A. N. DIVECHA, J. ( 1 ) THE order passed by the Industries Commissioner at Ahmedabad (respondent No. 2 herein) on 8th September/ 8th October 1986 on behalf of the State of gujarat (respondent No. l herein) under section 20 (1) of the Urban Land (Ceiling and rugulation) Act, 1976 (the Act for brief) is under challenge in this petition under Article 226 of the Constitution of India. By its impugned order , as against prayer for grant of exemption to the entire parcel of land bearing survey No. 589/2 admeasuring 60703 square metres situated in Sayajipura within the urban agglomeration of Baroda (the disputed land for convenience), exemption to the tune of 14834 square metres therefrom came to be granted in exercise of powers under section 20 (1) of the Act. ( 2 ) IT is not necessary to set out in detail the facts giving rise to this petition. It appears that the petitioner was in occupation and possession of the disputed land and it obtained industrial licence for establishment of industries some time in 1974. It appears to have made an application on 28th June 1982 for exemption under section 20 (1) of the Act on the ground of expansion of its industrial activities as set out in detail in its application for the purpose. By its order passed on 8th September/sth October 1986, that application was accepted by respondent No. 2 on behalf of respondent No. 1 only in part and an area to the tune of 14884 square metres was exempted from the operation of the Act. Its copy is at annexure-6 to this petition. The aggrieved petitioner has thereupon approached this court by means of this petition under Article 226 of the Constitution of India for questioning its correctness. ( 3 ) RIVAL submissions have been urged before me in this matter. It is however not necessary to refer to them in extenso as this petition can be disposed of on a short ground that the fate of the application for exemption has been decided on the basis of past history without examining the merits of the application made on 28th June 1982. It is however not necessary to refer to them in extenso as this petition can be disposed of on a short ground that the fate of the application for exemption has been decided on the basis of past history without examining the merits of the application made on 28th June 1982. It transpires from the tenor of the impugned order at Annexure-6 to this petition that omission on the part of the petitioner not to take steps for expansion/diversification of its industrial activities in the disputed land during the period from 1974 to 1982 has been taken into consideration. It is not possible to cull out from the impugned order at Annexure-6 to this petition whether or not the petitioner was called upon to explain why no action in that regard was taken from 1974 to 1982. If some explanation was obtained and it was found that the claim of expansion/diversification made by the petitioner with respect to its application for exemption under section 20 (1) of the Act lacked bonafide, there would have been some justification for taking that aspect into consideration. There can be thousand and one reasons for not undertaking any expansion/diversification of its industrial activity by the petitioner. It could have explained reasons for not undertaking such diversification expansion programme. In absence of any such explanation, respondent No. 2 acting on behalf of respondent No. 1 was not justified in taking that aspect into consideration without examining the application made on 28th June 1982 on its own merits. ( 4 ) WHAT has to be considered while deciding the fate of application under section 20 (1) of the Act on the ground of diversification/expansion of an industrial activity in a particular land would be whether the applicant is genuinely interested in undertaking the proposed expansion/diversification and whether it has necessary funds for the purpose or is in a position to raise such funds. In other words, what is required to be examined at that stage would be whether the applicant is bonafide pursuing the proposed diversification /expansion programme or is just a camontlage for retaining a large parcel of land beyond the ceiling limit prescribed under the Act. ( 5 ) IT clearly transpires from the impugned order at Annexure-G to this petition that its author has not addressed himself to this aspect of the matter. ( 5 ) IT clearly transpires from the impugned order at Annexure-G to this petition that its author has not addressed himself to this aspect of the matter. It can therefore, be said to be suffering from the vice of non-application of mind on his part. Such an order cannot be sustained in law. The matter will have to be remanded to respondent No. 1 for restoration of the proceeding to file and for its fresh decision according to law. It would be open to the petitoner to furnish all relevant details, meterials and particulars as called for by and on behalf of the respondents or on its own for the purpose of deciding the fate of the application for exemption in question. ( 6 ) IN the result, this petition is accepted, the order passed by respondent No. 2 on behalf of respondent No. 1 on 8th September/8th October 1986 at Annexure-G to this petition is quashed and set aside. The matter is remanded to respondent No. l for restoration of the proceeding to file and for its fresh decision according to law in the light of this judgment of mine. Rule is accordingly made absolute to the aforesaid extent with no order as to costs. .