Holding

A master plan prepared even after the Act’s commencement must be considered for determining vacant land, and the explanation to Section 6(1) makes the date a land becomes vacant the relevant "commencement" date.

Summary

The case concerned the interpretation of the Urban Land (Ceiling & Regulations) Act, 1976 with respect to whether a master plan existing at the time of the Act's commencement or a later master plan should be used to determine if land is vacant land in excess of the ceiling limit. The State of Andhra Pradesh sought to enforce the Act against N. Audikesava Reddy and others, arguing that the earlier master plan should control, while the respondents relied on a subsequent master plan that re‑classified the land. The Supreme Court examined the definition of "master plan" in Section 2(h) and the explanation to Section 6(1), holding that the master plan prepared under any law, even after the Act’s commencement, is relevant for ascertaining vacancy. It further clarified that "commencement of the Act" includes the date when land becomes vacant, not merely the statutory start date. Consequently, the Court overruled the view in Atia Mohammadi Begum’s case and allowed the appeals that sought to apply the later master plan, while dismissing those that insisted on the earlier plan. The judgment emphasized the Act’s purpose of preventing concentration of urban land and ensuring equitable distribution.

Issues considered

Whether the master plan existing at the time of the Act's commencement or a later master plan should be used to determine vacant land under the Urban Land (Ceiling & Regulations) Act, 1976.
Interpretation of the term "commencement of the Act" in the explanation to Section 6(1).
Whether the decision in Atia Mohammadi Begum (Smt.) v. State of U.P. is applicable to the present facts.

Legislation cited

Urban Land (Ceiling Regulations) Act, 1976s. 10, s. 15, s. 16, s. 2(c), s. 2(h), s. 2(n), s. 2(o), s. 2(q), s. 3, s. 4, s. 6(1), s. 7, s. 8, s. 9

Subjects

Urban land ceilingMaster planVacant landCommencement of ActInterpretation of statuteEquitable distribution of landUrban development planning

Judgment

A STATE OF-A.P. AND ORS.
v.
N. AUDIKESAVA REDDY AND ORS.

NOVEMBER 6. 2001

B [S.B. BHARUCHA, C.J., Y.K. SABHARWAL AND BRIJESH KUMAR, JJ.]

Urban Development and Town Planning :

Urban Land (Ceiling & Regulations) Act, 1976-Vacant land-Jn excess
ofceiling limit-Quantification of-Master plan-Applicability of-Held: Master
c plan prepared even subsequent to enforcement of the Act is to be taken into
consideration for determination of vacant land.

Words and Phrases:

D "Master plan"-Meaning of-In the context of S. 2(h) of the Urban Land
(Ceiling & Regulations) Act, 1976.

"Commencement of the Act"-Meaning of-In the context of S.6(1) of
the Urban Land (Ceiling & Regulations) Act, 1976.

E In this appeal the following question-arose before the Court:

Whether it is the master plan that was in existence when the Urban
Land (Ceiling & Regulations) Act, 1976 was enforced, and not the plan
prepared subsequently, that has to be taken into consideration to deter-
F mine if land is vacant land held in excess of the ceiling limit fixed under the
Act?

Allowing the appeal, the Court

HELD : 1. The primary object of the Urban Land (Ceiling & Regu-
G lations) Act, 1976 was to prevent the concentration of urban land in the
hands of a few persons and speculation and profiteering therein, and to
bring about an equitable distribution of land in urban agglomerations to
~ob-serve the common good. [165-C]

H 2.1. Development and town planning are ongoing processes and they
162
STATE v. N. AUDIKESAVA REDDY 163
go on changing from time to time depending upon the local needs. It is A
evident from the definition of the master plan in Section 2(h) that it takes
in view any plan prepared even subsequent to the coming into force of the
Act. Further, the explanation to Section 6(1) very significantly provides
that every person holding vacant land in excess of the ceiling limit at the
commencement of the Act shall file a statement before the competent B
authority and "the commencement of the Act" under Clause (ii) of Expla-
nation to Section 6(1) would be when the land becomes vacant for any
- reason whatsoever. Therefore, the date of commencement of the Act in a
case where the land, which was not vacant earlier, would be the date on
which such land becomes vacant land. It thus, contemplates a situation of
land, not being vacant, becoming vacant due to preparation of a master
c
plan subsequent to the date of enforcement of the Act. [171-D-F]

. Maharani Shantidevi P.Gaikwad v. Savjibhai Haribhai Patel, [2001] 5
sec 101, referred to.
D
2.2. The master plan prepared as per law in force even subsequent
to enforcement of the Act is to be taken into consideration to determine
whether a particular piece of land is vacant land or not. [171-G]

Atia Mohammadi Begum (Smt.) v. State of U.P., [1993] 2 SCC 546,
partly overruled. E

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3813 of 1996.

