N.H. Bhatt, J.
1. These 17 matters are taken up together because of the common question pertaining to the interpretation of Section 20 of the Urban Land (Celling and Regulation) Act, being Act No. 33 of 1976, but certain factual situations make us divide these petitions into three groups. First 9 matters out of the serial numbers mentioned at the top of this judgment simplicitor deal with only one point, namely, whether the Government before rejecting an application for exemption under Section 20(1) of the Urban Land (Ceiling and Regulation) Act, 1976, hereinafter referred to as the Act for brevity's sake, is bound to give audience to the person who has applied for exemption. In the next six matters commencing from the Special Civil Application No. 2895 of 1983 mentioned at the top of this judgment, the above question is certainly there, but there is one additional point also that was canvassed by the petitioners of these six petitions. They allege that the rejection of their applications was bad for want of any opportunity of audience having been extended to them, but those rejections were bad also on the ground that the Government had brought to bear on their mind extraneous considerations in the form of Government's policy decisions in respect of granting exemption for industrial purposes. So, in these six petitions the point that will be required to be considered is, what is the scope and ambit of the Government's power while dealing with such applications and whether the Government is competent to lay down guidelines even if those guidelines tend to whittle down the comparatively wider scope of power conferred on the State Government by the Parliament under whose authority alone the lands in various agglomerations could be declared surplus and acquired or deemed to be acquired. In the last two matters the declaration of the surplus land has been effected even before the applications made by those parties had come to be dealt with one way or the other. Obviously, but incidentally, the question about the Government's alleged obligation to hear those petitioners in that regard also would arise. We shall take up the last group first. Section 20 of the Act is reproduced below:
20. (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 own motion or otherwise, that, having regard to the location of such land, the purposes 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.
2. Chapter-III of the Act containing Sections 3 to 24 deals with ceiling on vacant lands. The scheme of the Act is too well-known to call for any repeated elaboration. It is truism to state that other stringent provisions of the Chapter-Ill of the Act are subject to Section 20 of the Act which begins with a non-obstante clause. This means that the declaration about the land being surplus can be made only after the decision on an application under Section 20 of the Act for exemption is taken. The over-all consideration of the provisions of Chapter-Ill pre-supposes that the full effect will be given to all the provisions so that a coherent system of working out the problem is evolved. If a declaration under Sections 8(1) and 8(3) proceeds one way or the other, decision of an application for exemption, it will be tantamount to putting a cart before a horse and if the application (covered under that declaration) would ultimately come to be granted and it will be a meaningless exercise, that is why we say that after filing of a statement under Section 6 of the Act, if a citizen applies for exemption under Section 20 of the Act, it is the duty of the Government to deal with that application first and then proceed to resort to Sections 8(1) and 8(3) of the Act. In the petition Nos. 2941 of 1983 and 2161 of 1983 the grievance of the petitioners is that the Government slept over their applications under Section 20 of the Act for exemption and the competent authority actually went to issue the declarations in question under those provisions. As per the Scheme understood and stated to be underlined, the provisions of Chapter-Ill of the Act such an exercise of power is contrary to the spirit of the Act and we, therefore, allow both these petitions by quashing the said declarations in those two petitions and we direct that the Government shall take up their applications for exemption first on hand, decide them in accordance with law that we are laying down in other matters (i.e. hear and then decide) and then the competent authority can take up the question one way or the other under the provisions of Sections 8(1) and 8(3) of the Act. The Special Civil Application Nos. 2941 of 1983 and 2161 of 1983 accordingly stand allowed by making the rule absolute with no order as to costs.
