JUDGMENT Sengupta, J. : This appeal is directed against the order passed by Bhagabati Prosad Banerjee, J. directing the competent authority under the Urban Land (Ceiling & Regulation) Act, 1976 that if there be any excess land under the said Act the authorities concerned should accord permission to the writ petitioners in accordance with law. 2. The facts of the case are shortly stated as follows : The respondents/writ petitioners are the owners of premises No. 26B, 26C, 27, 28 and 29, Dr. Suresh Sarkar Road, Calcutta–700-014. According to the writ petitioners there is no vacant land in excess of the ceiling limit in the said premises within the meaning of the said Act. The said premises consisting of law with old buildings and structures. According to the writ petition although it was not required to obtain permission from the Urban Land Ceiling Authority for development of the said property belonging to the writ petitioners, however, the writ petitioners made an application on 2nd February, 1987 for clearance under the said Act for construction of a residential apartment and/or complex at the said premises. The appellant, the purported authority under the Land Ceiling Act made an enquiry, but they did not issue any "no objection" certificate or any clearance certificate to the writ petitioners. 3. According to the writ petitioners the Competent Authority purportedly refused on the ground the State Government had issued directions or instructions or circulars to the effect that no permission and/or clearance under the Land Ceiling Act should be given to any person who is interested or making profit out of such construction. 4. By a memo dated 3rd July, 1987 the Competent Authority informed the writ petitioners that the Competent Authority had objection to the proposed demolition and construction at the said premises. But no reason has been assigned for such rejection. 5. Against the said order refusing to accord permission for demolition and construction of residential housing complex, the writ petitioners moved this Court, and the writ application was disposed or by Bhagabati Prosad Banerjee, J. by the order under appeal as indicated earlier. 6. But no reason has been assigned for such rejection. 5. Against the said order refusing to accord permission for demolition and construction of residential housing complex, the writ petitioners moved this Court, and the writ application was disposed or by Bhagabati Prosad Banerjee, J. by the order under appeal as indicated earlier. 6. At the hearing before us it has been contended by the appellants that in terms of the Circular of the Government if the construction is to be made on any plot of land after demolishing the existing structures for non-profiteering purpose and in common good in that event permission could only be accorded for demolition and reconstruction. The contention, is that in view of the circulars of the Government, the learned Judge was not right in directing the competent authority to accord permission or to issue no objection certificate to the proposed construction of the residential flats in the premises in question after demolition of the existing structure. 7. The contention of Mr. Jayanta Mitra, learned Counsel on behalf of the respondents/writ petitioners is that the circulars cannot override the provisions of the Act. It is only where there is any land in excess of the ceiling limit within the meaning of the said Act, the competent authority may object to the demolition and construction of the building. But there is no such excess land in this case and as such the competent authority cannot withhold 'no objection' certificate. 8. We have considered the rival contentions. It is necessary for us to refer to the circulars relied on by the appellant. The circulars are as under :– "No. 7887-U-L/7P-21/79(1) The 13th November, 1979. To : The Director, Urban Land Ceiling, West Bengal, 12B, Russel Street, Calcutta 700 071. Subject : Re-construction of buildings on demolition of old and dilapidated ones-anticipatory permission under section 22 of the Urban Land (Ceiling and Regulation) Act, 1976. The circulars are as under :– "No. 7887-U-L/7P-21/79(1) The 13th November, 1979. To : The Director, Urban Land Ceiling, West Bengal, 12B, Russel Street, Calcutta 700 071. Subject : Re-construction of buildings on demolition of old and dilapidated ones-anticipatory permission under section 22 of the Urban Land (Ceiling and Regulation) Act, 1976. The question of construction of new buildings according to approved plans after demolition of old ones on sites which do not at present contact any vacant land beyond ceiling limit has been examined by the Government in consultation with its Law Officer and in the context of the provisions constained in section 22 of the Urban Land (Ceiling and Regulation) Act, 1976 and the guidelines issued by the Government of India on the subject owners of old buildings, who propose to construct new buildings after demolition of the old ones, are to observe the formalities laid down in section 22 in the circumstances contemplated therein. Section implies prior demolition of the existing buildings before the owners can seek the permission of the Competent Authority to retain the land thus rendered vacant for the purpose of re-development, if it be in excess of the ceiling. Owners are feeling, diffident to have recourse to the above measures as the Competent Authorities cannot take any action under the existing provisions of section 22 until the existing buildings are demolished. It has, therefore, been necessary to lay down a policy in the matter so that valuable Urban Lands may not remain locked up in old and decrept buildings and house building activities do not suffer. 