Bombay High Court

ACME HOUSING INDIA PVT LTD AND ANRversusSTATE OF MAHARASHTRA AND ORS

Decided: 12 February 2026
Disposal: Allowed
Bench: BHARATI DANGRE MANJUSHA AJAY DESHPANDE

Holding

A Section 20 exemption order does not survive a subsequent revised order under Section 8(4) that determines the land is not in excess of the ceiling, and the repeal’s saving clause applies only where a valid exemption exists; consequently the mutation entry and related notices are invalid and must be set aside.

Summary

Acme Housing India Pvt. Ltd. and its director sought a declaration that the Urban Land (Ceiling and Regulation) Act, 1976 no longer applied to their 54,500 sq m of land in Thane, the deletion of a mutation entry (No. 1125) that recorded an exemption under Section 20 of that Act, and the quashing of several notices issued by municipal authorities. The dispute turned on whether a Section 20 exemption order survived a later revised order under Section 8(4) of the 1976 Act and the subsequent repeal of the Act in 1999. The Court held that the revised order cancelled the earlier exemption, and the repeal’s saving clause applies only where a valid exemption order exists; therefore the mutation entry and the notices were invalid. The petition was allowed, the mutation entry was deleted, the land was restored to the petitioners, and the impugned letters and notices were set aside.

Issues considered

The effect of a revised order under Section 8(4) of the Urban Land (Ceiling and Regulation) Act, 1976 on a prior exemption order under Section 20.
Whether the exemption order under Section 20 survives the repeal of the 1976 Act under Section 3(1)(b) of the Repeal Act, 1999.
The validity of the mutation entry (No. 1125) that recorded the exemption after the revised order and repeal.
The legality of the municipal notices directing cessation of construction based on the purported exemption.
Whether the petitioners are entitled to a declaration that the 1976 Act is inapplicable to the land and to proceed with development.

Legislation cited

Maharashtra Regional and Town Planning Act, 1966 — s. 154, 37(1)
Urban Land (Ceiling and Regulation) Act, 1976 — s. 10(1), 10(3), 20, 22, 3(1)(a), 3(1)(b), 4, 8(4)
Urban Land (Ceiling & Regulation) Repeal Act, 1999 — s. 3(1)(a), 3(1)(b)

Subjects

Urban Land Ceiling Act
Section 20 exemption
Section 8(4) revised order
Repeal Act 1999
mutation entry
mandamus
certiorari
rental housing policy
Maharashtra land law
development permission

Judgment

904-J-WP-2612-2021.odt

rajshree

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.2612 OF 2021

Acme Housing India Pvt. Ltd. & Anr. ....Petitioners
V/S
State of Maharashtra & Ors. ....Respondents

Dr.Birendra Saraf, Senior Advocate a/w Bhushan Deshmukh,
Jasmine Kachalia, Viren Mandhle and Sahil Singh i/b Wadia
Ghandy & Co. for the Petitioners.
Mr.Ashutosh Kulkarni, Special Counsel a/w Karan Thorat, B
Panel Counsel a/w V.G. Badgujar, AGP and Sarthak Diwan for the
State-Respondent Nos.1, 4 and 5.
Mr.Vedant Bende h/f Mandar Limaye for Respondent Nos.2 and 3-
TMC.

CORAM : BHARATI DANGRE &
MANJUSHA DESHPANDE, JJ

RESERVED ON : 4th FEBRUARY 2026
PRONOUNCED ON : 12th FEBRUARY, 2026

JUDGMENT (PER BHARATI DANGRE, J) :

1 Petitioner No.1, a company registered under the Companies
Act, 2013, interalia engaged in the business of development of
real estate in and around the State of Maharashtra, claiming to
be the owner of immovable property in form of piece of land
bearing Gut No.61/1 admeasuring 46,400 sq. mtr. and Gut
No.61/2 admeasuring 8100 sq. mtrs. aggregating to 54,500 sq.
Digitally signed
by RAJSHREE
RAJSHREE KISHOR MORE
KISHOR Date:
MORE 2026.02.18
15:56:11
+0530

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mtrs in Thane, situated at Village Chitalsar, Manpada, Thane,
alongwith its Director i.e. Petitioner No.2, has approached this
Court seeking the following reliefs :-
(a) That this Hon'ble Court be pleased to declare that the provisions of
Urban Land (Ceiling and Regulation) Act. 1976 are not applicable and
proceedings have abated under Section 3 (1) (a) of the Urban Land
(Ceiling and Regulation) Repeal Act, 1999 in respect of the said Land
i.e.. Gut No. 61/1 and 61/2, Village Chitalsar. Manpada. Thane totally
admeasuring 54,500 square meters:

(b) That this Hon'ble Court be pleased to issue a writ of mandamus, or
any other appropriate writ, order or direction under Article 226 of the
Constitution of India in the nature of mandamus, directing Respondent
No. 4 to withdraw/cancel the communication dated 25th February
2021 issued to Respondent No. 5 (Exhibit "V" hereto) and directing
Respondent No. 5 to delete the Impugned Mutation Entry No. 1125
dated 26th February 2021 (Exhibit "W" hereto) from the revenue
records for the said Land i.e. Gut No. 61/1 and 61/2, Village Chitalsar,
Manpada, Thane totally admeasuring 54,500 square meters;

(c) That this Hon'ble Court be pleased to issue a writ of certiorari or
any other appropriate writ, order or direction in the nature of
certiorari calling for the records and proceedings pertaining to
issuance of the Impugned Letter dated 25th May 2021 (Exhibit “Z”
hereto) and the Impugned Letter dated 10th June 2021 (Exhibit “CC”
hereto) issued by Respondent No.3 and after examining the legality
and validity thereof, this Hon’ble Court be pleased to quash and set
aside the Impugned Letter dated 25 th May 2021 (Exhibit “Z” hereto)
and the Impugned Letter dated 10th June 2021 (Exhibit “CC” hereto);

(c-1) That this Hon'ble Court be pleased to issue a writ of certiorari or
any other appropriate writ, order or directions in the nature of
certiorari calling for records and proceedings pertaining to issuance of
the Impugned Letter (Exhibit HH hereto) and the Impugned Notice
(Exhibit II hereto) issued by Respondent No. 3 and after going through
the legality and validity thereof, this Hon'ble Court be pleased to quash
and set aside the Impugned Letter (Exhibit II hereto) and the
Impugned Notice (Exhibit II hereto).”

2 On 11/10/2021, the Petition was admitted by
recording prima-facie observations to the following effect :-
“32. Of course, in that case original section 8(4) order was set
aside by the Appellate Authority whereafter the matter was sent back
on remand. It was on remand that fresh order under section 8(4) was
passed and it was in that context the above principle of law has been

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laid down. Nonetheless in the said case, this Court referred to section
3(1)(b) of the ULC Repeal Act and held that the savings clause under
section 3 of the ULC Repeal Act would operate only in cases where a
valid exemption order under section 20 of the ULC Act is existing.
When the subsequent revised order was passed by the Competent
Authority under section 8(4) of the ULC Act whereby it was held that
the owner did not have land in excess of the ceiling limit, question of
existence of exemption order under section 20 of the ULC Act would
not arise. Once it is held that exemption order under section 20 of the
said Act ceases to exist or it stood cancelled upon the Competent
Authority passing fresh order under section 8(4) there can be no
mutation entry pertaining to the land in question stating that the land
is subject to exemption under section 20 of the ULC Act for industrial
user.

33. Prima facie the principle of law laid down in Bombay Fibre
Industries Pvt. Ltd. (supra) would be applicable to the facts of present
case. As already noted above, the issue involved is what would be the
impact of the revised order under section 8(4) on the exemption order
under section 20 passed on the basis of the earlier section 8(4) order ?
This will require further deliberation.

34. In the circumstances the following order is passed :
(i) Let the Writ Petition be admitted for hearing.
(ii) As an interim measure, we direct stay of mutation entry
No.1125 and the stop work notices dated 30.06.2021 and
30.08.2021.
(iii) Respondent No.4 shall inform the Petitioner the amount of
premium @ 15% of the ASR as mentioned in paragraph 21 of the
affidavit in reply. Petitioners shall identify and not sell the flats of
that value as per the ready reckoner rate for the year 2021 from
the sale building pending the hearing of the Writ Petition.
(iv) Hearing of the Writ Petition is expedited.”

3 Upon the pleadings being completed, the Petition is ready
for hearing and we have heard the learned senior counsel
Dr.Birendra Saraf for the Petitioner and Mr.Ashutosh Kulkarni,
Special Counsel for Respondent Nos.1, 4 and 5 and Mr.Vedant
Bende for Respondent Nos. 2 and 3.
In order to appreciate the contentions advanced on behalf of
the Petitioners, it is necessary for us to cull out the background
facts in which the reliefs are sought and which are presented

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before us by Dr.Birendra Saraf by placing on record list of dates
and events.

