Gujarat High Court
Indequip Engineering Ltd. And Anr. vs Urban Land Tribunal And Ex-Officio ... on 18 August, 2005
Author: Akil Kureshi
Bench: Akil Kureshi
JUDGMENT Akil Kureshi, J.
1. The petitioner No. 1 the Indequip Engineering Ltd. was initially the sole petitioner which had filed the present petition challenging the order passed by the Competent Authority and Deputy Collector, Urban Land Ceiling, Ahmedabad on 1-4-1991 as confirmed by an order dated 27-4-1992 passed by the Urban Land Tribunal, Ahmedabad in Appeal No. 113 of 1991. It appears that during the pendency of the petition in certain civil suits filed by the respondent No. 3-Bank of India, order came to be passed by the Civil Court appointing the Receiver to dispose of the properties of the petitioner No. 1-Company at the instance of the respondent No. 3-Bank. The application being Civil Application No. 8691 of 2004 came to be filed by the Receiver seeking to be joined as petitioner No. 2 in the present petition. In the Civil Application, it was stated that ends of justice would be served if he is joined as co-petitioner as it is his duty to ensure that the properties are disposed of as expeditiously as possible. On 17th February, 2005 while disposing of this application being Civil Application No. 8691 of 2004, learned single Judge of this Court allowed the applicant therein to be joined as petitioner No. 2 in the main petition. While allowing the application, the Court however, observed that the application is allowed without considering the rights of the parties and without considering the fact as to who is in possession of the land in question. The petitioner No. 2 as a Receiver appointed by the Court to dispose of the properties of the petitioner No. 1-Company, is thus joined in the present petition in the above-mentioned circumstances.
2. On 17-8-2005, when this petition was taken up for final hearing, the learned Advocate Ms. K. J. Brahmbhatt appearing for petitioner No. 1 stated before the Court that she has no instructions on the basis of which she could make her submissions in the present matter on behalf of the petitioner No. 1. I had therefore, heard other learned Advocates appearing for the respective parties.
2.1 At this stage, it may be noted that the respondent No. 3-Bank of India claims to have loaned substantial amount of money to the petitioner No. 1-Company and as security for such loans, the respondent No. 3-Bank has taken in mortgage the immovable properties belonging to the petitioner No. 1-Company which includes certain urban lands which are subject-matter of the present litigation. It may also be noted at this stage that respondent No. 3-Bank had challenged an order dated 12-4-1991 passed by the Competent Authority and Deputy Collector, Ahmedabad with respect to the very same lands for which order under Section 8(1) of the Urban Land (Ceiling and Regulation) Act, 1976 (hereinafter referred to as "the said Act") was passed by the Competent Authority. Appeal No. 98 of 1991 filed by the respondent No. 3-Bank before the Urban Land Tribunal came to be rejected by an order dated 28th February, 1992. A copy of this order dated 28th February, 1992 not being on record has been tendered by learned A.G.P. Shri P. R. Abichandani and the same being undisputed has been taken on record. From perusal of this order dated 28th February, 1992 passed by Urban Land Tribunal, it can be seen that the Appeal of the respondent No. 3-Bank against the order dated 12-4-1991 passed by the Competent Authority (under Section 8(1) of the said Act) came to be rejected on the ground that the Bank claimed interest in the disputed land by virtue of the mortgage-deed executed on 5-7-1976 and 26-7-1985, and therefore, on the date of the commencement of the said Act, i.e. on 17-2-1976, the Bank had no interest in the land in question. It was observed that the Bank acquired interest in the land only pursuant to mortgage-deed. The Tribunal relying on certain decisions of the Court observed that a person who had no interest whatsoever in the land on 17-2-1976 i.e. the date of commencement of the said Act, cannot participate in the proceedings under the Act nor does it have a right to be heard. It was, therefore, held that the Bank having no title in the land on 17-2-1976, it cannot participate in the proceedings. So observing, the Tribunal was pleased to reject the Appeal filed by the respondent No. 3-Bank. It is not in dispute that against the said order dated 28-2-1992 passed by the Urban Land Tribunal, respondent No. 3-Bank has not filed any further proceedings. It is also not in dispute that respondent No. 3-Bank has not challenged in any other manner the orders passed by the Competent Authority and the Urban Land Tribunal which are impugned in the present petition.
2.2 In this complex nature of factual background and conflicting rival interests, it was necessary at the outset to define with clarity the locus of each party and the stand that either of the petitioners or the supporting respondents could adopt before this Court. As noted earlier, the petitioner No. 1 has virtually abandoned the litigation. The respondent No. 3-Bank which claims vital interest in the property in question is not before this Court as a petitioner. The petitioner No. 2 who is appointed as Receiver is joined as party at his request by an order dated 17th February, 2005 where this Court has guardedly stated that the application is allowed without considering the rights of the parties and without considering the fact as to who is in possession of the land in question. The petitioner No. 2 cannot take place of respondent No. 3-Bank. The Receiver appointed by the Court cannot be confused as representing the interest of the Bank in the same manner as the Bank itself could. The petitioner No. 2 at best can derive interest and upto the extent that petitioner No. 1 can do so before this Court. Ordinarily, when the petitioner No. 1 has abandoned the litigation and has shown no active interest, it would have been open for this Court to drop the entire proceedings without any further discussion. Substantial amount of money loaned by respondent No. 3-Bank which was sought to be secured through the mortgage of the property in question is at stake. The respondent No. 6-Union espouses the cause of the workmen earlier employed by the petitioner No. 1-Company who have been left without salaries and without payment of other dues and are banking on this litigation to salvage at-least a portion of their claim against the petitioner No. 1-Company. In that view of the matter, I do not find it appropriate to close the proceedings without adjudication of the issues arising therein simply because petitioner No. 1-Company on account of subsequent development has lost interest in the litigation.
2.3 The conclusion of the above discussion is that having heard the learned Advocate appearing for different parties, it is necessary for this Court to focus on only those contentions which the petitioner No. 1-Company could have raised in the present petition ignoring and indicating those which only respondent No. 3-Bank had it been a challenger, could have but cannot, under the present circumstances, be permitted to raise.
3. With this clarity and background in mind, I would like to proceed further with recording of the rival contentions and dealing with the same as found appropriate. Before that however, it would be necessary to record few facts which would permit me to have a better view of the contentions raised. Dated 22-8-2005 :
(This judgment was dictated in part on 18-8-2005. Thereafter, for want of time, the matter was posted 24-8-2005 for dictating judgment further. Today having found some time on hand, after indicating to all the learned Advocates appearing for the parties and with their consent, I have taken up the petition for further dictation of the judgment. It may be noted that though Mrs. Sangeeta M. Pahwa has filed sick note today, Ms. Vinita Vinayak is present for her while this order is being dictated.)
4. The petitioner No. 1 herein-Indequip Engineering Ltd. is a company registered under the Companies Act. By an order dated 18-5-1961, the State Government was pleased to grant the land admeasuring 52,635 sq. yards bearing original Survey Nos. 217, 219 and 220 of village Naroda, City Taluka Ahmedabad District to the petitioner No. 1 for its use and occupation for setting up an Engineering workshop on the said land. According to the petitioner No. 1, the total area of the land comes to approximately 44010 sq. mtrs. The petitioner No. 1 thereafter, purchased certain portions of Survey No. 256 of Naroda on 1-5-1964. The State Government acquired some more lands for the petitioner No. 1, out of Survey Nos. 213 and 218 of Naroda on 11-12-1973. Some of these Survey Numbers were given new numbers and Survey No. 213 and 256 together formed a new Survey No. 1956. Survey No. 218 on the other hand remained unchanged. These were the lands owned and possessed by the petitioner No. 1 when the said Act was introduced on 17-2-1976. The petitioner No. 1 was required to and had filed necessary declaration before the Authorities regarding its holding of urban lands. It is the case of the petitioner No. 1 that the petitioner No. 1 had constructed factory in a total area of 17604 sq. mtrs. out of the above-mentioned parcel of the land. On 4-6-1976, the petitioner No. 1 applied for the permission to mortgage a building situated in the above-mentioned land in favour of respondent No. 3-Bank of India under the provisions of the Section 27 of the said Act. Such permission was granted on 16-6-1976 by the Competent Authority. It appears, that thereafter, for the area not covered by the factory construction, such permission to mortgage the open land, in favour of the respondent No. 3-Bank, was also granted to the petitioner by the Competent Authority on 22-1-1979.
4.1 The Competent Authority under the provisions of the said Act by order dated 12-4-1991 was pleased to declare that the petitioner No. 1 holds a total of 48,374 sq. mtrs. of land which is vacant land. After deducting 1000 sq. mtrs. of land which the petitioner No. 1 can retain for itself, the Competent Authority held that a total area of 47,374 sq. mtrs. of the land held by the petitioner No. 1 is excess vacant land. He, therefore, ordered taking further steps in pursuance of this declaration. In the order dated 12-4-1991 passed by the Competent Authority, it was recorded that though the petitioner No. 1 was given sufficient opportunity to produce evidence, the said petitioner has not produced any evidence regarding the construction on the land in question. It was recorded that from the evidence produced, it is not possible to establish since when the construction is in existence. The bills produced are for the period 1979-1980 and 1983. With respect to the objection regarding the land being mortgaged with the Bank of India, it was recorded that the provisions of the said Act would override all other provisions.
