P. Chennakesava Reddy, Ag.C.J.
1. The true limit of the power of the State Government to exempt from the ceiling limit any vacant land under S. 20 of the Urban Land (Ceiling and Regulation) Act 1976 (hereinafter referred to as 'the Act') as could be gathered from the objects of the Act and the extent of the authority of the Central Government to issue directions to the State Government for the implementation of the Act under Arts. 256 and 257 of the Constitution read with S. 36 of the Act, are the questions of general interest and considerable importance that are evoked in this batch of writ petitions.
2. The Act is a Central enactment and provides for the imposition of ceiling on vacant land in urban agglomerations. The reason for the enactment is the necessity to exercise social control over the scarce resource of urban land due to the growth of population and increasing urbanisation. The dominant object sought to be achieved by the Act is to prevent concentration of urban land in the hands of a few persons so as to checkmate speculation and profiteering therein and ensure equitable distribution of land in urban agglomerations to subserve common good. In order to achieve the said object, provisions for the imposition of a ceiling to hold vacant land is made in S. 4 appearing in Chap. III of the Act. S. 5 deals with the transfer of vacant land held in excess of the ceiling limit. 'Vacant land' is defined under S. 2(q) of the Act. S. 10 provides for the acquisition of vacant land in excess of the ceiling limit. Sub-sec. (3) of S. 10 lays down that vacant land declared to be in excess under sub-sec. (1) shall vest absolutely in the Sate Government with effect from the date of the notification under sub-sec. (3). S. 19 of the Act exempts the provisions of the Act to any vacant land held by the Central or State Government, or any local authority or any corporation established by or under a Central or a State Act or any company as defined in S. 617 of the Companies Act, any military, naval or air force institution, any bank or any public or religious trust or any co-operative society or any educational or cultural institut9ion or club etc. The most relevant section in the context is S. 20 of the Act which gives power to the State Government to exempt vacant land in excess of the ceiling limit from the provisions of Chapter III of the Act. Ss. 25 to 30 appearing in Chapter IV of the Act provide for the regulation of transfer and use of urban property. S. 36 is the next relevant section which confers power on the Central Government to give such directions to the State Government as may appear to the Central Govt. to be necessary for implementation of the provisions of the Act.
3. The Act came into force on 17th Feb. 1976. With the growth of population and increasing urbanisation housing problem had become acute in urban areas. It is a matter of common knowledge that in the past two decades the State Government encouraged orderly development of urban areas and construction of houses through co-operative housing societies. Therefore, a number of house building co-operative societies had been registered in the State. The main object of these societies was to acquire land, develop it, devide it into plots and allot the same to their members for the construction of houses. The societies had purchased large extents of land from various vendors and entered into agreements of sale by paying huge amounts as advances. Pursuant to the agreements of sale, the house building co-operative societies had been put in possession of the land. After taking over possession, the societies invested huge amounts in developing these lands, preparing lay-outs, getting the lay-outs approved by the local authorities, dividing the land into plots, laying of roads and providing other public amenities for the benefit of the members to whom the plots were allotted. The sale transactions, however, could not be completed after the Act came into force on 17th Feb. 1976. Therefore, a representations was made by the several registered house-building co-operative societies that had entered into agreements of sale long before the enactment of the Act for exempting such transactions. The State Government requested the Central Government to protect such transactions exempting them from Chap. III of the Act and allow the registered house building co- operative societies to complete the sale transactions. The Government of India considered the proposal and directed the State Government by their letter dt. 6th Jan. 1977, to examine each such case of exemption under S. 20(1)(a) of the Act and exempt the said land from the purview of the Act where considered necessary in public interest or in order to avoid undue hardship to the holders of such excess vacant land after satisfying themselves about the genuineness of the transfers and the purpose of the transfers. The State Government in pursuance of the said direction issued G.O. Ms. No. 186 Revenue (U.C. II) Department dt. 2nd Mar. 1977. Under the said G.O. the Government observed that the matter of granting exemption for the lands proposed for the sale by the excess land holders to co-operative societies and individuals had been examined in consultation with the government of India and the Government laid down certain guidelines for processing the application for exemption under S. 20(1) of the Act.
4. It will be relevant to extract the guidelines laid down by the Government in the said G.O. Grant of exemption to surplus land holders may be considered for the sale of land to the registered Housing Co-operative Societies and individuals on the basis of agreements entered into prior to 28-1-1976 subject to the following conditions:
(a) that the land holder was granted permission by the Government under Andhra Pradesh Vacant Land in Urban Areas (Prohibition of Alienation) Act, 1972 (Act 12/1972) for the alienation of such land;
(b) that the genuineness of the deed of agreement is established by documentary evidence which cannot be fabricated;
(c) that the land held by the transferee together with the land proposed to be sold to him does not exceed the ceiling limit as defined under S. 4 of the Act and
(d) that in the case of sale of land to the registered Housing Co-operative Societies the members of the Housing society to whom the above land is proposed to be sold are not hit by the Urban Land (Ceiling and Regulation) Act 1976 i.e. the land held by a member of the Housing Co-operative Society together with the land under sale proposed to be allotted to him does not exceed the ceiling limit as defined under S. 4 of the Urban Land (Ceiling and Regulation) Act, 1976.
