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Shah Jitendra Nanalal Vs. Patel Lallubhai Ishverbhai - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtGujarat High Court
Decided On
Case NumberFirst Appeal No. 438 of 1977
Judge
Reported inAIR1984Guj145; (1984)2GLR1001
ActsUrban Land (Ceiling and Regulation) Act, 1976 - Sections 5(3) and 20(1); Specific Relief Act, 1963 - Sections 10 and 12
AppellantShah Jitendra Nanalal
RespondentPatel Lallubhai Ishverbhai
Appellant Advocate J.M. Thakore, Adv. General and; N.J. Mehta, Adv.; H.M. M
Respondent Advocate Suresh M. Shah and; S.K. Zaveri, Advs.
Cases ReferredBai Dosabai v. Mathurdas Govinddas
Excerpt:
.....of this chapter -(a) where any person holds vacant land in excess of the ceiling limit and the state government, is satisfied, either on its owri 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; or otherwise, is satisfied that the applic ation of the provisions of this chapter would cause undue hardship 10 such person, that government ,may by order, exempt, subject to such conditions, if any, as..........for specific performance, subject to the condition of the plaintiff ob,aining exemption from the state government under clause (b) of sub-see. (1) of s. 20a the urban land (ceiling and regulation) act, 1976 can or cannot be passed, following the decisions of the division bench in first appeal no. 1174 of 1968 decided on april 25/26, 1974 and first appeal no. 251, of 1967 decided on nov. 22, 1974 in the context of s. 7, sub-section (2) of the gujarat vacant lands in urban areas (prohibition of alienation) act, 1972. the need for consideration of a larger bench arises because of he important question of law involved and berause the decision of the division bench in kanubhai v. nayankuni society, (1978) 19 gui lr 920: (air 1978guj 140), which takes the view that s. 20 of 1he urban land.....
Judgment:

P.S. Poti, C.J.

1. This matter comes up before the Full Bench on the following order of reference by our learned brother P. D. Desai and R. C. Mankad, jj

'The papers of !he case to be placed before the learned Chief Justice for f,onstitution of a larger Bench to consider the question whether or not there is any material and substantial distinction between the provisions of sub-section (2), S. 7 of the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienation) Act, 1972 (since repealed) and Clause (b) of subscc. (1) of S. 20 of the Urban Land (Ceiling and Regulalion) Act. 1976 and whether, therefore, a conditional decree for specific performance, subject to the condition of the plaintiff ob,aining exemption from the State Government under Clause (b) of sub-see. (1) of S. 20A the Urban Land (Ceiling and Regulation) Act, 1976 can or cannot be passed, following the decisions of the Division Bench in First Appeal No. 1174 of 1968 decided on April 25/26, 1974 and First Appeal No. 251, of 1967 decided on Nov. 22, 1974 in the context of S. 7, sub-section (2) of the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienation) Act, 1972. The need for consideration of a larger Bench arises because of he important question of law involved and berause the decision of the Division Bench in Kanubhai v. Nayankuni Society, (1978) 19 Gui LR 920: (AIR 1978Guj 140), which takes the view that S. 20 of 1he Urban Land (Ceiling and Regulation) Act, 1976 confers upon the State Government power to expemt, which is materially different from the corresponding provision of S. 7 of the Gujarat Vacant Lands in Urban Areas (Prohibition of' Alienation) Act , 1972, requires, in our opinion, reconsideration.'

