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CASE NO.: Appeal (civil)  5956 of 1997

PETITIONER: State of A.P.                                            

RESPONDENT: V. Venkataswara Rao (Dead) by L.R.               

DATE OF JUDGMENT: 16/01/2004

BENCH: SHIVARAJ V. PATIL & D.M. DHARMADHIKARI.

JUDGMENT: J U D G M E N T

W I T H

C.A. NO. 5957-59 OF 1997

SHIVARAJ V. PATIL J.

       The respondent Valluru Venkateswara Rao was holder  of excess vacant land to the extent of 5849 sq. metres  (1 acre 44 cents) as per the provisions of the Urban  Land (Ceiling and Regulation) Act, 1976 (for short ‘the  Act’).  He made an application under Section 20(1) of  the Act claiming exemption on the ground that he had  entered into an unregistered lease agreement on  1.5.1975 with M/s. Ushodaya Publications Pvt. Ltd. for  a period of 33 years.  This lease was entered into  during the period when there was no prohibition for  alienation of vacant land. The Act also prohibited any  transaction other than bona fide sales during the  period from 17.2.1975 to 28.1.1976.  The lessee also  filed an application seeking exemption under the Act.   The State Government, after considering the matter,  issued a Government Order G.O.Ms. No. 7 Rev.(UC.III)  Department dated 3.1.1984 granting exemption under the  Act with certain conditions attached including the one  that after the period of exemption of 33 years of  lease, the land would vest in the State Government.   Respondent Valluru Venkateswara Rao filed Writ Petition  No. 19026 of 1988 before the High Court challenging the  said condition imposed in the aforementioned G.O.  granting exemption. A learned Single Judge of the High  Court by his order dated 29.3.1994 quashed said G.O.Ms.  No. 7 dated 3.1.1984 and directed consideration of  exemption before the preparation of the draft statement  under Section 8 of the Act taking a view that the  question of exemption after preparation of the draft  statement was not permissible in law.  Aggrieved by  this order of the learned Single Judge, the State of  Andhra Pradesh filed Writ Appeal No. 791 of 1994 before  the Division Bench of the High Court.  The respondent  Valluru Venkateswara Rao also filed Writ Appeal No. 851  of 1994.  The Division Bench of the High Court dealt  with both the appeals together and passed the impugned  judgment dated 9.4.1997 following the judgment of this  Court and restored the G.O.Ms. No. 7 dated 3.1.1984 but  held that the condition, namely, that after the lease  period of 33 years, the land would vest in the State  Government, contained in para 4(d) of G.O.Ms. No. 7,

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could not be sustained.  Aggrieved by the order of the  Division Bench of the High Court, the State of Andhra  Pradesh has filed Civil Appeal No. 5956 of 1997, to the  extent of striking down condition No. 4(d) contained in  G.O.Ms. No. 7.  M/s. Ushodaya Publications Pvt. Ltd.,  had filed application for impleading before the  Division Bench of the High Court in Writ Appeals.  The  Division Bench of the High Court did not allow the  application filed for impleadment.  M/s. Ushodaya  Publications Pvt. Ltd., has filed Civil Appeal Nos.  5957-5959 of 1997 to the extent aggrieved by the  impugned order.  The original respondent Valluru  Venkateswara Rao has died and his son is on record as  legal representative.

       It was contended on behalf of the appellant that  clause (d) of para 4 of the order of exemption is valid  and if the said clause is void, exemption granted  subject to such condition itself becomes void and  inoperative; the State Government under Section 20 of  the Act was competent to grant exemption subject to  such conditions as may be specified in the order of  exemption and as such condition contained in clause (d)  of para 4 of the order could be validly imposed;  exemption did not confer any vested right in the  respondent; exemption was granted only in the  discretion of the State Government.  The High Court  exercising jurisdiction under Article 226 could not  substitute the said condition.

       On behalf of the Legal Representative of the  Respondent Valluru Venkateswara Rao submissions were  made supporting the impugned order.  Pointing out to  scheme of the Act and, in particular, referring to  Sections 6 and 8 of the Act, it was urged that after  lease period of 33 years, land could not be vested  automatically with the State Government; even after the  expiry of the lease period, if the vacant land became  excess land, it is open for filing the fresh  declaration and it is equally open to exercise option  as to which land within the ceiling  limit is to be  retained.   