5. Again the Government of India in their letter dt. 7-5-1980 stated that the house building co-operative societies evidently had difficulty to acquire land after the enactment of the Act because of the prohibition against transfer of vacant land in excess of the ceiling limit or any portion thereof held by a person and that considerable time is taken by the Government to acquire vacant lands in excess of the ceiling limit and then dispose of them under s. 23 of the Act and having regard to the provisions contained in S. 20 of the Act and the purpose for which the excess land is proposed to be used and the objects of the Act, namely, that concentration of the urban land in the hands of a few persons and profiteering and speculation therein should be prevented and the need for increasing the housing stock utilising the urban developed land, there could be no objection to exempt the vacant land held by persons in excess of the ceiling limit in public interest so that they may transfer them to registered housing co-operative societies for the purposes of constructing dwelling units subject to the conditions laid down therein. One of the conditions which is relevant, is that the housing societies should have been in existence and registered under the law relating to the registration of such societies before the commencement of the Act, namely, 17th Feb. 1976, and the holder of the land should not receive directly for the transfer of the land to the co-operative housing society an amount exceeding the amount that he would be entitled to receive as price of the land under para 4(2) of Sch. 1-A of the Urban Land (Ceiling and Regulation) Rules, 1976, had the transfer of that land taken place in pursuance of the scheme under S. 21 of the Act. In pursuance of the directions of the Government of India, the State Government re-examined the whole matter and issued G.O. Ms. No. 4270 Revenue (UC II) Department dt. 10-9-1980 amending G.O. Ms. No. 186 dt 2-3-1977 and issued revised guidelines for the grant of exemption under S. 20(1) of the Act. Under the said G.O. Government laid down the following revised guidelines:
Exemption to the surplus land holders may be considered in cases where they propose to transfer the excess lands to the registered housing co-operative societies or the Group Housing Co-operative Societies for the purpose of constructing dwelling units subject to the following conditions:
1. The holder of the land should not receive directly or indirectly by way of consideration for the transfer of such land to the Housing Society an amount exceeding the amount that he would be entitled to receive as the price of such land under para 4(2) of Sch. 1-A of Urban land (Ceiling and Regulation) Rules 1976, if a transfer of the land takes place in pursuance of a scheme under S. 21 of the Act (which at present is either ten times the net average annual income actually derived from the land for the period of five consecutive years referred to in Cl. (a) sub-sec. (1) of S. 11 or five times the amount admissible under Cl. (b) of sub-sec. (1) of S. 11 whichever is higher; and the holder of the land shall not claim or receive any sum in addition to or in excess of such price, provided however, that the stamp duty and registration fees payable in respect of the deed of transfer shall be paid by the transferee.
2. The housing society have been in existence and registered under the law relating to the registration of such societies before the commencement of the Act, namely 17th Feb. 1976.
3. No member of the housing society or the wife or husband as the case may be or minor unmarried children of such member should own any other vacant land or dwelling unit in the same urban agglomeration or in any other urban agglomeration to which the Act applies
4. The area of the land sold to the housing society should not if equally divided among the members of the society exceed 300 square metres per each member.
5. The housing society and its members should undertake to complete the construction of the dwelling units in accordance with the building regulations and the master plan if any in force in the area wherein the land is situated within a period not exceeding three years.
6. Where the vacant land is transferred to the housing society along with any building or land with building the price charged in respect of such building or built up property should not exceed the price the seller would have obtained under the prevailing market price in the area, for similar building or land.
7. The housing society should not transfer the land to any other person including another housing society, but the housing society may transfer the share of each member of that society in such land, such share not exceeding 300 square metres, to such member. The member of the housing society to whom any land and/or dwelling unit has been transferred by such housing society, shall not transfer such land and/or dwelling unit or the dwelling unit constructed by such member on such land to any other person, including another housing society for a period of ten years. The housing society or such member may however mortgage such land or dwelling unit to a financial institution for obtaining a loan from it for constructing dwelling unit/units or such land.
8. The land holder and an authorised agent of the housing society concerned should file affidavit before the State Government and the concerned competent authority to the effect that they fulfil and will comply with the conditions herein specified. If at any time the State Government is satisfied that the exemption has been obtained by misrepresentation or fraud or that any of the conditions subject to which the exemption is granted is not complied with by any person it shall be competent for the State Government to withdraw the exemption and thereupon the provisions of Chap. III will apply in relation to such land as if such land was vacant land notwithstanding that any dwelling units or other structures have been constructed on such land.
9. The provisions of Ss. 26 and 27 of the Act should be complied with wherever necessary.
6. While G.O. Ms. No. 4270 dt. 10-9-1980 was in force, it appears that some complaints were received by the Government that house building co-operative societies already in existence were indulging in lot of speculative activities and they were holding monopoly in the filed. Therefore, the Government issued further guidelines to prevent dubious transactions between the societies and the owners of the land in G.O. Ms. No. 136 dt. 28-1-1981 under which the concessions granted earlier in G.O. Ms. No. 4270 dt. 10-9-1980 were extended to other societies that existed and were registered after the Act came into force. Obviously the object of G.O. Ms. No. 136 was to curb speculative transactions between old co-operative housing societies and land holders of vacant land.