2. It has been decided that anticipatory permission may be granted under section 22 of the above Act by the Competent Authority for re-construction of new buildings after demolition of old and dilapidated ones according to approved plans, on sites which do not at present contain a vacant land beyond ceiling limit in the following categories of cases : (i) Where a person holds only one price of land entirely covered by building or buildings and land appurtenant thereto and therefore having no vacant land, where no demolition of the said building/buildings a portion of the land rendered vacant may be in excess of the ceiling limit. (ii) Where a person holds land with building thereon in a site which does not at present contain vacant land beyond ceiling limit but on demolition of the exiting building thereon the entire land or a portion thereof may be excess vacant land of the person, having regard to any other urban property or vacant land held by us a person. 3. Before anticipatory permission in granted to facilitate re-construction of buildings on demolition of the existing ones, the Competent Authority must satisfy itself about the genuineness of the proposal having regard to all surrending circumstances such as the 1) condition of the building, its situation, financial resources of the holder, possibility of the site being put to more profitable use and the re-development plans to be submitted to the appropriate authority. More existence of an intention in the mind of the holder to re-construct the building would not suffice. The bona fide of such intention has to be examined in relation to the surrounding circumstances. The permission to be accorded has to be followed by filing of a statement under, section 22(1) and formal permission under section 22(2) of the Act. It is also to be mentioned in the anticipatory permission that such permission is subject to the filing of a state under section 22(1) after demolition of the buildings and also granting of formal permission under section 22(2) of the above Act." Sd/ - S. K. Mitra Deputy Secretary to the Govt. of West Bengal.'' 9. The next circular is dated 27th January, 1987 which is as follows : "To The Special Secretary, Government of West Bengal, Land and Land Reforms Deptt., Urban Land Ceiling Branch, 12-B, Russel Street, Calcutta–71. Subject : The Urban Land (Ceiling & Regulation) Act, 1976 Demolition of an existing building for re-development in accordance with the Master Plan. Sir, Please refer to the Min. of Works and Housing (now Ministry of Urban Development)'s Letter No. 2/24/77-UCU dated 12.10.77, suggesting a produce to be followed in cases where existing buildings are proposed to be demolished for re-development in accordance with the Master Plan. 2. Sir, Please refer to the Min. of Works and Housing (now Ministry of Urban Development)'s Letter No. 2/24/77-UCU dated 12.10.77, suggesting a produce to be followed in cases where existing buildings are proposed to be demolished for re-development in accordance with the Master Plan. 2. Based on the experience of a case of grant of exemption under section 20(1)(a) read with section 22 of the Urban Land (Ceiling and Regulation) Act, 1976 involving a large chunk of land, it has been considered desirable that the burden of proving that the proposal for re-development would subserve the common good (and is not made for profiteering), which is the basis purpose of the Act, is placed squarely on this applicant and the order of the Competent Authority on is a speaking order. It is, therefore, requested that following may be added as Item No. (iii) after Item No. (ii) under (b) in para 3 of the letter of the Ministry of Works and Housing bearing No. 2/24/77-UCU, dated 12.10.77. "(iii) that, in particular, where large chunks of land are involved, the burden of proving that the proposal for re-development would subserve the common good (and is not made for profiteering), which is the basic purpose of the Ace, is placed squarely on the applicant and the order of the Competent Authority on this is a speaking order." 3. The State Government are advised to take action accordingly. Yours faithfully, Sd/ - C. S. Rao Dy. Secy. to the Govt. of India." There is yet another circular being Circular No. 571(13)-U-L/7B-21/79(I) dated 12th March, 1987 which is to the following effect. "To : The Competent Authority, Calcutta. The Competent Authority & Sub-divisional Officer. The Director, Urban Land Ceiling, West Bengal. Sub. : The Urban Land (C & R) Act, 1976–Demolition of an existing building for re-development in accordance with the Master Plan. The undersigned is directed to invite a reference to this department Circular No. 7888 (12)-U. L. dated 13.11.1979 and to enclose copies of Letter No. 24/24/77-U. C. U. dated 12.10.77 and No. 2/23/77-U. C. U. (Vol-Ill) dated 27.1.1987 from the Ministry of Urban, Development, Govt. of India, on the subject noted above, and to request that the guidelines contained therein should be followed while granting permission under section 22 of the Urban Land (Ceiling & Regulation) Act, 1976. of India, on the subject noted above, and to request that the guidelines contained therein should be followed while granting permission under section 22 of the Urban Land (Ceiling & Regulation) Act, 1976. It has been noticed that the existing buildings having industries which are reportedly close down are sought to be demolished and permission for constructing multistoried buildings on these sites are prayed for. It should be examined in such cases whether such buildings are to be constructed by Housing Co-operative. Private sponsorship may not be treated as such sub-servant to common good. Sd/ - Illegible, Assistant Secretary" The question which calls for determination is whether the State Government can by the aforesaid circulars compel the competent authority not to allow any construction in a case where construction has to be made upon demolition of existing structure and if such construction facilitates earning of profit by the developer of the property. In the second circular dated 27th January, 1987 relied on by the appellant, a rider has been added by the circular dated 12th October, 1977 to the effect that where a large chunk of land is involved, the burden of proving that the proposal of re-development would subserve