Holding

The Supreme Court set aside the High Court's dismissal and remitted the case for fresh consideration of the applicability of Sections 19(2) proviso and 20 of the Urban Ceiling and Regulation Act, 1976.

Summary

Allahabad Bank entered into agreements to purchase land and construct a 29‑flat building in Calcutta. After completing the building, the bank sought permission to sell the land under the Urban Ceiling and Regulation Act, 1976, but the Competent Authority rejected the application, deeming the land excess vacant land vested in the Government. The bank appealed, was directed to approach the State Government for exemption, received no response, and filed a writ petition which the Calcutta High Court dismissed on the ground of delay. The bank contended that Sections 19(2) (proviso) and 20 of the Act, which allow exemption of vacant land held by a bank or by State Government order, were not considered. The Supreme Court held that the High Court had erred by not examining the applicability of those provisions and set aside its order. The matter was remitted to the High Court for fresh consideration of the exemption claim, and the appeal was disposed of without costs.

Issues considered

Whether the Calcutta High Court erred in dismissing the writ petition on the ground of delay without considering Sections 19(2) proviso and 20 of the Urban Ceiling and Regulation Act, 1976.
Whether vacant land held by a bank is exempt from the ceiling provisions under Section 19(2) or can be exempted under Section 20 of the Act.
Whether the bank is entitled to seek exemption from the State Government under the Act.

Subjects

Urban Ceiling ActSection 19Section 20exemptionvacant landbankdelaywrit petitionproperty lawland ceiling

Judgment

r- ALLAHABAD BANK A
v.
STATE OF WEST BENGAL AND ORS.

FEBRUARY 20, 2007

[DR. ARIJIT PASAYA T AND S.H. KAPADIA, JJ.] B

Urban Ceiling and Regulation Act, 1976-ss.19(2), 20-Permission to
sell land rejected by competent authority on the premise that same was vested
with Government-Writ Petition rejected on the ground of delay-Plea that
issue was not examined in the light of ss. 19(2) proviso and 20-Held,
c
impugned order shows that High Court had not examined that aspect-
Matter remitted to High Court.

The Appell/nt Bank entered into an agreement with respondent nos. 4
& 5 in the year 1990 for purchase of land and building. The possession of D
the property was handed over to the appellant bank. Another agreement was
~
entered into whereby respondent no. 5 was appointed as contractor to construct
,.> a multi-storied building of 29 residential flats. The building was constructed
in terms of the plan and the possession was given to the Bank in 1992. All
the flats were allotted and were in occupation of the allottees. When the
construction was going on, the appellant-Bank s_ent a draft copy of the sale E
deed to respondent no.4 for finalization and for execution and registration of
sale deed. There was no response to the request made by the appellant-Bank.

The prayer for permission to sell was rejected by the Competent
-t Authority under the Urban Ceiling and Regulation Act, 1976. Appellate
F
Authority dismissed the appeal holding that the property in question vested
with the Government and was in fact the excess land of the owners. However,
liberty was granted to the appellant to move the State Government for seeking
exemption.

The State Government was moved but no action was taken on the G
applications. The appellant filed writ petition before the High Court which
•'· summarily rejected it on the ground that it was filed after seven years.

In appeal to this court, the appellant contended with reference to Section

913 H
914 SUPREME COURT REPORTS [2007] 2 S.C.R.

A
19(2) (proviso) and Section 20 of the Act that they are intended to take care -l
of the situation as involved in the present case.

Disposing of the appeal and remitting the matter to High Court, the
Court
B
Held: It is not really necessary to examine whether Sections 9 and 20
of the Ceiling Act have any application to the present case. The impugned
order shows that the High Court has not examined that aspect. Hence matter
remitted back to the High Court for fresh consideration on merits. [Para 8)
(916-H; 917-A)
c
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 862 of2007.

From the final Judgment and Order dated 22.9.2003 of the High Court
of Calcutta in C.O. No. 1820/2003.

D K.K. Venugopal, C. Mukund, Ashok Jain, Pankaj Jain and Bijoy Kumar
Jain for the Appellant.

Avijit Bhattacharjee and Saumya Kundu for the Respondents.

The. Judgment of the Court was delivered by
E
DR. ARIJIT PASAYAT, J. I. Leave granted.

2. Challenge in this appeal is to the order passed by the Division Bench
of the Calcutta High Court summarily dismissing the writ petition filed by the
appellant on the ground that it was highly belated.
F
3. A brief reference to the background facts as projected by appellant
would be necessary.