4 The earliest event in the present case is an order passed by
the Competent Authority under Section 8(4) of the ULC Act,
1976, in relation to a return filed by M/s.Shah Malleable Castings
Ltd. u/s 6(1) of the Act, in respect of the land in Gut No. 61/1
and 61/2 in Village Chitalsar, Manpada, Thane. Pursuant to the
enquiry being held, revealing that the company is holding excess
vacant land, notice under Section 8(3) of the ULC Act was issued
and on measurement of the land by City Survey Officer covering
the area under the factory building and other authorized
construction, 20,622.80 sq. mtrs. of land was declared as surplus
vacant land as against the total holding of 54500.00 sq. mtrs.
The Competent Authority, therefore, passed the following
order on 25/07/1985 :-
“ I, therefore, order that the company is surplus vacant land holder to
the extent of 20,622.80 sq. mtr. which should be acquired from the
following Gut Nos.
Gut No. Area in Sq.Mtrs.
61/2 8100.00
61/1 12522.80
Total 20622.80

Notice u/s 9 and notification u/s 10(1) should be issued. Party may
be informed accordingly.”

5 Followed by this order, the Joint Director of Industries
(ULC Branch) passed an order under Section 20(1) of the ULC
Act, 1976, exempting the vacant land from the provisions of
Chapter III of the Act, subject to the terms and conditions

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mentioned therein and also directed that the part of the
exempted land shall always be kept vacant. The Schedule
appended to the said order set out the area of vacant land
exempted and also set out the area of vacant land within matter
of course exemption limit, i.e. land permitted to be retained. It
exempted 35156.18 sq. mtrs. of vacant land.

6 In the year 1991, development plan of Thane was
sanctioned and the land under question was converted from
“Industrial Zone” to “Partly Residential Zone” and “Partly Market
and Road Reservations”. As a consequence, the owner of land
M/s.Shah Malleable Castings Ltd. submitted an Application for
revise order under Section 8(4) of the ULC Act, 1976, on
01/09/1997, which resulted in issuance of Revised Order under
Section 8(4) of the ULC Act, 1976 being issued on 20/11/1997
with reference to the area of land held by the Applicant/Company
in Gut No.61/1 and 61/2 with the total holding of 54500.00 at
Chitalsar Manpada.
The order record that as per the Draft Development Plan of
the 1991 for Corporation, the said land (Gut No.61/1) was shown
in reservation for residential cum D.P. Road of 20 mtr. and an
area of 2550 sq. mtr. was reserved for market and market center,
and therefore, the Company submitted an application for revised
order.
The order record that the Assistant Town Planner carried
out inquiry and on scrutiny determined the land rent for the road
and market center in Gut No.61/2. Since Chitalsar, Manpada was
falling within the vicinity of 1 k.m. of Thane Urban

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Agglomeration, where the ceiling of urban land was fixed at
2000 sq. mtrs., the Company was held eligible to reserve an area
to that extent.
With the computation being reworked with reference to the
exemption granted by the Department of Industry under Section
20 of the ULC Act, 1976, with the area under the roads, open area
for construction as well as permissible area of 2000.00 sq. mtr.,
the excess area was worked out as 114.72 sq. mtr.
The revised order passed by the Competent Authority on
20/11/1997 declared thus :-
“It is being declared that M/s.Shah Malleable Company is holding an
excess area of 114.72 Sq.M. This order be acquired from the Gat
No.61/2 and further action should be taken as per Section 9 and 10(1).
This order is being issued by setting aside the order passed on 25.7.85
under Section 8(4).”

At this stage, it is important to note the declaration in the
order, that it is issued, by setting aside the order passed on
25/07/1985 under Section 8(4) of the ULC Act, 1976, as the bone
of contention between the Parties involved revolve around this
revised order and its effect.

7 Continuing the sequence of events, a Notification under
Section 10(1) of the Act was issued notifying an area of 114.72 sq.
mtr. for acquisition from Gut No.61/2 on 26/05/2005 and a
Notification under Section 10(3) was issued in relation to the
surplus vacant land declared by the competent Authority by its
revised order on 20/11/1997.
After this development, Ascent Constructions Pvt. Ltd.
acquired the right, title and interest from M/s.Shah Malleable
Castings Ltd.

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8 On 01/12/2007 State of Maharashtra adopted the Urban
Land (Ceiling and Regulation) Repeal Act, 1999 (For short “ULC
Repeal Act, 1999”) which came into force w.e.f. 29/11/2007 in
the State of Maharashtra.
On 04/11/2008 the Urban Development Department of the
State of Maharashtra, formulated the ‘Rental Housing Policy’ for
various Municipal Corporations including Thane Municipal
Corporation (TMC) under Section 37(1) read with Section 154 of
the Maharashtra Regional and Town Planning Act, 1966 (for
short “MRTP Act, 1966”), with the object of providing affordable
housing for poor on rental basis and it appointed Mumbai
Metropolitan Region Development Authority (MMRDA) as
implementing agency for the Project which was considered to be
of vital public importance.
MMRDA granted Location Clearance to M/s.Ascent
Construction Pvt. Ltd. for development on the land subject to the
terms and conditions under the Rental Housing Policy, as the
located site was situated within the limits of Thane Municipal
Corporation (for short “Corporation).
The order granting clearance contemplated the ‘Rental
Housing Project’ component to be developed on minimum 25% of
land, with permission to develop free sale component on the
balance land area, with the requirement of securing fresh
development permission from the Corporation and the project
was directed to be developed in two years.
Pursuant to this permission, the Collector, Thane granted
permission to Ascent Constructions Pvt. Ltd. for ‘Non
Agriculture-Residential’ use of the land by invoking the powers

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under Section 44 of the Maharashtra Land Revenue Code, 1966
and even MMRDA granted layout approval for the same on
21/12/2009.

9 In the wake of the aforesaid developments, the Additional
Collector and Competent Authority, Thane, issued a Notification
on 03/09/2010 in respect of the ‘excess area’ of 114.72 sq. mtr.
directed to be acquired from Gut No.61/2. The said Notification
with reference to the Repeal Act of 1999 recorded that regarding
a land declared excess, after taking action under Section 10(3)
and 10(5) the lands taken into possession by the Government
prior to 29/11/2007 vested in it, but ownership of the excess
declared land not taken into possession, was to remain with the
original owner.
Recording that the area of 114.72 sq. mtr. in Gut No.61/2
Manpada i.e. the subject land, proceedings under Section
No.10(1), 10(3) and 10(5) had taken place and after 10(3) stage,
the name of the Government was shown in the Record of Rights
instead of the landholder. But, since the possession of the land
was not taken, Notification issued under Section 10(3) dated
25/11/2005 published in the Gazette on 19/01/2006 was
cancelled as the ULC Act was repealed. It was also directed that
the mutation entry in the revenue record of the Government
shall be deleted and the revised Village Form be submitted to the
Competent Authority.
Upon this development, a notice was addressed on behalf of
M/s. Shah Malleable Castings Ltd. to the Joint Director,
Industries, with reference to the Revised Order dated

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20/11/1997 passed by the Competent Authority, and the order
declaring surplus area of 114.72 sq. mtr. to be acquired from Gut
No.61/2, but the physical possession of the same not having been
taken by the Government of Maharashtra when the ULC Repeal
Act, 1996 came in force, resulting into setting aside of the order
dated 25/11/2005 passed under Section 10(3) of the Act of
1999.
A request was, therefore, made to issue a corrigendum to
exempt 114.72 sq. mtrs of the land and to restrict the
applicability of the exemption order only to the said area. It is
worth to note that this communication was addressed by way of
abundant precaution as the Notification dated 03/09/2010
already cancelled the Notification issued under Section 10(3) of
the ULC Act, 1976, in the wake of its repeal.
The company also made a request to the Principal Secretary
(UDD) to issue a clarification.

10 The next important milestone in the sequence of events is
the inquiry from the Additional Collector and Competent
Authority, to the Director of Industries (ULC) seeking
clarification whether the exemption order dated 21/01/1986 is
valid or it is set aside. This query was made with reference to the
application of the Company for grant of ‘NOC’ for ‘Rental Housing
Project’. The Additional Collector, sought clarification as to
whether the exemption order dated 21/01/1986 was valid as on
date, as in terms of the revised order dated 20/11/1997, 11.472
sq. mtr. was declared as excess land and on the area belonging to
company i.e. from Gut No.61/1 and 61/2 ‘Non Agriculture’

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permission was granted by the Collector, Thane, which was
followed by the Construction Permission and revised construction
permission in the year 2011 and the area under the industrial
zone was converted into residential zone.
The said query was met with a positive response from the
Deputy Director of Industries (ULC) in the following words :-
“Now, a period of more than 15 years have elapsed since the orders
granting exemption were issued. It is seen from the records available
with the Directorate, the Additional Collector & Competent Authority,
Thane Urban Agglomeration, Thane has submitted to the Directorate of
Industrial Units, the revised orders issued vide his office No.ULC/TA/Te-
1/Chitalsar Manpada/SR-27, dated 2011/1997, under section 8(4) of
the Act, 1976. As per these orders, it has been declared that an excess
area admeasuring 114.72 sq. meters has remained free with the said
Industrial Unit. In the said orders, it has been ordered the said area of
114.72 sq. meters should be acquisition from Gat No.61/2. In the order
of exemption issued by the Directorate of Industries, there is no
mention of land area of Gat No.61/2. Therefore, the orders issued by
the Directorate of Industries are not valid for land area declared to be
‘excess’. Similarly, in the same order it has been mentioned that the
Additional Collector & Competent Authority has declared that there is
‘NIL’ additional land area with the said Industrial Unit in Survey No.44,
Gat No.61/1 and therefore also, the said orders dated 21/1/1986 about
the exemption are not valid.”

