Case Note & Summary
The appellant, Shridhar C. Shetty (deceased through legal representatives), was granted exemption under Sections 20 and 21 of the Urban Land (Ceiling and Regulation) Act, 1976 on 02.03.1988 for construction on two plots (CTS No. 261 and CTS No. 245). The exemption required the appellant to surrender 20% of the constructed area to government nominees. The appellant raised construction on only one plot and failed to hand over seven tenements. The Additional Collector and Competent Authority issued a demand on 15.10.2005 for Rs. 51,97,196/- plus interest, penalty and recovery expenses as arrears of land revenue. The Additional Commissioner, Konkan Division, Mumbai affirmed the demand on 12.07.2006. The High Court upheld the demand. The appellant appealed to the Supreme Court, arguing that the authorities had no statutory power to levy such a demand, that the 'No Objection Certificate' dated 08.06.1993 acknowledged handing over of seven tenements, that after the judgment in M/s Shantistar Builders vs. Narayan Khimalal Totame (1990) 1 SCC 520 only 5% tenements were required, and that the liability rested with respondent nos. 2-4 to whom development rights were transferred. The respondents argued that the exemption was composite for both plots, the certificate was not conclusive, Shantistar Builders was prospective, and the appellant remained liable. The Supreme Court examined Sections 20, 21 and 38(4) of the Act and held that the Act does not provide for any monetary demand as arrears of land revenue for breach of exemption conditions. The only remedies are withdrawal of exemption under Section 20 or declaration of land as excess under Section 21, and penalty under Section 38(4). The Court set aside the impugned demand and the orders of the High Court and appellate authority, but left it open to the authorities to take appropriate action in accordance with law.
Headnote
A) Urban Land Ceiling - Exemption Conditions - Breach - Sections 20, 21, 38(4) Urban Land (Ceiling and Regulation) Act, 1976 - The appellant was granted exemption under Sections 20 and 21 for construction on two plots, requiring surrender of 20% constructed area to government nominees. The appellant failed to hand over seven tenements. The competent authority raised a demand for market value of the tenements as arrears of land revenue. The Supreme Court held that the Act does not empower the authorities to levy such a monetary demand; the only remedies are withdrawal of exemption under Section 20 or declaration of land as excess under Section 21, and penalty under Section 38(4). The demand was set aside. (Paras 9-12) B) Urban Land Ceiling - No Objection Certificate - Conclusiveness - The appellant relied on a 'No Objection Certificate' dated 08.06.1993 stating that seven tenements had been handed over. The Court held that the certificate was not conclusive as it used the phrase 'so far', indicating that the remaining tenements were yet to be handed over. (Para 6) C) Urban Land Ceiling - Prospective Effect of Judgment - Shantistar Builders - The appellant argued that after the judgment in M/s Shantistar Builders vs. Narayan Khimalal Totame (1990) 1 SCC 520, only 5% tenements were required. The Court noted that the High Court had held Shantistar Builders to be prospective, and the appellant's exemption was granted before that judgment. (Para 8) D) Urban Land Ceiling - Liability of Developer - Transfer of Development Rights - The appellant contended that liability for breach rested with respondent nos. 2-4 to whom development rights were transferred. The Court rejected this, holding that the exemption was granted to the appellant, and any illegal transfer cannot absolve him of liability. (Paras 6-7)
Issue of Consideration
Whether the Additional Collector and Competent Authority had statutory authority under the Urban Land (Ceiling and Regulation) Act, 1976 to demand Rs. 51,97,196/- plus interest, penalty and recovery expenses as arrears of land revenue for alleged breach of exemption conditions under Sections 20 and 21 of the Act.
Final Decision
The Supreme Court allowed the appeal, set aside the impugned demand dated 15.10.2005, the order of the Additional Commissioner dated 12.07.2006, and the High Court order. The Court held that the Act does not provide for any monetary demand as arrears of land revenue for breach of exemption conditions. The authorities may take appropriate action in accordance with law, including withdrawal of exemption under Section 20 or declaration of land as excess under Section 21, or penalty under Section 38(4).
Law Points
- Exemption under Sections 20 and 21 of the Urban Land (Ceiling and Regulation) Act
- 1976 can only be withdrawn or land declared excess upon breach
- no statutory power to levy monetary demand as arrears of land revenue
- Section 38(4) provides penalty for contravention
- Shantistar Builders judgment prospective in effect
- no objection certificate not conclusive if it shows part performance.
