M SIVA RAMAKRISHNAIAH Vs. STATE

JUDGEMENT

(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 a 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 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, provision 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 State 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 including a housing co-operative society or any educational or cultural institution 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 Chap. III of the Act. Sections 25 to 30 appearing in Chap. IV of the Act provide for the regulation of transfer and use of urban property. Section 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 Government 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 Governments 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, divide 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 17th Feb., 1976. Therefore, a representation was made by the several registered house-building cooperative societies that had entered into agreements of sale long before the enactment of the Act for exempting such transactions. The State Government requested the Central Government to protect such transactions exempting them from Chap. III of the Act and allow the registered house-building cooperative societies to complete the sale transactions. The Government of India considered the proposal and directed the State Government by their letter D/- 6th Jan., 1977, to examine each such case of exemption under S.20(1)(a) of the Act and exempt the said land from the purview of the Act where considered necessary in public interest or in order to avoid undue hardship to the holders of such excess vacant land after satisfying themselves about the genuineness of the transfers and the purpose of the transfers. The State Government in pursuance of the said direction issued G. O. Ms. No. 186 Revenue (U.C.II) Department D/- 2nd Mar.1977. Under the said G.O., the Government observed that the matter of granting exemption for the lands proposed for the sale by the excess land holders to co-operative societies and individuals had been examined in consultation with the Government of India and the Government laid down certain guidelines for processing the application for exemption under S.20(1) of the Act. It will be relevant to extract the guidelines laid down by the Government in the said G.O.