7. Law is no doubt a remedy for greater evils, but it brings with it evils of its own. It appears G.O. Ms. No. 136 dt. 28-1-1981 gave an impetus to the promotion of house building co-operative societies and consequently house building co-operative societies swelled in number and the number of applications for exemption under S. 20(1)(b) of the Act increased. It is true as observed by the government of India in their letter dt. 6th Jan. 1977 that it is difficult in these cases for exemption to distinguish between the genuine transaction and a bogus transaction in respect of vacant land entered into to evade the provisions contained in the Act and each case therefore had to be examined on merits and dealt with. The State Government instead of so doing and examining each case on merits passed G.O. Ms. No. 964 dt. 27-6-1983. Under the said G.O. the State Government directed that requests for exemption from the landowners shall be rejected under S. 20(1)(a) and the lands shall be taken over by the Government under the provisions of the urban Land Ceiling Act; (b) the Urban Development Authorities shall immediately thereafter make proper layouts and the plots so made shall in the first instance, allotted to the eligible members of the societies after verification of the eligibility of he member concerned and for the purpose of carrying out the said directions the Government constituted separate committees for each urban agglomeration in the State. Questioning the validity of the said G.O. these writ petitions have been filed.
8. It is contended on behalf of the petitioners that the impugned G.O. directing that all applications for exemption under S. 20 of the Act should be rejected is illegal, void and without jurisdiction and opposed to the statutory provisions contained in S. 20(1) of the Act. It is submitted that the provision is intended to remove undue hardship occasioned by the application of the provisions of the Act and a duty is cast on the Government to exercise the power to grant exemption whenever it is considered necessary to further the policy and object of the Act and in public interest. The G.O. directing that all applications shall be rejected it is maintained not only defeats the very purpose of the provisions contained in S. 20 of the Act but is also opposed to the directions issued by the Central Government and contained in their letters dt. 6-1-1977 and 7-5-1980 and the guidelines laid down by the State Government in G.O. Ms. No. 136 Revenue Dt. 28-1-1981 in pursuance of the directions issued by the Central Government in the aforesaid letters.
9. In the counter-affidavit filed on behalf of the State Government it is pleaded that the impugned G.O. is neither ultra vires of the statute nor illegal and void; that the transactions entered by the petitioners with the landowners are void and that in any case it is for the Government to consider whether exemption should be granted or not.
10. The two fundamental questions that arise on the basis of the rival contentions of the parties are: (1) what is the true limit of the power of the State Government to exempt from the ceiling limit any vacant land held by a person under S. 20 of the Act as could be gathered from the intendment and objects of the Act and (2) what is the extent of the authority of the Central Government under Arts. 256 and 257 of the Constitution read with S. 36 of the Act to issue directions to the State Government for the implementation of the provisions of the Act.
11. Before proceeding to consider the question, we may observe that the petitioners in most of the writ petitions are house building co-operative societies. The main purpose of any co-operative society is to promote thrift and self-help among the persons of limited means and weaker sections of the society. Therefore, every encouragement must be given to genuine co-operative societies and all discouragement to sham ones. But every care must be taken that in such screening bona fide societies are not excluded. No doubt under every law there is chance for misuse but it is always preferable to choose the lesser evil. Co-operative societies are essentially the out-come of poverty and need and persons of such class voluntarily associate themselves for the promotion of their economic interest and it is impossible to expect such persons to provide their own capital. It is apposite to visualise the nature of the surroundings in which the poor people live, lack of buildings and lack of knowledge and training to realise the benefits conferred by laws on weaker sections.
12. The general object and intention of the Legislature in passing the enactment is to prevent concentration of urban land in the hands of a few persons and speculation and profiteering therein and to bring about socialisation of urban land in urban agglomerations to subserve the common good by ensuring its equitable distribution and to regulate construction of buildings on such land due to scarcity of land in urban areas on account of growing population and increasing urbanisation. Thus the general object and purpose of the Act is to encourage construction of building on vacant lands in urban area and to subserve common good by ensuring equitable distribution of vacant land and bring about socialisation of urban land in urban agglomerations. The Act also regulates the use of urban land. S. 29 of the Act restricts the plinth area of a building and provides that in urban agglomerations falling within category A and category B the plinth area shall not exceed 300 square metres and in urban agglomerations falling within category C or Category D the plinth area shall not exceed 500 square metres. It is obvious that the restriction is apparently intended to discourage construction of luxury houses leading to conspicuous consumption of scarce building materials and large extent of land and to ensure equitable distribution of vacant land and raw materials.
13. Having noticed the purpose of house building co-operative societies, namely to help the very poor and needy to have their own dwelling units and the main objects of the Act also being the same, namely to bring about equitable distribution of land in urban agglomerations to subserve common good, it is necessary to survey the provisions of Chapter III of the Act wherein S. 20 appears to gather the legislative intendment and object of S. 20.
14. Section 4 prescribes a ceiling limit on vacant land in urban agglomerations. Sec. 5 expressly prohibits the transfer of vacant land after the commencement of the Act by way of sale, mortgage, gift, lease or otherwise and provides that any such transfer shall be deemed to be null and void. Secs. 6 to 10 provide of the filing of the statement by every person holding vacant land in excess of the ceiling limit at the commencement of the Act and acquisition of the vacant land in excess of the ceiling limit on determination of such excess. The next relevant provisions is S. 19 which says that the Chapter namely Chapter III shall not apply to certain vacant lands held by the Central Government or any State Government and certain institutions including any registered co-operative society. Now, we come to the crucial section and it is necessary to read S. 20.