11 Despite the aforesaid response from the Industry
Department, that the Exemption Order was not valid and legal,
on 24/08/2017, a Mutation Entry No.1052 was taken in respect of
various Gut Nos. which included Gut No.61/1/22, 61/2/1.
The criticism against the said mutation entry is, the
Exemption Order had ceased to exist in view of the fresh
computation of surplus land of 114.72 sq. mtr. and, therefore, the
mutation entry mentioning that the land was subjected to
Exemption Order, was a completely unjustified act.

12 This constrained the Petitioner to address a letter to the
Collector, Thane, to delete Mutation Entry No.1052 on the

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subject land in the Revenue Records, with regard to the
Exemption Order issued under Section 20 and this request was
again reiterated on 22/07/2019, but no action was initiated at the
end of the Revenue Authority.
In light of the request made by the Petitioner, on
13/09/2019 the Collector and Competent Authority, Thane,
through its communication addressed to the Tahsildar, Thane,
directed deletion with reference of the Mutation Entry No.1052.
This request was made in the backdrop of the records maintained
by the office in the register prepared for Schemes under Section
20 of the ULC Act, 1976, where it recorded the name of M/s.Shah
Malleable Castings Ltd. at S.R.No.189 against an area of 12522.00
sq. mtr. from Survey No.61/1/2 and area of 8100.00 sq. mtr. of
Survey No.61/2/1. However, it is also noted that the search of the
file further revealed that by order dated 20/11/1997 issued under
Section 8(4) of the ULC Act, 1976, area of 114.72 sq. mtr. has
been declared as ‘excess’ and action under Section 10(3) and
10(5) was taken, but the actual possession of the land was not
taken and hence the same was returned to the original owner by a
Notification dated 03/09/2010 and, therefore, the question of the
Scheme under Section 20 of the ULC Act, having being approved
on the land property bearing Survey No.61/1/2 and 61/2/1 does
not arise.
The communication contain the following reference :-
“7) The Government of Maharashtra has repealed the said Urban Land
(Ceiling and Regulation) Act, 1976 on 29/11/2007 and Urban Land
(Ceiling & Regulation) Repealment Act, 1999 has been accepted for the
State of Maharashtra and thereafter section 20 has been protected.
Since the regulation of industrial exemption is being implemented by
the Directorate of Industries, the exemption under section 20 has been
granted on 21/1/1986 to the land bearing Gat No. 61/1 of mouze

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Chitalsar Manpada for industrial purpose by the Directorate of
Industries. The remarks of Directorate of Industries were sought by
this office vide letter dated 9/1/2012 requesting whether their said
orders granting industrial exemption after the repealment of the ULC
Act would be legally valid or otherwise. Thereafter, as informed by the
Directorate of Industries on 7/2/2013, a period of more than 15 years
has been elapsed since the order granting exemption under section 20
for the area admeasuring 17983.73 sq. meters from Gat No. 61. It is
seen from the records available with the Directorate, the Additional
Collector & Competent Authority, Thane Urban Agglomeration, Thane
has submitted to the Directorate of Industrial Units, the revised orders
issued vide his office No. ULC/TA/Te-1/Chitalsar Manpada/SR-27, dated
20/11/1997, under section 8(4) of the Act, 1976. As per these orders, it
has been declared that an excess area admeasuring 114.72 sq. meters
has remained free with the said Industrial Unit. In the said orders, it
has been ordered the said area of 114.72 sq. meters should be
acquisition from Gat No. 61/2. In the order of exemption issued by the
Directorate of Industries, there is no mention of land area of Gat No.
61/2. Therefore, the orders issued by the Directorate of Industries are
not valid for land area declared to be 'excess'. Similarly, in the same
order it has been mentioned that the Additional Collector & Competent
Authority has declared that there is ‘NIL’ additional land area with the
said Industrial Unit in Survey No.44, Gat No.61/1 and therefore also,
the said orders dated 21/1/1986 about the exemption are not valid.

Considering the above circumstances, it is seen that for cancellation of
the Entry in the column of other rights' of 7/12 on the property bearing
S. No. 61/2 and 61/1 in respect of the ULC Act, after the Notification
issued under section 10 (3) was cancelled by this office on 3/9/2010, it
was informed by this office on 2/8/2017 by sending a list of schemes
under section 20 and directed for taking entries in the column of ‘other
rights' in the village record in respect of the said property as per
Mutation Entry No. 1052, dated 28/4/2017 and it was also informed
that the entry under section 20 (1) about "the area under Housing
Scheme for Economically Weaker Sections and prohibition for transfer"
seems to have been taken inadvertently. However, in the S. R. Register
of this office register maintained under section 20, a entry of the name
of M/s. Shah Meliable Casting Pvt. Ltd. is found to have been taken at S.
R. No. 189 as the Scheme holder. However, there is no other details
mentioned in the register whether the said scheme has been approved
or otherwise. Therefore, as mentioned in Mutation No. 1052, the entry
made in the column of 'other rights' of the 7/12 extract in respect of the
land property of M/s. Shah Meliable Casting Pvt. Ltd., bearing S. No.
61/1/2 having an area of 12522.00 sq. meters and S. No. 61/2/1 having
an area of 8100.00 sq. meters that 'the area under Housing Scheme for
Economically Weaker Sections and prohibition for transfer' should be
deleted and compliance report of the action taken submitted to this
office.”

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13 The aforesaid communication was followed by a
communication from Tahsildar to Circle Officer, Thane with
reference to the letter of the Collector/Competent Authority dated
13/09/2019 and a direction was issued to the Circle Officer to take
suitable action and update the record of rights.
As a consequence of this, on 03/10/2019 the mutation entry
was deleted in Village Form No.7 with reference to the order of
the Collector dated 13/09/2019 and the order of the Tahsildar
dated 21/09/2019.

14 After a stoic silence for over a period of 2 years, all of a
sudden, the leader of opposition made a grievance with respect to
the entry of ‘Area under Housing Scheme for Weaker Section and
Prohibition for Transfer’ under Section 20/21 of the ULC Act,
1976, in the column of ‘other rights’ of Village Form No.7/12 in
respect of property bearing Gut No.61/1 and 62/2 of Mauje
Chitalsar, Manpada and sought its deletion. The letter levelled
serious accusations against the Collector and Competent
Authority, Thane and by attributing malice, a request was made
that the order may be cancelled, the earlier mutation entry be
restored and the construction work in progress on the subject
land be stayed.
This complaint-cum-communication received a response
from the Collector and Competent Authority on 15/02/2021
where, after highlighting the sequence of events, the Collector
clarified as below :-
“11) From the record of this office, the S.R. Register prepared
under section 20, the name of M/s. Shah Meliable Industries is
mentioned at S.R. No. 189 and there is entry of Gat No. 61/1/2 as

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having an area of 12522.00 sq. meters and the area of Gat No. 61/2 to
be 8100.00 sq. meters. However, since there is no entry about the date
of approval of the scheme or any other details regarding the scheme, it
has been made sure that no scheme for housing for economically
weaker section has been approved on the said area under section 20 of
the Act and no action has been taken by this office.

12) Considering the above circumstances, since there is no
'excess' area Gat Nos. 61/1 and Gat No. 61/2 and even though no
scheme for Economically Weaker Section Housing is approved on that
area under section 20 of the Act, the list sent along with this office
letter No. ULC/Sanar/Thane/8/2017/310, dated 2/08/2017, it has been
inadvertently mentioned about Housing Scheme for Economically
Weaker Sections S.R. 189 under section 20 of the Act and erroneous
entry has been made about the area under Housing Scheme for
Economically Weaker Sections under sections 20/21 of Urban Land
Ceiling Act, 1976 and Prohibition for Transfer made in 7/12 records
which was necessary to have been deleted.

