Holding

The condition that the land would vest in the State after the lease period is invalid and cannot be sustained; the exemption order stands without it.

Summary

The respondent, V. Venkateswara Rao, held vacant land in excess of the ceiling limit under the Urban Land (Ceiling and Regulation) Act, 1976 and obtained a 33‑year lease of the land before the prohibition on alienation of vacant land took effect. The State Government granted an exemption under Section 20(1)(a) of the Act, imposing several conditions, one of which required the land to vest in the State after the lease expired. The High Court struck down that vesting condition; the State appealed. The Supreme Court held that while the State may impose conditions on an exemption, a condition that defeats the statutory scheme—such as automatic vesting of the land in the State—cannot be sustained. The condition is severable, and the exemption order remains valid without it. Consequently, the appeals were dismissed.

Issues considered

Whether the condition that the exempted land would vest in the State Government after the lease period is valid under Section 20 of the Urban Land (Ceiling and Regulation) Act, 1976.
Whether the exemption order can survive the removal of the vesting condition.
Whether conditions imposed under Section 20 may defeat the rights and protections afforded under Sections 6 to 14 of the Act.

Legislation cited

Urban Land (Ceiling and Regulation) Act, 1976s. 10, s. 15, s. 20, s. 3, s. 4, s. 6, s. 8, s. 9

Subjects

urban land ceilingexemptioncondition of vestingSection 20severabilityexcess vacant landland acquisition

Judgment

A STATE OF A.P.
V.

V. VENKATASWARA RAO (DEAD) BY LR.

JANUARY 16, 2004
B
[SHIVARAJ V. PATIL AND D.M. DHARMADHIKARI, JJ.]

Land Laws:

C Urban Land (Ceiling and Regulation) Act, 1976:

Section 20(/)(a)-Vacant land-In excess of ceiling limit-Power to
exempt-Landowner leased out excess vacant land to a company for a period
of 33 years when there was no prohibition for alienation of vacant land-
State Government granted exemption to the excess vacant land subject to
D certain conditions including the one that the said land would vest in the State
Government after expiry of 33 years-High Court struck down the said
condition-Correctness of-Held: Conditions might be imposed to serve the
object and purpose of the Act and the exemption order itself-Jn the absence
of vesting of the land in the State absolutely, the same would revert back to
the landowner after expiry of the lease-The condition imposed by the State
E Government being severable from other conditions, even after setting it aside,
the Government Order could be val idly sustained-Hence, no interference
with the High Court order called for.

The respondent was holder of excess vacant land as per the
F provisions of the Urban Land (Ceiling and Regulation) Act, 1976. The
respondent filed an application under Section 20(J)(a) of the Act claiming
exemption on the ground that the said vacant land was leased out to a
company for 33 years. This lease was entered into during the period when
there was no prohibition for alienation of vacant land. The State
Government granted exemption to the excess vacant land with certain
G conditions including the one that the land would vest in the state
Government aJter the expiry of the lease period.

Being aggrieved the respondent filed a writ petition before the High
Court. The High Court restored the Government Order but held that the

H 538
--"''

STATE OF A.P. v. V. VENKATASWARA RAO 539
condifion that the land would vest in the State Government after 33 years A
could not be sustained. Hence the appeal.

Dismissing the appeal, the Court

HELD: I. Since the excess land was not acquired and no notification
was published in the official Gazette declaring that the excess land in B
question be deemed to have been acquired by the State Government, it
could not be deemed to have vested absolutely in the State Government
!~
free from all encumbrances under Section 10(3) of the Urban Land
(Ceiling and Regulation) Act, 1976 as on the date the exemption order was
issued. After the expiry of the lease period, in the normal course, the land
would revert to the respondent, in the absence of vesting of the land in c
the State absolutely, subject to the provisions of Chapter Ill to the extent
they are applicable. If on account of reverting the land to the respondent
and his holding exceeded the ceiling limit, the provisions contained in
Section IS got attracted. In such a case, as per Section 15(2), the provisions
of Sections 6 to 14 shall, so far as may be, apply to the statement filed D
under the said Section. The person concerned could avail the rights and .
protections available to him under Sections 8 to I 0 including exercise of
option or choice in the matter of retaining the land within the ceiling limit.
If the condition regarding vesting of the land in the State after expiry of
the lease period is sustained, it has the effect of taking away the rights
and protections available under Sections 6 to 14 as far as they apply. E
1551-A-EI

2.1. The State Government is empowered to impose conditions while
granting exemption under Section 20 but such conditions cannot run
contrary to or defeat the provisions of the Act. Conditions may be imposed
F

• to serve the object and purpose of the Act and the exemption order itself.
Furthermore, safeguard is made under Section 20(2) by stating that if any
conditions imposed while granting exemption are violated, the State
Government is entitled to withdraw the exemption granted. Further after
the expiry of lease period if the vacant land reverts to the contesting
respondent and his holding vacant land exceeds the ceiling limit, he is G
bound by the provisions of the Act and the action can be taken, if need
be, against him according to the provisions of the Act in respect of the
\' " excess vacant land. 1551-F-H; 552-AI

2.2. The contention that if the condition regarding vesting of the

- H
540 SUPREME COURT REPORTS [_2004] I S.C.R.