These questions arise on the following facts. Defendants 3, 4 and 5 entered in,o an agreement with defendents 1 and 2 to sell certain land comprised in survey No. 333 of village Amraiwadi. The sale was to be made to defendants Nos. 1 and 2 or their nominee at Rs. 12/- per sq. yard and the extent covered by the agreement was 3 acres of land. This agreement was executed on 4-7-1966. Thereafter defendants Nos. 1 and 2, in their turn, entered into an aggrement with the plaintiff on 1-7-1967 to sell a portion of such land to the plaintiff at Rs. 15.25 P. per sq. yard, The portion agreed to be sold was subsequently reconstituted under Town Planning Scheme No. 27 into Plot of 3451 sq. yards. Subsequently there appears to have, been a suit for specific performance as between defendants 1 and 2 on one hand and defendants 3 to 5 on the other, pending which suit the stitit from which this appeal arises was filed as Civil Suit No. 1915 of 1970, The strit filed by defendants 1 and 2 as plaintiffs, Civil Suit No. 2062 of 1969, was compromised between the parties thereto under Ex. 125 settlement based upon which Ex. 124 decree was passed on 5-7-1972. The plaintiff was not a party to that suit and naturally, therefore, he was not a party to that decree. In this suit, the plaintiff was nonsuited in so far as specific performance was concerned, though certain other reliefs were granted to him. Against this, plaintiff has come up in appeal.

2. Subsequent to the institution of the suit, the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienatioa) Act, 1972 (Gujarat Act No. 12 of 197?) came into force and later tha, ceased to operate and in its place the Urban Land (Ceiling and Regulation) Act, 1976 (Act No. 33 of 1976) came into force. For the purpose of this case, we are concerned only with the provisions of the latter Act.

3. One of the questions that arisen in the appeal is, whether, in of the provisions of the Urban (Ceiling and Regulation) Act, 1976 (Act No. 33 of 1976) prohibiting transfer of surplus land under S. 5, sub-section (3), any transfer made in contraven, , ion of the said provision shall be null and void and whether a decree for specific performance could be granted in a case where tne suit was pending on the date of the commencement of the Act.

4. Different views have been expressed on this question earlier by this Court but those decisions, to which we propose to advert, are the decisions rendered when the Gujarat Act No. 12 of 1972 was in f orce, The question concerned the grant of a conditional decree in the light of the provisions of that Act. S. 7 of the Gujarat Act No. 12 of 1972 enabled the State Government, by a general or special order, in writing and for reasons to be recorded therein, to exempt any area or any alienation or other transfer of any vacant land from all or any of the provisions of the said Act. Sub-sec, (2) of that section empowered the State Government to exempt any alienation or other transfer of any vacant land from all or any of the provisions of the Act. Sub-section (3) concerned specific exemption to educational, scientific, industrial or commercial purposes. Though S. 4 of that Act prohibited alienation of land in contravention of S. 4, and declared them to be null and void, in view of the power of exemption, the question of specific performance of agreements in respect of land concerning which power of exemption may operate, was considered in two decisions of this Court. The first of it, First Appeal No, 1174 of 1968 judgment in which was delivered on 25/26-4-1974 by a Division Bench consisting of Chief Justice Divan and Justice Dave, noticed that the State Government was empowered by the Legislature to exempt any area or any transfer from the operation of the Act in order to avoid any hardship, by general or special order and, therefore, it could not be said that the Court cannot pass decrees for specific performance in respect of the lands which fell within the term 'vacant land' as defined in S, 3 (j) of the Act The Court held in that case:

'Whatever decree is passed by the Court will be subject to the provisions of S. 7 11' the State Government exempted by an order in writing the present alienation, it would be open to thc plaintiffs to get a decree for specific perforrnance enforced. But it could not be said that merely because of S. 4 of the Act, the Court would be helpless and could not pass a decree for specific performance as prayed for.'

The same was the view expressed by a later Division Bench of Justice M. P. Thakkar (as he then was) and P. D. Desai, J., in First Appeal No, 251 of 1967. That Bench further took note of the fact that Gujarat Act No. 12 of 1972 was itself an Act of temporary duration was originally enacted for one year and was extended from time to time and that the Act was to expire in August 1974 was a matter of relevance. In considering whether a conditional decree can be granted, the Court noticed that besides this, even Act No. 12 of 1972, as amended, provided for exemption being granted for alienating lands in exercise of powers under S. 7 of the Act. A conditional decree was granted, postponing the transfer to the date after the expiry of the Act and also enabling the appellants to apply for exemption under S. 7 and to direct, specific performance in case such exemption was obtained.