13) Therefore, as per the applications dated 28/3/2019 and dated
22/7/2019 made to this office by M/s. Shah Meliable (Acme Housing
India Pvt. Ltd.), necessary scrutiny as above was made and thereafter
the Tahsildar, Thane was informed by this office letter No.
ULC/TA/ATP/Thane/415/2019, dated 03/09/2019 that the entry taken
under section 20 of the Act directing him for deletion of entry
regarding area under the Housing Scheme for Economically Weaker
Sections and Prohibition for Transfer.”

15 The Collector with clarity responded to the complaint but it
appears that some explanation was sought from him and he
responded to the same on 02/03/2021 and addressed a letter to
the Principal Secretary (UDD) reiterating the sequence of events
and informing that pursuant to the Thane Municipal
Corporation’s Draft Development Plan, the area of Gut No.61/1
part and Gut No.61/2 was included in the residential zone from
industrial zone and, therefore, as per the request of the Architect
of M/s.Shah Malleable Castings Ltd., revised orders dated
20/11/1997 was passed under Section 8(4) of the ULC Act, 1976,
and as per the said order, area of the statement-holders
admeasuring 114.72 sq. mtr. of land was declared ‘excess’.

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The Collector reiterated its stand which he had adopted
when he responded to the communication of the leader of
opposition but now he took a sudden U turn and clarified as
below :
“12) By order No. ULC/S 31/NC/DC/GAD/B/5247, dated
21/01/1986 from the Government's Directorate of Industries, orders of
exemption for industrial purpose have been passed for the area bearing
Gat No. 61/1 of mouze Chitalsar-Manpada, Tal. & Dist. Thane, having an
area of 35156.18 sq. meters. However, since it has come to notice that
in the Record of Rights in the column of 7/12 in respect of the land
bearing Gat No. 61/1 of mouze Chitalsar Manpada, no entry of
"exemption for ULC's industrial purpose and Prohibition for Transfer
without the prior permission of Government" is taken and therefore the
Tahsildar Thane has been informed by this office vide letter dated
25/2/2021 that as per the orders dated 21/1/1986 from the
Directorate of Industries, an entry about "exemption for ULC's
industrial purpose and Prohibition for Transfer without the prior
permission of Government" should be taken in the record of 7/12 in
respect of the land bearing Gat No. 61/1 of mouze Chitalsar Manpada
and accordingly vide Mutation No. 1125, an entries have been taken in
the column of ‘other rights’ of 7/12 of the land bearing Gat No. 61/1
(Pot-Hissas 61/1/1, 61/1/2A, 61/1/2B, 651/1/3 and 631 61/1/4) about
"exemption for ULC's industrial purpose and Prohibition for Transfer
without the prior permission of Government (photocopy of the updated
7/12 extract and the extract of Mutation have been attached and
submitted herewith.”

16 The aforesaid sequence of events constrained the Petitioner
to approach this Court by filing Writ Petition on 21/06/2021,
interalia raising a challenge to the impugned Mutation Entry
No.1125 and also for quashing of letter dated 25/05/2021 and
10/06/2021 issued by Respondent No.3, the challenge being
raised by amending Petition in terms of the order dated
03/09/2021.
Upon the Petition being filed and listed before this Court on
25/08/2021, a statement was made on behalf of the Respondents
that they would be ready and willing to hear the Petitioners on

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the notice dated 25/05/2021 and by permitting the Petitioners to
file additional submissions before Respondent No.3, Assistant
Director, Town Planning Department, Thane Municipal
Corporation, the order dated 10/06/2021 stopping the work,
was set aside and Respondent No.3 was directed to hear the
Petitioners on 27/08/2021 and communicate the decision in
writing.
Pursuant thereto, on 30/08/2021 the Petitioners were
communicated the decision of the Municipal Corporation. At the
conclusion of the hearing, Respondent No.3 recorded thus :-
“As informed by the Competent Authority on dt. 23.04.2021 and as
there is an entry as “Area Exempted for Industrial Purpose under ULC
Section 20 and Transfer Prohibited without Prior Permission of the
Government” on the 7/12 extract of the plots on Gut No. 61/1/1,
61/1/2A, 61/1/2B, 61/1/3, 61/1/4, vide mutation No. 1125, and upon
the hearing conducted on dt. 27.08.2021, the Developer could not
submit any reasons for cancelling the show cause notice issued on
25.05.2021 more so for withdrawing it, so the explanation submitted
by the Developer on dt. 10.06.2021 and also the additional submission
pleaded on dt. 26.08.2021 and the points raised during the hearing on
dt. 27.08.2021 are being rejected.”

This communication resulted into a notice addressed by the
Assistant Director, Town Planning Department on 30/08/2021,
once again directing the Petitioner No.1 to stop construction
work in progress.
Pursuant to the aforesaid development, the Petitioner was
permitted to amend the Petition and as a consequence the
Petition was amended raising a challenge to the impugned letter
dated 30/08/2021 as well as the notice directing the Petitioners
to stop construction of the work on site.

17 The learned senior counsel Dr.Saraf, representing the

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Petitioners, at the outset, clarified that the Petitioners do not
desire to press the prayer in the Petition seeking declaration
about the provisions of the ULC Act, 1976 being not applicable
and the proceedings being abated under Section 3(1)(a) of the
ULC Repeal Act, 1999 in respect of the subject land i.e. land in Gut
No.61/1 and 61/2 of Village Chitalsar, Manpada. However, it is his
specific contention that in the wake of the revised order dated
20/11/1997 passed by the Competent Authority, the earlier two
orders i.e. order dated 25/07/1985, which computed the surplus
vacant land and further order dated 21/01/1986 granting
exemption under Section 20 of the ULC Act, 1976 in respect of the
surplus land so declared, do not survive and have no legal
efficacy. According to him, for the purposes of ULC Act, 1976,
only 114.72 sq. mtrs. is the surplus vacant land, for which the
revised order dated 20/11/1997 directed the holder to obtain
fresh exemption under Section 20 and had this exemption not
been secured, the same would have been liable to be acquired.
However, in the wake of the revised order, passed under Section
8(4) of the Act of 1999, the area of land held by M/s.Shah
Malleable Castings Ltd. in Gut No.61/1 and 61/2 was recorded to
be 54500.00 sq. mtrs. and according to Dr.Saraf the computation
of surplus land was reworked by taking into consideration the
total area held by the Company alongwith the permissible area
available to it and computing the net open area after deducting
the area under construction, area to be kept permanently open as
well as as area under road, open area suitable for construction
and 20% of area to be kept open as per Construction Regulation.
Based upon the same, the excess area was computed as 114.72 sq.

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mtrs and the order directed that further action shall be taken as
per Section 9 and 10(1) of the ULC Act, 1976.
In light of the aforesaid, it is the submission of Dr. Saraf
that the order under Section 20 of the ULC Act, 1976 having been
superseded by the revised order issued under Section 8(4) of the
ULC Act, which was passed for Gut No.61/1 holding that the
surplus vacant land was to the extent of 114.72 sq. mtr, the order
of exemption under Section 20 became non est.
Dr.Saraf would place reliance upon the two decisions of the
Bombay High Court in case of Essen Realtors, Pune vs. State of
Maharashtra & Ors.1 as well as the decision in case of Bombay
Fibre Industries Private Limited & Anr. vs. State of Maharashtra
& Anr.2. Reliance is also placed upon the decision of the Apex
Court in case of State of Uttar Pradesh vs. Hari Ram 3 and it is
urged that the Petitioners are entitled to a declaration that the
said land is not subjected to ULC Act, 1976 since it is repealed in
the State of Maharashtra with effect from 29/11/2007 and
consequently the impugned mutation entry , the impugned letter
dated 25/05/2021 and the impugned letter dated 10/06/2021
are liable to be quashed and set aside.

18 The State Government being represented by the Special
Counsel Mr.Ashutosh Kulkarni alongwith Mr.Karan Thorat
strongly opposed the relief in the Petition.
Mr.Kulkarni would rely upon the Affidavit filed by the
Collector & Competent Authority, Thane Urban Agglomeration to

1 2018(2)Mh.L.J. 455
2 2018(3)Mh.L.J. 404
3 (2013) 4 SCC 280

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submit that M/s.Shah Malleable Casting Ltd. submitted an
application on 01/09/1997 for obtaining revised order under
Section 8(4) of the ULC Act, 1976, in the wake of change in the
development plan for the City of Thane for the year 1991 and
accordingly a revised order was passed on 20/11/1997.
According to the said order, 114.72 sq. mtr. of land was declared
as surplus and it is categorically stated that the said order was
passed by setting aside the earlier order dated 25/07/1985 under
Section 8(4) of the ULC Act, 1976, but a specific stand adopted on
behalf of the Government is that the order passed under Section
20 of the ULC Act on 21/01/1986 is still in existence and valid as
the calculations and deductions made in the order dated
20/11/1997 i.e. the revised order, are based on the exemption
order which had considered the exempted area.
The Affidavit contain a very specific statement to the
following effect :-
“ I say that, the said revised order 20-11-1997 under Section 8(4)
was passed /issued with the condition that the applicant company shall
obtain revised/ modified order from the industries department in place
of present order. I say that, the company/ petitioner should have
applied for cancellation and revision of the existing exemption order
u/s. 20. I say that, the said condition is mandatory. I say that, the the
order of industries department dated 17th July, 1997, passed under
Section 20 is still in existence and is never been cancelled.
I say that the validity of any order granting exemption under sub-
section (1) of Section 20 of the ULC Act has been saved under the ULC
Repeal Act, 1999.”
I say that, this Hon’ble Court has, vide their Judgment dated 3 rd
Sep, 2014 in Writ Petition no.9872/2010 and other, held that the
conditions of exemption orders under section 20 of the ULC Act will
survive despite repeal of ULC Act and are enforceable even after the
repeal and the land owners/developers will be liable to comply with
those conditions. I say that the said Judgment of Bombay High Court
was not set aside by the Hon’ble Supreme Court, as requested by the
Maharashtra Chamber of Housing Industries (MCHI) in Civil Appeal
No.558/2017.”