3. We now take-up the group of nine petitions listed first at the top of this judgment beginning with the Special Civil Application No. 2181 of 1983. The provisions of Section 20(1)(a) are already reproduced by us above. The Government's satisfaction about granting or not granting the exemption under that provision obviously rests on objective facts. The factors which are required to be taken into account by the Government are (1) the location of the land (2) purpose for which such land was used at the time the application comes to be made, or (3) the purpose for which such land is proposed to be used in future and (4) such other relevant factors as make the Government decide that it is necessary or expedient and that too in the public interest, to grant the exemption. What is public interest is a matter difficult to be defined, but not difficult to be understood by description. A good deal of factors would be required to be examined by the Government under this head. It is well said that in a complex spectrum of facts like-the one required to be examined by the Government for the purpose of exercising its powers under Section 20(1)(a) which powers are not absolute powers, but are powers coupled with a duty, the Government must have proper presentation of materials before it. More often than not if such a complex issue is taken on hand by the Government ex-parte, incorrect or improper decision is likely to arise. It is, therefore, in the fitness of the things that the Government should ordinarily hear the applicant if the Government is prima facie and ex-parte inclined to take a view that the exemption was not to be granted. If an applicant has specifically sought for an opportunity to present the case personally or through an agent in a situation like the one arising under Section 20(1)(a) of the Act, it is all the more necessary for the State Government to hear the applicant. We would say that the case of an applicant for exemption under Section 20(1)(a) of the Act is akin to the case of a citizen applying for a licence under some provisions of the Act. In the case of Raj Restaurant and Anr. v. Municipal Corporation of Delhi : AIR1982SC1150 , the Division Bench of the Supreme Court has held that where, in order to carry on business a licence is required, obviously refusal to give a licence or cancellation or revocation of a licence would be visited with both civil and pecuniary consequences and as the business cannot be carried on without the licence it would also affect the livelihood of the person. In such a situation before either refusing to renew the licence or cancelling or revoking the same, the minimum principle of natural justice of notice that is, opportunity to represent one's case is a must. When a citizen applies for exemption, say for example, for establishing any industry and such proposed future user of the land is one of the relevant factors to be counted while dealing with an application under Section 20(1)(a) of the Act, the citizen in such a situation would be able to explain his difficulties more effectively if the personal hearing is granted. It is because of this far-reaching effect of the Government's decision on his prospects that we say that the hearing is required to be read as the implicit requirement of the provisions of the Section 20(1)(a) and (b) of the Act.
4. We, in this view, are in the happy company of the Division Bench of the Madhya Pradesh High Court whose judgment is in the case of Nandkishore v. State of Madhya Pradesh : AIR1982MP33 . We would like to reproduce hereinbelow para-6 of the said judgment:
6. The power of exemption has the effect of restoring the applicability of the general law by taking away the exemption to it created by the special law. Accordingly, the power to claim exemption is a valuable right. Where under the provisions of an Act an authority is empowered to grant exemption and a person has a right to claim it on fulfilment of statutory conditions, the authority is bound to hear him and pass a speaking order giving reasons in support of its finding that he is not entitled to the exemption.
5. It is no doubt true that the judgment of the Madhya Pradesh High Court was one relating to an application for exemption under Sub-Clause (b) of Sub-section (1) of Section 20 of the Act, but the underlying principles remain the same. As a matter of fact, some petitions in tins group are the petitions for exemption under Section 20(1)(b) itself. To our mind, the underlying principles remain the same when the Government has to consider an application for exemption either under Clause (a) or Clause (b) of Sub-section (1) of Section 20 of the Act. In this view of the matter these nine petitions beginning with the Special Civil Application No. 2181 of 1983 are required to be allowed by setting aside the orders of refusal to grant exemption. The outcome will be that the Government will afford a reasonable opportunity of audience to all these petitioners and then decide their applications afresh in accordance with the provisions of the Act. The extension of opportunity of audience can be best proved to have been given by the necessary corollary of giving reasons if the vigourous submissions of the applicants are dealt with by a reasonably reasoned order. It is in the interest of the Government also to give a reasoned order in order to escape the charge of non-application of mind. We accordingly direct to give personal hearing to these petitioners and decide the matters by a reasonably reasoned order.