4. Appellant-Bank entered into an agreement with respondent Nos. 4
and 5 in the year 1990 for purchase of land and building situated at No. I
G Fakirpara Road, Calcutta. The consideration was fixed at Rs.20 lacs. Out of
the said amount Rs.19,00,000/- was paid to the vendors-respondent Nos. 4-
5. The possession of the property was handed over to the appellant-Bank
with the right to demolish the existing structures and to construct building
thereon. Another agreement was entered into on 12.11.1990. By this agreement
H respondent No.5 was appointed as contractor/developer to construct a multi-
ALLAHABAD BANK v. STATE OF WEST BENGAL [PASAYAT, J.] 915
,.,
)- storied building of 29 residential flats at the property in question. The said A
flats were constructed by spending more than rupees one crore six lacs. The
building was constructed in terms of the plan sanctioned by Calcutta Municipal
Corporation and possession was given to the Bank in 1992. All the flats were
allotted and are in occupation of the allottees. When the constructions were
going on, the appellant-Bank sent a draft copy of the sale deed to respondent
No. 4 for finalisation and for execution and registration of the sale deed. There B
was no response to the request made by the appellant-Bank. The prayer for
permission to sell was rejected by the Competent Authority under the Urban
--.: Ceiling and Regulation Act, 1976 (in short the 'Act'). An appeal was filed
which was dismissed by holding that the property in question vested with
the Government and was in fact the excess land of the owners. It was c
categorically held by the order dated 20.3.1996 that the Competent Authority
was right in treating the land in question to be taken into account while
determining the total excess vacant land. However, liberty was granted to the
appellant to move the State Government for seeking exemption. According to
the appellant, after the said order the State Government was moved in terms
of the directions given by the Appellate Authority on 2nd September, 1996, D
)>-
13th March, 1997, 20th April, 2001and18th May, 2002. According to appellant-
Bank since no action was taken on the applications, it was compelled to file
.... writ petition before the High Court which summarily rejected it on the ground
that it was filed after seven years.

5. Mr. K.K. Venugopal, learned senior counsel appearing for the appellant
E
submitted that the High Court has erroneously concluded that there was
inaction on the part of the appellants or that there was any delay. In fact in
terms of the earlier directions of the High Court, several representations were
made to the Competent Authority. Since no action was taken, filing of the writ
-\ petition became imperative. F
6. It is stated with reference to Section 19(2) (proviso) and Section 20
of the Act that they are intended to take care of the situation as involved in
the present case. Unfortunately the official respondents have not examined
the issues in the proper perspective.

- ·~-~-
7. According to the learned counsel for the State of West Bengal, in
reality there was no direction for consideration as contended by the appellant.
It is, however, submitted that the Appellate Authority had granted liberty to
G

the appellant-Bank to move the concerned authorities for such remedy as is
,. available in law.
H
+-·
916 SUPREME COURT REPORTS [2007] 2 S.C.R.

A Section 19 and Section 20 read as follows: "
-1
"19. Chapter not to apply to certain vacant lands:- (I) Subject to the
provisions of sub-section (2) nothing in this Chapter shall apply to
any vacant land held by -

(i) the Central Government or any State Government or any local
B
authority or any Corporation established by or under a Central
or Provincial or State Act or any Government Company as defined
in section 617 of the Companies Act. 1956 (1 of 1956)
1-
(ii) any military, naval or air force institution
c (iii)'any bank

I
················
2 . ................

Section 20. Power to exempt:-(!) Notwithstanding anything contained
·-
D in any of the foregoing provisions of this Chapter-

(a) where any person holds vacant land in excess of the ceiling limit ·-1

1
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
E 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;
F (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
G of this Chapter;

Provided that no order under this clause shall be made unless the
reasons for doing so are recorded in writing."
·\.._.A
-
,
8. It is not really necessary to examine whether these provisions have
H
ALLAHABAD BANK v. STATE OF WEST BENGAL [PASAYAT. J.] 917

any application. The impug!l'ed order shows that the High Court has not A
examined that aspect. We, therefore, set.aside the \Jltpugned order and remit
the matter to High Court for fresh consideration on merits. This order, however,
shall not stand in the way of the official respondents in considering the
prayer made by the appellant-Bank.

9. The appeal is accordingly disposed of with no orders as to costs. B
D.G. Appeal di'sposed of.

..

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