Section 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 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. (1) or cl. (b) of sub-sec. (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 section provides 'notwithstanding anything contained in any of the foregoing provisions of this Chapter'. As already noticed, the Chapter contains provisions relating to prohibition on transfer of vacant land, determination of excess of such vacant land and the vesting of such vacant land in the Government under S. 10(3) of the Act. The words are plain of meaning and the intention is clear from the words employed in the section itself. The section being remedial in nature should be so construed as to accomplish the object, sought namely to eradicate any defects or evils in the provisions contained in Ss. 3 to 19 of Chapter III. Therefore, the power conferred on the State Government to exempt can be exercised even in respect of vacant land found to be in excess of the ceiling limit and vested in the State Government under S. 10 or land that has been transferred in violation of S. 5. Then the question is what are the circumstances in which the exemption can be granted. To grant exemption under S. 20(1)(a) the Government must be satisfied that having regard to the purpose for which the land is being or is proposed to be used, the location of the land and such other relevant factors as the circumstances of the case may require it is found to be necessary or expedient in public interest so to do. Under cl. (b) of Sub-sec. (1) of section 20 the State Government may grant exemption if it is satisfied that the application of the provisions of the Chapter would cause undue hardship to sub-sec. (1) of S. 20 the State Government is entitled to take the purpose for which the land is being or is proposed to be used into consideration for granting exemption and also other relevant factors as the circumstances of the case require (Sic). The Government may reasonably take into consideration circumstances such as unreasonable delay in filing an application for exemption.
15. When the purpose for which the land is proposed to be used is construction of houses for poor and the needy who have formed into a co-operative house building society, it is a purpose promoting public interest and a relevant factor for consideration under S. 20. The guidelines contained in G.O. Ms. No. 4270 lay down that no member of the housing society or the wife or husband, as the case may be or minor unmarried children of such member should own any other vacant land or dwelling unit in the same urban agglomeration or in any other urban agglomeration to which the Act applies, that the area of the land sold to the housing society should not if equally divided among the members of the society exceed 300 square metres per each member and that the housing society and its members should undertake to complete the construction of the dwelling units in accordance with the building regulations and the master plan, if any, in force in the area wherein the land is situated, within a period not exceeding three years. These guidelines are in pursuance of the directions and advice given by the Central Government by their letters dt. 6-1-1977 and 7-5-1980. House building co-operative societies which are bona fide societies require all encouragement. There may be some that are sham and deserve to be discouraged. Just because there are a few societies that are sham, that is no reason why the members of bona fide societies or the majority members of the bona fide societies should be made to suffer. To remedy a small evil a greater evil cannot be inflicted. On the other hand a smaller evil can be tolerated to confer greater good on the weaker sections of the society who have no dwelling units and who cannot afford to own a dwelling unit at enormous cost. Nor do we think that the mere fact that a co-operative house building society was formed after the Act came into force is per se fatal to the grant of exemption under S. 20(1) of the Act. It is observed by the Government in G.O. Ms. No. 136 dt. 28-1-81 that:
'The aforesaid condition (the housing societies should have been in existence and registered under the law relating to the registration of such societies before 17th Feb. 1976) has created a scope for indulging in speculative activities by the old societies as they are holding monopoly in the filed. The Commissioner, Land Reforms and Urban Land Ceiling Hyderabad in his reference 2nd read above, has recommended to the Government for extending the concession available in G.O. Ms. No. 4270 Revenue dt. 10-9-80 to the new co-operative housing societies registered after the commencement of the Urban Land (Ceiling and Regulation Act) 1976.'
The Government have accordingly directed that cases for grant of exemption under S. 20(1)(a) of the Act of the bona fide members of co-operative house building societies, whether they have come into existence prior to or after the commencement of the Act shall be considered. However, the above concession was made operative for a period of one year from the date of issue of the order and later extended by G.O. Ms. No. 91 till 31-3-1982.
16. The Government in issuing G.O. Ms. No. 964 dt. 27-6-1983 apparently took into consideration the observations of the Dharma Maha Matra that the guidelines have helped unscrupulous elements to promote societies in collusion with the surplus land holders resulting in generation of black money and promoting corruption and that some middlemen and co-operative housing societies in collusion with the landlords have been indulging in malpractices. The said observations are indeed intended to see that sham house building co-operative societies are not encouraged and not that bon fide house building societies and their members are discouraged and thereby defeat the very purpose of forming into a co-operative house building society by the weaker sections of the public. It should not be forgotten that co-operations is essentially the outcome of poverty and need and those who voluntarily associate together are poor persons with limited means without any dwelling unit of their own. So bona fide co-operative house building societies ought not to be denied any encouragement. Instead of encouraging thrift and self-help by such wholesale rejection of applications for exemption by bona fide co-operative house building societies, the very motto of co-operation is struck a fatal blow. G.O. Ms. No. 964 directs that all requests for exemption from the land owners shall be rejected under S. 20(1)(a) of the Act and the land shall be taken over by the Government under the provisions of the Act. The said direction is totally opposed to the statutory provisions contained in S. 20(1)(a) of the Act. The Government have to consider the bona fides of each application made under S. 20(1)(a) of the Act for grant of exemption and the purpose for which the land is proposed to be used and such other relevant factors as the circumstances of the case may require. But to say that the purpose for which the land is proposed to be used shall not be considered in granting exemptions to defeat the very object of the provision and render the section itself purposeless and functionless. That is what the impugned G.O. in effect mandates and is therefore liable to be struck down.