4.2 The petitioner No. 1, aggrieved by the order passed by the Competent Authority, preferred an Appeal before the Urban Land Tribunal, Ahmedabad by filing Appeal No. 113 of 1991. The Appeal filed by the petitioner No. 1 came to be rejected by the order dated 27-4-1992. The Tribunal was pleased to hold that petitioner No. 1 has failed to establish that there was any construction on the land in question on the appointed day which was authorised construction. Referring to the provisions of Section 93 of the Gujarat Panchayats Act which requires that no person shall erect or re-erect or commence to erect or re-erect within the limits of the Gram or Nagar, as the case may be, any building without the previous permission of the Panchayat, it was held that no such permission has been produced. It was observed that the petitioner No. 1 has not produced any concrete evidence such as sanctioned building plan, permission from the concerned Gram Panchayat, Progress Report and the tax-bill to prove that construction, if any, on the land in question was carried out before the appointed day. The Tribunal held that in absence of sanctioned building plan, permission from the Gram Panchayat concerned, tax-bills, it is difficult to hold that construction on the land is of authorised character. Relying on the provisions, of the said Act and in particular definition of vacant land under Section 2(q) of the said Act, it was observed that only the authorised construction which has been carried out with prior permission of the appropriate authority is excluded from the computation of excess vacant land held by a person. Regarding the contention raised on behalf of the petitioner No. 1, that in view of the pendency of its application under Section 20 of the said Act, that no proceedings further than the stage of passing of an order by the Competent Authority under Sub-section (4) of Section 8 of the said Act could have been carried, the Tribunal observed that in view of Full Bench decision of the High Court in the case of M/s. Avanti Organisation v. Competent Authority & Additional Collector, Urban Land Ceiling Act, Rajkot and Anr. reported in 1989 (1) GLR 586, the proceedings should not travel beyond the stage of passing of order under Sub-section (2) of Section 10 of the said Act. The contention raised on behalf of the petitioner No. 1 that the respondent No. 3-Bank of India should have given an opportunity of being heard was turned down by the Tribunal observing that Bank acquired interest on the land only after 17-2-1976 and thus, the Bank did not have any interest in the land in question on 17-2-1976 i.e. the date of commencement of the said Act in the State of Gujarat. The Bank, therefore, would not have any right to participate in the proceedings under the Act nor would it have any right to be heard.
5. The petitioner No. 1 being aggrieved by the above-mentioned order passed by the Competent Authority as confirmed by the Urban Land Tribunal has preferred the present petition before this Court. During the pendency of the petition, certain developments took place. The Receiver was appointed by the City Civil Court, Ahmedabad by order dated 13-4-1994 at the instance of respondent No. 3-Bank for taking possession of the properties belonging to the petitioner No. 1 and its disposal for realisation of the dues of respondent No. 3-Bank. As noted earlier the Receiver was permitted to be joined as party petitioner No. 2 by order dated 17-2-2005 passed by the learned Judge in Civil Application No. 8691 of 2004. This application for being permitted to be joined as petitioner No. 2 filed by the Receiver was allowed observing that same is allowed without considering the rights of the parties and without considering the fact as to who is in possession of the land in question. One may notice again here that against the order passed the Competent Authority on 1-4-1991, respondent No. 3-Bank had preferred an Appeal before the Urban Land Tribunal being Appeal No. 98 of 1991. This Appeal came to be rejected or 28-2-1992 holding that respondent No. 3-herein had no interest whatsoever in land in dispute on 17-2-1976 on the date of commencement of the Act in the State of Gujarat and the respondent No. 3 therefore, cannot participate in the proceedings under the Act nor it has got any right to be heard. This order has achieved finality it and on further proceedings have been carried by the respondent No. 3 against the said order. So far as challenge of respondent No. 3 is concerned to the order passed by the Competent Authority, the same has therefore concluded.
6. At this stage, it would be necessary to note that pursuant to the order passed by the Competent Authority and Urban Land Tribunal as indicated hereinabove, notification under Section 10(3) of the said Act came to be issued by the State Government on 19-5-1992, vesting the excess vacant land in the Government. Notification under Section 10(5) of the said Act came to be punished on 20-8-1992 seeking to take possession of the land in question it is the case of the State Government that ultimately the possession was taken on 6-10-1992 in presence of Panchas.
7. In the above-mentioned factual background, learned Senior Advocate Shri Mihir Thakore has advanced detailed arguments. Though on record, he appears for petitioner No. 2 and has tried to espouse the cause of respondent No. 3-Bank, he has also made submissions at length which submissions could be made by the petitioner No. 1 alone. As noted earlier, it would be necessary to separate out the contentions and take into account only those contentions which the petitioner No. 1 could have made and no others.
8. Taking me through various documents produced on record, it was strongly urged that the factory premises were constructed on the land in question long before Urban Land Ceiling Act was introduced. By referring to the balance-sheet of the petitioner No. 1-Company, it was sought to be suggested that the construction was completed many years before the Urban Land Ceiling Act was introduced. It was contended that in the decades of 1960 and 1970s, no permission was necessary to be obtained from any Gram or Nagarpanchayat before commencing and completing the construction, and therefore, the question of construction being unauthorised does not arise. It was contended that the application filed by the petitioner No. 1 under Section 20 of the said Act seeking exemption for the land in question was pending before the Government and the proceedings under the said Act could not have been terminated finally by taking possession of the land in question without first disposing of the application made by the petitioner No. 1 under Section 20 of the said Act. It was further contended that in reality the possession was never taken by the Government as is apparent from the subsequent events. It was pointed out that the Receiver appointed by the Civil Court had not only taken possession of the land in question, movable properties and machinery were sold which would demonstrate that the State Government had never actually taken physical possession of the land in question.
9. On the basis of above averments, the learned Advocate Shri Mihir Thakore raised the following specific contentions :
(1) It was contended that 17604 sq. mtrs. of built up land was mortgaged with the respondent No. 3-Bank pursuant to the permission granted by the Competent Authority under the provisions of Section 27 of the said Act. This order was passed on 4-6-1976. Thus, less than four months after the introduction of the said Act, the Competent Authority has recorded the existence of construction in excess of 17,000 sq. mtrs. area. It was, therefore, contended that substantial portion of the land in question was built-up land and it was not open for the Competent Authority to treat the entire parcel of the land as vacant land. The impugned orders passed by the Competent Authority and Urban Land Tribunal, are therefore, erroneous, contrary to record, and therefore, illegal and unlawful. All consequential orders passed by the Government would also be therefore, rendered illegal.
(2) Drawing my attention to the Section 25 and Section 27 of the said Act, it was contended that the permission granted by the Authorities to mortgage the building, and thereafter, open land also, would indicate that no further proceedings can be taken by the authorities to declare the same land as excess vacant land.
(3) Drawing my attention to the discussion in the order passed by the Urban Land Tribunal on 27-4-1992, it was pointed out that no proceedings beyond the stage of passing of an order under Sub-section (2) of Section 10 of the said Act could have been undertaken. It was pointed out that the Urban Land Tribunal held that despite the pendency of the application under Section 20 of the said Act made by the petitioner No. 1, the authorities can travel beyond passing of order under Sub-section (4) of Section 8 of the said Act nevertheless notification under Section 10(3) of the said Act should not be issued until exemption application is decided by the State Government. On the basis of these observations, it was contended that at-least inter-party there was finding given by the Tribunal that beyond passing of an order under Sub-section (2) of Section 10, no further progress could be made till disposal of the exemption application filed by the petitioner No. 1.
(4) Relying on the decision of the Hon'ble Supreme Court in the case of Smt. Darothi Clare Parreira and Ors. v. State of Maharashtra and Ors. and in the case of Special Officer & Competent Authority Urban Land Ceilings, Hyderabad and Anr. v. P.S. Rao , it was contended that in any case, the authorities could not have proceeded further than the issuance of notification under Sub-section (3) of Section 10 of the said Act and the attempt to take actual possession of land in question by issuance of notice under Sub-section (5) of Section 10 of the said Act and the drawing of panchnama indicating that the possession has been taken was illegal and unlawful. It was contended that entire purpose of granting exemption under Section 20 of the said Act if the Government is allowed to take the possession of the land in question from the land-holder even before deciding his application for exemption.
(5) It was next contended that the possession was never actually taken as can be seen from subsequent events. It was contended that initially the petitioner No. 1, and thereafter, the Receiver appointed by the Court enjoyed the actual possession of the land in question. It was pointed out that machinery and other movables were sold by the Receiver which would demonstrate that the State Government never really enjoyed the actual possession of the land in question. It was contended that respondent No. 3-Bank was not issued any notice under the provisions of Section 10 of the said Act and the attempt to take the possession of the land in question, would therefore, be rendered illegal.