       For proper appreciation of the rival contentions,  it is necessary to notice the provisions of the Act to  the extent they are relevant:-

"Section 6. Persons holding vacant land in  excess of ceiling limit to file statement \026  (1) Every person holding vacant land in  excess of the ceiling limit at the  commencement of this Act shall, within such  period as may be prescribed, file a statement  before the competent authority having  jurisdiction 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,  whether or not with a dwelling unit therein,  held by him (including the nature of his  right, title or interest therein) and also  specifying the vacant lands within the  ceiling limit which he desires to retain;  

       Provided that in relation to any State

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to which this Act applies in the first  instance, the provisions of this sub-section  shall have effect as if for the words "Every  person holding vacant land in excess of the  ceiling limit at the commencement of this  Act", the words, figures and letters "Every  person who held vacant land in excess of the  ceiling limit on or after the 17th day of  February, 1975 and before the commencement of  this Act and every person holding vacant land  in excess of the ceiling limit at such  commencement", had been substituted."

"Section 8 \026 Preparation of draft statement  as regards vacant land held in excess of  ceiling limit \026  

(1) On the basis of the statement filed under  Section 6 and after such inquiry as the  competent authority may deem fit to make the  competent authority shall prepare a draft  statement in respect of the person who has  filed the statement under Section 6.

(2)     Every statement prepared under sub- section (1) shall contain the following  particulars, namely :

       (i)     the name and address of the person;                  (ii)    the particulars of all vacant lands  and of any other land on which there is  a building, whether or not with a  dwelling unit therein, held by such  person;

(iii)the particulars of the vacant lands  which such person desires to retain  within the ceiling limit;

(iv)    the particulars of the right, title  or interest of the person in the vacant  land; and

(v)     such other particulars as may be  prescribed.

(3)     The draft statement shall be served in  such 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.

(4)     The competent authority shall duly  consider any objection received, within the  period specified in the notice referred to in  sub-section (3) or within such further period  as may be specified by the competent  authority for any good and sufficient reason,  from the person on whom a copy of the draft  statement has been served under that sub- section and the competent authority shall,  after giving the objector a reasonable  opportunity of being heard, pass such orders

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as it deems fit"

"Section 9 \026 Final statement \026 After the  disposal of the objections, if any, received  under sub-section (4) of Sec. 8 the competent  authority shall make the necessary  alterations in the draft statement in  accordance with the orders passed on the  objections aforesaid and shall determine the  vacant land held by the person concerned in  excess of the ceiling limit and cause a copy  of the draft statement as so altered to be  served in the manner referred to in sub- section (3) of Sec. 8 on the person concerned  and where such vacant land is held under a  lease, or a mortgage, or a hire-purchase  agreement, or an irrevocable power of  attorney, also on the owner of such vacant  land."

"Section 10 \026 Acquisition of vacant land in  excess of ceiling limit \026

(1)     As soon as may be after the service of  the statement under Sec. 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 \026

(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 interests 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  persons 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

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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  with 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  authorized by such State Government in  this behalf and may for that purpose use  such force as may be necessary.

Explanation \026 In this section, in sub-section  (1) of Sec. 11 and in Secs. 14 and 23,  "State Government" in relation to \026

(a)     any vacant land owned by the  Central Government, means the  Central Government;

(b)     any vacant land owned by any State  Government and situated in a Union  territory or within the local  limits of a cantonment declared as  such under Sec. 3 of the Cantonment  Act, 1924 (2 of 1924), means that  State Government."

"Section 11 \026 Payment of amount for vacant

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land acquired \026 (1)  Where any vacant land is  deemed to have been acquired by any State  Government under sub-section (3) of Sec. 10,  such State Government shall pay to the person  or persons having any interest therein, -

(a)     in a case where there is any income from  such vacant land, an amount equal to  eight and one-third times the net  average annual income actually derived  from such land during the period of five  consecutive years immediately preceding  the date of publication of the  notification issued under sub-section  (1) of Sec. 10; or  

(b)     in a case where no income is derived  from such vacant land, an amount  calculated at a rate not exceeding \026

(i)     ten rupees per square metre in the  case of vacant land situated in an  urban agglomeration falling within  category A or category B specified  in Sch. 1; and

(ii)    five rupees per square metre in the  case of vacant land situated in an  urban agglomeration falling within  category C or category D specified  in that schedule."

"Section 15 \026 Ceiling limit on future  acquisition by inheritance, bequest or by  sale in execution of decrees, etc. \026  

(1)      If, on or after the commencement of  this Act, any person acquires by inheritance,  settlement or bequest from any other person  or by sale in execution of a decree or order  of a civil court or of an award or order of  any other authority or by purchase or  otherwise, any vacant land the extent of  which together with the extent of the vacant  land, if any, already held by him exceeds in  the aggregate the ceiling limit, then he  shall, within three months of the date of  such acquisition, 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 and also specifying  the vacant lands within the ceiling limit  which he desires to retain.