17. Now the Act is a Central enactment. S. 36 of the Act authorises the Central Government to issue directions to any State Government for effective execution of any of the provision of the act. The letters of the Central Government referred to above contain the necessary directions for grant of exemption under S. 20(1) of the Act. It is obligatory under Art. 256 of the Constitution on the part of any State to ensure compliance with the laws made by the parliament and the directions given by the Central Government for implementing the provisions of the Act. Art. 257 further provides that the executive power of the State shall be so exercised as not to impede or prejudice the exercise of executive power by the Union. The direction contained in the impugned G.O. is violative of Arts. 256 and 257 of the Constitution and is void. The State Government appears to have acted unmindful of the sanction under Art. 365 for enforcement of the obligations and directions under Arts. 256 and 257 of the Constitution.
18. The learned Government Pleader submits that the agreements entered into by the land-holders with the co-operative house building societies after the Act came into force are null and void under S. 5 of the Act and therefore the question of ranting exemption in pursuance of the said agreements does not arise. As already held by us, S. 20 provides that notwithstanding anything contained in the provisions of this Chapter, S. 5 is undoubtedly Chapter III and therefore the provisions of Chapter III cannot prevent the Government from exercising the power conferred on it under S. 20 of the Act.
19. In Nandakishore v. State, : AIR1982MP33 it was observed:
'The power under S. 20(1) of the Act is undoubtedly quasi-judicial in nature. Therefore the authority must genuinely address itself to the matters before it and cannot decline to consider or lay down directions disabling itself from considering the matter.'
20. The State Government appears to have passed the impugned G.O. oblivious to its obligation under Arts. 256 and 257 of the Constitution and relying on extraneous considerations namely, general observations made by the Dharma Maha Matra and this Court in a writ petition.
21. The learned Government Pleader placing reliance on the decision in Dominion v. Shrinbai A. Irani, : [1955]1SCR206 submits that the non-obstante clause appearing in S. 20 of the Act cannot be invoked to nullify the effect of the provisions of S. 5 of the Act. We are unable to see any substance in this submission. The Supreme Court clearly said in that case that if the words of the enactment are clear and are capable of only one interpretation on a plain and grammatical construction of the words thereof, a non-obstante clause cannot cut down that construction and restrict the scope of its operation and in such cases the non0obstante clause has to be read as clarifying the whole position and must be understood to have been incorporated in the enactment by the legislature by way of abundant caution and not by way of limiting the ambit and scope of the operative part of the enactment. The Supreme Court in that case construing the non-obstante clause appearing in Cl. 3 of the Requisitioned Land (Continuance of Powers) Ordinance; namely, 'notwithstanding the expiration of the Defence of India Act, 1939 (XXXV of 1939) and the rules made thereunder' held that the non-obstante clause cannot be invoked in support of the submission that those orders which would have ceased to be operative and come to an end with the expiration of the Act and the rules were the only orders which were intended to be continued under cl. 3 of the Ordinance, and not those orders which by reason of their inherent weakness such as the limitation of the period of duration expire ipso facto on the date of the expiration of the Act and the Rules. We are unable to see how the said observations of the Supreme Court are relevant for construing the non-obstante clause appearing in S. 20 of the Act which clearly sys that notwithstanding anything contained in the provisions of Chapter III which includes S. 5.
22. In Beni Prasad v. District Judge, Allahabad : AIR1982All103 . Mehrotra, J. held that exemption under S. 20 of the Act can be granted by the State Government even after the notification issued by the competent authority under S. 10(3) of the Act declaring the excess of the vacant land.
23. The learned Government Pleader, however, placing reliance on the rule of harmonious construction of the provisions of the Statute submits that S. 20 of the Act should be so construed as not to lead to a manifest contradiction of the very object and purpose of the enactment. In support of his submission he placed reliance on the decision of the Supreme Court in Union of India, v. S. H. Sheth, 0065/1977 : [1978]1SCR423 familiarly known as the Judges Transfer case. Construing the word 'Consultation' occurring in Art. 222(1) of the Constitution Chandrachud, J. (as he then was) observed 9at P.2337):
'The normal rule of interpretation is that the words used by the legislature are generally a safe guide to its intention. Lord Reid in Westminster Bank Ltd. V. Zang, 1966 AC 182 observed 'No principle of interpretation of statutes is more firmly settled than the rule that the Court must deduce the intention of the parliament from the words used in the Act.' Applying such a rule this Court observed in S. Narayanaswami v. G. Pannerselvam, : [1973]1SCR172 that 'where the statute's meaning is clear and explicit, words cannot be interpolated.' What is true of the interpretation of an ordinary statute is not only the less true in the case of a constitutional provision, and the same rule applies equally to both. But if the Words of an instrument are ambiguous in the sense that they can reasonably bear more than one meaning, that is to say, if the words are 'semantically ambiguous, or if a provision, if read literally, is patently incompatible with the other provisions of that instrument, the Court would be justified in construing the words in a manner which will make the particular provision purposeful. That, in essence, is the rule of harmonious construction.... But, if the provision is clear and explicit, it cannot be reduced to a nullity by reading into it a meaning which, it does not carry and, therefore, 'Courts are very reluctant to substitute words in a statute or to add words to it, and it has been said that they will only do so where there is a repugnancy to good sense.'