(6) It was contended that the respondent No. 3-Bank had vital interest in the property in question. That the Bank held the possession of the land in question through the Receiver. The authorities therefore, ought to have issued notice to the Bank under Section 10 of the said Act.
(7) Relying on the provisions of Section 19 of the said Act, it was contended that the provisions of the said Act cannot be applied to the land in question since the land is held by the Bank as defined in the explanation to Sub-section (1) of Section 19 of the said Act. It is contended that as a mortgagee, Bank is in actual possession of the land in question and should be deemed to be holding the land. The provisions of Sub-section (1) Section 19 of the said Act, would therefore, ensure that the land in question cannot be declared as excess vacant land, possession of which cannot be taken by the State Government.
10. In support of his contentions, learned Senior Advocate Shri Mihir Thakore relied on the decision of the Hon'ble Supreme Court Smt. Darothi Clare Parreira and Ors. v. State of Maharashtra and Ors. (supra) wherein the Hon'ble Supreme Court held that it cannot be said that until application under Section 21 or Section 20 of the said Act is considered and disposed of, the Competent Authority has no power to publish the notification under Section 10(3) of the said Act vesting the excess vacant land in the Government. On the basis of the said decision, it was urged that even the Hon'ble Supreme Court provided that the proceedings can continue upto the stage of issuance of notification under Sub-section (3) of Section 10, but no further. For the same purpose reliance was also placed on the decision in the case of Special Officer & Competent Authority Urban Land Ceilings, Hyderabad and Anr. v. P. S. Rao (supra).
11. The decision of the Hon'ble Supreme Court in the case of Gujarat State Financial Corporation v. M/s. Lotus Hotel Pvt. Ltd. and the decision in the case of M/s. Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. and Ors. were relied upon to contend that once having granted permission under Section 27 of the said Act to enter into the mortgage with the respondent No. 3-Bank, State Government was estopped on the principles of promissory estoppel from declaring the land in question as excess vacant land.
12. The decision of the Calcutta High Court in the case of Smt. Rama Debt and Ors. v. Union of India and Ors. was cited in support of the contention that once the permission under Section 27 of the said Act is granted by the Government, the Authorities are estopped from declaring the land in question as excess vacant land.
13. Appearing for respondent No. 6 Mrs. Sangeeta M. Pahwa raised similar contentions. The respondent No. 6 is Union representing the workers earlier employed by the petitioner No. 1. It is the stand of the Union that their members who were working for petitioner No. 1 have not been paid all the dues. If the land in question is released by the Government, it would be possible for the workers to receive at-least part of their legitimate dues. Mrs. Pahwa relied on the decision of the Hon'ble Supreme Court in the case of Smt. Darothi Clare Parreira and Ors. v. State of Maharashtra and Ors. (supra) and contended that under no circumstances, State Government could have proceeded to take the possession of the land in question when petitioner No. 1 was pending.
13.1 Reliance was placed on the Division Bench judgment of this Court dated 25-6-2003 passed in Letters Patent Appeal No. 5 of 2002 in Special Civil Application No. 4220 of 1999 wherein the Division Bench was pleased to strike down the order passed by the Competent Authority when application Section 21 of the said Act was not yet disposed of. It was pointed out that the Review Application filed by the Government against the said decision of the Division Bench also came to be turned down by or was placed on dated 18-2-2005. Reliance was placed on yet another Division Bench judgment dated 4-10-2001 passed in Letters Patent Appeal No. 498 & 699 of 1995 in Special Civil Application No. 6194 of 1984 and 5508 of 1988 and connected matters. In the said decision, Division Bench was pleased to hold that the occupants of the constructed premises on the land in question were not heard before taking possession of the land in question and the action of the Government was bad in law.
14. Appearing for the State Government, learned A.G.P. Shri P. R. Abichandani resisted the petition. It was urged that respondent No. 3-Bank had already unsuccessfully challenged the order passed by the Competent Authority. The appeal filed by the Bank was rejected by the Urban Land Tribunal by order dated 28-2-1992. No further proceedings were carried by the Bank against the said order. It is therefore, not open for the Bank to pursue the present litigation in disguise. It was contended that the petitioner No. 1 has not shown any interest in pursuing the petitioner. The petitioner No. 2 cannot espouse the cause of the Bank and was in any case permitted to be joined without prejudice to the rights and contentions of the rival parties. It was contended that the authorities below have passed order in accordance with law and in exercise of power under Articles. 226 and 227 Constitution of India, no interference is called for. It was contended that the petitioner No. 1 never produced any material before the authorities to establish that there was any construction on the land in question on 17-2-1976. In any case, there is nothing on record to establish that construction even if there was any was with prior permission as required under the law. Any construction which is without proper permission would be unauthorised construction and land occupied by such construction cannot be excluded from the consideration of vacant land under the provisions of Section 2(q) of the said Act. It was contended that pursuant to the orders passed by the Competent Authority and by Urban Land Tribunal earlier, further proceedings were undertaken by Government. Notification under Sub-section (3) of Section 10 of the said Act was issued on 19-5-1992. Notice under Sub-section (5) of Section 10 of the said Act was issued on 20-8-1992 to take the possession of the land in question. The actual possession was taken on 6-10-1992. He pointed out that the petitioner No. 1 has in fact admitted to have received the said notice under Section 10(5) of the said Act in the petition itself. He pointed out that a proper panchnama was drawn indicating that the possession was taken in presence of panchas. It is therefore, not open for the petitioner No. 1 to contend that the possession was never taken by the Government. He further contended that on 2-3-1994. Learned single Judge of this Court passed the following order :
Rule. By way of interim relief both the sides are directed to maintain status-quo with respect to the subject-matter of this petition as on today.
14.1 He further pointed out that Receiver appears to have been appointed by the City Civil Court by order dated 13-4-1994. Any attempt on part of the Receiver to take possession of the land in question, would therefore, be in violation of the order passed by this Court on 2-3-1994 directing both the sides to maintain status quo. He, therefore, submitted that Receiver could not have taken the possession of the land in question from the Government or even from the importance, therefore, should be attached to any proceedings taken thereafter for sale of movable properties belonging to the petitioner No. 1-Company.
14.2 Reliance was placed on the decision of the Supreme Court in the case of Surya Dev Rai v. Ram Chander Rai and Ors. reported 2004 (1) GLR 320 to contend that scope of writ of certiorari under Artcle 226 of the Constitution of India or that of superintending power exercised by High Court under Article 227 of the Constitution of India would be extremely narrow and this Court would not interfere with the orders passed by the authorities below unless the same are shown to be wholly unreasonable and arbitrary resulting into manifest injustice.
14.3 The decision of the Court in the case of Suryapur Co-operative Housing Society Ltd., Surat v. State of Gujarat and Anr. reported in 1989 (1) GLR 674 was relied upon to contend that the respondent No. 3-Bank had no right to be heard in the present proceedings as the Bank derived its rights after the said Act was introduced in the State of Gujarat. It was contended any case, so far as the present proceedings are concerned since the Appeal of the Bank challenging order passed by Competent Authority was turned down by the Tribunal and since no further proceedings were carried by the Bank against such rejection, he has no further right to be heard or to question the order passed by the Tribunal. It was further submitted that the possession of the land in question was taken by the Government and panchnama thereof was drawn in presence of independent witnesses. He submitted that, it is therefore, now not possible for the petitioners to contend that the possession was not legally taken by the Government. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of M/s. Larsen and Toubro Ltd. v. State of Gujarat and Ors. . He further contended that the decision of the Hon'ble Supreme Court in the case of Smt. Darothi Clare Parreira and Ors. v. State of Maharashtra and Ors. (supra) does not lay down the proposition that while Section 20 application is pending with the Government, no further steps beyond the issuance of notification under Sub-section (3) of Section 10 of the Act can be taken. He submitted that once the land vests in the Government pursuant to the notification under Sub-section (3) of Section 10, taking the possession of the land is a natural corollary and a necessary concomitant thereof. If the ownership vests in the Government, the Government cannot be prevented from taking possession of such a land and pendency of application under Sections 20 or 21 of the said Act cannot be a limitation on power of the Government to take over the possession of such land. He submitted that application under Sections. 20 or 21 of the said Act can be considered even after obtaining possession of the land.
15. On behalf of the petitioner No. 2, in rejoinder it was contended that the respondent No. 3-Bank can be treated to be possessing the land in question. Reliance was placed on definition of term "possessed" as defined and discussed in the Law Lexicon by P. Ramanatha Aiyar. It was contended that as mortgagee, the respondent No. 3-Bank was in possession of the land in question, and therefore, the provision of Sub-section (1) of Section 19 of the Act would be applicable in the facts of the present case making other provisions of the Act inapplicable to the land in question.