(2)     The provisions of Secs. 6 to 14 (both  inclusive) shall, so far as may be, apply to  the statement filed under this section and to  the vacant land held by such person in excess  of the ceiling limit."

"Section 20 \026 Power to exempt \026 (1)  Notwithstanding anything contained in any of  the foregoing provisions of this Chapter \026

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(a)     where any person holds vacant land in  excess of the ceiling limit and the  State Government is satisfied, either on  its own motion or otherwise, that,  having regard to the location of such  land, the purpose for which such land is  being or is proposed to be used and such  other relevant factors as the  circumstances of the case may require,  it is necessary or expedient in the  public interest so to do, that  Government may, by order, exempt,  subject to such conditions, if any, as  may be specified in the order, such  vacant land from the provisions of this  Chapter;

(b)     where any person holds vacant land in  excess of the ceiling limit and the  State Government, either on its own  motion or otherwise, is satisfied that  the application of the provisions of  this Chapter would cause undue hardship  to such person, that Government may by  order, exempt, subject to such  conditions, if any, as may be specified  in the order, such vacant land from the  provisions of this Chapter;

       Provided that no order under this clause  shall be made unless the reasons for doing so  are recorded in writing.

(2)     If at any time the State Government is  satisfied that any of the conditions subject  to which any exemption under Cl. (a) or Cl.  (b) of sub-section (1) is granted is not  complied with by any person, it shall be  competent for the State Government to  withdraw, by order, such exemption after  giving a reasonable opportunity to such  person for making a representation against  the proposed withdrawal and thereupon the  provisions of this Chapter shall apply  accordingly."

       The Government Order G.O.Ms. No. 7 Rev. (UC.III)  Department dated 3.1.1984 granting exemption under  Section 20(1)(a) of the Act reads:-

"GOVERNMENT OF ANDHRA PRADESH ABSTRACT Urban Land (Ceiling and Regulation) Act, 1976  \026 Industries \026 Vijayawada Urban Agglomeration \026 Vijayawada village \026 Exemption under section  20(1) (a) of the Act for the lands held by  Sri V. Venkateswara Rao, in NTS. No. 142,  Block No. 6, Ward No. 1 of Patamata (v)  Vijayawada leased out in favour of M/s.  Ushodaya Publications Ltd. Granted \026 Orders \026  Issued.

REVENUE (U.C. III) Department

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G.O. Ms. No. 7                          Dated 3.1.1984 1.      From Sri V. Venkateswara., Vijayawada         application dated 17.12.1980.

2.      From the Chairman, M/s. Ushodaya  Publications (P) Ltd. letter dated  9.9.1981.

3.      From the Director of Industries and  Commerce letter No. RC.No. 72/ULC/81 dt.  7.3.1981.

4.      From the Commissioner of Land Reforms  and Urban Land Ceilings, Hyderabad,  L.Dis. No. UC3/7142/80 dt. 25.8.82.

O R D E R

Whereas Sri Velluri Venkateswara Rao,  Vijayawada hold vacant land measuring 2438.60  sq. mts., in NTS. No. 142, Block-6, Ward-11  of Vijayawda Village in Vijayawada Urban  Agglomeration which is in excess of the  ceiling limit prescribed in Urban Land  (Ceiling and Regulation Act, 1976 (Central  Act, 33/1976.  Which also includes in the  extent of 5949 sq. mts. Of land leased out in  favour of M/s. Ushodaya Publications  consequent on an ur-regd. lease deed executed  in their favour on the 1st May, 1975 for a  period of thirty three years and hand over  the possession of the said extent of land to  set up "EENADU" complex for running the  News paper industry.

2.      And whereas the entire extent of land  measuring 2438 sq. mts., is needed to be  retained in favour of Sri Valluri Venkeswaa  Rao, Vijayawada till the lease period expires  consequent upon establishing the news papers  industry by the lease on the lease hold land  and running the business.

