A. v. KULKARNI VS STATE OF KARNATAKA — 1998 DIGILAW 452 (KAR)

H. N. TILHARI, J. ( 1 ) BY this petition under Article 226 of the Constitution of India, the petitioners have challenged the order dated 24-9-1993 passed by the government in. No. Vanae/110/cup/86/bangalore (Annexure-P ). ( 2 ) THE facts of the case in a nutshell are that the petitioner had moved an application for grant of exemption under Section 20 (1) of the urban Land Ceiling Act, 1976 (hereinafter referred as the 'act'), with reference to the land bearing No. 109/ - measuring 13 acres, situated at Sattur Taluk, Dharwad District. With reference to the said land on 19-8-1963 the competent authority granted permission to put the above land for non-agricultural use by an Order No. LNA. SR. 1537, dated 10-8-1963. Further the second respondent acceeding to the request of the petitioner to exempt the said land from the operation and purview of chapter III of the Act, has granted the said exemption, subject to certain conditions as contained in order dated 12-4-1983 at Annexure-D. The condition No. (III) was to the effect that" (III) The person mentioned in Column 1 of the Schedule shall not transfer by way of sale, mortgage, gift, lease or otherwise the lands described in Columns 2 and 3 of Schedule without prior permission of the Government and such permission shall be subject to such condition as Government may deem fit to impose". ( 3 ) THE petitioner's case is that, after having got the exemption the petitioner sought extension of time to complete the construction of Industrial shed, which was no doubt granted by an order dated 19-5-1983 at Annexure-A to the writ petition. On 19-11-1985 the petitioner made his representation to respondent 2 for extension of time for another period of two years or for extension of the order Annexure-D for another period of two years, for the reasons stated for that request. Certain clarification was also sought for from the petitioner. The petitioner sent a reply vide Annexure-H. ( 4 ) THEREAFTER, the petitioner also sent a letter explaining the delay in implementing the project dated 3-2-1988 as per Annexure-K. As long time did pass, the project could not be completed and implemented. Thereafter first respondent issued a show-cause notice as to why the land be not, acquired and exemption be recalled. Thereafter first respondent issued a show-cause notice as to why the land be not, acquired and exemption be recalled. It was also stated that the petitioner has not filed any documents nor furnished any document to prove the financial burden of the firm and petitioners were asked to show cause within 21 days. ( 5 ) THEREAFTER on receipt of the said show-cause notice, the petitioner sent an interim reply dated 6-6-1992 and a detailed reply along with copies of documents on 6-7-1992. Thereafter the 2nd respondent passed the impugned order dated 23-9-1993. The petitioner's case is that the respondent 2 has passed the impugned order on the recommendation of the High Power Committee without applying its mind to the petitioner's case for delay. Petitioner's case is that they have not given any opportunity of personal hearing before passing the impugned order. The recommendations are vitiated, according to the petitioner due to non-consideration of the vital documents by the High Power Committee and as the decision was given or passed only on the basis of recommendations of the said committee, which were not at all communicated to the petitioner before passing the impugned order on the basis thereof. ( 6 ) IT is further submitted that the petitioner was not supplied with the copies of the proceedings of the High Power Committee. That in reply dated 6-6-1992 at Annexure-M, it has been stated amongst other things that 'due to unforseen circumstances beyond our control and recession in our existing industry, we have suffered huge losses'. We have borrowed from KSFC for procuring additional machinery, the loan which we were unable to pay and the same is overdue along with interest and the amount is increasing year by year. We have also defaulted in the payment of our sales tax due to the State Government, we have also have PF liability. Thus all the above liabilities are pending and the same is mounting year by year. The list of our liabilities shall be submitted to you in due course. We also have bank liability. It has been further mentioned that the permission had been obtained for setting up the industry, but on account of the present condition and the liabilities mounting from year to year, the petitioner found it highly impractical to start the industry in the area surrounded by residential houses as well. We also have bank liability. It has been further mentioned that the permission had been obtained for setting up the industry, but on account of the present condition and the liabilities mounting from year to year, the petitioner found it highly impractical to start the industry in the area surrounded by residential houses as well. Therefore a request was also made for permission being granted for sale of its land in that area for residential purpose and to relieve the petitioner from undue financial hardship as well. ( 7 ) ANNEXURE-N is dated 6-7-1992, wherein a list of liabilities has been indicated to the tune of Rs. 36. 