KANUBHAI NAGINBHAI SHAH v. COMPETENT AUTHORITY — 1993 DIGILAW 161 (GUJ)

R. A. MEHTA, J. ( 1 ) THE petitioners in these three petitions are holders of vacant land in urban agglomeration of Baroda. The land is survey no. 159 admeasuring 1464 Sq. mts. Each of the three petitioners have their shares of less than 500 sq. mts. The ceiling limit in the urban agglomeration of Baroda is 1500 sq. mts. The petitioners entered into an agreement for sale of this land at the rate of Rs. 7. 00 per sq. ft. (Rs. 75. 35 per sq. mt.) and gave a written notice of the intended transfer to the competent authority under section 26 (1) of the Urban Land (Ceiling and Regulation) Act 1976 ( 2 ) THEREUPON the competent authority exercised first option to purchase such land on behalf of the State Government at a price calculated in accordance with the provisions in the Land Acquisition Act. The petitioners preferred three appeals against the decision to exercise the option. However the appeals were dismissed as premature because according to the appellate authority the Government was yet to pass the final orders under section 26 (2) determining the price calculated in accordance with he provisions of the Land Acquisition Act. The competent authority decided the price at Rs. 58. 00 per sq. mt. and paid that price to the petitioner who accepted the same under protest. In the appeal against that order the appellate authority looking to the merits of the case observed that the competent authority has steam rolled in arriving at his decision and order dated 13. 9 The appellate authority also referred to the earlier appeal which was rejected on August 23 1977 on the ground that the appeal proceedings were premature since three months period had not expired. The appellate authority also observed that it was clear that having waited for three months without any obvious reason for delay the competent authority acted on the last day of the expiry of the statutory period under section 26 (2) to complete at a time all the procedures within one day for determining the price of the land. It was also noted that the opinion of the consulting surveyor was given on September 30 1977 the day on which the competent authority has taken and completed all the proceedings. It was also noted that the opinion of the consulting surveyor was given on September 30 1977 the day on which the competent authority has taken and completed all the proceedings. The appellate authority therefore concluded that there was reason to believe that the appellants had to undergo entire proceedings under dress in order that the competent authority can adhere to the statutory time limit. The appellate authority also held that the manner in which the case was handled and the treatment which was meted out to the appellant and the speed with which the entire proceedings were concluded in one day lcd to the conclusion that the competent authority was in not haste to abide by the statutory limitation provided in the Act. As regards the fixation of price the appellate authority observed that the competent authority had not discussed the merit of the price offered to the appellant by the vendee i. e. Rs. 75. 35 per sq. mt. The appellate authority also observed that the competent authority had not considered that this would be the price offered against an effective demand for exactly the same land in question and had not given any pros and cons as to why he has rejected the price demanded by the appellant and had not applied the factors mentioned in sections 23 and 24 of the Land Acquisition Act and for all these considerations the procedure adopted by the competent authority and the conclusions arrived at by him were found to be not free from bias and were taken in undue haste and it was necessary to quash the order of the competent authority and to remand the case back to him for taking fresh proceedings under section 96 of the Act in an objective and unbiased manner by taking timely action of various stages within three months from the date of appellate order. Thus the appeals were allowed and the matters were remanded. ( 3 ) AFTER the remand the competent authority proceeded to redetermine the price. The petitioners insisted that the question of pre emption be decided. However the competent authority was disinclined to consider that aspect thinking that only the question of price was required to be redetermined. The petitioners approached the appellate authority pointing out this aspect to the appellate authority. The petitioners insisted that the question of pre emption be decided. However the competent authority was disinclined to consider that aspect thinking that only the question of price was required to be redetermined. The petitioners approached the appellate authority pointing out this aspect to the appellate authority. However the appellate authority replied that after the remand the proceedings before the competent authority were subjudice and it would not be proper to give any advice or instruction in respect of a pending matter and after the order of the competent authority if necessary the party can prefer appeal. (Annexure T ). ( 4 ) THIS appliction to the appellate authority and the order thereon were produced before the competent authority. Yet the competent authority observed that as the judgment in appeal was silent about the order dated June 14 1977 it meant that the order of the competent authority dated June 14 1977 was not disturbed by the appellate authority and therefore only the question of price was to be redetermined on remand. This order of the competent authority is annexure C to the petition. On redetermination the competent authority again fixed the price at Rs. 55. 