Shridhar C. Shetty (deceased) v. The Additional Collector & Competent Authority& Ors.
CIVIL APPEAL NO(s). 2019 of 2010 decided on September 2, 2020.
BENCH– Rohinton Fali Nariman, Navin Sinha, JJ.
A and Bwere the original owners of the lands, whose land were declared surplus under the Urban Land (Ceiling and Regulation) Act (hereinafter referred as ‘Act’). The agreement for sale was executed by the owners in favour of the appellant who himself agreed to pursue matters before the competent authority under the Act and to obtain all necessary permissions, exemptions etc. for development on the land. The appellant then applied for exemption which was subsequently granted on by the State Government under the guidelines issued under Section 20 of the Act. The exemption mandated 20% (14 tenements) to be handed over for allotment to government nominees. Subsequently, appellant failed to handover seven tenements are per condition prescribed for exemption. The demand for Rs. 51,97,196/plus interest, penalty and recovery expenses as arrears of land revenue was raised by competent authority consequent to the default by appellant under Sections 20 and 21 of the Act.
Whether the competent authority under the Act possesses the power to recover the market value of seven tenements for failure to hand over possession in terms of the order of exemption?
The Supreme Court in its judgement declared that the impugned demand of government for market value of seven tenements is unsustainable and arbitrary. The Hon’ble Court held that ‘competent authority’ being a creature of the statute under Section 2(d) of the Act, cannot act beyond its statutory jurisdiction and the exercise of its powers shall remain circumscribed by the provisions of the Act.Furthermore, theCompetent Authority under the Act could have certainly withdrawn the exemption in the event of breach along with all its attended consequences as power prescribed under section 20 and 21 of the Act. Both the sections contain provisions that if the government or competent authority is satisfied that any of the conditions subject to which exemption was granted is not complied with, it shall be competent to withdraw the order of exemption or to declare such land to be excess. Hence, the demand for the market value of the remaining seven tenements falls outside the purview of the Act and it cannot be construed as money due to the government.
[See Following Sections
“2(d) “competent authority” means any person or authority authorised by the State Government, by notification in the Official Gazette, to perform the functions of the competent authority under this Act for such area as may be specified in the notification
and different persons or authorities may be authorised to perform different functions.
20. Power to exempt. —(1) Notwithstanding anything contained in any of the foregoing provisions of this Chapter—
(a) where any person holds vacant land in excess of the ceiling limit and the State Government is satisfied, either on its own motion or otherwise, that, having regard to the location of such land, the purpose for which such land is being or is proposed to be used and such other relevant factors as the circumstances of the case may require, it is necessary or expedient in the public interest so to do, that Government may, by order, exempt, subject to such conditions, if any, as may be specified in the order, such vacant land from the provisions of this Chapter;
(b) where any person holds vacant land in excess of the ceiling limit and the State Government, either on its own motion or otherwise, is satisfied that the application of the provisions of this Chapter would cause undue hardship to such person, that Government may by order, exempt, subject to such conditions, if any, as may be specified in the order, such vacant land from the provisions of this Chapter:
Provided that no order under this clause shall be made unless the reasons for doing so are recorded in writing. Provided that no order under this clause shall be made unless the reasons for doing so are recorded in writing.
(2) If at any time the State Government is satisfied that any of the conditions subject to which any exemption under clause (a) or clause (b) of subsection (1) is granted is not complied with by any person, it shall be competent for the State Government to withdraw, by order, such exemption after giving a reasonable opportunity to such person for making a representation against the proposed withdrawal and thereupon the provisions of this Chapter shall apply accordingly.
21. Excess vacant land not to be treated as excess in certain cases.— (1) Notwithstanding anything contained in any of the foregoing provisions of this Chapter, where a person holds any vacant land in excess of the ceiling limit and such person declares within such time, in such form and in such manner as may be prescribed before the competent authority that such land is to be utilised for the construction of dwelling units (each such dwelling unit having a plinth area not exceeding eighty square metres) for the accommodation of the weaker sections of the society, in accordance with any scheme approved by such authority as the State Government may, by notification in the Official Gazette, specify in this behalf, then, the competent authority may, after making such inquiry as it deems fit, declare such land not to be excess land for the purposes of this Chapter and permit such person to continue to hold such land for the aforesaid purpose, subject to such terms and conditions as may be prescribed, including a condition as to the time limit within which such building are to be constructed.
(2) Where any person contravenes any of the conditions subject to which the permission has been granted under subsection (1), the competent authority shall, by order, and after giving such person an opportunity of being heard, declare such land to be excess land and thereupon all the provisions of this Chapter shall apply accordingly.”]