3.      And where the Government consider it  expedient in the public interest to exempt  the land mentioned in para two above from the  provisions of Chapter-III of the said Act by  imposing a condition that after the lease  period expires the lands so exempted would  vest in the Government along with such  structures on the said land;

4.      Now therefore in exercise of the powers  conferred by clause (a) of sub-section (1) of  section 20 of the Urban Land (Ceiling and  Regulation) Act, 1976 (33 of 1976) the  Governor of Andhra Pradesh hereby exempts:

i)      the land measuring 2438 sq. mts., out of  5949 sq. mts. Of leased land in favour  of M/s. Ushodaya Publications Ltd. in  NTS. No. 142, Block Ward 11 of  Vijayawada village in Vijayawada Urban  Agglomeration mentioned in para 2 above

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subject to the condition that the said  land should be utilized for the purpose  of said proposed industry and also  subject to the following conditions; (a)     that it should not be leased out or sold  without the permission of the  Government. (b)     that the land should be utilized for the  purpose for which it is exempted within  three years from the date of granted  shall stand cancelled and the said land  will be subject to the provisions of the  Urban Land (Ceiling and Regulation) Act,  1976.

(c)     that the land may be mortgaged to any  bank as defined in clause (iii) of sub- section (1) of section 19 including  Andhra Pradesh State Financial  Corporation for the purpose of raising  finances for the industry.

(d)     that the land so exempted above would  vest in the Govt. after the expiry of  the aforementioned lease period under  the provision of the said Act.

(BY ORDER AND IN THE NAME OF THE GOVERNOR OF  ANDHRA PRADESH)

R.KODAMA RAMA REDDY DEPUTY SECRETARY TO GOVERNMENT."

       In the light of the contentions urged before us,  the only question that arises for consideration is  whether the condition contained in clause (d) of para 4  of the Government Order could be sustained.

       Section 3 of the Act declares that no person shall  be entitled to hold any vacant land in excess of  ceiling limit.  Ceiling limit is prescribed under  Section 4.  Under Section 6, every person holding  vacant land in excess of the ceiling limit at the  commencement of the Act was required to file statement  before the competent authority giving particulars and  also specifying the vacant lands within the ceiling  limit which he desired to retain.  Section 8 refers to  preparation of draft statement as regards vacant land  held in excess of ceiling limit.  Under Section  8(2)(iii) the particulars of vacant lands which a  person desires to retain within the ceiling limit are  to be given.  Under sub-section 3 of Section 8, draft  statement shall be served on the person concerned  together with notice inviting objections.  After  considering the objections, the competent authority  after hearing the person shall pass the order.  Under  Section 9, final statement would be issued as to vacant  land held by the person concerned in excess of the  ceiling limit.  Under Section 10(1), the competent  authority shall cause a notification giving the  particulars of the vacant land held by such person in  excess of the ceiling limit stating that such vacant  land is to be acquired by the State Government and the  claims of all persons interested in such vacant land

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may be made by them giving particulars of the nature of  their interest in such land.  Under sub-section (3) of  Section 10, the competent authority may by notification  published in the official gazette declare that excess  vacant land referred to in the notification published  under sub-section (1), 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.  As per Section 15, if on or  after the commencement of the Act, any person acquires  any vacant land together with the extent of the vacant  land  if already held by him exceeds the aggregate  ceiling limit, then he shall within three months of  such acquisition file a statement before the competent  authority.  Under sub-section (2) of Section 15, the  provisions of Sections 6 to 14 are made applicable to  the statement filed under Section 15(1).  Section 20  deals with the power of exemption.  Under the said  Section notwithstanding anything contained in any of  the foregoing provisions of Chapter III (which contains  Sections 3 to 24), the State Government may by order,  exempt such vacant land from the provisions of Chapter  III.  Under Section 20(2), the State Government has  power to withdraw by order such exemption on being  satisfied that any of the conditions subject to which  any exemption was granted was not complied with by any  person.   

       As can be seen from the provisions referred to  hereinabove, the person holding excess land is given  option to express the lands he desires to retain within  the ceiling limit;  he is also given right to file  objections under Section 8 before making a final  statement under Section 9.  Under Section 10(1), after  service of statement under Section 9 on the person  concerned, giving particulars of the excess land held  by such person in excess of the ceiling limit, the  competent authority shall cause a notification stating  that such land is to be acquired by the concerned State  Government.  After publication of notification under  Section 10(1), the competent authority by notification  published in the official gazette shall declare that  the excess land be deemed to have been acquired by the  State Government and upon such publication of  declaration such land shall be deemed to have vested  absolutely in the State Government free from all  encumbrances from the date specified.   