Dated 24-8-2005 :
16. At this stage, it would be necessary to take note of some of the statutory provisions contained in the said Act. Section 2(q) of the said Act defines term "vacant land" and reads as follows:
(q) "Vacant land" means land, not being land mainly used for the purpose of agriculture, in an urban agglomeration, but does not include,-
(i) land on which construction of a building is not permissible under the building regulations in force in the area in which such land is situated;
(ii) in an area where there are building regulations, the land occupied by any building which has been constructed before, or is being constructed on the appointed day with the approval of the appropriate authority and the land appurtenant to such building; and
(iii) in an area where there are no building regulations, the land occupied by any building which has been constructed before, or is being constructed on, the appointed day and the land appurtenant to such building :
Provided that where any person ordinarily keeps his cattle, other than for the purpose of dairy farming or for the purpose of breeding of livestock, on any land situated in a village within an urban agglomeration (described as a village in the revenue records), then, so much extent of the land as has been ordinarily used for the keeping of such cattle immediately before the appointed day shall not be deemed to be vacant land for the purpose of this clause.
16.1 Section 2(g) is the definition of term "land appurtenant" and reads as follows :
(g) "land appurtenant", in relation to any building means -
(i) in an area where there are building regulations, the minimum extent of land required under such regulations to be kept as open space for the enjoyment of such building, which in no case shall exceed five hundred square meters; or
(ii) in an area where there are no building regulations, an extent of five hundred square meters contiguous to the land occupied by such building, and includes, in the case of any building constructed before the appointed day with a dwelling unit therein, an additional extent not exceeding five hundred square metres of land, if any, contiguous to the minimum extent referred to in sub-clause (i) or the extent referred to in sub-clause (ii), as the case may be;
16.2 Section 3 of the said Act provides that except as provided in the Act, on and from the commencement of Act, no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which this Act applies.
16.3 Section 4 of the said Act prescribes the ceiling limit. Different areas have been prescribed as ceiling limits for different categories of urban agglomeration ranging from 500 sq. mtrs. in category 'A' to 2000 sq.mtrs. in category 'D' specified in the Schedule.
16.4 Section 5 of the said Act pertains to transfer of vacant land. Sub-section (1) of Section 5 deals with transfer of land to which this Act applies which is in excess of ceiling limit which transfer has taken place at any time during the period commencing on the appointed day and ending with the commencement of this Act, and provides that extent of land so transferred shall also be taken into account in calculating the extent of vacant land held by such person. Subsection (2) of Section 5 provides that where any excess vacant land is selected out of the vacant land transferred under Sub-section (1), the transfer of the excess vacant land so selected shall be deemed to be null and void. Sub-section (3) of Section 5 inter alia provides that in any State to which this Act applies, no person holding vacant land in excess of the ceiling limit immediately before the commencement of this Act shall transfer any such land or part thereof by way of sale, mortgage, gift, lease or otherwise until he has furnished a statement under Section 6 and a notification regarding the excess vacant land held by him has been published under Sub-section (1) of Section 10.
16.5 Section 5 of the said Act reads as follows :
(1) In any State to which this Act applies in the first instance, where any person who had held vacant land in excess of the ceiling limit at any time during the period commencing on the appointed day and ending with the commencement of this Act has transferred such land or part thereof by way of sale, mortgage, gift, lease or otherwise, the extent of the land so transferred shall also be taken into account in calculating the extent of vacant land held by such person and the excess vacant land in relation to such person shall, for the purposes of this Chapter, be selected out of the vacant land held by him after such transfer and in case the entire excess vacant land cannot be so selected, the balance, or where no vacant land is held by him after the transfer, the entire excess vacant land, shall be selected out of the vacant land held by transferee :
Provided that where such person has transferred his vacant land to more than one person, the balance, or as the case may be, the entire excess vacant land aforesaid, shall be selected out of the vacant land held by each of the transferees in the same proportion as the area of the vacant land transferred to him bears to the total area of the land transferred to all the transferees.
(2) Where any excess vacant land is selected out of the vacant land transferred under Sub-section (1), the transfer of the excess vacant land so selected shall be deemed to be null and void.
(3) In any State to which this Act applies in the first instance and in any State which, adopts this Act under clause (1) of Article 252 of the Constitution, no person holding vacant land in excess of the ceiling limit immediately before the commencement of this Act shall transfer any such land or part thereof by way of sale, mortgage, gift, lease or otherwise until he has furnished a statement under Section 6 and a notification regarding the excess vacant land held by him has been published under Sub-section (1) of Section 10; and any such transfer made in contravention of this provision shall be deemed to be null and void.
16.6 Section 6 of the said Act inter alia provides that every person holding vacant land in excess of ceiling limit at the commencement of the Act, to file a statement before the Competent Authority specifying the location, extent, value and such other particulars as may be prescribed of all vacant lands and of any other land on which there is a building held by him as also specifying the vacant lands within the ceiling limit which he desires to retain.
16.7 Section 8 of the said Act, provides for preparation of Draft Statement as regards vacant land held in excess of ceiling limit. Sub- section (1) of Section 8 requires the Competent Authority to prepare a Draft Statement in respect of the person who has filed statement under Section 6. Sub-section (2) of Section 8 provides for particulars which such a statement shall contain. Sub-section (3) of Section 8 provides that Draft Statement shall be served in such a manner as may be prescribed on the person concerned together with a notice stating that any objection to the Draft Statement shall be preferred within thirty days of the service thereof. Sub-section (4) of Section 8 of the said Act requires that the Competent Authority shall duly consider any objection received under Sub-section (3) within the time prescribed or within such extended time as the authority may find appropriate and pass such orders as found necessary after giving the objector a reasonable opportunity of being heard.
16.8 Section 9 of the said Act pertains to final statement to be prepared by the Competent Authority.
16.9 Section 10 of the said Act pertains to acquisition of vacant land in excess of ceiling limit. Section 10 of the said Act reads as follows :
(1) As soon as may be after the service of the statement under Section 9 on the person concerned the Competent Authority shall cause a notification giving the particulars of the vacant land held by such person in excess of the ceiling limit and stating that -
(i) such vacant land is to be acquired by the concerned State Government, and
(ii) the claims of all persons interested in such vacant land may be made by them personally or by their agents giving particulars of the nature of their interest in such land, to be published for the information of the general public in the Official Gazette of the State concerned and in such other manner as may be prescribed.
(2) After considering the claims of the person interested in the vacant land, made to the Competent Authority in pursuance of the notification published* under Sub-section (1), the Competent Authority shall determine the nature and extent of such claims and pass such orders as it deems fit.
(3) At any time after the publication of the notification under Sub-section (1) the Competent Authority may, by notification published in the Official Gazette of the State concerned, declare that the excess vacant land referred to in the notification published under Sub-section (1) shall, with effect from such date as may be specified in the declaration, be deemed to have been acquired by the State Government and upon the publication of such declaration, such land shall be deemed to have vested absolutely in the State Government free from all encumbrances with effect from the date so specified.
(4) During the period commencing on the date of publication of the notification under Sub-section (1) and ending with the date specified in the declaration made under Sub-section (3) -
(i) no person shall transfer by way of sale, mortgage, gift, lease or otherwise any excess vacant land (including any part thereof) specified in the notification aforesaid and any such transfer made in contravention of this provision shall be deemed to be null and void; and
(ii) no person shall alter or cause to be altered the use of such excess vacant land.
(5) Where any vacant land is vested in the State Government under Sub-section (3), the Competent Authority may, by notice in writing, order any person who may be in possession of it to surrender or deliver possession thereof to the State Government or to any person duly authorised by the State Government in this behalf within thirty days of the service of the notice.
(6) If any person refuses or fails to comply an order made under Sub-section (5), the Competent Authority may take possession of the vacant land or cause it to be given to the concerned State Government or to any person duly authorised by such State Government in this behalf and may for that purpose use such force as may be necessary.
16.10 Section 11 of the said Act pertains to payment of amount for vacant land acquired.
16.11 Section 19 of the said Act provides that Chapter 3 shall not to apply to certain vacant lands.
16.12 Section 20 of the said Act pertains to the power of the Government to exempt certain vacant lands from the provisions of the said Act.
16.13 Section 21 of the said Act provides for the excess vacant land not to be treated as excess in certain cases.
16.14 Section 27 of the said Act puts prohibition on transfer of urban property and reads as follows :
(1) Notwithstanding anything contained in any other law for the time-being in force, but subject to the provisions of Sub-section (3) of Section 5 and Sub-section (4) of Section 10, no person shall transfer by way of sale, mortgage, gift, lease for a period exceeding ten years or otherwise, any urban or urbanisable land with a building (whether constructed before or after the commencement of this Act) or a portion only of such building for a period of ten years of such commencement or from the date on which the building is constructed, whichever is later, except with the previous permission in writing of the Competent Authority.
(1) Any person desiring to make a transfer referred to in Sub-section (1), may make an application in writing to the Competent Authority in such form and in such manner as may be prescribed.
(2) On receipt of an application under Sub-section (2), the competent authority may, after making such as it deems fit, by order writing grant or refuse to grant the permission applied for:
Provided that the Competent Authority shall not refuse to grant the permission applied for unless it has recorded in writing the reasons for doing so and a copy of the same has been communicated to the applicant.
(3) Where within a period of sixty days of the date of receipt of an application under this Section, the Competent Authority does not refuse to grant the permission applied for or does not communicate refusal to the applicant, the Competent Authority shall be deemed to have granted the permission applied for.