30 lakhs, inclusive of interest and it was stated that there were undue hardships and the petitioner as such sought for permission to sell the land for residential purpose, so that the applicant may be relieved of all the debts and liabilities finally. The above request was rejected by Annexure-P to the writ petition dated 26-9-1993 and it has been rejected on the ground that in view of the supreme Court decision in the case of S. Vasudeva v State of Karnataka and Others, the Government has no power under Section 20 (l) (b) of the urban Land (Ceiling and Regulation) Act, 1976, to permit sale of excess land and State High Court's order of stay of sale/transfer of excess land. It has been contended by the learned Counsel for the petitioner, Ms. Anuradha, holding brief for Sri D. L. N. Rao, Counsel for the petitioner that the order impugned is really a refusal to exercise the power on basis of Government's opinion that it had no power to grant exemption and permit sale under Section 20 (1) (b) of the Act. ( 8 ) THE learned Counsel for the petitioner further contended that the decision referred by the Government, namely the decision of the Supreme court in the case of S. Vasudeva, supra, has been overruled by a larger Bench of the Supreme Court in the case of T. R. Thandur v Union of India and Others. The learned Counsel for the petitioner further contended that 3 Judges Bench of the Supreme Court has opined that when exemption is granted without condition, the impact of order granting of exemption is that the logical consequence of the exemption as indicated there must follow. The learned Counsel for the petitioner further contended that 3 Judges Bench of the Supreme Court has opined that when exemption is granted without condition, the impact of order granting of exemption is that the logical consequence of the exemption as indicated there must follow. It must follow that if the restriction on transfer of the vacant land in excess of the ceiling limit is only because of any provision contained in Chapter III i. e. , in Sections 3 to 24, then the effect of the exemption under Section 20 is to lift even that embargo. Sub-section (2) gives to the State Government power to withdraw the exemption under clause (a) or clause (b) of sub-section (1), if it is satisfied in the manner indicated that any of the conditions subject to which the exemption has been granted has not been complied with. The learned Counsel further contended that, in this view of the matter, apart from non-application of mind by the Government and non-consideration of the documents furnished, is illegal and void. ( 9 ) THE learned Government Advocate Sri M. H, Ibrahim, contended that in this case a reply was furnished in respect of notice. The exemption was withdrawn as condition in terms of order was not complied and land was not used for the purpose with reference to which exemption had been granted. If petitioner wants to claim exemption on account of undue hardship, a fresh application should have been made under section 20 (1) (b) and the Government could have considered the same. ( 10 ) I have applied my mind to the contentions urged by the learned counsel for the petitioner and the Government Counsel Shri Ibrahim. ( 11 ) EXEMPTION has been granted under Section 20 (1) (a) but subject to the conditions prescribed and placed under order. Under the order, the right to transfer the property to the petitioner, would have been available if there would have been no such condition, in view of the decision of the Court. No person shall transfer by way of sale, mortgage, 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. No person shall transfer by way of sale, mortgage, 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. The learned counsel for the petitioner further contended that no doubt right to transfer was recognised under this order, but that party shall not make transfer thereof without taking prior permission from the Government to transfer in either way. She further contended that the undue hardship could have been considered under Class 2. But the Government has opined that it had no power to permit transfer. In my opinion, the government on the basis of the decision of the Supreme Court in vasudev's case, supra, which has been overruled by the 3 Judges Bench of the Supreme Court in T. R. Thandur's case, supra, passed the order impugned which is not according in law. ( 12 ) DEALING with the aspect their Lordships of the Supreme Court in the case of T. R. Thandur, supra, have observed that"the condition precedent for granting exemption under clause (a) or clause (b) must, however exist but on the exemption being granted thereunder, the logical consequence of the exemption as indicated must follow. It must follow that if the