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19 Mr.Kulkarni, submitted before us that municipal area of
Thane fell in Category D specified in Schedule I of ULC Act and the
ceiling limit in case of every person was 2000 sq. mtr. and the
term ‘person’ under the Act include a firm, a company, whether
incorporated or not, apart from an individual. According to him,
after deducting the ceiling limit of 2000 sq. mtr. and the area
under the road, R.G. and non buildable reservation area from the
total holding area, ‘surplus vacant land’ is calculated.
By applying this formula he would submit that M/s.Shah
Malleable Castings Ltd. was holding a large chunk of 54500 sq.
mtr. area of land, but it is their claim that the excess vacant land
was only 114.72 sq. mtr. and its possession was not taken. He
would submit that the Petitioner/Company is overlooking the fact
that the revised exemption order under Section 8(4) was passed
by deducting the area under industrial exemption order under
Section 20 of the ULC Act, 1976, it being passed with a condition
that the Petitioner shall obtain revised order, on cancellation of
the existing order, but according to Mr. Kulkarni, the Company/
Petitioner never applied for cancellation and revision of previous
exemption order under Section 20 and this fact is intentionally
suppressed.
Mr. Kulkarni would place reliance upon the Government
Resolution dated 17/07/1997, which provided a guidance to the
effect, that all previous orders passed under Section 20 of the Act
shall be considered afresh under Section 8(4) and therefore, it is
his submission that that if there is any change in the holding of
the owners/surplus land, it shall be mandatorily communicated to
the Government and only after its approval, further order under

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Section 8(4) was permitted to be passed.
It is his contention that the Petitioner has completely
neglected to comply with the obligations as provided in the said
Government Resolution and it has also failed to seek cancellation
of the Industrial Exemption Order dated 21/01/1986 issued under
Section 20 of the ULC Act, 1976, and the Government was not
informed about the revised order passed on 20/11/1997 under
Section 8(4) of the Act, prior to its passing.

20 Mr.Kulkarni who has insisted upon the adherence to the
Government Resolution dated 17/07/1997 submit that the
Deputy Director of Industries (ULC) has given opinion that the
order passed under Section 20 of the Act on 20/01/1986 is not
valid, but according to him, this opinion in light of the
Government Resolution, cannot prevail as the order under
Section 20 is never cancelled by the Competent Authority and
the same is still in existence.
It is his further submission that by letter dated 02/08/2017
issued by the Competent Authority, Tahsildar of Thane was
directed to ensure that the entries “area under weaker section
housing scheme under Section 20, restriction on transfer” on
7/12 extract of respective lands under Section 20 are in place
and if such entries are not earlier taken, they should be taken
with immediate effect and based upon the direction, the entry
was made in the 7/12 extract of Gut No.61/1 and 61/2 of
Chitalsar, Manpada through Mutation Entry No.1125 which was
certified by the Circle Officer, Thane. In short, it is the
submission of Mr. Kulkarni that Section 20 order for industrial

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use is still in existence and M/s.Shah Malleable Castings Ltd.,
should apply to the Government to take further action to revise
Section 20 order for industrial use or to pay premium as per the
Government policy, where it is permissible to release the subject
land by paying premium at the rate of 50% of ASR Rate in respect
of total land exempted for industrial purpose as a one time
settlement. It is his contention that though surplus vacant land
admeasuring 114.72 sq. mtrs. is out of purview of ULC Repeal Act,
but the land under Section 20 order for industrial use i.e. area
admeasuring 35156.18 sq. mtrs. out of Gut No.61/1 or part
thereof is not freehold and provisions of Section 20 of ULC Act are
applicable to the said area.

21 As far as the Corporation is concerned, it has adopted a
stand that action taken by it is based upon the letter received
from the Competent Authority, Thane Urban Agglomeration, and
in compliance of the communication dated 23/04/2021, since it
was directed that the construction work of the residential/
commercial premises being undertaken on the plot of land under
the Development Proposal No.88/142 shall be stopped with
immediate effect, the Respondents had followed the directions
given to them.
The counsel would restrict his argument to the stand set
out in the Affidavit filed by the authorized representative of the
Corporation on 27/07/2021.

22 In order to appreciate the controversy involved and the
rival contentions placed before us and the specific contention of

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the Respondents/State that despite, a revised order being passed
under Section 8(4) of the ULC Act, 1976, recalculating the
surplus vacant land of lesser area than the one which is reflected
in Section 8(4) order passed on 25/07/1985, whether the
exemption order based on it will survive and for this purpose, we
must make reference to the ULC Act, 1976.
The enactment which provide for imposition of the ceiling
on vacant land in Urban Agglomerations also contemplated
acquisition of such land, in excess of the ceiling limit, with an
object to regulate the construction of the buildings and with a
view to prevent concentration of urban land in the hands of a few
persons and speculation and profiteering therein and to bring
more equitable distribution of land in urban Agglomerations to
subserve common wood.
On determining the ceiling limit under Section 4, the Act
prohibited holding of any vacant land in excess of the ceiling limit
in the territories to which the Act applied. Admittedly, Thane
Municipal Corporation fell in Category D and the ceiling limit as
per Section 4(1)(b) was fixed at 2000 sq. mtr.
A person holding vacant land in excess of ceiling limit at
the time of commencement of the Act was to file a statement
before the Competent Authority, giving the particulars of the
vacant land held by him and also specifying the vacant lands
within the ceiling limit, which he desire to retain.
Upon such a statement being filed and after such enquiry
made by the Competent Authority, as it deem fit, Section 8
provide for preparation of a draft statement, containing the
particulars of all vacant lands and/ or any other land on which

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there is a building, whether or not, with a dwelling limit therein
held by a declarant under Section 6 and also the particulars of
the vacant land which such person desire to retain within the
ceiling limit alongwith the particulars of the right, title or interest
of the person in the vacant land.
Sub-Section (4) of Section 8 then directed the Competent
Authority to consider any objection received to the draft
statement within the period specified in the notice and pass an
order declaring the vacant land held in excess of the ceiling
limit.

23 Section 10 of ULC Act, 1976, provide that the Competent
Authority shall cause a notification giving particulars of the
vacant land held by a person in excess of ceiling limit and stating
that ‘such vacant land’ is to be acquired by the concerned State
Government and the claims of all persons interested in such
vacant land may be made by him personally or by the Agent,
giving particulars of the nature of their interest and such
notification shall be published in the official gazette.
Upon the declaration of the excess vacant land in the
Notification, such land shall be deemed to have been acquired by
the State and vest absolutely in it free of all encumbrances, with
effect from the date so specified. It also impose a restriction on
its transfer by any means, from the date of publication of the
notification and impose a restriction on altering or causing to
alter the use of such vacant land.
By virtue of sub-section(5) the Competent Authority , on
vesting of the land, by issuing a notice in writing, order any

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person who may be in possession of the said land to deliver
possession thereof to the Government within a period of 30 days,
but if the person refuse or fail to comply, the Competent Authority
may take possession of the land or cause it to be taken, to be given
to the concerned State Government.
In the scheme of the enactment, Section 11 deals with
payment of amount of vacant land acquired and the State
Government shall pay to the person, having any interest therein,
the amount specified in clause (a) or clause (b) of sub-section (1)
of Section 11 of the ULC Act, 1976.

24 Section 20 of the ULC Act, 1976, which is in form of a
power of the State Government to exempt, open with a non
obstante clause, prescribe that when any person holds vacant
land in excess of the ceiling limit and the State Government is
satisfied that having regard to the location of such land, the
purpose for which such land is being used or proposed to be used
or such other relevant factors, it is necessary and expedient in
the interest of public to exempt such vacant land from the
provisions of the Chapter III, it may do so.
Similarly it is also open for the State Government to exempt
any land, if the Government is of the view that application of
the provisions of the Chapter would cause undue hardship to
such person, but it is permitted to be so done by recording the
reasons in writing.
Sub-clause (2) of Section 20, confer a power on the State
Government to withdraw such exemption when it is satisfied that
the conditions of exemption are not complied with and upon such

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an action, the provisions of the Chapter shall apply.
Section 23 of the ULC Act, 1976 then provide for disposal of
the vacant land acquired under the Act, to any person for any
purpose relating to or in connection with any industry or for
providing residential accommodation of such type as may be
approved by the State Government to the employees of any
industry. Section 24 is another provision in form of a special
provision for disposal of vacant land in favour of certain persons.