common good and that it is not made for profiteering, which is the basic purpose of the Act, is placed squarely on the applicant. In our view the question of burden of proof will only arise in a proceeding where the competent authority purports to hold that there is excess land and such excess land can only be allowed to be retained by the applicant for utilisation, if a housing co-operative constructs the building. The question of burden of proof at the stage when an existing building is demolished and in its place another multistoryed building is constructed cannot and does not arise at all. In our view the circulars relied on by the appellants cannot apply to such a contingency. In every re-development on the existing land with building, demolition of the existing structure is necessarily involved. Whenever the Corporation sanctions plan it specifically directs demolition of existing structure before a new building can be erected. Where there is existing building over a plot of land such land does not come within the purview of "vacant land" under the said Act. Whenever the Corporation sanctions plan it specifically directs demolition of existing structure before a new building can be erected. Where there is existing building over a plot of land such land does not come within the purview of "vacant land" under the said Act. It does not stand to reason that because the structure is demolished for construction of a new building on the identical site, it would automatically come within the purview of vacant land. After demolition, nature and character of land do not charge. The only change that is made is that instead of two storeyed, three storeyed or four storeyed existing building, a multi-storeyed building is constructed without there being any excess land within the meaning of the said Act. It is difficult to imagine a situation where a construction of building is made without any profit motive. Any building project even for the common people must necessarily involve some profit for the developer. Even where the Government undertakings or Government Departments make construction of multistoreyed building for the low or middle income groups the element of profit is always taken into account. It cannot be a sound commercial proposition that a developer shall construct buildings without any profit motive for providing accommodation to the middle class or upper middle class on actual cost basis. No promoter would venture to engage in the business of construction of house if he has to sell flats at a cost lower than the cost incurred by him. Even the Government or public undertaking cannot go in for such construction. It is not that the Housing Co-operative Society always provides flats at a cheaper rate to the members on no profit basis. To obtain a flat in a Housing Co-operative Society in a post locality of Calcutta, a member has to spend huge sum of money. Can it be said that in such a case the construction was made for the common good inasmuch as the common people is provided with a residential complex ? In an urban area in or around Calcutta it is hardly possible for any middle class or upper middle class family to buy a small plot of land for construction of a residential house in view of scarcity and prohibitive price of land. The only option to them is to buy a flat which can only be provided by promoter or a developer of multistoreyed building. The only option to them is to buy a flat which can only be provided by promoter or a developer of multistoreyed building. The Co-operative Housing Societies have created more problems for the middle class and upper middle class people than they have solved. A person would prefer to have a flat, constructed by a developer even if he has to pay more than the price fixed by a Housing Co-operative Society only to avoid all future complications arising in a Co-operative Housing Complex where sense of Co-operation is absolutely lacking and where time is never considered to be the essence of the contract for construction and sale of flats. 10. It would appear from the circular dated 12th March, 1987 that where the existing buildings having industries which are reportedly closed down are sought to be demolished, permission has to be sought for construction of multistoreyed building on those sites. This has got no application to the facts of this case. It is not the case here that a multistoreyed building is sought to be constructed at the site after demolition of the existing building of an industry since closed down. Accordingly, in our view this circular cannot be made applicable to the facts of this case. 11. Even if section 22 is applicable in the instant case, it has to be considered whether by the circulars any objective of the Act is being achieved and whether the Act has given any guidelines for refusing or allowing permission for construction of a house after demolition of the existing structure. 12. The Act is intended to achieve, inter alia, the following objectives :– i) to prevent concentration of urban property in the hands of a few persons and speculation and profiteering therein ; ii) to bring about socialisation of urban land in urban agglomerations to subserved the common good by ensuring its equitable distribution ; iii) to discourage construction of luxury housing leading to conspicuous consumption of scarce building materials and to ensure the equitable utilisation of such materials ; and iv) to secure orderly urbanisation. 13. 