P.S. POTI

(1) This matter comes up before the Full Bench on the following order of reference by our learned Brothers P. D. Desai and R. C. Mankad JJ.

(2) The papers of the case to be placed before the learned Chief Justice for constitution of a larger Bench to consider the question whether or not there is any material and substantial distinction between the provisions of sub-sec. (2) of sec. 7 of the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienation) Act 1972 (since repealed) and clauses (b) of sub-sec. (1) of sec. 20 of the Urban Land (Ceiling and Regulations) Act 1976 and whether therefore a conditional decree for specific performance subject to the condition of the plaintiff obtaining exemption from the State Government under clause (b) of sub-sec. (1) of sec. 20 of the Urban land (Ceiling and Regulation) Act 1976 can or cannot be passed following the decisions of the Division Bench in First Appeal No. 1174 of 1968 decided on 25/04/1974 and First Appeal No. 251 of 1967 decided on 22/11/1974 in the context of sec. 7 sub-sec. (2) of the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienation) Act 1972 The need for consideration of a larger Bench arises of the important question of law involved and because the decision of the Division Beach in KANUBHAI V. NAYANKUNJ SOCIETY 19 G. L. R. 920 which takes the view that sec. 20 of the Urban Land (Ceiling and Regulation) Act 1976 confers upon the State Government power to exempt which is materially different from the corresponding provision of sec. 7 of the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienation) Act 1972 requires in our opinion reconsideration.

(3) These questions arise on the following facts. Defendants Nos. 3 and 5 entered into an agreement with defendants Nos. 1 and 2 to certain land comprised in survey No. 333 of village Amraiwadi. The sale was to be made to defendants Nos. 2 and 3 or their nominee at Rs. 12.00 per sq. yard and the extent covered by the agreement was 3 acres of land. This agreement was executed on 4-7-1966. Thereafter defendants Nos. 1 and 2 in their turn entered into an agreement with the plaintiff on 1-7-1967 to sell a portion of such land. to the plaintiff at Rs. 15.25 p. per sq. yard. The portion agreed to be sold was subsequently reconstituted under Town Planning Scheme No. 27 into Plot of 8451 sq. yards. Subsequently there appears to have been a suit for specific performance as between defendants Nos. 1 and 2 on one hand and defendants Nos. 3 to 5 on the other pending which suit the suit from which this appeal arises was filed as Civil Suit No. 1915 of 1970. The suit filed by defendants Nos. 1 and 2 as plaintiffs Civil Suit No. 2062 of 1969 was compromised between the parties thereto under Ex. 125 settlement based upon which Ex. 124 decree was passed on 5-7-1972. The plaintiff was not a party to that suit and naturally therefore he was not a party to that decree. In this suit the plaintiff was non-suited in so far as specific performance was concerned though certain other reliefs were granted to him. Against this the plaintiff has come up in appeal.

(4) Subsequent to the institution of the suit the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienation) Act 1972 (Gujarat Act No. 12 of 1972) came into force and later that ceased to operate and in its place the Urban Land (Ceiling and Regulation) Act 1976 (Act No. 33 of 1976) came into force. For the purpose of this case we are concerned only with the provisions of the latter Act.

(5) One of the questions that has arisen in the appeal is whether in view of the provisions of the Urban Land (Ceiling and Regulation) Act 1976 (Act No. 33 of 1976) prohibiting transfer of surplus land under sec. 5 sub-sec. (3) any transfer made in contravention of the said provision shall be null and void and whether a decree for specific performance could be granted in a case where the suit was pending on the date of the commencement of the.

