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Odhavji Narsi Rajgor Vs. State of Gujarat and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtGujarat High Court
Decided On
Judge
Reported in(1976)17GLR259
AppellantOdhavji Narsi Rajgor
RespondentState of Gujarat and anr.
Excerpt:
- - the impugned order clearly shows that while rejecting the application made by the petitioner the state government did not decide whether he was indebted or not. if the creditors or lenders recover their dues from debtors, monies so recovered by them start flowing again in the legitimate channels of trade, business and other economic activities and enjoy, what is called in economics, liquidity preference......therefore, made under sub-section (2) of section 7 of the vacant lands act an application to the state government for exemption of alienation or transfer of his land from the provisions of the act. the state government by its order which is impugned in this petition refused to grant exemption.3. it is that order which is challenged in this petition.4. the question which has been raised before me relates to the scope and ambit of sub-section (2) of section 7 and its application to the facts of this case. section 7 confers upon the state government the power to grant exemption from all or any of the provisions of the vacant lands act. sub-section (2) of section 7 under which the present application was made to the state government provides as follows.the state government may, if it.....
Judgment:

S.H. Sheth, J.

1. The petitioner is one of the owners of S. No. 131 situate in the city of jamnagar. It admeasures 5 acres-37 gunthas. Since 1963 it forms a part of jamnagar municipal area. It is the case of the petitioner that he and his sons partitioned the joint family properties on 13th February 1959. S. No. 131 could not be the subject matter of that partition between them because there was a litigation in relation to it. On 6th September 1971, after the litigation had ended, the petitioner got possession of that land.

2. The petitioner alleges that he has been in debts since 1967. His debts include a debt which he owes to the Gujarat State Co-operative Land Development Bank Ltd. According to the petitioner, he received notices from the bank to pay up the debt which he owes to it. Meanwhile on 12th August 1972 the Gujarat Vacant Lands in urban areas (prohibition of alienation) Act, 1972 came into force (hereinafter referred to as the Vacant Lands Act). The petitioner wanted to sell a part of the land in question to pay up his debts. He, therefore, made under Sub-section (2) of Section 7 of the Vacant Lands Act an application to the State Government for exemption of alienation or transfer of his land from the provisions of the Act. The State Government by its order which is impugned in this petition refused to grant exemption.

3. It is that order which is challenged in this petition.

4. The question which has been raised before me relates to the scope and ambit of Sub-section (2) of Section 7 and its application to the facts of this case. Section 7 confers upon the State Government the power to grant exemption from all or any of the provisions of the Vacant Lands Act. Sub-section (2) of Section 7 under which the present application was made to the State Government provides as follows.

The State Government may, if it considers it necessary so to do for avoiding any hardship, exempt, by an order in writing, any alienation or other transfer of any vacant land from all or any of the provisions of this Act.

The power to grant exemption from all or any of the provisions of the Vacant Lands Act, has, therefore, been conferred upon the State Government in cases of hardship. If an application is made to the State Government for granting exemption under Sub-section (2) the State Government has to decide upon the hardship of the person who makes the application. In other words, the State Government has to decide what hardship he would face if the exemption was not granted and whether exemption should be granted in order to avoid the hardship which he faces. What is a hardship and whether a particular set of facts and circumstances constitute hardship are questions of fact in each case. While determining the question of hardship the State Government has first to decide upon the existence of the facts and circumstances which an applicant alleges before it. After permitting such an applicant to place his case before them and to lead such evidence in support of his case as he wants to lead, the State Government has to decided whether it accepts the evidence fully or partly. If the State Government accepts the facts and circumstances placed before it by an applicant, the next question which arises is whether those facts and circumstances constitute a hardship within the meaning of Sub-section (2) of Section 7. If the State Government comes to the conclusion that the facts and circumstances accepted by it constitute hardship for an applicant, the next question which it has to decide is whether exemption under Sub-section (2) of Section 7 should be granted. If it decides that it should not be granted, it is necessary for it to say why it should not be granted.