(4)(a) Where the permission applied for is for the transfer of the land with the building, or as the case may be, a portion only of such building referred to in Sub-section (1) by way of sale, and Competent Authority is of the option that such permission may be granted, then, the Competent Authority shall have the first option to purchase such land with building or a portion only of such building on behalf of the State Government at such price as may be agreed upon between the Competent Authority and the applicant or in a case where there is no such agreement, at such price calculated in accordance with the provisions of the Land Acquisition Act, 1894, or of any other corresponding law for the time-being in force.
(b) If the option referred to in Clause (a) is not exercised within a period of sixty days from the date of receipt of the application under this Section, it shall be presumed that the Competent Authority has no intention to purchase such land with building or a portion only of such building on behalf of the State Government and it shall be lawful for such person to transfer the land to whomsoever he , may like :
Provided that where the Competent Authority exercises within the period aforesaid the option to purchase such land with building or a portion only of such building, the execution of the sale-deed shall be completed and the payment of the purchase price thereof shall be made within a period of three months from the date on which such option is exercised.
(5) For the purpose of calculating the price of the land and building or as the case may be, a portion only of such building under Clause (a) of Sub-section (5), it shall be deemed that a notification under Sub-section (1) of Section 4 of the Land Acquisition Act, 1894 or under the relevant provision of any other corresponding law for the time-being in force, had been issued for the acquisition of that land and building or as the case may be, a portion only of such building on the date on which the application was made under Sub-section (2).
16.15 Section 42 of the said Act gives overriding effect to the provisions of the Act over other laws and reads as follows :
The provisions of this Act shall have effect notwithstanding anything inconsistent therewith in any other law for the time-being in force or any customs, usage or agreement or decree or order of a Court, Tribunal or other authority.
17. On the basis of above-noted legal submissions and statutory provisions, I have to examine the legality of the orders passed by the authority.
18. As noted earlier by order dated 12-4-1991, the Competent Authority declared that the petitioner No. 1 holds a total of 48,374 sq.mtrs., of urban land of which the petitioner No. 1 would be entitled to hold 1000 sq.mtrs., of land and the remaining portion i.e. 47,374 sq.mtrs. of land was declared as excess vacant land. In the said order, the Competent Authority noted that though opportunity was given to the petitioner No. 1-Company, no evidence is produced to establish that there was construction on the land in question. The evidence produced does not show when the construction was carried on. It was also observed that the bills were for the period 1979-1980 and 1983. The Urban Land Tribunal rejected the Appeal filed by the petitioner No. 1 by an order dated 27-4-1992. It was noted that the petitioner No. 2 has not produced any concrete evidence such as sanctioned building plan from the concerned Gram Panchayat, permission, progress reports or tax bills to prove that construction, if any, on the land was carried out before the appointed day. It was observed that as per Section 93 of the Gujarat Panchayat Act, 1961, no person could have erected within the limit of Gram Panchayat any building without the previous permission of the concerned Gram Panchayat. In the present case, no such permission was obtained from Sardarnagar Gram Panchayat. It was therefore, observed that in absence of sanctioned building plan, permission from the Gram Panchayat, tax bill, etc., it is difficult to hold that construction on the land, if any, is authorised in nature. It was observed that it is only the authorised construction which appropriate authority which is excluded from the computation of the extent of vacant land held by a person.
19. In view of the above records, one may now advert to the contentions raised by the learned Senior Advocate Shri Mihir Thakore. While dealing with these contents one after another, I would also simultaneously bear in mind the contentions raised by Mrs. Pahwa and the authorities cited in support of such contentions. Since, her submissions overlap those made by learned Senior Advocate Shri Mihir Thakore and are meant to compliment, his submissions, it would not be necessary to separately deal with the contentions raised by her,
20. First contention raised by learned Senior Advocate Shri Mihir Thakore in support of his challenge as noted earlier was that there was a construction covering 17,000 sq.mtrs. of land carried on by the petitioner No. 1 long before the Act was introduced and made applicable to the State Government. It was his contention, therefore, that substantial portion of the land in question was built-up land. The land which was constructed upon could not have been considered as vacant land and the orders passed by the authorities, are therefore, illegal and unlawful. He submitted that the order pertains to the entire parcel of land and since portion of the land was built up land, orders in their entirety must fail.
20.1 As noted earlier both the authorities namely Competent Authority and Urban Land Tribunal have come to a conclusion that petitioner No. 1 has not produced any material to establish that the construction was carried on prior to the implementation of the Act in question. The Competent Authority has recorded that despite sufficient opportunity being given to the petitioner No. 1, no proof was forthcoming to establish as to when the construction was made. The Tribunal also came to the similar conclusion. Additionally, it was found that construction, if any, on the land in question was not with prior approval or permission of the Gram Panchayat as required under the law. It was, therefore, held that such construction, if any, would be unauthorised and area occupied by such construction and land appurtenant cannot be excluded from the consideration of vacant land as defined under Section 2(q) of the said Act. Though, in the petition, the petitioner No. 1 has contended that lands were situated in Sardarnagar Township and at the relevant time, the petitioner was not required to obtain any building permission or to get the building plan approved from any local authority, there is no assertion about the observations of the Tribunal being incorrect in any manner. Sub-section (1) of Section 93 of the Gujarat Panchayat Act, 1961 provided that no person shall erect or re-erect or commence to erect or re-erect within the limits of Gram or Nagar, any building without previous permission of the Panchayat. Admittedly, no such permission was produced on record before the authorities. The Tribunal had recorded that no permission was obtained from the Gram Panchayat and no Sanad was obtained as required. In absence of sanctioned plan, permission from the concerned Gram Panchayat and the tax bills being produced by the petitioner No. 1, it is difficult to hold that the construction, if any, is of the authorised nature. To these factual findings, there is no challenge in the present petition. In that view of the matter, it is not possible to accept the contention raised on behalf of the petitioners that the land in question was not fully vacant land and substantial portion thereof was built upon. Section 2(q) of the said Act inter alia provides that any area where there are building regulations, land occupied by any building which is been constructed upon before or is being constructed on the appointed day with the approval of the Competent Authority and the land appurtenant to such building shall not be included in the term vacant land. To the proposition laid down by the Tribunal that if the nature of the construction is authorised, such construction is required to be ignored for the purpose of considering the total area of the vacant land; there was no serious dispute raised. What was sought to be suggested was that in fact there was construction on the land long before the Act was introduced in February, 1976 which can be seen from the orders passed by the Competent Authority permitting the petitioner No. 1 to mortgage the building in favour of the respondent No. 3 and that such construction was not unauthorised since at the relevant time, no permission was necessary from any authority. This I aspect have already dealt with earlier, same is not required to be repeated. In the conclusion, I am unable to accept first contention raised on behalf of the petitioners.
21. Keeping the second contention raised on behalf of the petitioners aside for the time-being for being dealt with at the later stage, it would be convenient to discuss the contentions Nos. 3 and 4 raised by learned Senior Advocate Shri Mihir Thakore simultaneously. As noted earlier, it is contended that the Urban Land Tribunal in its impugned judgment had held that while the application of the petitioner No. 1 under Section 20 of the said Act is pending, there is no prohibition against the Competent Authority passing the order under Section 8(4) of the said Act and only requirement is that notification under Section 10(3) should not be issued till exemption application is decided by the State Government. On the basis of these observations, it was contended that between the parties atleast there is a finding given by the Tribunal that proceedings may not travel beyond the stage of Sub-section (2) of Section 10 of the said Act. It is additionally contended that in any view of the matter, even if the later view of Hon'ble Supreme Court is to be taken into consideration as propounded in the decision of Smt. Darothi Clare Parreira and Ors. v. State of Maharashtra and Ors. (supra), it was not open for the State Government to issue notice under Sub-section (5) of Section 10 of the said Act or to take actual possession of the land in question till finalisation of the exemption application filed by the petitioner No. 1.
21.1 As noted earlier, the contention of the learned A.G.P. Shri P. R. Abichandani is that there is no restriction on the State Government proceeding further with different stages of acquisition of the excess vacant land as provided under Section 10 of the said Act. He contended that once notification under Sub-section (3) of Section 10 is issued, the land vests absolutely in the State Government free from all encumbrances. He, therefore, submitted that once the land vests in the State Government taking physical possession thereof by the State Government is a natural corollary and Government does not have to wait till the disposal of the exemption application that may have been filed by erstwhile land-owner.
21.2 In the case of Smt. Darothi Clare Parreira and Ors. v. State of Maharashtra and Ors. (supra), the Hon'ble Supreme Court observed that on publication of the notification under Section 10(3) of the said Act and after putting a date from which the land stands vested in the State and after publication of notification in the Gazette and on and from the date mentioned therein, the excess vacant land stands vested in the State free from all encumbrances subject to the decision in Appeal, if any, filed according to the law. It was observed that previous owner stands divested of right, title and interest in the land subject to the right to make application provided under Section 20 and Section 21. It was observed that it is difficult to accept the contention that the Competent Authority has no power to have notification, under Section 10(3), published in the Gazette until the application either under Section 20 or Section 21 is disposed of. The very language of Section 20 and Section 21 and the exercise of power thereunder would arise only when the land stands vested in the Government. The power of examination and exemption would arise only when the Government becomes the owner and the erstwhile owner seeks to obviate the hardships under Section 20 or to subscribe the Housing Scheme for weaker sections under Section 21 as envisaged thereat, the Government is required to consider whether the proposals made by the erstwhile owner for undertaking the scheme as envisaged under Section 21"or hardship as envisaged under Section 20 for Exemption would warrant consideration.