24. But the provisions in S. 20 are very clear. There is absolutely no ambiguity and they do not run contrary to the purpose and object of the Act. It is also clear from the directions issued by the Government of India under S. 36 of the Act that the provision (S. 20) is intended to the invoked to grant exemption of the vacant land in excess of the ceiling limit depending upon the purpose for which the excess vacant land is sought to be used.
It is the underlying policy of the Act itself to grant exemption in public interest and in case of undue hardship. Undoubtedly the grant of exemption in favour of house building co-operative society, the aim of which is to help the poor and the needy as co-operation is essentially the outcome of poverty and need, is in public interest. To deny exemption is to deal a death below to the co-operative movement. In case it is found that a co-operative society is a sham one and not a genuine one, the proper course would be to cancel the very registration of the society after proper enqiry or investigation. It will be wholly unfair and improper to presume that any co-operative house building society duly registered is a sham one and deny to its members any benefits of the remedial provision and the encouragement which they deserve. It is wrong to consider a co-operative society as speculative in nature. There is absolutely no speculation in nature. There is absolutely no speculation or profit in co-operation. Co-operation is a form of organisation wherein persons voluntarily associate themselves for the promotion of the economic interest of themselves.
25. When statutory discretion is vested under S. 20, there is a duty to exercise the desecration conferred by the statute in every case in which those upon whom it is conferred are called upon to exercise it. They cannot fetter their own powers by self-imposed rules. In Maxwell on the Interpretations of Statutes (12th Edition) Page 146, the learned author observed:
'First of all then there is a duty to exercise the discretion conferred by the statute in every case in which those upon whom it is conferred are called upon to exercise it, they may not fetter their own powers by self imposed rules.'
When the statute gives the power to exercise discretion and grant or refuse to grant exemption the State Government is bound to exercise the power and honest discretion in every case and it cannot pass a general order to the effect that they shall reject all applications for grant of exemption under S. 20 of the Act by co-operative house building societies.
26. In his text book on Judicial Review of Administrative Action third edition page 252 S. A. De Smith says under the heading 'Principles Governing the exercise of Discretionary Powers.'
'In general, discretion must be exercised only by the authority to which it is committed. That authority must genuinely address itself to the matter before it: it must not act under the dictation of another body or disable itself from exercising a discretion in each individual case.'
27. It is now well-settled that a person entrusted with discretion must direct himself property in law. He must exclude from his consideration mattes which are irrelevant to the matter that he has to consider and must bestow his attention only to matters which he is bound to consider. (vide Rohtas Industries Ltd. V. S. D. Agarwal, : [1969]3SCR108 ).
28. The Supreme Court is State of U.P. v. Jogendra Singh, : (1963)IILLJ444SC observed:
'It is also clear that where a discretion is conferred upon a public authority coupled with an obligation, the word 'may' which denotes discretion should be construed to mean a command. Sometimes, the legislature uses the word 'may' out of deference to the high status of the authority on whom the power and the obligation are intended to be conferred and imposed.'
29. Though the word employed in s. 20 is 'may' since the power conferred under S. 20 on the State Government is coupled with a duty, the State Government cannot pass an order of blanket refusal in all cases without exercising the discretionary power vested in it in respect of each individual case.
30. One other submission made by the learned counsel for the petitioners was that by virtue of G.O. Ms. No. 136 Revenue dt. 28-1-1981 under which guidelines for grant of exemption under S. 20 of the Act to bona fide houseless members of the housing co-operative society were laid down in order to curb speculative transactions and to make the land easily available at reasonable prices to bona fide houseless members of the co-operative society the Government is estopped by the doctrine of promissory estoppel from refusing to grant exemption contrary to the said guidelines since several poor persons had invested huge moneys and entered into agreements with the land owners for the purchase of the land. Reliance is placed on the decision of the Supreme Court in Jit Ram Shiv Kumar v. State of Haryana, : [1980]3SCR689 . There, the Supreme Court dealing with the scope of the plea of doctrine of promissory estoppel against the Government laid down on a consideration of the decisions of the Supreme Court, that there can be no promissory estoppel against the exercise of legislative power of the State. So also the doctrine cannot be invoked for preventing the Government from acting in discharge of its duty under the law.
31. A Division Bench of this court in Godavari Trading Co. v. A.M.C., Palakol, (1984) 1 Andh LT 221 to which one of us. Kodandarmayya, J. was a party dealing with the law of promissory estoppel observed:
'Instead of resting the doctrine on the basis of contract, consideration, detriment, or cause of action, it should be based upon equity governing the jural relationship between the State and the citizen when the citizen acted to his detriment on the declared policies of the State.'
32. We are unable to say that the petitioners suffered any detriment even under the impugned G.O. Leaving that apart, the petitioners are not promised any exemption. At the most what all that has been promised under the G.O. is consideration of the applications for grant of exemption under Sec. 20 of the Act in accordance with the guidelines. Therefore, the plea of promissory estoppel cannot be upheld.
33. Before proceeding to consider the individual writ petitions on merits it would be useful to sum up our conclusions.
1. The words employed in s. 20 of the Act, namely not with standing anything contained in any of the foregoing provisions of this Chapter which include Ss. 3 to 19 the Government may by order exempt such vacant land from the provisions of this Chapter are plain and the legislative intent is revealed by the apparent meaning i.e. the meaning clearly expressed by he language of the section. There is no scope for conjectures. The section clearly empowers the Government to grant exemption notwithdtanding the prohibition on the transfer of vacant land contained in S. 5 of the Act and the vesting of the vacant land in excess of the ceiling limit absolutely in the State Government under S. 10 which are contained in Chapter III.