From the Judgment and Order dated 28.10.94 of the Andhra Pradesh
High Court in W.A. No. 1220 of 1994.
F
With

C.A. Nos. 7238/2001, 1149/85, 10851196 and 7239 of 2001.

Sudhir Chandra Aggarwal, Ms. K. Amreswari, Anoop G. Choudhary, P.
Chidambaram, Raju Ramachandran, (A.C.), R.F. Nariman, V.A. Mohta, Guntur G
Prabhakar, Ms. T. Anamika, K. Ram Kumar (NP), S.K. Agnihotri, Ms. Geetanjali
Mohan, A.V. Velayudhan Nair, D.N. Ray, R.N. Karanjawal, Ms. Nandini Gore,
Ms. Manik Karanjawala, R.N. Keshwani, K. Raghavacharulu, P. Narasimha,
Ram Lal Roy, Rakesh K. Sharma, Ms. C.K. Sucharita, K. V. Sreekumar, Rajiv
Nanda, G. Seshagiri Rao, C. Hanumantha Rao, S.U.K. Sagar, K. Ram Kumar, H
164 SUPREME COURT REPORTS [2001] SUPP. 5 S.C.R.
A B. Sridhar, Sushi! Kumar Jain, Ms. Jaspreet Gogia, M. Sridhar, V.G. Pragasam,
Ms. Anjani Aiyagari and S.V. Deshpande for the appearing parties.

The Judgment of the Court was delivered by
'-•

Y.K. SABHARWAL, J. The question for determination in these appeals
B is whether it is the master plan that was in existence when the Urban Land
(Ceiling & Regulations) Act, 1976 (for short, 'the Act') was enforced, and not
the plan prepared subsequently, that has to be taken into consideration to
determine if land is vacant land held in excess of the ceiling limit fixed under
the Act.
c The High Court, by the impugned judgment and order, relying upon the
decision of a Bench of two Judges in Aria Mohammadi Begum (Smr.) v. State
of U.P. & Ors., [ 1993] 2 SCC 546, has held that when the land was not vacant
land on the date of the commencement of the Act, the authorities cannot
convert that land into vacant land by their unilateral act by inc;luding it in the
D master plan for a purpose other than agriculture. On this view, the proceed-
ings taken under the Act have been declared null and void by the High Court.

Since reconsideration of the decision in Atia Bef?um's case was sought,
it was directed by a Bench of Two Judges that these matters be placed before
E a three judges' Bench. Therefore, these appeals have been placed before us.

Aria Begum's case also came to be considered in Her Highness Maha-
rani Shantidevi P. Gaikwad v. Savjibhai Haribhai Patel & Ors., [2001] 5 SCC
101 before a three Judges' Bench of which two of us (Bharucha, CJ. and
Sabharwal, J.) were members. Since, in the said case, the matter was not
F concerning quantification of excess vacant land, the question whether, or
purpose of quantification of vacant land, the master plan as in existence on
enforcement of the Act, namely, 17th February, 1976, would be applicable
or the master plan prepared subsequent thereto could be taken note of for
quantifying the vacant land was not examined and was left open to be decided
G in an appropriate case. In Shantidevi Gaikwad's case it was, however,
observed that Aria Begum's case did not hold that planning and development,
which is a State subject, would stand frozen on 17th February, 1976 and that
the said decision cannot be read as laying down the law that for all and every
purpose, the master plan as in existence on 17th February, 1976 will freeze.
H and also that the definition of 'master plan' does not contemplate a 'static
STATE v. N. AUDIKESAVA REDDY [SABHARWAL, J.] 165
master plan'. On the facts of Shantidevi Gaikwad's case, it was concluded that A
the High Court, erroneously relying on Aria Begum's case, held that the user
as provided in the master plan as in existence on 17th February, 1976 alone
is to be seen and the subsequent change in the master plan reserving the land
for open space is of no consequence. The view of the competent authority
that the land would permanently remain in the residential zone was held to B
be erroneous.

