Competent Authority cannot force any act which falls outside the purview of the Act:SC

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Shridhar C. Shetty (deceased) v.  The Additional Collector & Competent Authority& Ors.

 

CIVIL APPEAL NO(s). 2019 of 2010 decided on September 2, 2020.

 

https://main.sci.gov.in/supremecourt/2007/22893/22893_2007_33_1502_23716_Judgement_02-Sep-2020.pdf

 

BENCHRohinton Fali Nariman, Navin Sinha, JJ.

 

FACTS

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.

 

 

ISSUE

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?

 

HELD

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circumscribed by the provisions of the Act.Furthermore, theCompetent Authority under the Act could have certainly withdrawn the exemption in the event of breach along with all its attended consequences as power prescribed under section 20 and 21 of the Act.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.”]

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