1993 (3) TMI 350 - SC - Indian Laws

Whether the two permissions given by the State Government to the firm on 6.3.1987 and 18.4.1987 to sell land admeasuring 16194 sq.mtrs. and 3444 Sq. mtrs. respectively under Section 20 (1) of Urban Land (Ceiling and Regulation) Act, 1976 are legal? Held that - If the vacant lands which have vested in the State are also to be disposed of strictly keeping in view the spirit and object of the Act, how under section 20(1)(b) exemption can be granted to holders of such lands to dispose of such lands in the manner they like, the persons they prefer, the price they dictate, for clearing their debts? If it is conceded that indebtedness amounts to an undue hardship, then it may cover the debts incurred even after the commencement of the Act. Thus provisions of Section 20 1 (b) of the Act do not permit the State Government to give exemption to the vacant in excess of the ceiling limit for the purposes of transferring the same. As concluded that the State Government has no power to grant permission to sell the land under Section 20 1 (b), the orders dated 6.3.87 and 18.4.87 granting exemption and permission to the firm for sale of the land are void ab initio having been passed without jurisdiction. Accordingly, the sale-deed dated 30.9.1987 executed by the 2nd respondent firm in favour of the 3rd respondent-builders is held invalid and inoperative, as the respondent-firm had no legal right to transfer the land in favour of the builders. We accordiigly allow the appeals and set aside the impugned order of the High Court. The respondents State of Karnataka, M/s. Narayanaswamy & Sons and M/s. Reevajethu, Builders & Developers will pay the costs to the appellants in one set.

Summary

Issues Involved:

1. Validity of permissions granted by the State Government to sell land under the Urban Land (Ceiling and Regulation) Act, 1976.
2. Allegations of mala fides in granting the said permissions.
3. Validity of the sale deed executed by the firm in favor of the builders.

Issue-wise Detailed Analysis:

1. Validity of Permissions Granted by the State Government to Sell Land:

The primary issue was whether the permissions granted by the State Government on 6.3.1987 and 18.4.1987 to sell land admeasuring 16194 sq. mtrs. and 3444 sq. mtrs., respectively, were valid under the Urban Land (Ceiling and Regulation) Act, 1976. The Court examined the scheme of the Act, which aims to prevent the concentration of urban land in the hands of a few persons, to ensure equitable distribution, and to regulate the construction of buildings. The Court concluded that Section 20(1)(b) of the Act does not permit the State Government to grant permission for the sale of excess vacant land. The Act's objective is to acquire such land and prevent speculation and profiteering. The exemption under Section 20(1)(b) is meant to relieve undue hardship related to the use of the land, not to facilitate its sale. The Court found that the permissions granted by the State Government were void ab initio as they were beyond the jurisdiction granted by the Act.

2. Allegations of Mala Fides:

The Court did not delve into the allegations of mala fides in detail because it had already concluded that the State Government lacked the power to grant the permissions for the sale of land under Section 20(1)(b). The permissions were void ab initio, rendering the issue of mala fides moot.

3. Validity of the Sale Deed Executed by the Firm in Favor of the Builders:

Given the conclusion that the State Government had no power to grant the permissions for the sale of the land, the sale deed dated 30.9.1987 executed by the firm in favor of the builders was declared invalid and inoperative. The firm had no legal right to transfer the land to the builders, making the sale deed void.

Conclusion:

The Supreme Court allowed the appeals, set aside the impugned order of the High Court, and declared the permissions granted by the State Government and the subsequent sale deed as void. The respondents were ordered to pay the costs to the appellants. The judgment emphasized the importance of adhering to the legislative intent of the Urban Land (Ceiling and Regulation) Act, 1976, which aims to prevent the concentration of urban land and ensure its equitable distribution.