       Under Section 20, the State Government  notwithstanding anything contained in any of the  foregoing provisions of Chapter III is conferred with  the power to exempt excess vacant land from the  provisions of the said Chapter containing Sections 3 to  24.  The G.O. Ms. No. 7 in the present case exempted  the excess vacant land in question from the provisions  of Chapter III of the Act by imposing condition  including a condition that after the lease period  expires, the land so exempted would vest in the  Government along with structures.  Since the excess  land was not acquired and no notification was published  in the official Gazette declaring that the excess land  in question be deemed to have been acquired by the

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State Government, it could not be deemed to have vested  absolutely in the State Government free from all  encumbrances under Section 10(3) of the Act as on the  date the exemption order was issued.  After the expiry  of the lease period, in the normal course, the land  would revert back to the L.R. of respondent  Venkataswara Rao, in the absence of vesting the land in  the State absolutely, subject to the provisions of  Chapter III to the extent they are applicable. If on  account of reverting the land to the respondent in  Civil Appeal No. 5956 of 1997 and respondent No. 2 in  Civil Appeal Nos. 5957-5959 of 1997 and his holding  exceeded the ceiling limit, the provisions contained in  Section 15 get attracted.  In such a case, as per  Section 15(2), the provisions of Sections 6 to 14  shall, so far as may be, apply to the statement filed  under the said Section.  The person concerned could  avail the rights and protections available to him under  Sections 8 to 10 including exercise of option or choice  in the matter of retaining the land within the ceiling  limit.  If the condition contained in clause (d) of  para 4 of the Government Order is sustained, it has the  effect of taking away the rights and protections  available under Sections 6 to 14 as far as they apply.   The Division Bench of the High Court by the impugned  order has held that the said condition was not valid  and could not be sustained for the reasons stated  therein.  With regard to the reasons given by the  Division Bench of the High Court in setting aside the  said condition, we have some reservations to accept.   Be that as it may. In the light of what is stated  above, we hold that the condition contained in para  4(d) of the Government Order cannot be sustained.  It  is true as contended on behalf of the appellant that  the State Government is empowered to impose conditions  while granting exemption under Section 20 but such  conditions cannot run contrary to or defeat the  provisions of the Act.  Conditions may be imposed to  serve the object and purpose of the Act and the   exemption order itself.  One more thing to be noticed  is that safeguard is made under sub-section (2) of  Section 20 by stating that if any of the conditions  imposed while granting exemption are violated, the  State Government is entitled to withdraw the exemption  granted.  As already stated above, further after the  expiry of lease period if the vacant land reverts to  the contesting respondent and his holding vacant land  exceeds the ceiling limit, he is bound by the  provisions of the Act and the action can be taken, if  need be, against him according to the provisions of the  Act in respect of the excess vacant land.  We have to  notice one more submission made on behalf of the  appellant that if the condition contained in para 4(d)  of the Government Order is invalid, the very exemption  order cannot remain in existence.  The Government Order  granting exemption has imposed other conditions to  serve the purpose of exemption and public interest in  terms of Section 20.  In case those conditions are  violated or the land is not used for the purpose for  which exemption was granted, it is open to the State  Government to withdraw the order of exemption under  Section 20(2).  The condition contained in para 4(d) of  the order is separable and even after setting aside the  said condition, the Government Order can be validly  sustained.  This position gets support from the

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judgment of this Court in R.Jeevaratnam vs.  State of  Madras [AIR 1966 SC 951]. In that case the order dated  October 17, 1950 directed that the appellant be  dismissed from service with effect from the date of his  suspension, that is to say, from May 20, 1949.  In  effect the order contained two parts \026 (1) the  appellant be dismissed and (2) the dismissal to operate  retrospectively as from May 20, 1949.  These two parts  of the composite order were severable. This Court while  dealing with said order, observed that "an order of  dismissal with retrospective effect is, in substance,  an order of dismissal as from the date of the order  with the superadded direction that the order should  operate retrospectively as from an anterior date.  The  two parts of the order are clearly severable.  Assuming  that the second part of the order is invalid, there is  no reason why the first part of the order should not be  given the fullest effect.  The Court cannot pass a new  order of dismissal, but surely it can given effect to  the valid and severable part of the order."      

       Further this Court in R.M.D. Chamarbaugwalla and  anr. vs. Union of India [AIR 1957 SC 628] while dealing  with separability of valid and invalid parts of statute  in para 22(2) has stated thus:-

"20(2). If the valid and invalid provisions  are so inextricably mixed up that they cannot  be separated from one another, then the  invalidity of a portion must result in the  invalidity of the Act in its entirety.  On  the other hand, if they are so distinct and  separate that after striking out what is  invalid, what remains is in itself a complete  code independent of the rest, then it will be  upheld notwithstanding that the rest has  become unenforceable."

This being the position, we find no force in this  contention advanced on behalf of the appellant.

       Thus looking to all aspects of the matter and for  the reasons recorded above, in our view, the impugned  order does not call for any interference.  Hence, the  appeals are dismissed with no order as to costs.