2. The section being purely remedial in nature, should be given a liberal construction in order to advance the remedy intended and accomplish the object sought, namely to eradicate any defects or evils in the provisions contained in Ss. 3 to 19 of Chap. III.
3. Co-operation has taken deep roots in the country. It is essentially the outcome of poverty and need and the Cooperative Societies Act is expressly designed to assist persons with limited means. The object of the Act being to prevent concentration of urban land in the hands of a few persons and speculation and profiteering therein and to bring about equitable distribution of the land in urban agglomeration to subserve common good, the exercise of power under. S. 20(1) by the State Government to grant exemption in favour of a house building co-operative society undoubtedly subserves common good as it promotes both economic development and social improvement.
4. The guidelines contained in the letters of the Government of India dt. 6-1-1977 and 7-5-80 are directions issued under S. 36 of the Act, a Central enactment. The impugned G.O. which impedes or prejudices the compliance with the said directions is violative of Arts. 256 and 257 of the Constitution and is void to the extent of the impediment. Having regard to the objects of the act, the Central Government had specifically instructed the State Government to exempt vacant land held by persons in excess of the ceiling limit under S. 20 of the Act to enable the and-holders to transfer such vacant lands to housing co-operative societies or group housing Co-operative societies for the purpose of constructing dwelling units subject to certain conditions. In is obligatory on the part of the State Government to comply with the directions of the Central Government under Arts. 256 and 257 of the Constitution. The sanction to enforce the directions is enshrined in Art. 365 which declares that if any State fails to carry out such directions, it would be lawful for the President to proclaim that a situation has arisen in which the Government of the State cannot be carried on in accordance with the provisions of the Constitution.
5. Law must in a democracy harmonise with the general aims and standards of the people. Civilised society is founded upon certain standards of ethical conduct. All laws are enacted in the light of what the people believe is honest, fair and equitable and in harmony with public welfare. If some people do not behave in a fair manner and if some people are not honest and the law is misused should all the other fair and honest people be made to suffer by making a general order that no exemption shall be granted under S. 20(1) of the Act in favour of the house building co-operative societies since it had been brought to the notice of the Government that there were some sham and nominal co-operative housing societies? To remedy a small evil greater evil ought not to be inflicted. It is axiomatic that law is a remedy for greater evils but it brings with it evils of its own. A smaller evil of the likelihood of misuse by some of exemptions under S. 20 can be tolerated to confer greater good on a larger number of limited means.
6. Sec. 20 confers a power coupled with a duty on the part of the State Government and it has to be exercised by the State Government in respect of each case applying its mind as to the purpose for which the land is proposed to be used and such other relevant factors as the circumstances of the case may require. The Government in such cases have to examine whether the house building co-operative society and the landlords have complied with the conditions laid down by the Government of India and dispose of the application for exemption after proper enquiry in accordance with the directions of the Union Government. The impugned order of the State Government that all requests for exemption from the land owners shall be rejected under S. 20(1)(a) of the Act and the land will be taken by the Government under the provisions of the Act is contrary to the provisions of S. 20(1) of the Act and the directions of the Union Government and is liable to be quashed and cannot be upheld. This Court, however, would decline to grant the discretionary relief under Art. 226 of the Constitute to an applicant if there has been unreasonable delay in filing the application for exemption under S. 20 of the Act, after the notification under S. 10(5) of the Act.
34. Applying the aforesaid conclusions, we shall now proceed to examine the nature of the relief, if nay, the petitioners in these writ petitions are entitled to.
W.P. Nos. 5968, 6611, 6854, 8005, 1183, 6173, 6365, 6329, 6639, 7906, 12607, 7374, and 6718/1983.
35. In these writ petitions the petitioners are house building co-operative societies. They have purchased large extents of land from various vendors and entered into agreements of sale by paying huge advances. They claim that the vendors have put the petitioner-societies in possession of the land and that the societies have developed the land investing huge amounts. They have made applications along with the vendors to the first respondent for exemption under S. 20(1) of the Act after complying with the procedural formalities envisaged under the guidelines laid down by the Government and the said applications for exemption are said to be pending with the Government. The Government is directed to consider the applications filed by the societies and their vendors in accordance with the provisions of S. 20(1) of the Act and the guidelines laid down by the Central Government for granting exemption under S. 20(1) of the Act from time to time without reference to the further instructions contained in G.O. Ms. No. 964 dt. 27th June, 1983 that the requests for exemption shall be rejected and the land taken over by the Government under the provisions of the Act. The writ petitions are ordered accordingly. No costs. Advocates fee Rs.150/- in each.
W.P. Nos. 7330 and 6302/1983
36. In these writ petitions, the request of the petitioners for exemption under S. 20(1) of the Act was considered by the Government and rejected on the ground that the lands are required by the Huda for implementing public schemes. It is clear from the record that the request for exemption was considered with reference to the guidelines contained in G.O. Ms. No. 136 dt. 28th Jan. 1981 and rejected. We therefore find no valid grounds for granting relief to the petitioners in these writ petitions. They are accordingly dismissed. No costs. Advocate's fee Rs.150/- in each.