The primary object of the Act was to prevent the concentration of urban
land in the hands of a few persons and speculation and profiteering therein,
and to bring about an equitable distribution of land in urban agglomerations
to subserve the common good. Section 1 refers to the short title, application C
and commencement of the Act. It applies in the first instance to the whole
of the States of Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh,
_ Karnataka, Maharashtra, Orissa, Punjab, Tripura, Uttar Pradesh and West
Bengal and to all the Union Territories and it shall also apply to such other
State which adopts this Act. Thus, in these States including Andhra Pradesh D
from which many of these appeals arise, the Act came into force on 17th
February, 1976. Section 2 deals with definitions. Section 2(c) defines
'ceiling limit' as the ceiling limit specified in Section 4. Section 2 (n) defines
'urban agglomeration' as under :

"2(n) 'urban agglomeration',-
E

(A) in relation to any State or Union territory specified in Col.(1)
of Schedule I, means,-

(i) the urban agglomeration specified in the corresponding entry
F
in Col.(2) thereof and includes the peripheral area specified in the
corresponding entry in Col.(3) thereof; and

(ii) any other area which the State Government may, with the
previous approval of the Central Government, having regard to its
location, population (population being more than one lakh) and such G
other relevant factors as the circumstances of the case may require,
by notification in the official Gazette declared to be an urban agglom-
eration and any agglomeration so declared shall be deemed to belong
to category D in that Schedule and the peripheral area therefor shall
be one kilometer; H
166 SUPREME COURT REPORTS [2001] SUPP. 5 S.C.R.
A (B) in relation to any other State or Union territory, means, any
area which the State Government may, with the previous approval of
the Central Government, having regard to its location, population
(population being more than one lakh) and such other relevant factors
as the circumstances of the case may require, by notification in the
B official Gazette, declare to be an urban agglomeration and any
agglomeration so declared shall be deemed to belong to category D
in Schedule I and peripheral area therefor shall be one kilometer."

"urban land" as defined under Section 2(o) means, -

c "(i) any land situated within the limits of an urban agglomeration
and referred to as such in the master plan; or

(ii) in a case where there is no master plan, or where the master
plan does not refer to any land as urban land, any land within the
D limits of an urban agglomeration and situated in any area included
within the local limits of a municipality (by whatever name called),
a notified area committee, a town area committee, a city and town /

committee, a small town committee, a cantonment board or a
panchayat,

E
but does not include any such land which is mainly used for the
purpose of agriculture.

Explanation.- For the purpose of this clause and Cl.(q),-

F (A) 'agriculture' includes horticulture, but does not include,-

(i) raising of grass,

(ii) dairy farming,

(iii) poultry farming,
G
(iv) breeding of live-stock, and

(v) such cultivation or the growing of such plant, as may be
prescribed;

H (B) land shall not be deemed to be used mainly for the purpose
STATE v. N. AUDIKESAVA REDDY [SABHARWAL, J.] 167

of agriculture, if such land is not entered in the revenue or land records A
before the appointed day as for the purpose of agriculture :

Provided that where on any land which is entered in the revenue
or land records before the appointed day as for the purpose of agricul-
ture, there is a building which is not in the nature of a farm-house then, B
so much of the extent of such land as is occupied by the building shall
not be deemed to be used mainly for the purpose of agriculture :

Provided further that if any question arises whether any building
is in the nature of a farm-house, such question shall be referred to the C
State Government and the decision of the State Government thereon
shall be final;

(C) notwithstanding anything contained in Cl.(B) of this explana-
tion, land shall not be deemed to be mainly used for the purpose of
D
agriculture if the land has been specified in the master plan for a
purpose other than agriculture."

Section 2(q) defines "vacant land" as under :

"2.(q)'vacant land' means land, not being land mainly used for the E
purpose of agriculture, in an urban agglomeration, but does not in-
clude,-

(i) land on which construction of a building is not permissible
under the building regulations in force in the area in which such land F
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 G
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 H
168 SUPREME COURT REPORTS [2001] SUPP. 5 S.C.R.
A 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,
B
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."