25 The Parliament enacted the ULC Repeal Act, 1999,
repealing the Urban Land (Ceiling & Regulation) Act, 1976.
Section 3 of the Repeal Act provide for the following : -
“3(1) The repeal of the principal Act shall not affect -
(a) the vesting of any vacant land under sub-section (3) of section 10,
possession of which has been taken over by the State Government or
any person duly authorised by the State Government in this behalf or
by the competent authority.
(b) the validity of any order granting exemption under sub-section (1)
of Section 20 or any action taken thereunder, notwithstanding any
judgment of any court to the contrary.
(c) any payment made to the State Government as a condition for
granting exemption under sub-section (1) of section 20.
(2) Where -
(a) any land is deemed to have vested in the State Government under
sub-section (3) of section 10 of the principal Act but possession of
which has not been taken over by the State Government or any person
duly authorized by the State Government in this behalf or by the
competent authority; and
(b) Any amount has been paid by the State Government with respect to
such land, then, such land shall not be restored unless the amount paid,
if any, has been refunded to the State Government.”

26 Admittedly, despite Repeal of Act of 1976, the validity of
the order granting exemption under Sub-section (1) of Section 20
or any action thereunder is not impacted since it is saved. The
aforesaid being the scheme of the statute and the Repeal Act, we

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turn our attention to the facts placed before us.
M/s.Shah Malleable Castings Ltd. filed statement under
Section 6(1) of the ULC Act, 1976 in respect of 8100 sq. mtr. of
land in Gut No.61/2 and 46400 sq. mtr of land in Gut No.61/1 of
Village Chitalsar, Manpada , Taluka and District, Thane. On the
measurement being carried out by the City Survey Officer and
conduct of enquiry it was noticed that the company is holding
excess vacant land and, therefore, a notice under Section 8(3) of
the Act alongwith draft statement in Form No.III was issued
calling upon the company to prefer their objection, if any, to the
draft statement.
M/s.Amubhai & Diwanji, on behalf of the declarant on
07/04/1977 raised an objection about the exemption being
granted for internal roads and the land under use for building
structures, offices, godowns and also the requirement of vacant
land for drying raw material as well as an area of 3177.00 sq. mtr.
being reserved for scrap storage and parking which is covered for
sheds and, therefore, requested that it shall not be treated as
vacant land.
The objection also mentioned that the company had made
an application under Section 20 of the Act for exemption of the
entire factory, which is pending with the Government. It was also
notified that vacant land admeasuring 1221.00 sq.mtr. is covered
under garden and 6932.00 sq. mtr. is covered under playground
and these facilities are absolutely necessary and, therefore, the
lands may be exempted from the provisions of ULC Act.

27 On consideration of the said objections and taking into

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consideration the actual measurement of the land, the Competent
Authority for Thane Agglomeration, computed the surplus land
held by the Company, by recording that as per the Building
Regulation, 10% area for internal roads, 15% area for statutory
open space and land appurtenant has been left with the declarant
and in addition, area admeasuring 2000 sq. mtr. is allowed to be
retained with the Company as it falls within the Thane
Agglomeration.
The computation of the surplus land was, therefore, worked
out as below :-
Total Holding .. 54,500.00 sq. mtrs.
Deduct
1) Area under building .. 6756.00
2) Land appurtenant .. 13512.00
3) 10% internal road .. 4643.30
4) 15% statutory open space .. 6965.50
5) Retainable land .. 2000.00

Based on the aforesaid computation, the Competent
Authority declared that the company is surplus vacant land
holder to the extent of 20622.80 sq. mtr. which should be
acquired from Gut No.61/1 and 61/2 to the extent of 12522.80 sq.
mtr. and 8100.00 sq.mtr. respectively. Notice under Section 9
and Notification under Section 10(1) was directed to be issued
accordingly.

28 After passing of the above order, the Application of the
Company dated 27/01/1977 for exemption under Section 20 was
granted thereby exempting the ‘said vacant land’ from the
provisions of Chapter III, subject to several conditions, thereby
imposing a restriction on a different use of the land other than

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for which the exemption is sought, transfer of the exempted land
in any manner etc. Similarly some restriction was also imposed
on part of the exempted land which was directed to be kept
vacant by indicating it in the plan.

The schedule appended to the said order was captioned
thus:-
“Details regarding Applicant and the vacant land possessed by him for
which exemption is sought under Section 20 of the ULC Act, 1976.”

The said Schedule gave the description of the property for
which exemption was sought and this included the total area
from Gut No.61/1 i.e. 46400.00 sq. mtr., with the area under the
building to the extent of 8254.67 sq. mtr. and the area of the
land appurtenant to the building alongwith the area of land kept
vacant as per statutory regulation and also the area of vacant
land within matter of course of exemption limit/permitted to be
retained. The area under different heads was computed as
35156.18 sq. mtr.
Thus, it can be seen that Section 20 order exempted
35156.18 sq. mtr. of land from the provisions of Chapter III, on
the vacant land being declared surplus, which otherwise would
have been acquired by the State Government as per the
provisions of Section 10.
It is pertinent to note that under Scheme of the ULC Act,
1976, the power to exempt is available qua the vacant land in
excess of the ceiling limit and the term ‘vacant land’ is defined in
Section 2 (q), which shall not include the areas which are
specified in clause (i) (ii) (iii). On a declaration being made about

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a vacant surplus land by the Competent Authority after taking
into consideration the statement filed under Section 6 and a draft
statement being circulated under Section 8, upon the vacant land
being declared as surplus, it is liable to be acquired by the
concerned State Government. However, notwithstanding the
aforesaid procedure to be followed, the State Government is
competent to exempt holding of vacant land in excess of ceiling
limit, if the Government deem it necessary to do so in public
interest and such land shall stand exempted from the provisions
of the Chapter.
The exemption is, therefore, available qua the vacant
surplus land which is declared by the Competent Authority and
necessarily the power to exempt the land is dependent on
declaration of surplus vacant land, on the process initiated from
Section 6 till the final publication under Section 10 by way of
Notification as what is permissible for exemption is the vacant
land in excess of the ceiling limit prescribed under the ULC Act.

29 In the wake of the change in the development plan of the
city, an application was filed by M/s.Shah Malleable Casting Ltd.
on 01/09/1997 for revised order under Section 8(4),
accompanied with a copy of the map and the previous order dated
25/07/1985 under Section 8(4) of the Act. In the wake of orders
being set aside and the Additional Collector & the Competent
Authority being authorized to issue amended orders under
Section 34, the revised order came to be passed under Section
8(4) with reference to the holding of M/s.Shah Malleable Casting
Ltd. in Gut No.61/1 and 61/2 in Chitalsar, Manpada i.e. an area

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of 54500 sq. mtr.
Recording that the land in Gut No.61/2 was included in
residential zone as per the map of the year 1972 of BMRDA and
the land in Gut No.61/1 was kept reserved as industrial zone, as
per the Draft Development Plan for the year 1991 of the
Municipal Corporation, the land in Gut No.61/1 was shown in the
reservation of residential-cum-DP road of 20 mtr. and an area of
2550 sq. mtr. was shown for market and market centre. In the
wake of this development, the company submitted an application
for revised order.
The Assistant Town Planner after carrying out an enquiry
noted that the exemption under Section 20 of the ULC Act, 1976
was given to the entire land area of Gut No.61/1 i.e. area
admeasuring 43400.00 sq. mtrs. The revised order specifically
mention that on cancellation of the exemption order of the
Department of Industries as per Government Resolution dated
17/07/1997, it would be binding upon the Company to obtain
revised orders, which is clear indication that the exemption order
under Section 20 is cancelled.
At this juncture, it is relevant to refer to the Government
Resolution dated 17/07/1997 which is annexed alongwith the
Affidavit in Reply filed by the State. The said Resolution issued
by the Housing and Special Assistance Department, with
reference to Section 8(4) of the ULC Act, 1976, take into account
a situation where while passing orders under Section 8(4) of the
ULC Act, 1976 by the Competent Authority, the order of the State
Government granting exemption under Section 20 is not taken
cognizance of and the land is declared surplus land as per their

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convenience. Citing an example, the resolution state that the
Special Commissioner (Industries) which has granted exemption
for industrial use under Section 20, but if its user is changed to
residential or non residential purpose, the exemption granted
under Section 20 for industrial purpose must be cancelled and it
would be necessary to declare the said surplus land considering
this cancellation and the purpose of the Government Resolution
is to take cognizance of the cancellation of Section 20 Exemption
Order, while passing a revised Section 8(4) order.