(6) Different views have been expressed on this question earlier by this Court but those decisions to which we propose to advert are the decisions rendered when the Gujarat Act No. 12 of 1972 was in force. The question concerned the grant of a conditional decree in the light of the provisions of that Act sec. 7 of the Gujarat Act No. 12 of 1972 enabled the State Government by a general or special order in writing and for reasons to be recorded therein to exempt any area or any alienation or other transfer of any vacant land from all or any of the provisions of the said Act. Sub-sec. (2) of that section empowered the State Government to exempt any alienation or other transfer of any vacant land from all or any of the provisions of the. Sub-sec. (3 concerned specific exemption to educational scientific industrial or commercial purposes- Though sec. 4 of that Act prohibited alienation of land in contravention of sec. 4 and declared them to be null and void in view of the power of exemption the question of specific performance of agreements in respect of land concerning which power of exemption may operate was considered in two decisions of this Court. The first of it First Appeal No. 1174 of 1968 judgment in which was delivered on 25/26-4-1974 by a Division Bench consisting of Chief Justice Divan and Justice Dave noticed that the State Government was empowered by the Legislature to exempt any area or any transfer from the operation of the in order to avoid any hardship by general or special order and therefore it could not be said that the Court cannot pass decrees for specific performance in respect of the lands which fell within the term vacant land as defined in sec. 3 (j) of the. The Court held in that case:

Whatever decree is passed by the Court will be subject to the provisions of sec. 7 If the State Government exempted by an order in writing the present alienation it would be open to the plaintiffs to get a decree for specific performance enforced. But it could not be said that merely because of see. 4 of the the Court would be helpless and could not pass a decree for specific performance as prayed for.

(7) The same was the view expressed by a later Division Bench of Justice M. P. Thakkar (as he then was) and P. D. Desai J. in First Appeal No. 251 of 1967. That Bench further took note of the fact that Gujarat Act No. 12 of 1972 was itself an Act of temporary duration was originally enacted for one year and was extended from time to time and that the was to expire in August 1974 was a matter of relevance. In considering whether a conditional decree can be granted the Court noticed that besides this even Act No. 12 of 1972 as amended provided for exemption being granted for alienating lands in exercise of powers under sec. 7 of the. A conditional decree was granted postponing the transfer to the date after the expiry of the and also enabling the appellants to apply for exemption under sec. 7 and to direct specific performance in case such exemption was obtained.

(8) These decisions it may be noticed were rendered before the Urban Land (Ceiling and Regulation) Act 1976 (Act No. 33 of 1976) came into force in this State on 17/02/1976.

(9) It may be necessary to advert in brief to certain provisions of the Gujarat Act No. 33 of 1976 for the purpose of answering the reference. Vacant Land is defined in sec. 2(q) of the and reads:

Vacant land means land not being land mainly used for the purpose of agriculture in an urban agglomeration but does not include (i) land on which construction of a building is not permissible under the building regulations in force in the area in which such land is situated: (ii) in an area where there are building regulations the land occupied by any building which has been constructed before or is being constructed on the appointed day with the approval of the appropriate authority and the land appurtenant to such building; and (iii) in an area where there are no building regulations the land occupied by any building which has been constructed before or is being constructed on the appointed day and the land appurtenant to such building; Provided that where any person ordinarily keeps his cattle other than for the purpose of dairy farming or for the purpose of breeding of live-stock on any land situated in a village within an urban agglomeration (described as a village in the revenue records) then 50 much extent of the land as has been ordinarily used for the keeping of such cattle immediately before the appointed day shall not be deemed to be vacant land for the purposes of this clause.

(10) Sec. 3 provides that except as otherwise provided in the on and from the commencement of the no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which the applied. Sec. 4 makes detailed provisions concerning the determination of vacant land under the. Sec. 5 deals with transfer of vacant land. Sub-sec. (1) was intended to deal with transfers made between the period commencing with the appointed day and ending with the commencement of the. The object behind the provision was that to see that such transfer does not defeat the provisions of Act No. 33 of 1976. Sub-sec. (3) of sec. 5 has to be read as it is of some application to the facts and therefore we extract subsec. (3).

(11) In any State to which this Act applies in the first instance and in any State which adopts this Act under clause (i) of article 252 of the Constitution no person holding vacant land in excess of the ceiling limit immediately before the commencement of this Act shall transfer any such land or part thereof by way of sale mortgage gift lease or otherwise until he has furnished a statement under see. 6 and a notification regarding the excess vacant land held by him has been published under sub-sec. (1) of sec. 10; and any such transfer made in contravention of this provision shall be deemed to be null and void.