Section 3 provides ceiling on vacant land. It reads as under :
c "3. Persons not entitled to hold vacant land in excess of the ceiling
limit. - Except as otherwise provided in this Act, on and from the
commencement of this Act, no person shall be entitled to hold any
vacant land in excess of the ceiling limit in the territories to which
this Act applies under sub-section (2) of Section !."
D
Section 4 prescribes the ceiling limit. Under Section 6 every person
holding vacant land in excess of ceiling limit at the commencement of the
Act is required to file a statement before the competent authority within the
prescribed time. Section 7 deals with filing of statement· in cases where
E vacant land held by a person is situated within the jurisdiction of two or more
competent authorities. Section 8 deals with the preparation of draft statement
as regards vacant land held in excess of ceiling limit. Section 9 provides for
preparation of final statement. After filing the statements and after such
enquiry as laid down, if there is any land in excess of the ceiling limit, such
land would be acquired under Section 10 of the Act. Section 15, inter alia,
F
provides that if, on or after commencement of this Act, any person acquires
by inheritance, settlement etc. any vacant land the extent of which together
with the extent of the vacant land, if any, already held by him exceeds in the
aggregate the ceiling limit, then he shall, within three months of the date of
such acquisition, file a statement before the competent authority also speci-
G fying the vacant lands within the ceiling limits which he desires to retain.
Sub-section (2) of Section 15 provides that the provisions of Sections 6 to 14
(both inclusive) shall apply to the statement filed under Section 15(1) and to
the vacant land held by such person in excess of the ceiling limit.

H Section 16 also stipulates filing of statement where a person holds vacant
STATE"· N. AUDIKESAVA REDDY [SABHARWAL, J.] 169
land in excess of ceiling limit in view of adoption of the Act by a different A
State in which he was having vacant land. Sub-section (2) of Section 16 also
applies Sections 6 to 14 (both inclusive) to the statements filed under Section
16(1).

Now we will briefly notice the facts of Aria Begum's case and the
B
question involved therein. In that case the question was regarding the quan-
tification of vacant land. The competent authority had declared that the
appellant had 19813.83 sq. mts. of vacant land in Aligarh in excess of the
ceiling limit but the District Judge reduced the area of the excess land to
6738.23 sq. mts. The order of the District Judge was challenged by both, i.e.,
the owner and the State by filing writ petitions in the High Court. The owner's c
writ petition was dismissed and that of the State was partly allowed. In appeal
before this Court, the owner sought restoration of the order of the District Judge
which had been set aside by the High Court on the interpretation of the
provisions of the Act. The Act came into force in the State of Uttar Pradesh
on 17th February, 1976. At that time, there was no master plan for the area D
of Aligarh. The master plan for Aligarh was made on 24th February, 1980. In
that master plan, the land in dispute was shown. The High Court took the view
that by virtue of explanation (c) of Section 2 (o) defining 'urban land', the land
of the appellant could not be treated as mainly used for the purpose of agri-
culture because it was shown in the master plan made on 24th February, 1980. E
The correctness of this view was in issue in Atia Begum's case. The decision,
though it notices that determination of the area of vacant land in excess of
ceiling limit under the Act is to be made with reference to the date of com-
mencement of the Act, fails to notice the explanation to Section 6 which
provides the meaning of the expression "commencement of this Act". Section F
6(1) and the explanation read as under :

"6. Persons holding vacant land in excess of ceiling limit lo file
statement. - (I) Every person holding vacant land in excess of the
ceiling limit at the commencement of this Act shall, within such period
as may be prescnbed, file a statement before the competent authority G
having jurisdiction specifying the location, extent, value and such
other particulars as may be prescribed of all vacant lands and of any
other land on which there is a building, whether or not with a dwelling
unit therein, held by him (including the nature of his right, title or
interest therein) and also specifying the vacant lands within the ceiling H
170 SUPREME COURT REPORTS (2001] SUPP. 5 S.C.R.
A limit which he desires to retain :

Provided that in relation to any State to which this Act applies in
the first instance, the provisions of this sub-section shall have effect
as if for the words 'Every person holding vacant land in excess of the
ceiling limit at the commencement of this Act', the words, figures and
B letters 'Every person who held vacant land in excess of the ceiling limit
on or after the 17th day of February, 1975 and before the commence-
ment of this Act and every person holding vacant land in excess of the
ceiling limit at such commencement' had been substituted.

c Explanation.-In this section, ~commencement of this Act' means

(i) the date on which this Act comes into force in any State ;

(ii) where any land, not being vacant land, situated in a State in
which this Act is in force. has become vacant land by any reason
whatsoever, the date on which such land becomes vacant land;
D
(iii) where any notification has been issued underCl.(n) of Section
2 in respect of any area in a State in which this Act is in force, the date
of publication of such notification."