21.3 In the decision of Smt. Darothi Clare Parreira and Ors. v. State of Maharashtra and Ors. (supra), therefore, there is no conclusion that having issued a notification under Section 10(3) of the said Act, the Government must stop from taking any further steps in furtherance of such a notification before deciding the application of the landowner under Section 20 or 21 of the said Act.
21.4 In the present case, the notification under Section 10(3) of the said Act was published on 19-5-1992, notice under Sub-section (5) of Section 10 was issued on 20-8-1992. The possession of the land in question according to the State Government was taken on 6-10-1992. The petitioner No. 1 has stated in the petition that the application under Section 20 of the said Act is pending. The petitioner No. 1 has stated that the latest communication was one dated 19-9-1992 received from the respondent No. 4 in this regard. In the communication dated 19-9-1992, it is stated by the Government that in response to the application under Section 20 of the Act, the Company has not sent certain details which may be supplied by 31st October, 1992. If the details are not supplied, it will be presumed that exemption application under Section 20 is not required. The communication included as many as 14 items which were not supplied by the Company along with the application for exemption. The details called for by the State Government included those regarding the licence, if any, obtained by the applicant before 28-1-1976, details of form filed under Section 6(1) of the Act, details regarding the construction, if any, existing as on 28-1-1976, copy of N. A. permission issued by the Competent Authority, copies of sanctioned plan and rajachitthi issued by the Corporation or Gram Panchayat, details of authorised construction as on 28-1-1976 and an affidavit that no further construction has been carried out after that date. These and many other details were called for from the petitioner No. 1 under communication dated 19-9-1992. In the petition, there is no averment that these details were supplied within the permitted time or whether there was any extension sought and granted. It would, therefore, appear that by afflux of time and the petitioner No. 1 not pursuing the exemption application, the same died its natural death. The action of the State Government taking possession of the land in question and the petering out of the application of the Company under Section 20 of the Act happened almost simultaneously and in close proximity. It would, therefore, not be possible for the Company to contend at this distant point of time that entire action of the State Government must fail since on the date on which the possession was being taken over, Section 20 application of the Company was pending before the State Government. Just before taking over the possession the Government had put the Company to notice that certain details would be necessary to process the application under Section 20 of the Act further. Firstly, after taking over the possession, the application was treated to have been closed for want of supply of material called for. Even thereafter, the petitioner No. 1-Company does not appear to have taken any further steps to revive or to pursue the application for exemption. Therefore, even without concluding on the legal contentions raised by both the sides with respect to the powers of the Government to proceed ,beyond the stage of notification under Sub-section (3) of Section 10 of the Act, while the exemption application of the land-owner is pending, in facts of the present case, I find that it is not possible to strike down the orders passed by the authorities simply on the ground that exemption application was not disposed of by the Government on the date on which the possession of the land in question was being taken over. The observations made by the Urban Land Tribunal that there is no embargo on the proceedings beyond the stage of passing of order under Section 8(4) of the said Act as long as the Government stops at the stage of Sub-section (2) of Section 10 of the said Act, were on the basis of Full Bench decision of this High Court in the case of M/s. Avanti Organisation v. Competent Authority & Additional Collector, Urban Land Ceiling Act, Rajkot and Anr. reported in 1989 (1) GLR 586 which decision held the field at the relevant time. By virtue of subsequent decision of the Hon'ble Supreme Court in the case of Smt. Darothi Clare Parreira and Ors. v. State of Maharashtra and Ors. (supra), this view has been substantially modified. In any case, this question was not directly at issue before the Tribunal and any observations made in this regard were only passing remarks and were not meant to be binding precedent providing for an issue estoppel between the parties. The learned Advocate Mrs. Sangeeta Pahwa had relied on the decision of the Division Bench of this Court dated 25-6-2003 in Letters Patent Appeal No. 5 of 2002 in Special Civil Application No. 4220 of 1999. In the said decision, Division Bench was pleased to strike down the Government action on the ground that Application under Section 21 of the Act remained pending with the Authorities and the same was not decided though directed to do so by the Court. It was in that background that Division Bench observed that the authorities are not competent to initiate proceedings beyond the stage of Section 10(2) of the said Act and prepare statement under Section 10(3) and Section 10(5) of the said Act. In facts of the present case, the view of the Division Bench would have no application. In view of the above discussion, I am unable to uphold the third and fourth contentions raised on behalf of the petitioners.
22. The contention No. 5 raised on behalf of the petitioners was that the possession in fact was never taken over by the Government. It was contended that the factory premises were locked since the factory had closed down. The petitioner No. 1 was not directly served with the notice under Sub-section (5) of the Section 10 of the said Act. In any case, the possession was only a paper possession and all throughout the petitioner No. 1-Company, and thereafter, the Receiver, appointed by the Civil Court had actual possession of the premises in question. It was contended that the very fact that the Receiver was in a position to dispose of substantial portion of the movable property and machinery belonging to the petitioner No. 1 would show that possession was with the Receiver received through the petitioner No. 1. In connection with this contention, it can be seen that after issuing notification under Section 10(3) of the said Act on 19-5-1992, notice under Section 10(5) of the said Act came to be issued on 20-8-1992. The respondent No. 2 along with his affidavit dated 22-1-2001 has produced the said notice dated 20-8-1992. Along with notice, there is a document which records that on 25-8-1992, the officers had visited the site of the factory. The Security Officer of the Company Shri Gobarji Javanji Bihola was present who was tendered a copy of the notice which he accepted. On being requested to acknowledge the receipt of the notice he stated that he has been instructed by his employer not to sign acknowledgment of any kind. In the petition, the petitioner No. 1 has stated that petitioner No. 1 was not aware about the issuance of the notification under Section 10(3) of the Act. However, it came to know about the same on 25-8-1992 from the notice dated 20-8-1992 issued by respondent No. 2 under Section 10(5) of the said Act as the same was received by the petitioner No. 1 on 25-8-1992. Thus, the receipt of the said notice under Section 10(5) of the said Act is not in dispute. The State Government took possession of the land in question through the panchnama dated 6-10-1992. The procedure for taking possession, was therefore, legally and validly over. There is nothing on record to suggest that the panchnama does not record true and correct events. Beyond taking the possession, there was no further responsibility on the State Government in terms of provision of the said Act. It may be noted that this Court issued an order directing both the sides to maintain status quo on 2-3-1994. The Receiver was appointed by City Civil Court on 13-4-1994. If the position on record was that the possession was taken over by the Government on 6-10-1992 and this Court had directed both the sides to maintain status quo on 2-3-1994, Receiver could not have taken possession of the land in question since his appointment itself was made on 13-4-1994. It is entirely believable that the learned Advocates representing the parties before the City Civil Court were not aware about the order passed by this Court on 2-3-1994 when the City Civil Court passed its order appointing the Receiver on 13-4-1994. The order passed by the City Civil Court was for appointment of the Receiver and not for taking possession of the land in question irrespective oil any order that may have been passed by this Court. Even if innocently, the Receiver could not have legally taken the possession of the land in question in face of two important circumstances. Firstly the State Government had already taken the possession of the land in question on 6-10-1992. Secondly this Court had directed both the sides to maintain status-qao as on 2-3-1994. Without clarification and further permission from this Court, Receiver could not have taken the possession of the land in question. His possession, was therefore, legally not tenable. The fact that Receiver could dispose of certain movable properties belonging to the petitioner No. 1-Company would not change the situation. In that view of the matter, it is not possible to hold that petitioner No. 1 initially and Receiver thereafter, was legally in possession of the land in question and the stage of taking possession pursuant to the notice under Section 10(5) of the Act was not concluded when the Repeal Act was adopted by the State of Gujarat. In this regard, observations of Division Bench in the case of State of Gujarat and Anr. v. Ravjibhai Chhotabhai Patel and Ors. reported in 2000 (3) GLR 2386 need to be noted :
Though, the appellants at the time of hearing of the petition before the learned single Judge had not filed counter-affidavit placing all the material relating to this case in the Court, with the permission of the Court, they have now filed additional affidavit-in-reply dated 28th February, 2002 of Mr. V.C. Varma, Addl. Collector, Co-ordination, Vadodara. Along with the affidavit, the appellants have also placed on record relevant documents including all the Postal acknowledgment receipts in support of their contentions. The respondents have not chosen to file affidavit-in-rejoinder to this affidavit. Perusal of the record shows that after the respondents filed form No. 1 along with the affidavit under Section 6 of the Act, the Competent Authority prepared draft statement which was duly served on the respondents, to which they filed objections and after hearing the parties the Competent Authority on 30th December, 1982 declared 3255 sq.mtrs. of land as excess land. Thereafter, the notification under Section 10(3) relating to land in question came to be published in the Government Gazette on 11th August, 1983. It is well settled law by now that upon publication of notification under Section 10(3) of the Act the land stands vested in the State Government free from all encumbrances. In this case also, upon publication of notification under Section 10(3) of the Act, the land in question came to be vested in the State Government free from all the respondents have ceased to have any right, title or interest in the said land. The record further shows that things have even travelled further than the stage of Section 10(3) of the Act. In accordance with the provision of Section 10(5) of the Act, before taking physical possession of the land, respondents were served with notices on three occasions, namely, on 29th January, 1985, 1st April, 1985 and 31st July, 1985 and all these notices were duly received by the respondents as per the copies of the acknowledgment receipts placed on record by the appellants. The respondents also do not dispute this fact. However, the respondents on all the three occasions did not remain present to hand over possession, and ultimately, on 19th September, 1985 the authorised officer, namely, the Maintenance Surveyor of Unit No. 4 took physical possession of the land in presence or two independent persons acting as panchas. While taking the possession necessary panchnama was also drawn which has been placed on record along with the affidavit of Mr. Varma. There is absolutefy no reason to doubt these documents. The panchnama clearly shows that on 19th September, 1985 the respondents had not remained present. However, the physical possession of the land was taken by the authorised officer in accordance with the provision of Sub-section (6) of Section 10 of the Act, as the respondents did not deliver the possession after issuance of notice under Section 10(5) of the Act. When the possession of the land is taken over by the State Government, nothing more is required to be done except determination of the amount to be paid to the land-holders in accordance with the provisions of Section 11 of the Act. Thus, considering the fact that possession of the land was already taken over by the Government back on 19th September, 1985, the whole matter is now pending only at the stage of Section 11 of the Act.