5. In the instant case, the petitioner alleged that he was heavily indebted. His indebtedness, according to him, was the hardship which he had been facing and which he wanted to remove by selling the land in question, recovering the sale proceeds and paying up his debts with the help of those sale proceeds. The impugned order clearly shows that while rejecting the application made by the petitioner the State Government did not decide whether he was indebted or not. Obviously, therefore, the State Government could not decide whether there was any hardship for the petitioner which warranted the grant of exemption to him under Sub-section (2) of Section 7 in respect of the land in question. In a case under Sub-section (2) of Section 7 where it is alleged that an applicant is in debts and that he wants the exemption from the provisions of the Vacant Lands Act to sell his vacant land in order to discharge his debts, it is always necessary for the State Government to decide whether his indebtedness exists and if it exists, to what extent. If the State Government finds that an applicant is not indebted, the further question of deciding whether he has any hardship to mitigate, avoid or remove for which exemption should be granted to him does not arise. However, if the State Government finds that an applicant is in debts, indebtedness, in my opinion, is certainly a hardship within the meaning of Sub-section (2) of Section 7 of the Vacant Lands Act. Indebtedness is a hardship within the meaning of Sub-section (2) of Section 7 because no prudent man with a sense of social responsibility wants to live in society in debts on one hand and with immovable property on the other hand. In a case where a debtor wants to discharge his indebtedness by selling his vacant land which is governed by the Vacant Lands Act it is always necessary to make an inquiry into the existence or otherwise of his indebtedness. In the interest of the society a debtor must be given an opportunity to discharge his indebtedness and to be free from it. Continuing indebtedness for an individual is undoubtedly a hardship in life. His hardship may be individual or social in nature. If an individual on one hand has an immovable property which he cannot ordinarily sell on account of the application of the Vacant Lands Act to it and if, on the other hand, he starves for want of other means of livelihood or does not have food or clothing or roof over his head, it may be a case of individual hardship. I am trying to illustrate the proposition. On the other hand, in my opinion, indebtedness is a social hardship. It is social hardship because if a debtor is not able to pay his debts and his creditors or lenders are not able to recover it, it is ultimately the society which suffers. If the creditors or lenders recover their dues from debtors, monies so recovered by them start flowing again in the legitimate channels of trade, business and other economic activities and enjoy, what is called in economics, liquidity preference. I have, therefore, no doubt in my mind that discharge of indebtedness by an individual produces social benefits. If such a hardship as indebtedness exists, should exemption under Sub-section (2) of Section 7 be granted in respect of a vacant land? This question cannot be answered in the affirmative straightaway. To illustrate, if the debts which an individual has to discharge are only mortgage debts, it may not be necessary to grant the exemption because the debtor can sell his equity of redemption in respect of the mortgage securities and discharge his debts provided that he is able to do so. However, if the debts which an individual owes consist partly of mortgage debts and partly of unsecured debts or if they consist wholly of unsecured debts, in my opinion, exemption under Sub-section (2) of Section 7 should ordinarily be granted. While deciding the question of granting or refusing to grant exemption under Sub-section (2) of Section 7 it is indeed necessary to determine the nature of the debt and to find out whether the vacant land in respect of which exemption is sought is required to be sold. However, if a debtor has more unencumbered properties than one, I do not think exemption can be refused to be granted in respect of a particular vacant land on the ground that he has got other properties which he can sell off and pay the debts. Amongst the unencumbered properties which a debtor has it is for the debtor to decide which should be sold and which not in order to discharge his indebtedness. It is his right to decide upon his private circumstances and come to a conclusion. The Vacant Lands Act does not empower the State Governments, once a debtor has succeeded in establishing his hardship before the State Government, to refuse the exemption to him on the ground that he can sell his other properties and discharge his debts. The power which has been conferred upon the State Government by Sub-section (2) of Section 7 enables it to determine whether the facts and circumstances alleged by an applicant under Sub-section (2) of Section 7 exist or not and to infer from the facts and circumstances found existing whether any hardship exists for him. If the hardship is found existing, the State Government has no further power to refuse to grant the exemption under Sub-section (2) of Section 7 nor has it got the power to determine whether such a person should be directed to sell off other unencumbered properties and to refuse to grant exemption after having given such a direction. To permit the State Government to give such a direction is not only unwarranted by the provisions of Sub-section (2) of Section 7 but amounts to permitting it to probe deeply into the private life and affairs of a citizen after the hardship which a citizen faces has been determined and found to be existing by it.

