners in Civil Misc. Writ No. 1236 of 1974 are M/s. Group Industries Private Ltd. which is a private limited company manufacturing cycle parts and its Managing Director. The petitioners allege that because of coercive tax recovery proceeding against the Company, they decided in February 1972 to dispose of their surplus land not in immediate use of the industry. The Company had certain other liabilities and it therefore sold its surplus land and paid up most of its income-tax and sales tax dues. In order to meet its other liabilities, it was negotiating with parties for sale of remaining surplus land not immediately needed by the company. While the negotiations were going on, the Act came into force. The petitioners applied under Section 3 (4) of the Act for exemption of their surplus land from the provisions of the Act and for permission to sell the same. By a letter dated 23rd February, 1973, a Deputy Secretary of the State Government communicated to the Managing Director of the Company that its application for exemption had been rejected by the State Government by an order dated 28th August, 1972. The order of the State Government rejecting the petitioners application for exemption has not been filed. Faced with the problem of meeting its tax liabilities, the petitioners filed Civil Misc. Writ No. 1482 of 1973 in this Court against the State of Uttar Pradesh, the Additional Revising Authority, Sales Tax, Varanasi the Assistant Commissioner (Judicial) IV, Sales Tax, Varanasi, and the Sales Tax Officer, II Varanasi. The petitioners prayed for a writ of certiorari quashing the orders of the Sales Tax Authorities dated 30th September, 1970, 2nd March, 1972 and 7th October, 1972 and further proceedings before Additional Revising Authority, Sales Tax, Varanasi. There was a further prayer for a mandamus directing the State of U. P. to grant necessary permission to the petitioners to sell their land situated within the "urban" areas. By a judgment and order dated 8th November, 1973 a Bench of this Court allowed the writ petition and quashed the ex parte assessment orders passed against the Company dated 30th September, 1970 in respect of the assessment year 1966 along with subsequent orders passed in that connection on the 2nd March 1972 and 7th October, 1972. The Assessing Authority was directed to proceed afresh to assess the petitioners for the assessment years 1966-67 also in accordance with law. No relief was granted against the State Government. Subsequently the present petition has been filed mainly for a direction to the State Government to grant necessary permission to the petitioners for transfer of their land situated within "urban" areas.

3. Civil Misc. Writ No. 2529 of 1974 has been filed by a registered partnership firm carrying on business as "colonisers" as defined in the U. P. Regulation of Building Operations Act. 1958. The petitioner is a member of the U. P. Colonisers Association. The Association presented an application to the State Government for exempting the "colonisers" from the operation of the Act. According to the petitioner of this writ petition, keeping in view the acute housing problem in Varanasi, it purchased large tracts of land in pieces from individuals and developed the same by levelling, laying out roads, sewer line and electric poles. These developments, according to the petitioner firm, are done free of charge. The petitioner then divided the land into plots for sale and provided free of charge sites for a park, school, roads, lanes, community centre and market etc. Thereafter it sold the various plots in the colonies to private individuals on a small margin of profit for residential or business purposes. The




















































































































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