22.1 In view of the above discussion, I am unable to uphold the contention of Shri Mihir Thakore that possession not having been actually taken by the State Government when the Repeal Act was introduced in the State of Gujarat, the proceedings should be deemed to have abated.
23. The contention Nos. 6 and 7 can be clubbed together. It was contended that no notice was issued to the Bank under Section 10 of the Act, though the Bank was in possession through Receiver or independently as a mortgagor. Secondly, it was contended that under provision of Section 19(1)(iii), provision of Chapter 3 of the said Act would not apply to the land in question since the land was held by the Bank. Both these contentions deserve summary rejection since as noted at the outset. Respondent No. 3-Bank is not a petitioner before this Court and has not challenged the order passed by this Urban Land Tribunal. These contentions cannot be and have not been raised by the petitioner No. 1. In a petition filed by the petitioner No. 1, it is not possible for the respondent No. 3-Bank to raise these contentions. Both these contentions, are therefore, turn down only on this ground.
24. This brings me to the second contention raised by the learned Advocate Shri Mihir Thakore. In this regard, it was contended that the Competent Authority having granted permission to the petitioner No. 1 to mortgage the properties in question, it was thereafter, not open for the State Government to declare any part of such land as excess vacant land. Sub-section (1) of Section 27 of the said Act inter alia provides that notwithstanding anything contained in any other law for the time-being in force, but subject to the provisions of sub-section (3) of Section 5 and Sub-section (4) of Section 10 no person shall transfer by way of sale, mortgage, gift, lease for a period exceeding ten years or otherwise, any urban or urbanisable land with a building (whether constructed before or after the commencement of this Act) or a portion only of such building except with the previous permission in writing of the Competent Authority. On the basis of this provision, it is the contention of the petitioners that the Competent Authority having granted such a permission on 4-6-1976 permitting the petitioner No. 1 to mortgage the building in favour of the respondent No. 3-Bank, and thereafter, by subsequent order having permitted the petitioner No. 1 to mortgage also the open land in favour of the respondent No. 3-Bank, it was not open for the State Government, thereafter, to process the form filled by the petitioner No. 1 further and to declare any part of the land held by the petitioner as excess vacant land.
24.1 Section 3 of the said Act as noted earlier provides that except as otherwise provided in this Act, on and from the commencement of the Act, no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which this Act applies.
24.2 Section 5 of the said Act deals with transfer of the vacant land. Subsection (3) of Section 5 in particular provides that in any State to which this Act applies, no person holding vacant land in excess of the ceiling limit immediately before the commencement of this Act shall transfer any such land or part thereof by way of sale, mortgage, gift, lease or otherwise until he has furnished a statement under Section 6 and a notification regarding the excess vacant land held by him has been published under Sub-section (1) of Section 10 and any such transfer made in contravention of this provision shall be deemed to be null and void.
24.3 Significantly, Sub-section (1) of Section 27 states that notwithstanding anything contained in any other law for the time-being in force, but subject to the provisions of Sub-section (3) of Section 5 and Sub-section (4) of Section 10, no person shall transfer by way of sale etc. any land with the building or a portion thereof except with the previous permission in writing of the Competent Authority. Insofar as the said provision applies to the land with building, the provision has been held to be unconstitutional by the Hon'ble Supreme Court in the case of Bhim Singhji v. Union of India . However, rest of the provisions contained in Section 27 are held to be applicable.
24.4 It can, therefore, be seen that Section 27(1) of the said Act also makes the provisions thereof applicable subject to the provisions of Sub-section (3) of Section 5 and Sub-section (4) of Section 10. As noted earlier, Sub-section (3) of Section 5 prohibits transfer of any vacant land in excess of ceiling limit by any person immediately before the commencement of this Act until such person has furnished a statement under Section 6 of the Act and notification regarding excess vacant land held by him has been published under Sub-section (1) of Section 10 of the Act.
24.5 While interpreting the provision of Sub-section (5) of Section 27 of the said Act, Division Bench of this Court in the case of Kanubhai Sankalchand Patel (Heir of Deed. Sankalchand Manilal Mukhi) v. Nayankunj Co-op. Housing Soc. Ltd. and Ors. reported in 1978 GLR 920 made following observations :
6. The Act came into force on 17th February, 1976. It affects all transactions which took place after 28th January, 1976 which is the appointed day so far as the city of Ahmedabad is concerned. Section 2(n) of the Urban Land (Ceiling and Regulation) Act, 1976 defines 'urban agglomeration' and has reference to Schedule I in the Act. Section 4 sets down ceiling limit in respect of vacant land which can be held by a person in urban agglomeration of different categories specified in Schedule I. Section 11 provides for payment of compensation for the vacant land acquired under the Act and has reference to Schedule I. Section 29 regulates construction of buildings with dwelling units falling within the categories A, B, C and D, and has reference to Schedule I. In Schedule I, State of Gujarat appears at Sr. No. 4. In Sr. No. 4, under the entry "Gujarat" appears 'Ahmedabad urban agglomeration'. It clearly shows that Rajpur-Hirpur, where the suit land is situate and which is regarded by the Act as an out-growth of the city of Ahmedabad, is governed by the Act. The finding recorded by the learned trial Judge and certified to this Court also shows that the land in question is governed by the Act. Section 3 provides that except as otherwise provided in the Act on and from the commencement of the said Act, no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which the Act applies under Sub-section (2) of Section 1. Section 4 groups different cities and towns in the country under four categories. Schedule I shows that Ahmedabad falls under category B. It provides that ceiling limit in case of every person subject to the other provisions of the said Section shall be 1000 sq. meters where such land is situate in an urban agglomeration falling within category B specified in Schedule I. It is, therefore, clear that the ceiling limit which has been prescribed for the city of Ahmedabad in case of every person is 1000 sq. meters. Indisputably, the subject-matter of the agreement of sale Exh. 116 and the decree under appeal exceeds 1000 sq.mtrs. Section 2(i) defines "person" so as to include an individual, a family, a firm, a company or an association or body of individuals whether incorporated or not. Section 5 imposes a ban on transfer of such vacant land. Sub-section (3) of Section 5 is material for the purpose of the present case. It provides that no person holding vacant land in excess of the ceiling limit immediately before the commencement of the Act shall transfer any such land or a part thereof by way of sale, mortgage, gift, lease or otherwise until he has furnished as statement under Section 6 and a notification regarding the excess vacant land held by him has been punished under Sub-section (i) of Section 10 and that any such transfer made in contravention of the provisions shall be deemed to be null and void. Section 6 requires every person holding vacant land in excess of the ceiling limit to file statement before the Competent Authority within the specified time. Such a declaration must specify the location, extent, value and such other particulars as may be prescribed of all vacant lands and of any other land on which there is a building, whether or not with a dwelling unit therein. It also requires such a person to specify vacant land within the ceiling limit which he desires to retain. Section 10 provides that the Competent Authority shall cause a notification giving the particulars of the vacant land held by every such person in excess of the ceiling limit to be published for the information of the general public in the Official Gazette and in such other manner as may be prescribed. That notification is required to state that such vacant land is to be acquired by the State Government and that the claims of all persons interested in such vacant land may be made by them personally or by their agents giving particulars of the nature of their interests in such land. Whereas Section 5 bans the transfer of vacant land exceeding 1000 sq. mtrs. Section 26 deals with transfer of vacant lands which are admeasuring less than 1000 sq. meters. It lays down that no person holding vacant land within the ceiling limit shall transfer such land by way of sale, mortgage, gift, lease or otherwise except after giving notice of the intended transfer to the Competent Authority. It further provides that it shall be open to the Competent Authority to purchase such open land on behalf of the State Government at a price calculated in accordance with the provisions of the Land Acquisition Act, 1894, or of any other corresponding law for the time-being in force. It next provides that if the Competent Authority does not exercise such option within a period of 60 days from the date of the receipt of the notice by the person concerned under Sub-section (1), it shall be presumed that the Competent Authority has no intention to purchase such land on behalf of the State Government and it shall be lawful for such person to transfer the land to whomsoever he may like. Proviso to Sub-section (2) is not necessary to be reproduced for the purpose of the present case. Section 27 prohibits transfer of urban property on which building is constructed except with the previous permission in writing of the Competent Authority. It inter alia provides that no person shall transfer by way of sale, mortgage, gift, lease for a period exceeding ten years or otherwise any urban or urbanisable land with a building whether