restriction on transfer of the vacant land in excess of the ceiling limit is only because of any provision contained in Chapter III in Sections 3 to 24, then the effect of the exemption under Section 20 is to lift even that embargo. Sub-section (2) gives to the State Government power to withdraw the exemption under clause (a) or clause (b) of sub-section (1) if it is satisfied in the manner indicated, that any of the conditions subject to which the exemption has been granted is not complied with. The power of withdrawal in sub-section (2) is to ensure full compliance of the conditions subject to which the exemption is granted. The restriction on transfer may be imposed by such a condition. In that event, the restriction is by virtue of the condition imposed and not because of any statutory prohibition in Chapter III of the Act". The power of withdrawal in sub-section (2) is to ensure full compliance of the conditions subject to which the exemption is granted. The restriction on transfer may be imposed by such a condition. In that event, the restriction is by virtue of the condition imposed and not because of any statutory prohibition in Chapter III of the Act". ( 13 ) IN para 10 of the judgment, their Lordships have further observed that-"for the reasons stated, because of the provision made in Section 20 an order of exemption made under Section 20 exempts the vacant land in excess of the ceiling limit from this restriction of transfer because the order of exemption exempts the excess vacant land from the provisions of Chapter III". From the above it is clear that provisions of Section 20 exempts the excess land from restriction of transfer. By virtue of the condition contained in the order and condition providing that the transfer can be made only with permission of the Government, that is on a conditional order being passed under Section 20, the condition becomes part of the order and effects the operation and implementation of the order, in the sense, the transfer can be made only with the said permission, because of the condition in the exemption order and without this restriction is in the order is to operate. No doubt the party may approach the Government for withdrawal of the said condition and granting permission to transfer, because the Government under its power can consider to grant of permission to transfer. Apart from that, Section 20, clause (b), it is more clear that this section does empower the State Government to exempt vacant land, in excess of the ceiling limit, for the purposes of transfer on the necessary conditions be established or made out therefor. ( 14 ) THEIR Lordships in para 16 of T. R. Thandur's case, supra, have observed that"cases falling under clause (b) for grant of exemption may be rare, but it cannot be said that the enactment of clause (b) is an exerelse in futility which does not permit grant of exemption in any case of undue hardship with permissions also to transfer". It is further observed by their Lordships as T. R. Thandur's case, supra, clearly reveals that the Government has power to grant exemption with right to transfer. It is further observed by their Lordships as T. R. Thandur's case, supra, clearly reveals that the Government has power to grant exemption with right to transfer. It can permit or grant permission in cases of undue hardship with permission to transfer or with no restriction on the right of the transfer. When this decision, i. e. , T. R. Thandur's case, supra, has overruled earlier decision in S. Vasudeva's case, supra, in my opinion, this order of the Government which is impugned in this petition dated 24-9-1983 appears to be an order refusing to exercise the power to grant permission to sell remaining land, on the ground that the Government has no power to permit the sale of excess land. ( 15 ) THE order impugned in this writ petition, in my opinion, is a clear case of failure to exercise the power vested in the Government to grant permission to sell the remaining land in case of undue hardship arid to grant exemption under Section 20 (b ). It appears it is just and appropriate to set aside and quash the impugned order and to direct the State government to consider the petitioners application as per Annexures-M and N for grant of permission to sell or for exemption under clause (b) of section 20 and if the petitioner is able to establish the case of undue hardship, then to grant appropriate order in accordance with law. ( 16 ) THE writ petition is as such allowed. Let a direction be given to the Government, in clear terms that in view of the Supreme Court decision in T. R. Thandur's case, supra, it has got power to grant permission as well as it has got power to grant exemption with permission under Section 20 (b) if appropriate case is made out of undue hardship by the petitioner, to pass necessary orders after giving an opportunity of hearing to the petitioner, in accordance with law. Until the matter is disposed of by the Government, possession from the petitioner may not be taken. --- *** --- .