Read Time: 09 minutes

Synopsis

The Supreme Court has decided to place before a larger bench the issue for authoritative determination of issues concerning interpretation, spirit and object of the Urban Land (Ceiling and Regulation) Act, 1976 as envisaged at the time of its enactment, when juxtaposed against the regressive impact experienced in different States.

A bench of Justices Surya Kant and Dipankar Datta, in a recent order, noted the Ceiling Act, repealed in 1999, indeed is an expropriatory legislation as the 'payment' under Section 11 of the Act to a landowner is not fair and just market value of the surplus vacant land. Principles of strict construction would thus be attracted to such a statute, the court said.

"The words, “….in an area” as incorporated in all the sub-clauses of Section 2(g) and 2(q) also deserve special attention but have not been explicitly discussed in any of the cited (previous) decisions," the bench said.

"We are thus of the considered opinion that the interpretation, spirit and object of the Ceiling Act, as it was envisaged at the time of its enactment, when juxtaposed against the regressive impact experienced in different States which is indicated in the Statement of Objects and Reasons of the Repeal Act, invite an authoritative determination of all the related issues by a Larger Bench," the bench added.

The Ceiling Act was enacted by Parliament to provide, inter alia, imposition of a ceiling on ‘vacant land’ in urban agglomeration, the acquisition for such lands in excess of the ceiling limit, to regulate the construction of buildings on such lands and also to prevent the concentration of urban land in the hands of a person etc.

As many as 11 States had passed a resolution authorising the Parliament to enact a law imposing a ceiling on urban property, more so after the imposition of a ceiling on agricultural lands in most of the States. 

The landowner who has been expropriated of the ‘vacant land’ would receive 'payment' as may be determined on receipt of his claim in accordance with Section 11 of the Ceiling Act. 

Section 20 nevertheless empowers the State Government either on its own motion or otherwise to exempt such ‘vacant land’ from the provisions of the Ceiling Act if it is found to be necessary or expedient in the public interest and/or when the State Government is satisfied that the applicability of the provisions of taking away the land would cause undue hardship to such person.

The issue before the top court revolved around the true construction, meaning and import of the expression ‘vacant land’ as contained in Section 2(q) of the Ceiling Act.

It arose out of an appeal filed by M/s Kewal Court Pvt Ltd and Another against the Kolkata Municipal Corporation's decision to declare 3115.50 sq mt of land purchased by it as vacant land. The single judge bench had dismissed a writ petition in 1987 and the division bench the writ appeal in 2011. On appeal, the top court had directed for maintaining status quo.

The competent authority had declared the entire land as vacant area after excluding retainable area of 500 sq mt. The question before the court was as to what should be the true interpretation of the meaning of Section 2(q)(i) and (ii) of the Ceiling Act for determination of `vacant land’.

Referring to the its previous judgements in case of State of UP and Others vs L J Jhonson and Others (1983), Meera Gupta (Smt) vs State of West Bengal and Others (1992) and State of Maharashtra and Another vs B E Billimoria and others (2003), the bench said this court consciously resorted to interpret and explain the entire scheme of the Act including the fall out of Section 2(q)(i) thereof.

"However, before the controversy could be authoritatively settled by a five-Judge Bench, Angoori Devi (1997) was rendered infructuous due to repeal of the Ceiling Act in the State of Uttar Pradesh," the bench said.

"Unfortunately, the lead judgement in Billimoria did not even notice Jhonson though apparently it was brought to the notice of the Bench. We say so for the simple reason that the concurring opinion specifically refers to Jhonson. Billimoria did not expressly overrule Jhonson. Whether Jhonson, to the extent it opined on Section 2(q)(i) of the Ceiling Act, has been impliedly overruled or not, is a debatable issue," the bench said.

Case Title: M/s. Kewal Court Pvt. Ltd. and Anr. vs. The State of West Bengal and Ors.