constructed before or after the commencement of the said Act or a portion only of such building for a period of ten years of such commencement or from the date on which the building is constructed whichever is later. Sections 5, 26 and 27 deal with urban properties of three different and distinct kinds. We are concerned with Sub-section (3) of Section 5. Sub-section (3) of Section 5, in our opinion, imposes a complete ban upon the transfer of vacant land which exceeds the area of 1000 sq. meters. It is not correct to say as has been argued by Miss V.P. Shah that the transfer of such land is subject to two conditions, namely, furnishing a statement under Section 6 and issuance of notification under Sub-section (1) of Section 10. We state so because we have not been able to find in the Act any provision which lays down what is going to follow if no notification under Section 10(1) is issued. If the transfer of such a vacant land was merely subjected to two conditions specified in Sub-section (3) of Section 5, the Parliament would have certainly provided for the consequences of non-issuances of notification under Sub-section (1) of Section 10. One such consequence would have been to permit the person concerned to enter into a transaction of transfer. In this context, Sub-section (3) of Section 5 can be usefully read in contrast with Sub-sections. (1) and (2) of Section 26. Section 26 in terms provides that if the land to which that Section applies is not acquired by the Competent Authority within a period of sixty days after he has received the notice in writing of the intended transfer, he shall be entitled to transfer it in manner he likes. There is no such provision in regard to vacant land governed by Section 5(3). It is clear, therefore, that issuance of a notification under Sub-section (1) of Section 10 in respect of the land governed by Sub-section (3) of Section 5 is compulsory or mandatory and that delay in issuance of such a notification does not restore to the person concerned the right to transfer such land. Consequences of non-issuance of notification under Sub-section (1) of Section 10 have not been provided in the case of land to which Sub-section (3) of Section 5 applies because the Parliament has not contemplated any such contingency. It is therefore, clear that the land in question which is governed by Sub-section (3) of Section 5 cannot be transferred by its owner under any circumstances. It is in this light that we have to examine the question whether the decree for specific performance of the agreement of sale Exh. 116 can he passed in the instant case.
24.6 Though, in somewhat different factual background provisions of Sub-section (5) of Section 27 of the said Act came to be considered by the Hon'ble Supreme Court in the case of State of Madhya Pradesh v. Surendra Kumar and Anr. wherein the Hon'ble Supreme Court made the following observations :
(3) It is true, as rightly contended by Shri Deshpande, the learned Counsel for the respondent that Sub-section (3) of Section 5, prohibits a person from alienating any vacant land by way of sale, etc. until he has furnished the statement under Section 6 and a notification regarding the excess vacant land held by him has been published under Sub-section (1) of Section 10, and any such transfer made in contravention thereof shall be deemed to be null and void. Equally under Sub-section (4) of Section 10 during the period commencing on the date of publication of the notification under Sub-section (1), and ending with the date specified in the declaration made . under Sub-section (3) the person in excess of vacant land including any portion thereof specified in the notification has sold that land by way of sale or transfer, etc., in contravention of the Act, such transfer shall be deemed to be null and void and no person shall alter or cause to be altered the use of such excess vacant land during that period. Sub-section (1) of Section 5 gives power to the Competent Authority in calculating the excess land that any land so transferred shall also be taken into account in calculating the extent of vacant land held by such person and the excess vacant land in relation to such person shall, for the purposes of the Chapter, be selected out of the vacant land held by him after such transfer and in case the entire excess vacant land has been sold or cannot be so selected, the balance, or where no vacant land is held by him, after the transfer, the entire excess vacant land, shall be selected out of the vacant land held by the transferee. Thus, it could be seen that during the pendency of the proceeding an application could be made under Sub-section (1) of Section 27 of the Act for seeking permission for transfer.
4. After the application has been made, two options are open to the competent authority. In a case where the State intends to purchase the property exercising its option, there is no prohibition for the state to purchase the property though the declaration has not been finalised and exercise option as envisaged under Sub-section (5)(a) of Section 27 and complete the sale transaction in the manner contemplated therein. Thereafter, they can finalise the excess area include the area purchased by it while as calculating excess land as the total holding of the person and accept only other excess area held by the person and deduct the land or building purchased by it from the ceiling area which the person is entitled to retain under the Act. The person in this case is entitled to 15,000 sq.mts. as ceiling area.
5. The second option is that since the proceedings have not been finalised, either would return the application, the draft declaration should be taken up and declaration should be finalised, and thereafter, the option can be exercised to purchase the land and building or to permit the sale of the land to the third parties. In this situation, the State appears to have exercised the first option and purchased the property. Therefore, we find that there is no illegality in the exercise of the option by the State to purchase the property sought to be sold by the owner. The respondent, being only an intending purchaser cannot complain that until the draft proceedings have been finalised and the declaration under Sub-section (3) of Section 10, has been published, the State cannot exercise the option to purchase the property. It is next contended that since the land proposed to be sold is within the ceiling limit, no permission under Section 27(1), is needed. There is no substance in the contention on the statement made by the person she was admittedly in possession of more than the ceiling area. So, permission under Section 27(1), is mandatory and she had rightly filed the application.
24.7 From the above statutory provisions and observations made by the decisions cited above, it would appear that the restriction on transfer of land which is excess vacant land on the date of introduction of the Act in the State is complete and is not conditional upon any of the provision of the Act. There is total prohibition against the transfer of any excess vacant land held by a person until he furnishes a statement under Section 6 of the said Act and a notification regarding excess vacant land held by him under Sub-section (1) of Section 10 of the said Act has been issued. The provision of Section 27 in no way abridge or restrict the ambit of application of Sub-section (3) of Section 5 of the said Act. In that view of the matter any order passed by the Competent Authority under Section 27 cannot be pressed in service to overcome the restriction imposed under Sub-section (3) of Section 5 of the said Act against the transfer of any excess vacant land before the holder thereof files declaration under Section 6 of the said Act and notification under Sub-section (1) of Section 10 has been issued by the Authority. Full particulars and details of the application made by the petitioner No. 1 seeking permission under Section 27 of the said Act and circumstances under which such permission is granted is not before this Court. In fact some of the orders granting this permission are not even legible and none of the Advocates are in a position to supply legible copies thereof. It is not to suggest that anyone has doubted the Government having passed such orders. However, for want of full particulars, it is not possible for this Court to comment on the nature of the order passed by the authority under Section 27 of the said Act. It is not the case of the State Government that such orders were ever sought to be withdrawn. It is therefore, not possible or proper on my part to comment on nature of these orders. Suffice to say that restriction on transfer of excess vacant land under Sub-section (3) of Section 5 is not subject to the provisions of Section 27 of the said Act. It is therefore, not possible to accept the contention raised on behalf of the petitioners that having granted the permission under Section 27, it was not open for the State Government, thereafter, to process further declaration of petitioner No. 1 under Section 6 of the Act and to declare any part of the land as excess vacant land. As noted earlier, Section 42 of the said Act has been given overriding effect to all other laws customs, usage or agreement or decree or order of a Court, Tribunal or other Authority. It is not debated that there cannot be any estoppel against the statute (See ). In that view of the matter argument of promissory estoppel cannot be upheld. The decision of Calcutta High Court in the case of Smt. Rama Debi and Ors. v. Union of India and Ors. , was rendered in some what different-actual background. However, it is true that there are some observations made by the learned Judge concerning the application of Section 27 and Sub-section (3) of Section 5 of the said Act. However, in view of the observations made by the Division Bench of this Court in the case of Kanubhai Sankalchand Patel (Heir of Deed. Sankalchand Manilal Mukhi) v. Nayankunj Co-op. Housing Soc. Ltd. and Ors. (supra) and in the case of State of Madhya Pradesh v. Surendra Kumar and in view of my discussions hereinabove, I am unable to follow the path adopted by the learned single Judge of Calcutta High Court.
25. In the result, I do not find that petitioners have made any case for interference. The petition, is therefore rejected. Rule is discharged with no order as to costs.
26. At the request of learned Advocate Shri P. A. Medh for petitioner No. 2, this order is stayed upto, 23rd September, 2005.