5. These decisions, it may be noticed, were rendered before the Urban Land (Ceiling and Regulation) Act 1976 (Act No. 33 of .1976) carne into force in this State on 17th Feb. 1976.

6. It may be necessary to advert, in brief, to ce rtain provisions of the Gujarat Act No. 33 of 197C) for the purpose of answering the reference. 'Vacant Land' is defined in S. 2(q) of the Act and reads :

''Vacant land' means land, not being land mainly used for the purpose of agriculture, in an urban agglomeration but does not include -

(i) land on which construction of a building is not permissible under the building regulations in force in the area in which such land is situated;

(ii) in an area where there are building regulations, the land occupied by any building which has been constructed before. or is being constructed on, the appointed day with the approval of the appropriate authority and the land appurtenant to such building; and

(iii) in an area where there are no building regulations, the land occupied by any building which has been constructed before, or is being construcled on, the appointed (lay and the land appurtenant to such building:

Provided that where any person ordinarily keeps his cattle, other than for the purpose of dairy farming or for the purpose of breeding of livestock, on any land situated in a village within an uiban agglomeration (described as a village in the revenue records), then, so much extent of the land as has been ordinarily used for the keeping of such cattle immediately before the appointed day shall not be deemed to be vacant land for the, purposes of this clause.'

Section 3 provides that except as otherwise provided in the Act, on and from the commencement of the Act, no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which the Act applied. S. 4 makes detailed provisions concerning the determination of vacant land under the Act. S. 5 deals with 'transfer of vacant land'. Sub-sec, (1) was intended to deal with transfers made between the period commencing with the appointed day ending with the commencement of the Act: The object behind the provision was that to see that such transfer does not defeat the provisions of Act No. 33 of 1976. Sub-see. (3) of S. 5 has to be read as it, is of some application to the facts and, therefore, we extract sub-section (3).

'In any State to which this Act applies in the first instance and in any State which adopts this Act under Clause (1) of Art. 252 of the Constitution, no person holding vacant land in excess of the ceiling limit' immediately before the commencement of this Act shall transfer any such land or part thereof by way of sale, mortgage, gift, lease or otherwise until he has furnished a statement under S. 6 and a notification regarding the excess vacant land held by him has been published under sub-section (1) of S. 10; and any such transfer made in contravention of this provision shall be deemed to be null and void.'

Section 6 casts obligation On person holding vacant land in excess of ceiling limit to file statement and Ss. 7 and 8 are machinery provisions, intended to facilitate the, acquisition of vacant land on excess of ceiling limit under the provisions of S. 10(1). S. 10(1) of the Act contemplates the issue by a complete authority of a notification giving the particulars of the vacant land held by 5 person in excess of the ceiling limit. Sub-section (3) of S. 10 enables the competent authority at any time after the publication of the notification under subsec.. (1) to declare, by notification in the 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 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 specificed. Evidently, therefore, the Act contemplates a period between the date of its commencement and the date when it issues a notification when vacant lands held by persons are in a state of suspense. During this period it is open to any person holding vacant land in excess of the ceiling limit to seek exemption provided his situation falls within that contemplated in S. 20(l) (a) or (b) of the Act. Since this section also may be relevant for the, purposes of this case, It would be profitable to extract it, here:

'20. Power to exempt.- (1) Notwithstanding anything contained in any of the foregoing provisions of this Chapter -

(a) where any person holds vacant land in excess of the ceiling limit and the State Government, is satisfied, either on its owri 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 applic ation of the provisions of this Chapter would cause undue hardship 10 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 Clause (a) or Clause (b),'of sub-sec'. '(1) is granted is notcomplied 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.'