30 In the present case, exemption is granted by the
Department of Industries under Section 20 of the ULC Act, 1976
by taking into consideration location of the land and considering
that the land is situated in industrial zone subject to certain
conditions which are imposed. While passing the revised order,
on 20/11/1997 it is recorded that after cancellation of the
exemption order by the Department of Industries, it would be
necessary for the company to obtain revised orders, clearly
indicating that a fresh order under Section 20 would be sought
only after determination of the excess area, in the wake of the
change in the development plan as the land from Gut No.61/1 was
shown in reservation for residential-cum-DP road of 20 mtr.
which was earlier reserved in industrial zone.
The exemption granted by the Department of Industries,
therefore, has undergone a change and the order record that after
cancellation of the Exemption Order, the Petitioner/Company
would obtain revised order under Section 8(4) and therefore,
when the revised order declared the surplus vacant area of

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114.72 sq. mtr. it was the starting point for the process to be
initiated for seeking exemption as against the declared surplus
land of 114.72 sq. mtr. This is the specific reason that the
Additional Collector & Competent Authority on 13/04/2005
communicated to M/s.Shah Malleable Casting Ltd. that Section
8(4) revised order shall be obtained before formal order is issued
and the application should be accompanied with a closure
certificate from Department of Industries.
While granting permission for redevelopment of the
property in Gut No.61/1 and 61/2, under the Rental Housing
Scheme, the permission was granted to demolish authorized
structures by invoking Section 22 of the ULC Act, 1976 and
retaining the vacant land.
The Additional Collector & Competent Authority even
issued Notification under Section 10(1) of the ULC Act, 1976, in
the Maharashtra Government Gazette on 30/06/2005 showing
the land from Gut No.61/2 to the extent of 114.72 sq. mtr. to have
been acquired by the Government with effect from 30/06/2005
and it being vested in the Government. Therefore, an inference
which could be drawn is specific, that the exemption shall be
granted qua the surplus land of 114.72 sq. mtr. only.
Subsequent to this, i.e. on 01/12/2007, the State of
Maharashtra adopted the Urban Land (Ceiling and Regulation)
Repeal Act, 1999, which came into force with effect from
29/11/2007.

31 The action on part of the Respondents failed to take into
consideration the most important aspect being the first order

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declaring the surplus vacant land comprising of part of land from
Gut No.61/2 and area from Gut No.61/1 part followed by the
exemption order under Section 20(1) of the Act of 1976, issued in
the year 1986 did not survive when an application for revise
order under Section 8(4) of the Act of 1976 was preferred by
erstwhile owner and pursuant thereto a revised order was issued
on 20/11/1997 computing the surplus vacant land of 114.72 sq.
mtrs., only restricting it to Gut No.61/2. In view of the revised
order, the procedure under the ULC Act, 1976 was followed as
Notification was issued under Section 10(1) notifying an area of
114.72 sq. mtrs. for acquisition from Gut No.61/2 to be followed by
a Notification issued under Section 10(3) issued on 25/11/2005.
In the meantime, repeal of ULC Act came into force in the State of
Maharashtra on 29/11/2007 and the Petitioners being desirous of
availing the benefit of rental housing policy, for the Municipal
Corporation of Thane, expressed its desire to be a part of the
same and in fact MMRDA also granted layout approval.
The Additional Collector & Competent Authority on
03/09/2010 set aside the Notification under Section 10(1) dated
26/05/2005 and under Section 10(3) dated 25/11/2005 since
the possession of surplus vacant land admeasuring 114.72 sq.
mtr. from Gut No.61/2 was not taken and ULC Act was already
repealed.
As a consequence thereof the mutation entries in the
Revenue Record were also deleted. Upon this exercise being
carried out, all of a sudden, in the circumstances narrated above,
upon the Leader of opposition taking up an issue, the Mutation
entry No.1125 was recorded on 02/03/2021.

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According to us, the whole premise on which the impugned
mutation entry is recorded by setting aside the earlier mutation
entry as well as the stop work notice issued to the Petitioners is
based on the saving of the Scheme under Section 20 of the ULC
Act, 1976. But a clear perusal of the ULC Repeal Act would
clearly reveal that what is saved is validity of an order granting
exemption under Sub-section (1) of Section 20 or any action
taken thereunder and Section 20 which is the power to exempt,
clearly contemplate the exemption of “such vacant land” subject
to such condition imposed by the Government, from the
provisions of the Chapter.

32 A careful reading of Chapter III in the ULC Act in form of
‘Ceiling on Vacant Land’ creates an embargo on the person
holding vacant land in excess of the ceiling limit that is specified
in Section 4 and the process culminates into acquisition of vacant
land in excess of ceiling limit under Section 10 of the Act.
Section 20 which finds place in the very same Chapter is a
specific provision to exempt such vacant land, which is declared
surplus from the provisions of the Chapter i.e. its acquisition and
payment of compensation, subject to such terms and conditions
as the Government deems fit. As a necessary corollary, the
exemption shall restrict itself to the land declared as ‘surplus’ on
following the procedure, with reference to the statement being
filed under Section 6, by the holder of the land, to be followed by
preparation of draft statement as regards the vacant land under
Section 8, and upon consideration of objections received under
Sub-section (4) thereof and the final statement being issued

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under Section 9, to be followed by acquisition of surplus vacant
land. The power of exemption, therefore, permit exemption of the
vacant land which is declared surplus and the exemption order
under Section 20 is relatable to the order under Section 8(4) and
the order issued under Section 9 and no other scope of
interpretation is possible, as is sought to be pressed into service
by the Respondent by submitting that though the order is revised
under Section 8(4), the exemption granted under Section 20 in
respect of the earlier declaration of the vacant land which
notification is superseded, it shall operate despite a fresh order
being passed under Section 8(4).

33 The stand of the Government that the exemption
notification dated 21/01/1986 survive based on the order dated
25/07/1985 despite a revised order being issued under Section
8(4) on 20/11/1997, is misleading argument as the perusal of
the revised order would itself make it clear that the exemption
granted under Section 20 of the Act by the Department of
Industries on 21/01/1986 to the entire land of Gut No.61/1 is
cancelled after cancellation of the exemption order of the
Department of Industries as per GR dated 17/07/1997 and,
therefore, it would be binding upon the Company to obtain revised
orders. The aforesaid statement in the revised 8(4) order make
it clear that the exemption order of the Department of Industries
is cancelled in the wake of the fact that the area which was earlier
falling in industrial zone is now removed therefrom and the
reservation has undergone change. The Resolution dated
17/07/1997 specifically directed that if the previous orders

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passed under Section 20 of the Act by the Competent Authority
are for industrial purpose, and due to change in the Development
Control Rules, there is change of user of such lands which is
permitted, then in all such cases before passing a revised order
under Section 8(4), prior cancellation of the order passed under
Section 20 must be first effected and the exempted lands be
considered as surplus under Section 8(4) of the Act.
According to us the Government Resolution very clearly
contemplate cancellation of the exemption granted by the
Department of Industry and in such circumstance it was the
duty of Competent Authority to take into consideration the
provision of the Government Resolution dated 17/07/1997 and if
it is not so done, the Petitioner cannot take the blame.
Shockingly, in the Affidavit of the State and the Competent
Authority, Thane Urban Agglomeration record thus
“I say that the Government Resolution dated 17/07/1997 being an
important and prima facie a worthy document has been suppressed by
the Petitioner by not filing on record before the Hon’ble Court. I say
that Petitioner herein has failed and neglected to comply with the
obligations as referred and speculated in the Government Resolution
dated 17/07/1997. I say that Petitioner has willfully failed and
neglected to comply with the obligations as referred and set out in the
Government Resolution dated 17/07/1997. I say that Petitioner has
willfully failed and neglected to seek cancellation of industrial
exemption order dated 21/01/1986 passed by the Industrial
Department under Section 20 of the Act. I say that the Government of
Maharashtra was not informed and reported about the revised order
dated 20/11/1997 under Section 8(4) of the Act prior to its passing.”

We find the stand adopted by the State Government to be
palpably fallacious and mistaken as the revised order is passed by
the Competent Authority and the aforesaid statement in the
Affidavit is made by the Competent Authority himself. We must

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note that the revised order under Section 8(4) dated 20/11/1997
clearly mention that the exemption order of 21/01/1986 stand
cancelled, for the obvious reason that the land no longer was
reserved for industrial purpose and that is the reason why the
Petitioner sought a revised order under Section 8(4) and we do
not find any merit in the the State and the Competent Authority
in unison raising a foul cry, blaming the Petitioner.

