What Does `Vacant Land’ Under Section 2 Of Urban Land Ceiling Act Mean? Supreme Court Refers To Larger Bench

The Supreme Court on Tuesday referred the question of the construction, meaning and import of the term ‘vacant land’ contained in Section 2(q) of the Urban Land (Ceiling and Regulation) Act, 1976 to a larger bench.

The Ceiling Act was enacted to impose a ceiling on the acquisition of urban property. It imposed a ceiling on ‘vacant land’ in urban agglomeration. The acquisition of urban land in excess of the ceiling limit, and construction of buildings on such land is regulated under the Act. The intention of the Act was to prevent the concentration of urban land in the hands of a few individuals.

“… 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. This case may, therefore, be placed before Hon’ble the Chief Justice of India for appropriate directions,” a bench of Justice Surya Kant and Justice Dipankar Datta said.

For reference, Section 2(q) in The Urban Land (Ceiling and Regulation) Act, 1976 is as follows:

(q) “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, so 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.

The Appellants in the case under consideration had purchased property in Kolkata and had applied to the Calcutta Municipal Corporation for sanction of the building plan. Subsequently, a part of the property was determined as ‘excess vacant land’ by the Competent Authority and deemed to have been acquired by the State Government. This was challenged by the Appellants. The Appellants urged the Apex Court to remit the case to the Competent Authority to re-determine the ‘vacant land’ after excluding the area on which no construction is permissible under the Building Regulations of Calcutta Municipal Corporation.

The Court was thus left with the question of 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’.

The Court noted that there was discordance between the two-judge bench decision in State of U.P. and Others vs. L.J. Jhonson and Others (1983) 4 SCC 110 and the three- judge bench decision in State of Maharashtra and Another vs. B.E. Billimoria and others (2003) 7 SCC 336.

According to the ruling in Jhonson, Section 2(q)(i) provides a blanket exemption to any land situated in an urban area where the entire area is covered by land on which it is not permissible to raise a building. Hence, according to the said decision this land will not be deemed to be ‘vacant land’ under Section 2 of the Ceiling Act because it cannot be used for building purposes.

In Billimoria, the Apex Court was of the view that the Ceiling Act being an expropriatory legislation, is to be construed strictly. In this case, the expression ‘means’ in Section 2(q) of the Ceiling Act was held to be, prima facie, restrictive and exhaustive. Since the Parliament has excluded the categories of lands in sub-clauses (i), (ii) and (iii) of Section 2(q) from the definition of ‘vacant land’, the exclusionary clauses must construed liberally the Apex Court had held.

“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 Apex Court observed.

The Court also took note of the Urban Land [Ceiling and Regulation] Repeal Act enacted by the Parliament in 1999 by which the Act was repealed in States like Haryana, Punjab and all the Union Territories. The State of Uttar Pradesh also adopted the Repeal Act. The Apex Court referred to the Statement of Objects and Reasons dated 17.02.1999 of the said Repeal Bill which indicates that the proposed repeal is expected to revive the stagnant housing industry.

“While we do not mean to infuse any binding force in a Statement of Objects and Reasons, but it certainly gives us a glimpse of the miserable failure of a reformatory legislation,” the Apex Court said about the Repeal Act.

The Apex Court also observed that the words, “….in an area” in sub-clauses of Section 2(g) and 2(q) of the Act have not been explicitly discussed in any of the cited decisions, but requires serious consideration.

Sr. Adv. Jaideep Gupta, appeared for the appellants and Sr. Adv. Rakesh Dwivedi appeared for the respondents.

Case Title: M/s. Kewal Court Pvt. Ltd. V. The State of West Bengal

Citation: 2023 LiveLaw (SC) 867

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