(12) Sec. 6 casts obligation on person holding vacant land in excess of ceiling limit to file statement and secs. 7 and 8 are machinery provisions intended to facilitate the acquisition of vacant land in excess of ceiling limit under the provisions of sec. 10 (1). Sec. 10(1) of the contemplates the issue by a competent authority of notification giving the particulars of the vacant land held by a person in excess of the ceiling limit. Sub-sec. (3) of sec. 10 enables the competent authority at any time after the publication of the notification under sub-sec. (1) to declares by notification in the Gazette that the excess vacant land referred to in the notification published under sub-sec. (1) shall with effect from such date as may be specified in the declaration be deemed to have been acquired by the State Government and upon the publication of such declaration such land shall be deemed to have vested absolutely in the State Government free from all encumbrances with effect from the date so specified. Evidently therefore the contemplates a period between the date of its commencement and the date when it issues a notification when vacant lands held by the persons are in a state of suspense. During this period it is open to any person holding vacant land in excess of the ceiling limit to seek exemption provided his situation falls within that contemplated in sec. 20(1)(a) or (b) of the. Since this section also may be relevant for the purposes of this case it would be profitable to extract it here:

Power to exempt 20(1). Notwithstanding any thing 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 any any time the State Government is satisfied that any of the conditions subject to which any exemption under clause (a) or clause (b) of sub-sec. (1) is S 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.

(13) Sec. 21 also deals with the power of exemption but that may not be of relevance here because the date within which the exemption should have been applied for under sec. 21 has admittedly expired. That section provides for an exemption sought by a person holding vacant land in excess declaring before the competent authority that such land would be utilized for the construction of dwelling units for the accommodation of the weaker sections of the society. One more provision that we may advert to is that in sec. 27 sub-sec. (1) of which prohibits a transfer by way of alienation for a period exceeding ten years or otherwise of any urban or urbanisable land with a building (whether constructed before or after the commencement of the) or a portion only of such building for a period of ten years of such commencement or from the date on which the building is constructed whichever is later except with the previous permission of the competent authority.

(14) The Supreme Court in BHIM SINGHJI V. UNION OF INDIA (1981)1 SUPREME COURT CASES 166 [LQ/SC/1978/24] held sub-sec. (1) of sec. 27 of the to be invalid in so far as it imposed a restriction on transfer of any urban or urbanisable land with a building or a portion only of such building which was within the ceiling area. The Court held that such property would be transferable without the constraints mentioned in sub-sec. (1) of the.

(15) Just as Gujarat Act No. 12 of 1972 prohibited transfer though it was an Act of a temporary nature Act No. 33 of 1976 also prohibits transfer under sub-sec. (3) of sec. 5 of the and renders any such transfer null and void. There is a provision for exemption under this Act too and naturally therefore it may be said in light of the two earlier decisions to which we have adverted that a conditional decree could be passed even after Act No. 33 of 1976. Such was the contention raised before a Division Bench of this Court in KANUBHAI SANKALCHAND PATEL (HEIR OF DECEASED SANKALCHAND MANILAL MUKHI) V. NAYANKUNJ CO-OP. HOUSING SOCIETY LTD. and ORS. (1978) 19 G.L.R. 920 but the contention did not succeed. The learned Judges of the Division Bench evidently took the view that the provisions for exemption under Gujarat Act No. 12 of 1972 and the Central Act No. 33 of 1976 were not identical and that there is material difference between the two sets of provisions. The Bench then went on to hold that the agreement for sale that the defendant in that case had executed in favour of the plaintiff was not enforceable in law. Of course there are provisions for exemptions in both the statutes and the provisions may not be identical. That by itself may not be determinative of the issue as to whether a conditional decree could be passed. Assuming that there is material difference between the provisions in Act No. 33 of 1976 and the earlier State Act No. 12 of 1972 in regard to the provisions relating to exemption still the question whether conditional decree can be passed in a suit in view of the provisions for exemption in Act No. 33 of 1976 needed independent consideration. This question as such is not seen considered in the judgment in the case of KANUBHAI V. NAYANKUNJ SOCIETY (SUPRA) and does not appear to have been urged as such before the Court. Merely because the Court found that the two sets of provisions relating to exemption varied the Court went on to hold that the agreement of sale executed in favour of the plaintiff could not be enforced. Evidently the Division Bench which referred this case felt that this question called for consideration by a Full Bench of this Court. Two questions have been referred to the Full Bench and they are:

(1) Whether or not there is any material and substantial distinction between the provisions of sub-section (2) of sec. 7 of the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienation) Act 1972 (since repealed) and clause (b) of sub-sec. (1) of sec. 20 of the Urban Land (Ceiling and Regulation) Act 1976 (2) Whether therefore a conditional decree for specific performance subject to the condition of the plaintiff obtaining exemption from the State Government under clause (b) of sub-sec. (1) of sec. 20 of the Urban Land (Ceiling and Regulation) Act 1976 can or cannot be passed.

(16) Though the answer to question No. 2 is sought to be connected to the answer to Question No. 1 we can answer Question No. 2 independent of any answer to Question No. 1 and in that event answer to the first question may not be called for. In fact it would be an academic exercise; though the two provisions are not identical both are for exemptions and the situations in which the exemption is to be sought are envisaged differently in the two sets of provisions. But the real question which calls for decision in the reference is whether a conditional decree for specific performance could be passed in view of the provision for exemption in sec. 20 (1) (b) of the Central Act No. 33 of 1976 and that is a question to which we propose to address ourselves.

(17) As we have indicated earlier the two decisions of the Division Bench of this Court referring to the exemptions under Gujarat Act No. 12 of 1972 found no reason why a decree for specific performance should be denied in the light of the provisions for exemption in the. That as such is not seen answered in the later decision in 19 G.L.R. 920.

(18) We had the benefit of hearing Mr. Harubhai Mehta counsel for the State who was so heard in the case at his instance on a motion made before us. It seems that the State apprehends that though the decision herein is inter partes such a decision would ultimately affect the interests of Government as it may involve an interpretation of the provisions of Act No 33 of 1976 in a manner prejudicial to the Government. In this view the learned counsel was permitted to address us and he drew our attention to the various provisions in Act No. 33 of 1976 particularly that in sec. 5 (3) and sec. 27 to emphasize his point that a transfer of vacant land was prohibited under the provisions of the that if therefore a transfer had been effected inter partes it would have been null and void and consequently a court should not grant a decree for specific performance. Of course as held by our learned Brother Mehta J. in KANTILAL AMRATLAL and ORS. V. SNEHLATA VIPINCHANDRA MEHTA and ORS. (1979) 20 G.L.R. 490 a decree for specific performance is really a decree which enjoins a transfer inter partes though it may be that instead of the party who had to execute the document the nominee of the Court effects such execution. It is really the party who ought to execute Therefore merely because the decree for specific performance contemplated execution of a sale deed by the person authorized by the Court it does not cease to be a transfer inter partes. But to see whether a plaint is should be defeated in a suit for specific performance because of the provisions adverted to it is necessary to look at the whole scheme of the and not any particular provision.

(19) At the commencement of the persons may be holding vacant land in excess of ceiling limit but as the vacant land does not automatically vest in the State Government they hold it subject to certain obligations There are restrictions imposed concerning dealing with such land. Until a notification issued under sec. 10 (3) the land does not vest in the Government and that is why we have referred to the situation as one of suspense till that date. Once the land vests in the State Government there is no question of invoking the exempttion clause under sec. 20 (1) (a) and (b); but until then there is a right to move the Government for exemption and there is an obligations on the Government to exempt the land in case the conditions which warrant the exemption sought are satisfied. In case such conditions are shown to be satisfied it is not as if the power of exemption could be exercised at the sweetwill and-pleasure of the State Government The State Government has necessarily to be guided by the policy indicated in the provision itself and cannot traverse that policy. Consequently the Government cannot also refuse to exempt if the case falls within those sub-sections. Therefore until vesting is under sec. 10(3) of the there is always a possibility of defeasance of such vesting on a motion for such exemption. If so in a case where the person holding excess land is under a contractual obligation to convey property under an agreement to another could he defeat that obligation by contending that transfer by him would be void and at the same time seeking exemption and obtaining benefit of such exemption in respect of such land