5.1 This brings us to the last group of six petitions. The impugned orders in these petitions will be required to be set aside on the ground that these decisions were reached ex-parte by the Government without affording any opportunity of audience. The petitioners of these petitions, however, want us to decide, to what extent the Government's general guidelines can be laid down by the Government itself in order to enable it to decide such applications themselves. Section 35 of the Act does envisage the issuance of such orders and directions of a general character as it may consider necessary irrespective of any matter, relating to the powers and duties of the competent authority, but they are to be issued when certain questions are required to be dealt with by the Competent Authority under the Act, but not by the Government itself. In order to have a consistent approach to the problems if the Government formulates some guidelines for itself, such an exercise by itself cannot be said to be in any way illegal, even though no statutory provision could be there in that regard. The guidelines in this group of six petitions are, however, attacked on the ground that they go beyond the statutory scope of the Government's powers under Section 20(1)(a) of the Act and also with Government's duties flowing from those powers. In order to understand this particular argument the Government's Circular letter dated 3rd February 1982 being the last of the series and alleged to have overriding effect over earlier resolutions requires to be considered. For the sake of convenience, we shall refer to Annexure-B of the Special Civil Application No. 2185 of 1983 where this resolution is produced. Clause 'KH' pertaining to the existing industries, and para-4 of the said Circular pertains to future industries, were specifically subjected to attack by the learned Advocates appearing for the petitioners in this group of six petitions. Clause 'KH' of para-3 puts an embargo by the Government on its own powers while dealing with the applications of the existing industries seeking exemptions from the rigorous operation of this Act on the ground of expansion. Clause 'KH' provides that the exemption shall be granted if and only if the existing industries had taken effective steps for expansion before the issuance of that Circular, but this ground cannot be said to be foreign to the Government's powers, but in a genuine case the rigid interpretation of this so-called guideline may ultimately detract from the Government's general powers say for example, an existing industry might bona fide take the decision to expand its scope and ambit of operation, but the effective steps might not have been taken for a variety of reasons. If such a guideline is rigidly adhered to, the object behind the Act would stand frustrated. This much clarification is necessary with respect of Clause 'KH' of para-3 of the said Circular of the Government. More onerous, however, is para 4 concerning future industries. The owner of a land may bona fide think of establishing an industry, say, on 28-4-1976 or some period thereto, but the effective steps (what is understood by the term 'effective step' is not at all elaborated arc not accidentally or for some appreciable reason not taken, this sort of rigid adherence to the alleged guideline would make the Government devoid of its powers and consequently not performing its corresponding duty in exercising those powers. It is, therefore, required to be clarified that while deciding the applications for exemptions under Section 20(1)(a) of the Act, only facts that the Government can take into account are (i) that the land is proposed to be used for a purpose which would advance the public interest. Ultimately all applications are required to be decided by the standards and grounds enumerated in Section 20(1)(a) of the Act and none other. Nothing can be allowed to be brought to bear, that in any way would narrow down the scope of the Government's power and consequential possible benefit that may accrue to a citizen. It is, therefore, clarified that such guidelines are only administrative deliberations of the Government at a particular point of time and they cannot and are not to be rigidly followed. Each case is to be decided, we repeat, by taking into account only those factors which are stated to be relevant by the Parliament while enacting Section 20(1)(a) of the Act and none other. The paramount consideration is the necessity or the expediency in the public interest to grant exemption, and that is the sine qua non, but any attempt by the Government by such guidelines to whittle down the ambit of its power and, therefore, lessening the possibility of the corresponding benefit to a citizen are to be discountenanced and, we therefore, say that any such guidelines are not to be taken as in any way binding to the Government which shall be bound to decide every application under Section 20(1)(a) only by the standards provided for in that Clause (a) or Clause (b). These guidelines are, therefore, declared to be not of any binding character and if at all the Government takes their assistance, it can be only for the purpose to deal with relevant factors in their proper perspective, but not in any way further. With this clarification we allow these six petitions also. We understand that while dealing with the applications under Section 20(1)(a) of the Act for industrial purposes, the Government can be requested to consider another policy decision of the Government in enacting Section 23 of the Act. Under the said section it is competent for the Government to confer the surplus land for industrial purposes. If it could be shown by an applicant to the Government that if his land taken as surplus land was liable to be allotted for some industrial purpose, his case for industrial purpose also deserves to be considered, when dealing with his application under Section 20(1)(a) of the Act. We may declare that by this exposition of the ambit scope of Section 20 of the Act we have not tried in any way to define or describe what can be said to be expedient or necessary in the public interest for the Government to accept. It is from the very nature of the things a matter to be decided by the Government in every case.
6. The rule is, therefore, made absolute in these six petitions also by cancelling the Government's orders refusing the exemption under Section 20 of the Act and directing the Government to hear these petitioners and decide the matter by a reasonably reasoned order. The rule is accordingly made absolute with no order as to costs.