00 per sq. mt. and held that since this was a voluntary sale solatium was not required to be given. ( 5 ) AGAIN the petitioners preferred appeals against these orders of the competent authority and raised the contention that the competent authority has erred in not going into the question of taking a fresh decision regarding pre-emption and option and also raised a contention regarding proper price and solatium. The appellate authority hold that the competent authority was required to redetermine the price only and the decision of exercising option was not required to be redetermined. It is thus clear that the decision to exercise the option has not been considered by any authority at any stage. When the petitioners first approached the appellate authority the appeals were dismissed as premature and after the order of the competent authority the matter has been remanded setting aside the order. Thereafter also the question regarding exercise of option is not considered. It is thus absolutely clear that the petiioners have not been given any opportunity at any stage regarding the exercise of option. ( 6 ) IN the case of G. B. Gautam vs. Union of India and Ors. Thereafter also the question regarding exercise of option is not considered. It is thus absolutely clear that the petiioners have not been given any opportunity at any stage regarding the exercise of option. ( 6 ) IN the case of G. B. Gautam vs. Union of India and Ors. (1993)1 SCC 78 the Supreme Court had an occasion to consider a similar provision of section 269 UD of the Income Tax Act 1961 and in the context of that provision the Supreme Court observed that Courts have generally read into the provisions of the relevant sections a requirement of giving a reasonable opportunity of being heard before an order is made which would have adverse civil consequences for the parties affected and accordingly before an order for compulsory purchase is made under section 269 UD the intending purchaser and the intending seller must be given a reasonable opportunity of showing cause against an order of compulsory purchase being made by the competent authority. The Supreme Court observed that though the time frame within which the order for compulsory purchase has to be made is a fairly tight one but urgency is not such as would preclude a reasonable opportunity of being heard or to show cause being given to the parties likely to be adversely affected by an order of purchase under section 269 UD (1 ). It was further held that the inquiry pursuant to the explanation given by the intending purchaser and the intending seller might be somewhat limited one or a summary one but the time limit provided is not so short as to preclude the inquiry. There also the time limit was of 90 days. ( 7 ) IN the present case not only no opportunity has been given to the parties before such decision but even after such decision the appellate authority as well as competent authority have repeatedly refused to entertain this question. Therefore the decision would be clearly violative of the principles of natural justice and is therefore required to be struck down. ( 8 ) IT is also pointed out that under section 35 of the Urban Land (Ceiling and Regulation) Act the State Government has power to issue orders and directions to the competent authority. Therefore the decision would be clearly violative of the principles of natural justice and is therefore required to be struck down. ( 8 ) IT is also pointed out that under section 35 of the Urban Land (Ceiling and Regulation) Act the State Government has power to issue orders and directions to the competent authority. The petitioners have relied on one such direction dated February 15 1979 (Annexure F) wherein it is directed that under sections 26 and 27 of the Act the right of pre emption shall not be exercised and the committee appointed under the earlier orders dated April 17 1976 would stand cancelled. This circular was issued before the appellate authority decided the matter and therefore the appellate authority was bound to give effect to this circular. ( 9 ) THE learned Asstt. Government Pleader submitted that this circular is contrary to the provisions of section 26 of the Act and therefore it is required to be ignored. It is true that section 26 gives discretion to the competent authority to take a decision to exercise option to purchase the land on behalf of the Government. Since the decision is to purchase the land on behalf of the State Government the State Government has naturally the final word in such decision. When the State Government had issued the directions that no land shall be compulsorily purchased under section 26 of the Act it was binding to the authorities including the competent authority and the appellate authority and it should have been given effect to. For this reason