6. The impugned order goes to indicate that the petitioner is likely to profiteer if exemption is granted to him in respect of the land in question under Sub-section (2) of Section 7. It appears to me that this observation has been made by the State Government in its impugned order without realizing what profiteering means. In my opinion, profiteering is a relative term. Profit-making is different from profiteering. They do not connote the same situation. It is always, therefore, necessary to draw a clear distinction between the two. Profit-making is the result of a legitimate economic Activity in which a person engages himself in order to earn his livelihood. Apart from the profits which one makes in a business, in a very broad sense even salary is a profit in the sense that it is the return which a person enjoys on the investment made in him by him or his parents to acquire a particular skill or knowledge. Profit-making activities are, therefore, not the activities which can be looked down upon. Profits which are the result of legitimate economic activities keep the economic channels of society flowing. Profiteering, on the other hand, is an Act which represents personal or individual aggrandizement at the cost of the society. This must be put down. Whether a particular Act amounts to profiteering or not depends upon the facts and circumstances attending upon that Act. It is a relative expression. What is profiteering in one set of circumstances may not be profiteering under a different set of circumstances, e.g. If a money lender charges interest at the rate of 13 or 14 per cent, it may be an Act of usuriousness. But if a bank does it, it is not. Similarly, if a person who has purchased land, say, for about Rs. 10,000/- sells it for a lac of rupees, channelizes his sale-proceeds in further land transactions with the object of making more and more monies, it is nothing but an Act of unabashed profiteering because the power of wealth which he possesses is used for personal aggrandizement to the detriment of the society. However, if a person who has purchased land, say, for Rs. 10,000/- sells it for a lac of rupees in order to discharge his debts only, it is not, in my opinion, an Act of profiteering. It is a legitimate economic Activity of earning profit to discharge ones indebtedness and to confer corresponding benefits upon society by paying up the latters dues. Therefore, merely because a person is likely to get high price of the land which he wants to sell, he cannot be branded a profiteer or black sheep in society. Social fabric consists of individuals who are intertwined. Therefore, no question of the type which has arisen before me can be considered in isolation or from the point of view only of an individual. It must be looked at from a compact social view point because an individual however insignificant otherwise he may be, is a very vital part of the society.

7. A close perusal of the impugned order makes it clear that the State Government has not considered the question of the petitioners hardship from this point of view. The order is laconic and terse. It does not show even briefly what evidence the petitioner has produced and why it has been rejected by the State Government. The first ground on which the impugned order is based, therefore, cannot be sustained.

8. The next ground which has weighed with the State Government is that the sale by the petitioner of the land in question would offend Section 4 of the Saurashtra Gharkhed, Tenancy Settlement and Agricultural Lands Ordinance, 1949 (hereinafter referred to as the gharkhed ordinance) invocation of this section by the State Government to reject the application made by the petitioner shows total non application of mind on their part because the land in question has been a part of Jamnagar Municipal Area since 1963 and Section 54 of the gharkhed ordinance was not applicable to it by virtue of the provisions contained in Clause (c) of Sub-section (1) of Section 79 of that ordinance. To invoke a section which has no application and to reject an application on that basis is nothing but a case of clear non-application of mind. In the affidavit-in-reply which has been filed on behalf of the State Government it has been stated that Clause (c) of Sub-section (1) of Section 79 has been repealed and that, therefore, the land in question is governed by Section 54. I am told that Section 79 was amended on 31st December 1974. The impugned order was made on 18th april 1974 when Clause (c) of Sub-section (1) of Section 79 had been in force. It is quite clear, therefore, that the State Government rejected the petitioners application on totally wrong and incorrect grounds. Another fact which has been stated in the affidavit-in-reply filed on behalf of the State Government is that when the present application was argued before the State Government it came to be known that one of the intending purchasers of the land in question had been residing in England. I have no doubt in my mind that when the question of granting exemption under Sub-section (2) of Section 7 arises in a particular case before the State Government, it cannot be granted if the intended sale violates the provisions of any other law. But it is equally true that exemption can be granted to an applicant under Sub-section (2) of Section 7 subject to the condition that he sells the land to an agriculturist or that he sells his land in compliance with the provisions of other laws in force. If a conditional exemption is granted and if the condition is violated the exemption can always be revoked.

9. The two grounds on which the order made by the State Government is based therefore, cannot be sustained. Therefore, the impugned order cannot be upheld in law. In the result, I allow this petition, issue a writ of mandamus directing respondent No. 1 to cancel the impugned order and to decide de now the application made by the petitioner in light of the principles laid down in this judgment and according to law. It is needless to repeat that while deciding the application made by the petitioner the State Government shall give the petitioner reasonable opportunity of adducing such evidence as he wants to in order to prove the facts and circumstances which he alleges to be existing, shall consider that evidence and record its decision on the question whether the indebtedness by the alleged petitioner or a part of it exists or not. After having recorded its decision on this question, it shall further record the decision whether the facts and circumstances found by it to be existing constitute for the petitioner hardship within the meaning of Sub-section (2) of Section 7 of the Vacant Lands Act. If the State Government records the conclusion that the hardship for the petitioner exists, it shall further decide whether exemption under Sub-section (2) of Section 7 should be granted or not in respect of the land in question and if it records the conclusion that it should not be granted it shall further state why it should not be granted. The State Government shall also decide the nature of the debt which the petitioner alleges to be existing and which he wants to discharge. It shall be open to the State Government to decide any other question which arises in the application made by the petitioner. Rule is made absolute with costs.


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