Section 21 also deals with the power of exemption but that may not be of relevance heye because the date within which the exemption should have been applied for under S. 21 has admittedly expired. That section provides for an exemption sought by a person holding vacant land in excess, declaring befcre the competent authority that such land would be utilised for the construction of dwelling units for the accommodation of the weaker sections of the society. One more pruvisien that we may advert to is that in S. 27, sub-see. (I) of which prohibits a transfer by way of alienation for a period exceeding ten years, or othewise of any urban or urbanisable land with a building (whether constructed before or after the commencement of the Act) or a portion only of such building for a period ten years of such commencement or from the date on which the building is constructed, whichever is later, except with the, previous permission of the cornpetent authority. The Supreme Court in Maharao Sahib Sbri Bhim Singhji v,. Union of India (1981) 1 SCC 166: (AIR 1981 SC 234) held sub-see. (1) of S. 27 61' the Act to be invalid in so far as it imposed a restriction on transfer of any urban or urbanisable land with a building or a portion o nl.v of such building, which was within the ceiling area. The Court held that such property would be transferable without the constraints mentioned in sub-section (1) of the Act.

7. Just as Gujarat Act Nc. 12 of 1972 prohibited transfer, though it was an Act of a temporary nature, Act No. 33 of 1976 also prohibits 'transfer' under sub-section (3) of S. 5 of the Act and renders any such transfer null and void. There is a provision for exemption under this Act too and naturally, therefore, it may be said in light of the two earlier dec isions to which we have. adverted that a conditional decree could be passed even after Act No.. 33 of 1976. Such was the contention , raised before a Division Bench of this Court in.Kanubhai Sankal 7 phand Patel (Heir of Decd. Sankalchand Manila] .Mukhi) , v. Nayankunj Co-operative Hoiasing Society. Ltd., (1978), 19.Guj LR .920: (AIR 1978 Gui 140), but the contention did not succeed. ' The learned Judges of the Division Bench evidently took the view that the provisions for exemption under Gujarat Act No. 12 of 1972 and the Ceniral Act No. 33, of 1976 were not identical and that there is material, difterence between the two sets of provisions. The Bench Then went on to hold that the agreement for sale that the defendant in that case had executed in favour of the plaintiff was not enlorceable in law. Of course, there are provisions for exemptions in both the statutes and the provisions may not be identical. That by itself may not be determinative of the issue as to whether a conditional decree could be passed. Assuming that there is material difference between the provisions in Act, No. 33of 1976 and the earlier State Act No. 12 of 1972 in regard to the provisions relating to exemption, still, the question whether a conditional decree can be passed in a suit in view of the provisions for exempt.101) in Act No. 33 of 1976 needed independent consideration. This question as such is not seen considered in the judgment in the case of Kanubbai v. Nayankuni.Society (AIR 1978 Guj 140) (supra) and does not appear to have been urged as such before the Court. Merely because the Court found that the two sets of provisions relating to exemption varied, the Court went on to hold that the agreement of sale execused in favour of the plaintiff could not be.enforced. Evidently, the Division Bench which referred this case felt that this question called for consideration by a Full Bench of this Court. Two questions have been referred to the Full Bench and they are

(1)Whether or not there is any malerial and substantial distinction between the Provisions of sub-see. (2) of S. 7 of the Gujarat Vacant Lands in Urban Areas (Prohibition of AlienatiOn) Act, 1972 (since repealed) and C1, (b) of subsee, (1) of S. 20 of the Urban Land (Ceiling and Regulation) Act, 1976?