also this matter is required to be allowed by quashing and selling aside the impugned orders. ( 10 ) IN the case of Bhimsinghji vs. Union of India AIR 1981 SC 234 the validity of the Urban Land (Ceiling and Regulation) Act 1976 was considered and it was hold under section 27 (1) of the Act to be invalid in so far as it imposes restriction on transfer of any urban or urbanisable land with a building or portion of such building which is within the ceiling area. This direction in para 5 of the judgment of the Supreme Court does not indicate the reasons. It was mentioned below para 6 that fuller reasons will follow later. This direction in para 5 of the judgment of the Supreme Court does not indicate the reasons. It was mentioned below para 6 that fuller reasons will follow later. These reasons are reported in AIR 1985 SC 1650 and it was stated that the only further order which we propose to pass now is to say that we agree fully with the reasons given by Krishna Iyer J. in his judgment reported in AIR 1981 SC 234 (supra ). Even the concurring judgment of Krishna Iyer J does not indicate any reason except what is stated in para 7 where the learned Judge has agreed with the learned Chief Justice regarding the partial invalidation of section 27 (1 ). Therefore the only reasons are found in the minority judgment of Tuljapurkar J. However as far as the partial invalidity of section 27 (1) is concerned there is unanimity amongst all the Judges of the Bench and the reasons are found in the minority judgment of Tuljapurkar J. They are in paras 101 to 104. Para 104 reads as under :" If vacant land owned by a person falls within the ceiling limits for an urban agglomeration he is outside the purview of s. 3 of the Act. That being so such a person is not governed by any of the provisions of the Act. When this was pointed out to the learned Attorney General he was unable to justify the imposition of the restriction imposed by sub section (1) of s. 27 in case of land falling within the ceiling limits as a reasonable restriction. It must accordingly be held that the provision of sub section (1) of s. 27 of the impugned Act is invalid insofar as it seeks to affect a citizens right to dispose of his urban property in an urban agglomeration within the ceiling limits". ( 11 ) IN view of the aforesaid legal position the circular of the Government cannot be said to be in any way inconsistent with section 26. In fact it is consistent with the interpretation by the Supreme Court that in respect of the land within the ceiling area a citizen is free to deal with his land and he is not governed by the urban land ceiling law. In fact it is consistent with the interpretation by the Supreme Court that in respect of the land within the ceiling area a citizen is free to deal with his land and he is not governed by the urban land ceiling law. ( 12 ) AS a result of the aforesaid discussion the impugned orders of the authorities are required to be quashed and set aside. The petitioners have been paid the price in 1978. Though the possession of the land has been taken by the respondents by way of interim orders in these petitions the respondents are restrained from disposing of or transferring or putting up any construction on the land. ( 13 ) SINCE the impugned orders of compulsory purchase of land are being set aside the parties will have to be put back and restored to their original position. The petitioners would therefore be required to return the money with appropriate rate of interest because for all these years they had the benefit of the amount and they are required to be returned their land which the Government could not put to any use because of the injunction of the Court obtained by the petitioners. ( 14 ) THE petitioners are directed to return the amounts received by them with 12% interest compounded yearly till the date of payment. The learned advocate for the petitioners submits that instead of compound interest of 12% per annum the petitioners be directed to pay simple interest at 24 per annum because the 12% compound interest would be equivalent to about 30% simple interest. But that is due to the long period for which the monies have remained with the petitioners. That is no ground for not awarding compound interest. On deposit of this amount with the respondents authorities the respondents authorities shall return the possession to the petitioners within one month. But that is due to the long period for which the monies have remained with the petitioners. That is no ground for not awarding compound interest. On deposit of this amount with the respondents authorities the respondents authorities shall return the possession to the petitioners within one month. ( 15 ) THE learned Additional Advocate General requests that the operation of this order be stayed till July 15 1993 In view of the fact that the petitioners are to deposit the amount within one month from today and thereafter the respondents have another one month to hand over the possession; it is directed that the petitioners shall have time to deposit the amount till May 15 1993 and the Government will have time to return the possession till June 15 1993 unless by that time any interim order is obtained from the superior court. Application Allowed. .