13. Section 22 of the Urban Land (Ceiling & Regulation) Act, 1976 provides as follows : "Retention of vacant land under certain circumstances– (1) Notwithstanding anything contained in any of the foregoing provisions of this chapter, where any person demolishes any buildings on any land held by him or any such building is destroyed or demolished solely due to natural causes and beyond the control of human agency and as a consequence thereof, in either case, the land on which such building has been constructed becomes vacant land and the aggregate of the extent of such land and the extent of any other vacant land held by him exceeds the ceiling limit then, he shall within three months from the date of such demolition or destruction file a statement before the competent authority having jurisdiction specifying the location, value and such other particulars as may be prescribed of all the vacant lands held by him. (2) Where on receipt of a statement under sub-section (1) and after such inquiry as the competent authority may deem fit to make, the competent authority is satisfied that the land which has become vacant land is required by the holder for the purpose of re-development in accordance with the master plan, such authority may, subject to such conditions and restrictions as it may deem fit to impose, permit the holder to retain such land in excess of the ceiling limit for such purpose and where the competent authority is not so satisfied and does not so permit, the provisions of sections 6 to 14 (both inclusive) shall so far as may be, apply to the statement filed under sub-section (1) and to the vacant land held by such person in excess of the ceiling limit." 14. The Act has not laid down any guideline to be followed in allowing application for exemption, what conditions and restrictions should be imposed must depend on the facts and circumstances of each case. It is true that one of the objects of the Act is to discourage construction of luxury housing estate but it cannot be said that in Calcutta only luxurious buildings are being constructed. Because of the scarcity of land in urban area and increasing pressure on such land for various reasons there is no other alternative but to buy a flat in multistoreyed building depending on the means of the buyer. Because of the scarcity of land in urban area and increasing pressure on such land for various reasons there is no other alternative but to buy a flat in multistoreyed building depending on the means of the buyer. He has to buy such flat at the prevailing market price. It appears to us that no objective facts have been specified in the matter of exercise of the discretion by the competent authority in allowing or refusing "no objection" Certificate to the applicant who wants to demolish the structure and intends to construct a new building thereon. If such demolition of the existing structure brings the land within the meaning of vacant land, it is all the more necessary for the competent authority to indicate the grounds supported by reasons for the decision. 15. It is fundamental requirement of fair play and natural justice that the party against whom an adverse decision is taken should know at the end of the day why the particular decision has been taken. If no reasons are given the decision will be arbitrary. The Competent Authority was, therefore, under an obligation to give reasons for the decision. Having not done so, its decision is liable to be set aside. 16. In our view, therefore, on the facts and in the circumstances of the case there was no material before the competent authority to refuse "no objection" to the respondents writ petitioners. The right guaranteed by the Constitution to carryon business cannot be lightly interferred with unless there are compelling reasons to impose restrictions or prohibitions. Whether a particular construction will subserve public good is essentially a question depending whom the construction is meant for. That apart, there cannot be any double standard of judgment in dealing with the applicants for "no objection" similar cases. It has not been disputed by the appellant that in two similar cases the competent authority accorded permission for construction. It is necessary to refer those cases. 17. On 11th December, 1987 the Competent Authority, Calcutta under the Urban Land (Ceiling and Regulation) Act, 1976 with respect to the property at No. 187, Prince Anwar Shah Road, has accorded permission which is as under :– "Subject : Regarding No-objection certificate in respect of premises No. 187, Prince Anwar Shah Road. It is necessary to refer those cases. 17. On 11th December, 1987 the Competent Authority, Calcutta under the Urban Land (Ceiling and Regulation) Act, 1976 with respect to the property at No. 187, Prince Anwar Shah Road, has accorded permission which is as under :– "Subject : Regarding No-objection certificate in respect of premises No. 187, Prince Anwar Shah Road. Sir, In reference to your application dated 11.9.87 for clearance you are hereby informed that the undersigned has no objection to the proposed demolition of construction at premises No. 187, Prince Anwar Shah Road subject to section 12(1) of the Urban Land (Ceiling & Regulation) Act." 18. Further the Competent Authority has given following permission on 4th May, 1985 with respect to the premises No. 9, Hunger Ford Street, Calcutta. 19. "In compliance with your application for clearance you are hereby informed that the undersigned has no objection to the proposed construction after demolishing the existing buildings at premises No.9 Hunger Ford Street, Calcutta in accordance with the plan to be sanctioned by the Corporation of Calcutta". 20. In those two cases 'no objection' certificate were issued to the proposed construction after demolition of the existing building subject to the sanction of Calcutta Municipal Corporation. In our view respondents cannot act arbitrarily in refusing to accord sanction in this case. 21. For the reasons aforesaid this appeal is dismissed. The competent authorities under Urban land (Ceiling & Regulation) Act is directed to issue "no objection" certificate to the respondents within two weeks from the date of communication of the operative part of this judgment and order. 22. The application and the appeal are disposed of accordingly. Filing of paper book is dispensed with. Undertakings will stand discharged. Each party will pay and bear its own costs. All parties shall act on a signed copy of the minute of the operative part of this judgment and order upon usual undertakings. Yusuf J.: I agree.