(20) So long as the provision declaring the transfer under sec. 5 (3) as void is subject to the right to move for exemption obtain exemption and transfer the property the power of an owner of vacant land in excess of the ceiling limit to alienate such land is dormant in him and such power could be exercised by him in case he seeks exemption satisfies the Government that the grounds for exemption exist and obtains such exemption. That being the case a decree cannot be defeated on the ground that transfer inter partes would not be possible. The possibility of obtaining exemption survives till the notification under sec. 10 (3) of the is issued. That being the situation until then a plaintiff seeking specific performance cannot be told that the terms of the contract cannot be fulfilled. Once it is said so the plaintiff loses his right to get a decree for specific performance though invoking the provisions of the very Act based on which the plaintiff was told that he could not get conveyance of the property agreed to be sold to him the owner of excess land obtains exemption and continues in possession of property and perhaps even alienates it later. We see no reason either in law or in logic to countenance such a situation. There is nothing prohibiting a decree being passed for specific performance with of course such alternative remedies as may be called for in a situation where that decree may become inoperative. The decree for specific performance may be made conditional on the exemption under sec. 20 (1) (a) or (b) operating. Of course it is not for us in this reference to envisage how safeguards should be built in such a decree. Resourcefulness of course must necessarily find answer to possible situations.

(21) We may in this context advert to a decision of the Supreme Court which has relevance on the question in issue before us. We are referring to BAI DOSABAI V. MATHURDAS GOVINDDAS AND OTHERS A.I.R. 1980 S. C. 1334. That was a case where there was an agreement between a lessor and a lessee the lessee agreeing to take a conveyance for the leased property within a specified period for as agreed price a portion of which was paid forthwith and further agreeing that in the event the lessor does not sell the property the lessee has right to seek specific performance and in case of lessor default to purchase the lessor has a right to seek sale by public auction of the leased property. In the event of such public auction the lessor will be entitled to realize the balance of the agreed price out of the sale proceeds and would be liable to account the balance to the lessee and in case the price realized shout a deficit the lessor would be entitled to recover the balance from We lessee. It was this that was sought to be enforced in the suit by Sale of the land by public auction. A decree was obtained which decree was confirmed before commencement of Act No. 33 of 1976. The matter went to the Supreme Court later in Civil Appeals and the Supreme Court had to consider the course to be adopted in view of the provisions of Central Act No. 33 of 1976. The learned Counsel appearing for the respondents in this Case pointed out that the said decision would have no application here because in that case the decree challenged in appeal before the Supreme Court had been in existence even prior to the commencement of Act No. 33 of 1976. No doubt this is referred to in the judgment but this is not of material significance for it is not as if for that reason the Supreme Court took the view that the appellate decree which was subjected to appeal the Supreme Court should be confirmed. The Court found that subsequent event viz. the new enactment had to be noticed and relief moulded to accord therewith The relevant and significant point to be noticed is that the Court took the view that in view of the provision for exemptions under secs. 20 and 21 of the having been invoked in that case and exemption was sought to be worked out through a Receiver appointed by the Court that arrangement should survive and in case the exemptions became effective the benefit of the proceeds should be applied to discharge the due of the decree-holder. We see this decision an approach to the question which accords with what we have said in this judgment. The fact that provisions of secs. 20 and 21 of the contemplate exemption and therefore the relief that is to be granted should be moulded in accordance with the provision for exemption have been noticed and applied in that case.

(22) In this view in answer to the second question referred to us we hold that a conditional decree for specific performance subject to exemption being obtained under sec. 20 of the Urban Land (Ceiling and Regulation) Act 1976 (Act No. 33 of 1976) is permissible. As we have said earlier we do not propose to answer the first question as it may not be necessary. The case will be sent back to the Division Bench for disposal in accordance with the decision herein and in accordance with law.

(23) The learned Advocate for respondents Nos. 3 to 5 makes an oral application under Art. 134A of the Constitution of India for leave to appeal to the Supreme Court of India under Art. 133 (1) (a) of the Constitution. We see no substantial question of law of general importance which needs to be decided by the Supreme Court arising in this case assuming that this is a final decision against which leave could be sought. Leave declined. Order accordingly.