(2) Whether, therefore, a conditional decree for specific performance, subject to the condition ol the plaintiff obtaining exemption from the State Government under Clause (b) of sub-section (1) of S. 20 of the urban Land (Ceiling and Regulation) Act, 1976 can or cannot be passed though the answer to Question No. 2 is sought to be connected to the answer question 'No. 1, we.ean, answer Question No. 2 independent of any answer to Question No. I and in that event, answer to the first question may not be called for in fact, it would be an academic exercise, though the two provisions are not identical both are for exemptions and the situation, in which the exemption is to be sought are envisaged differently in the two sets of provisions. But the real question which calls for decision in the reference is whether a conditional decree for specific performance could be pasged in view of the provision for exemption in S. 20(1)(b) of the Central Act No. 33 of 1976 and that is a question to which we propose to address ourselves.

8. As we have indicated earlier, the two decisions of the Division Bench of this Court referring to the exemption under Gujarat Act No. 12 of 1972 found no reason why a decree for specific performance should be denied in the li,oht of the provisions for exemption in the Act. That as such is not seen answered in the later decision in (1978) 19 Gui LR 920: (AIR 1978 Guj 140).

9. We had the benefit of hearing Mr. Harubhai Mehta, counsel for the State, who was so heard in the case at his instance on a motion made before us. It seems that the State apprehends that though the decision herein is inter partes, such a decision would ultimately affect the interests of Government as it may involve an interpretation of the provisions of Act No. 33 of 1976 in a manner prejudicial to the Government. In this view, the learned counsel was permitted to address us and he drew our attention to the various provisions in Ac, No. 33 of 1976 particularly that in S. 5(3) and S. 27 to emphasize his point that a 'transfer of 'vacant land' was 'prohibited' under the provisions of the Act, that if, therefore, a 'transfer' had been effected inter partes, it would have been null and void and consequently a Court should not grant a decree for specific performance. Of course, as held by our learned Brother Mehta, J. in Kantilal Amritlal v. Snehlata Vipinchandra Mehta, (1979) 20 Guj LR 490, a decree for specific performance is really a decree which enjoins a transfer inter partes, thouprh it may bethat instead of the party who had to execute the document, the nominee of ihe Court effects such execution, It is really the party who ought to execute. Therefore, merely because the decree for specific performance contemplated execution of a sale deed by the person authorised by the Court, it does not cease to be a transfer inter partes. But, to see whether a plaintiff should be defeated in a suit for specific performance because of the provisions adverted to, it is necessary to look at tne whole scheme of the Act and not any particular provision.

10. At the commencement of the Act, persons may be 'holding vacant land in excess of' ceiling limit', but as the 'vacant land' does not automatically vest in the State Govt., they hold it subject to certain obligations. There are restrictions imposed concerning dealing with such land. Until a notification is issued under S. 10(3), the land does not vest in the Government and that is why we have referred to the situation as one of 'suspense' till that date. Once the land vests in the Staic Government, there is no question of invoking the 'exemption' clause under S. 20(1) (a) and (b), but, until then, there is no right to move the Government for exemption and there is an 'obligation' on the. Governmerit to 'exempt' the land in case the conditions which warrant the exemption sought are satisfied. In case such conditions are shown to be satisfied, it is got as if the power of exemption couid be exercised at the sweetwill and pleasure of' the State Government. The State Government has necessarily to be guided by the policy indicated in the provision itself and cannot traverse that policy. Consequently the Government cannot also refuse to exempt if the case falls within those sub-sections. Therefore, until 'tvesting' under S. 10(3) of the Act, there is always a possibility of 'defeasance of such vesting' on a motion for such exemption. If so, in a case where the person holding excess land is under a contractual obligation to convey property under an agreement to another, could he defeat that obligation by contending that transfer by him would be void and at the same time seeking exemption and obtaining benefits of surh exemption in respect of such land

