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Issues Involved:
1. Whether the provision of Section 20(1)(b) of the Urban Land (Ceiling & Regulation) Act, 1976 permits the State Government to give exemption to the vacant land in excess of the ceiling limit for the purpose of transferring the same. 2. Interpretation of the expression "undue hardship" in clause (b) of sub-section (1) of Section 20. 3. The effect of an exemption granted under Section 20 of the Act, including the incidence of transfer. Summary: Issue 1: Exemption for Transfer of Excess Vacant Land The petitioner booked a flat on excess vacant land exempted u/s 20(1)(b) of the Urban Land (Ceiling & Regulation) Act, 1976. The Karnataka High Court restrained the State Government from permitting the transfer of such land based on the Supreme Court's decision in S. Vasudeva, which held that "the provisions of Section 20(1)(b) of the Act do not permit the State Government to give exemption to the vacant land in excess of the ceiling limit for the purpose of transferring the same." The Supreme Court reconsidered this interpretation and concluded that the exemption under Section 20(1)(b) could include the transfer of land if the exemption order specifies conditions to control such transfers. Issue 2: Interpretation of "Undue Hardship" The term "undue hardship" in clause (b) of sub-section (1) of Section 20 was examined. The Court noted that "undue hardship" must be a direct consequence of the application of the provisions in Chapter III, primarily economic in nature. The hardship must be significant enough to warrant exemption. The Court illustrated that if an owner needs to repay bona fide outstanding dues under court decrees and has no other means, this could constitute "undue hardship" justifying exemption. Issue 3: Effect of Exemption Under Section 20 The Court clarified that an exemption granted u/s 20(1)(a) or (b) exempts the land from the provisions of Chapter III, which includes restrictions on transfer. The imposition of conditions and the power to withdraw the exemption ensures control over such transfers. The Court emphasized that the restriction on transfer should not negate the purpose of promoting group housing schemes, which aim to provide housing to more people. The decision in S. Vasudeva was found incorrect, and the impugned order restricting transfer contrary to this view was not upheld. Conclusion The writ petition was decided in favor of the petitioner, clarifying that exemptions under Section 20(1)(b) could include conditions permitting transfer if justified by "undue hardship," and such exemptions must be recorded in writing. The decision in S. Vasudeva was overruled to the extent it prohibited such transfers.
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