E If the expression "commencement of the Act" is read with reference to
the aforesaid explanation, the area of doubt about the correctness of the deci-
sion of Atia Begum>· case becomes very narrow, e.g., few observations therein
which are these :

"Just as the holder of the land cannot by his subsequent actions reduce
F the area of the vacant land in excess of the ceiling limit, the authorities
too cannot by any subsequent action increase the area of the excess
vacant land by a similar action."

The observations that the authorities by their subsequent action after
17th February, 1976 .cannot alter or introduce the master plan which has the
G effect of increasing the area of excess vacant land do not represent the correct
view of law. The aforesaid explanation to Section 6(1 ), inter alia, provides that
where any land, not being vacant land, situated in a State in which this Act is
in force has become vacant land by any reason whatsoever, the date on which
such land becomes vacant land would be the date of the commencement of the
H Act as regards such land.

-i-
STATE v. N. AUDIKESAVA REDDY [SABHARWAL, J.] 171
Development and town planning are ongoing processes and they go on A
changing from time to time depending upon the local needs. That apart, the
definition of the "master plan" in Section 2(h) is very significant. It reads
as under :

"2(h) 'master plan', in relation to an area within an urban agglom-
eration or any part thereof, means the plan (by whatever name called)
B
prepared under any law for the time being in force or in pursuance
of an order made by the Stale Government for the development of
such area or part thereof and providing for the stages by which such
development shall be carried out."
c
The above provision, inter alia, contemplates the master plan prepared under
any law for the time being in force for development of an area. The plan shall
also provide for the stages by which such development shall be carried out.
It is evident from the aforesaid definition of master plan that it takes in view
any plan prepared even subsequent to the coming into force of the Act. D
Further, the explanation to Section 6( I), as noticed above, very significantly
provides that every person holding vacant land in excess of the ceiling limit
at the commencement of the Act shall file a statement before the competent
authority and "the commencement of the Act" under clause (ii) would be when
the land becomes vacant for any reason whatsoever. Therefore, the date of
commencement of the Act in a case where the land, which was not vacant
E
earlier, would be the date on which such land becomes vacant land. It, thus,
contemplates a situation of land, not being vacant, becoming vacant due to
preparation of a master plan subsequent to 17th February, 1976. Further, the
provisions of the Act require filing of a statement under Sections 6, 7, 15 and
16 from time to time as and when land acquires the character of a vacant land. F
Obligation to file statement under the Act arises when a person comes to hold
any vacant land in excess of the ceiling limit, which date necessarily may not
be 17th February, 1976. It would all depend on the facts and circumstances
of each case.
G
Accordingly, we hold that the master plan prepared as per law in force
even subsequent to enforcement of the Act is to be taken into consideration to
determine whether a particular piece of land is vacant land or not and, to this
extent, Atia Begum is not correctly decided.

In these matters, however, we are not concerned with the question as to H
172 SUPREME COURT REPORTS [2001] SUPP. 5 S.C.R.
A the consequences of filing of a statement by a person under a wrong impression
that the vacant land held by him is in excess of ceiling limit if it was not so
when he filed a statement. This aspect is left open to be decided in an
appropriate case.

Before concluding, we wish to place on record our deep appreciation for
B the able assistance rendered by Mr. Raju Ramachandran, Senior Advocate, who
on our request very readily agreed to assist the Court as amicus curiae.

For the aforesaid reasons, C.A. Nos.3813/1996, 7238/2001 and 7239/
2001 are allowed and C.A. Nos.1149/1985 and !0851/1996 are dismissed.
C The parties are left to bear their own costs.

V.S.S. Appeals allowed/dismissed.