34 Dr. Saraf has placed reliance upon the decisions of this
Court, the first being the decision in case of Essen Realtors, Pune
(supra), to be followed by another Division Bench decision of the
same Bench in Bombay Fibre Industries Pvt. Ltd. (supra).
Perusal of the facts in Essen Realtors, Pune are somehow
close to the facts placed before us, when on the return filed by the
original owner, a policy decision was taken by the State
Government in respect of the lands utilised for industrial purpose
and the State Government directed that lands upto 1 Acre in
Pune Urban Agglomeration be granted exemption as a matter of
course.
Similar to our case, the Joint Director of Industries passed
an order under Section 20 of the Act, on 11/07/1984, granting
exemption to the land, which form part of the larger area of land
belonging to the original owner and accordingly the original
owner continued to have its industrial units on the said land.
Pursuant to the development plan for the Municipal Corporation
being sanctioned in the year 1995 and the land being shown in
industrial zone, under the DCR the industrial use of land was
permitted to be converted to residential use, on the condition of

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providing specified percentage of land to the Corporation free of
cost for amenities and also on payment of specified premium.
This was done with a view to satisfy requirement of land for
residential purpose.
This prompted the original owner to request the Competent
Authority to decide its return filed under Section 6(1) of the Act
and the Competent Authority passed an order on 20/07/2005,
taking into consideration the earlier exemption order dated
11/07/1984 to find that, the original owner did not hold vacant
land in excess of the ceiling limit. The original owner, thereafter,
submitted an application before the Competent Authority under
Section 22 of the Act for permission of redevelopment and this
application was granted on 16/03/2007, on a condition of
obtaining necessary permission from the Planning Authority.
Immediately thereafter on 29/11/2007 the ULC Act stood
repealed and in terms of Section 3 the order granting exemption
under Section 20 was saved. When the Petitioner submitted
proposal for development before the Municipal Corporation, it
received the permission for non agricultural use and the
Petitioner commenced development work, which was stalled by
the impugned notice issued by Respondent No.3, directing it to
stop the development work on the ground that the exemption
order under Section 20 of the Act issued on 11/07/1984 has not
been cancelled and the Petitioner was required to deposit market
value of the land in question before undertaking the development
work.

35 It is in this background facts, the Division Bench of this

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Court observed thus :-
“13. A perusal of the order dated 20-7-2005 passed by the Competent
Authority Respondent No. 2 under section 8(4) of the said Act shows
that such order has been passed on the returns filed by the original
owner under section 6(1) of the said Act. This order takes into
consideration the exemption order dated 11-7-1984 passed under
section 20 of the said Act by the Jt. Director of Industries; this order
also records that a proper enquiry was conducted, with the
maintenance surveyor of the office of the Competent Authority visiting
the spot and verifying claim of the original owner. Upon said detailed
inquiry, it was concluded by the Competent Authority in the said order
dated 20-7-2005 that the original owner did not hold vacant land in
excess of the ceiling limit under the unchallenged thereby attaining
finality, the question of exemption under section said Act. Thus, the
moment such a finding was reached, which remained 11-7-1984 issued
as a matter-of-course by the Jt. Director of Industries under 20 of the
said Act did not arise. In other words, the earlier exemption order
dated issued by the Competent Authority concluding that the original
owner did not specific policy of 1977, stood eclipsed by the said detailed
order dated 20-7-2005 issued by the Competent Authority concluding
that the original owner did not hold surplus vacant land in excess of
the ceiling limit.

14. In fact, a perusal of the affidavit-in-reply filed on behalf of
Respondent Nos. 1 to 3 shows that in paragraph 3 thereof, it has been
stated as follows:

"3. I say that thereafter, by order dated 20-7-2005, the return under
section 6(i) was decided under the order under section 8(4), it was
held that the land owner is not in possession of any excess land.
Ordinarily, this made the exemption under order under section 20
unnecessary and irrelevant. However, the Petitioner did not take any
steps to get the order under section 20 set aside."

Thus, the said Respondents were also clearly aware that the order
dated 20-7-2005 passed by the Competent Authority under the said Act
concluding that the original did not hold surplus vacant land in excess
of the ceiling limit, rendered the exemption order dated 11-7-1984
under section 20 the said Act as "unnecessary" and "irrelevant". Once
the said admission is given by the Respondents, it cannot lie in their
mouth that the impugned order dated 1-10-2014 was justified, as it was
issued on the basis of the exemption order dated 11-7-1984 passed by
the Jt. Director of Industries. The only contention raised on behalf of
the Respondent - State was that the Petitioner failed to take any steps
to set aside the exemption order dated 11-7-1984 and therefore, the
impugned order dated 1-10-2014 was justified. But, this contention is
unsustainable because in the facts of the present case, a valid
exemption order is not in existence, in view of the order dated 20-7-

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2005 passed by the competent authority under the said Act, holding
that the original owner did not hold vacant land in excess of the ceiling
limit. It is clear that upon passing of the order section 8(4) of the said
Act holding that the original owner did not hold vacant land in excess
of ceiling limit, the exemption order under section 20 of the Act
becomes non est and a declaration regarding cancellation of the
exemption order is not necessary.”

36 The aforesaid view was again adopted by the same Division
Bench when it decided the case of Bombay Fibre Industries Pvt.
Ltd. (supra) , where the Court held thus :
“16. It is also clear that when a valid order of exemption under section
20 of the said Act does not exist in the present case, reliance placed by
the learned AGP on section 3(1)(b) of the Repeal Act, and the Full
Bench judgment of this Court, in the case of Maharashtra Chamber of
Housing Industry, Mumbai and ors. (supra), is wholly misplaced. The
saving clause under section 3 of the Repeal Act would operate only in
cases where a valid exemption order under section 20 of the said Act is
existing. In the present case, the subsequent order dated 4-4 2003
passed by the Competent Authority under section 8(4) of the said Act
clearly holds the field whereby it has been held that the owner does not
have land in excess of the ceiling limit. Section 20 of the said Act comes
into operation when an owner holds land in excess of the ceiling limit,
and therefore, in the absence of such a factual position in the present
case, there is no question of existence of exemption order under section
20 of the said Act.

17. Once it is held that exemption order under section 20 of the said Act
dated 24-4-1980 ceased to exist and it stood cancelled upon Competent
Authority passing the order dated 4-4-2003 under section 8(4) of the
said Act, there can be no mutation entry pertaining to the land in
question stating that the land is subject to exemption under section 20
of the said Act for industrial user. Therefore, Mutation Entry dated 25-
5-2009 in the revenue record pertaining to the land in question is
wholly unsustainable and deserves to be quashed and set aside.”

37 In the wake of aforesaid ruling by Coordinate Bench, clearly
adopting a view that upon a revised order under Section 8(4)
being passed, the exemption granted under Section 20, based on
the previous order, shall not survive and while considering the

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saving of Section 20 Scheme, the land owner will not be put to a
disadvantageous position, we are of the view that the facts in the
present case are almost identical to the one involved in the two
cases decided before and we express our concurrence with the
view expressed in the aforesaid decisions and even independently
on appreciation of the claim staked before us we have reached the
same conclusion.

38 In the wake of the aforesaid discussion, and by placing
reliance upon the two decisions by this Court, the Writ Petition is
allowed by directing deletion of the impugned mutation entry
No.1125 from the Revenue Record on land bearing Gut No.61/1
and 61/2 , village Chitalsar, Manpada, Thane, totally admeasuring
54,500 sq. mtrs. and we direct recording the name of the
Petitioner in the Revenue Record for the said land.
We also quash and set aside the impugned letters/notices as
set out in prayer clause (c) and (c-1) issued by Respondent No.3
as according to us, the Petitioner cannot be restricted from
proceeding with its project on land situated in Gut No.61/1 and
61/2 of Village Chitalsar for an area admeasuring 54,500 sq. mtrs
or any portion thereof, as we have directed deletion of Mutation
Entry No. 1125 from the Revenue Record and we direct
restoration of Mutation Entry in the name of the Petitioner as
regards Gut No.61/1 and 61/2 of Village Chitalsar, Manpada,
Thane.
Pursuant to the aforesaid, we direct that Respondent No.2
and 3 to permit the Petitioner to proceed with its project on the
subject land in terms of the permission/approval granted and if

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necessary as per the approvals in the revised form.
As a result of above discussion, the writ petition is made
absolute in terms of prayer clause (b), (c) and (c-1).
No order as to cost.

[MANJUSHA DESHPANDE, J.] [BHARATI DANGRE, J.]

39 Upon pronouncement of the Judgment in the Court
Mr.Kulkarni the Special Counsel representing the State make a
request for extension of the interim order passed by this Court on
11/10/2021 and in specific the direction contained in clause (iii)
of Paragraph 34 of the said order.
We, however, decline the said request as we have decided
the Petition on merits and having held that the Scheme under
Section 20 of the ULC Act, 1976, did not survive pursuant to the
revised order under Section 8(4) being passed and we refuse any
extension of the impugned order.

[MANJUSHA DESHPANDE, J.] [BHARATI DANGRE, J.]

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