11. So long as the provision declaring the transfer under S. 5(3) as void is subject to the right to move for exemption, obtain exemption and transfer the property, the power of an owner of vacant land in excess of the ceiling limit to 'alienate' such land is dormant in him and such power could be exercised by him in case he seeks exemption, satistias the Government that the grounds for exemption exist and obtains such excynption. That being the case, a decree cannot be defeated on the ground that 'transfer' inter partes would not be possible. The possibility of obtaining exemption survived till the notification under Section 10(3) of the Act is issued. That being the situation, until then, a plaintiff seeking specific performance cannot be told that the terms of the contract cannot be fulfilled. Once it is said so, the plaintiff loses his right to get a decree for specific performance, though, invoking the provisions of the very Act, based ,on which the plaintiff was told that he could not get conveyance of the property agreed to be sold to him, the owner of excess land obtained exemption and continues in possession of property and perhaps even alienates it later. We see no reason either in law or in logic to countenance such a situation. There is nothina prohibiting a decree being passed for specific performance, with, of course, such alternative remedies as may be called for in a situation where that decree may become inoperative. The decree for specific performance may be made conditional on the exemption under S. 20 M (a) or (b) operating. Of course, it is not for us in this reference to envisage how safeguards should be built in, in such a decree. Resourcefulness, of course, must necessariy find answer to possible situations.

12. We may in this context advert to a decision of the Supreme Court which has relevance on the question in issue before us. We are referring to Bai Dosabai v. Mathurdas Govinddas, AIR 1980 SC 1334. That was a case where there was an agreement between a lessor and a lessee, the lessee agreeing to take a conveyance for the leased property within a specified period for an agreed price, a portion of which was paid forthwith, and further agreeing that in the event the lessor does not sell the property, the lessee has right to seek specific performance and in case of lessee's default to purchase, the lessor has a right to seek sale bv public auction of the leased property. In the event of such public auction, the lessor will be entitled to realize the balance of the agreed price out of the sale proceeds and would be liable to account the balance to the lessee and in case the price realized showed a deficit, the lessor would be entitled to recover the balance from the lessee. it was this that was sought to be enforced in the suit by sale of 1he land bv public auction. A decree was ob,ained, which decree was confirmed before commencement of Act No. 33 of 1976. The matter went to the Supreme Court later in civil appeals and the Supreme Court had to consider the course to be ad-opted in view of the provisions of Central Act N0. 33 of 1976. The learned counsel appearing for the respondentsin this case pointed out that tha said decision would have no application here because in that case the decree challenged in appeal before the Supreme Court had been in existence even prior to the commencement of Act No. 33 of 1976. No doubt, this is referred to in the judgment but this is not of material significance, for, it is not as if, for that reason, the Supreme Court took the view that the appellate decree which was subjected to appeal before the Supreme Court should be confirmed. The Court found that subsequent event, viz. the new enactment had to be noticed and relief moulded to accord therewith. The relevant and significant point to be noticed is that the, Court took the view that in view of the provision for exemptions under Ss. 20 and 21 of the Act having been invoked in that case and exemption was sought to be worked out through a Receiver appointed by the Court, that arrangement should survive and in case the exemptions became effective, the benefit of the proceeds should be applied to discharge the, dues of the decree-holder. We see in this decision an approach to the question which accords with what we have said in this judgment, The [act that provisions of Ss. 20 and 21 of the Act contemplate exemption and, therefore the relief that is to be granted should be moulded in accordance with the provision for exemption have been noticed and applied in that case.

13. In this view, in answer to the second question referred to tis we hold that a conditional decree for specific performance subject to exemption beina obtained under S. 20 of the Urban Land (Ceiling and Regulation) Act, 1976 (Act No. 33 of 1976) is permissible. As we have said earlier, we do not propose tol answer the first question as it mav not' be necessary. The case will be sent back to the Division Bench for disposal in accordarce with the decision herein and in accordance with law.

14. The learned Advocate for respondents 3 to 5 makes an oral application under S. 134A 'of the Constitution of India for leave to appeal to the Supreme Court of India under Art. 133(1)(a) of the Constitution. We see, no substantial question of law' of generial importance which needs to be decided by the Supreme Court arising in this case assming' that this is a final decision against which leave could bs gought. Leave declined.

15. Order accordingly.


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