W.P. No. 3664/1983.
37. In this case the petitioner was granted exemption under S. 20(1) of the Act to alienate 32,370 sq. metres of land in favour of Mallikarjuna Co-operative Housing Society Limited, Hyderabad, in terms of G.O. Ms. No. 136 Revenue dt. 28th Jan. 1981 and was directed to surrender the remaining excess land of 9528.66 sq. metres. We are unable to see any substance in the grievance of the petitioner that exemption should have been ranted in respect of 9528.66 sq. metres also when it did not form part of the land that was the subject-matter of the agreement of sale with Mallikarjuna Co-operative Housing Society Ltd. Therefore, this writ petition is liable to be dismissed and it is accordingly dismissed. No. costs. Advocate's fee Rs.150/-.
W.P. No. 2892/1983.
38. The application made by the petitioner for exemption under S. 20(1) of the Act is said to be pending. But in the counter-affidavit it is stated that a declaration under S. 10(3) of the Act was issued on 22-1-1981 and that according to the said declaration an extent of 4595 sq. metres is vesting absolutely in the State Government free from all encumbrances; that the petitioner filed an application fork exemption on 29-11-1982 after service of the notice under S. 10(5) of the Act to surrender surplus land to the Tahsildar, Guntur and that the application for grant of exemption under S. 20(1) of the Act cannot be entertained. We have already held that an application for exemption can be entertained after such declaration, under sec. 20(1) of the Act. Therefore, there shall be a direction to the respondents to consider the application of the petitioner for exemption and dispose it of in accordance with the provisions of S. 20(1) of the Act and the relevant guidelines issued by the Central and State Government in that behalf. The Writ Petition is ordered accordingly. No costs. Advocate's fee rs.150/-.
W.P. No. 3477/1983.
39. In this case the petitioner was granted exemption by the Government in G.O. Ms. No. 931 Revenue dt. 30-5-1978 for the construction of a cinema theatre. The exemption was subject to the condition that the land should not be leased out or sold without the permission of the Government and that the land should be utilised within three years from the date of the exemption for the construction of the theatre. The time granted in the above G.O. expired by 29-5-1981. As the petitioner failed to construct the cinema theatre within the time allowed, the Government was pleased to cancel the exemption after serving a notice on the petitioner on 22-1-1983 for violating the conditions. The only ground for cancelling the exemption is that the petitioner did not take steps to construct the cinema theatre on the land and there was wilful default on the part of the petitioner in taking material steps for the construction of the cinema theatre. It is clear from the affidavit that the petitioner has already laid the foundation for the cinema theatre and commenced construction, but could not make much progress for want of construction materials, namely, iron and cement. The petitioner appears to have already spent good amount of money for constructing the theatre. In the circumstances, we think the petitioner should be given some more time for completing the construction of the cinema theatre. We, therefore, quash the order of the Government in G.O. Ms. No. 537 dt. 18-3-1983 and direct the Government to consider the request of the petitioner for grant of extension of time granted in G.O. Ms. 931 dt. 30-5-1978 for the purpose of completion of the construction of the theatre commenced already. The writ petition is allowed accordingly. No costs. Advocate's fee Rs.150/-.
W.P. No. 3400 of 1983.
40. This is a case where the petitioners submitted an application for exemption as long back as 7-8-1976 on the ground that they need the surplus land in excess of the ceiling limit for the construction of a theatre. But even without disposing of the application for exemption the competent authority appears to have issued a declaration under S. 10(3) of the Act and a notice under S. 10(5) of the Act directing the petitions to deliver possession of the land in excess of the ceiling limit. The only plea in the writ petition is that the proceedings under the Act have become final and therefore no relief can be granted to the petitioner. Indeed it is not disputed that the application of the petitioners for exemption under S. 20(1) of the Act is still pending. The application for exemption should be decided before the preparation of the draft statement under S. 8 of the Act. It is clear from R.5 of the Urban Land (Ceiling and Regulation) Rules 1976 that the draft statement prepared under sub-sec. (10 of S. 8 should contain the particulars specified in Form III and the draft statement should be served together with the notice under sub-sec. (3) of S. 8 on the holder of the vacant land and on all other persons so far as may be known to have or likely to have any claim to or interest in the ownership or possession of the said vacant land. Col 7 in part A of the draft statement relates to the extent of vacant land exempted under S. 20 of the Act. Therefore, the rule contemplates the disposal of the application for exemption even before the preparation of the draft statement under sub-sec. (1) of S. 8. the statement in Form I filed under S. 6 also requires the declarant to state whether any exemption from the ceiling limit is being claimed in respect of any vacant land under Ss. 19 or 20 of the Act and furnish details thereof. Therefore, the very declaration made under S. 10(3) of the Act is contrary to the procedure prescribed under S. 8 of the Act and R.5 of the Rules. Therefore, the declaration under S. 10(3) and the notice under S. 10(5) are accordingly quashed and the respondents are directed to dispose of the application of the petitioners for exemption in accordance with the provisions contained in s. 20(1) of the Act and the guidelines issued in that behalf. The writ petition is allowed accordingly. No costs. Advocate's fee Rs.150/-.
41. The learned Government Pleader makes an oral request for leave to appeal to the Supreme Court. In our opinion no substantial question of law of general importance, which requires to be considered by the Supreme Court arises in this batch of cases. The oral request is therefore, rejected.
42. Order accordingly.