A excess vacant land to the State Government is invalid the very exemption
Order cannot remain in existence cannot be accepted. The Government
Order granting exemption has imposed other conditions to serve the
purpose of exemption and public interest in terms of Section 20. In case
those conditions are violated or the land is·not used for the purpose for
B which exemption was granted, it is open to the State Government to
withdraw the order of exemption under Section 20(2). The condition of
vesting of the land in the State after the expiry of the lease period is
separable and even after setting aside the said condition, the Government
Order can be validly sustained. 1552-A-CI

C R. Jeevaratnam v. State of Madras, AIR (1966) SC 951 and R.M.D.
Chamrabaugwalla v. Union of India, AIR (1957) SC 628, relied on.

3. The impugned order of the High Court does not call for any
interference.

D CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5956 of
1997.

From the Judgment and Order dated 9.4.1997 of the Andhra Pradesh
High Court in W.A. No. 851 of 1994.

E WITH

C.A. Nos. 5957-59 of 1997.

Sudhir Chandra Parag, P. Tripathi, V.A. Mohta, Sudhir Chandra; Ms.
T. Anamika, G. Prabhakar, Ms. Neelima Tripathi, Jayant Mehta, Ms. Taru
F Gupta, S.A. Saud, Ms. Sumita Ray, P.S. Narasimha, P. Sridhar, Ananga
Bhattacharya, G. Seshagiri Rao for the appearing parties.

The Judgment of the Court was delivered by

SHIVARAJ V. PATIL J. The respondent Valluru Venkateswara Rao
G was holder of excess vacant land to the extent of 5849 sq. metres (1 acre 44
cents) as per the provisions of the Urban Land (Ceiling and Regulation) Act,
1976 (for short 'the Act'). He made an application under Section 20(1) of the
Act claiming exemption on the ground that he had entered into an unregistered
lease agreement on 1.5.1975 with Mis. Ushodaya Publications Pvt. Ltd. for
H a period of 33 years. This lease was entered into during the period when there
STATE OF A.P. v. V. VENKATASWARA RAO [PATIL . .l.] 54 \

was no prohibition for alienation of vacant land. The Act also prohibited any A
transaction other than bona fide sales during the period from 17.2.1975 to
28.1.1976. The lessee also filed an application seeking exemption under the
Act. The State Government, after considering the matter, issued a Government
Order G.0.Ms. No. 7 Rev.(UC.lll) Department dated 3.J.1984 granting
exemption under the Act with ce11ain conditions attached including the one B
that after the period of exemption of 33 years of lease, the land would vest
in the State Government. Respondent Valluru Venkateswara Rao filed Writ
Petition No. 19026 of 1988 before the High Court challenging the said
condition imposed in the aforementioned G.O. granting exemption. A learned
Single Judge of the High Court by his order dated 29.3.1994 quashed said
G.0.Ms. No. 7 dated 3.1.1984 and directed consideration of exemption before C
the preparation of the draft statement under Section 8 of the Act taking a
view that the question of exemption after preparation of the draft statement
was not permissible in law. Aggrieved by this order of the learned Single
Judge, the State of Andhra Pradesh filed Writ Appeal No. 791 of 1994 before
the Division Bench of the High Court. The respondent Valluru Venkateswara D
Rao also filed Writ Appeal No. 851 of 1994. The Division Bench of the High
Court dealt with both the appeals together and passed the impugned judgment
dated 9.4.1997 folliiwing the judgment of this Cout1 and restored the G.O.Ms.
No. 7 dated 3.1.1984 but held that the condition, namely, that after the lease
period of 33 years, the land would vest in the State Government, contained
in para 4(d) of G.O.Ms. No. 7, could not be sustained. Aggrieved by the E
order of the Division Bench of the High Court, the State of Andhra Pradesh
has filed Civil Appeal No. 5956 of 1997, to the extent of striking down
condition No. 4(d) contained in G.O.Ms. No. 7. Mis. Ushodaya Publications
Pvt. Ltd., had filed application for irnpleading before the Division Bench of
the High Court in Writ Appeals. The Division Bench of the High Court did F
not allow the application filed for impleadment. Mis. Ushodaya Publications
Pvt. Ltd., has filed Civil Appeal Nos. 5957-5959 of J 997 to the extent
aggrieved by the impugned order. The original respondent Valluru
Venkateswara Rao has died and his son is on record as legal representative.

It was contended on behalf of the appellant that clause (d) of para 4 of G
the order of exemption is valid and if the said clause is void, exemption
granted subject to such condition itself becomes void and inoperative; the
State Government under Section 20 of the Act was competent to grant
exemption subject to such conditions as may be specified in the order of
exemption and as such condition contained in clause (d) of para 4 of the H
542 SUPREME COURT REPORTS (2004] I S.C.R.

A order could be validly imposed; exemption did not confer any vested right in
the respondent; exemption was granted only in the discretion of the State
Government. The High Court exercising jurisdiction under Article 226 could
not substitute the said condition.

On behalf of the Legal Representative of the Respondent Valluru
B Venkateswara Rao submissions were made supporting the impugned order.
Pointing out to scheme of the Act and, in particular, referring to Sections 6
and 8 of the Act, it was urged that after lease period of 33 years, land could
not be vested automatically with the State Government; even after the expiry
of the lease period, ifthe vacant land became excess land, it is open for filing
C the fresh declaration and it is equally open to exercise option as to which
land within the ceiling limit is to be retained.

For proper appreciation of the rival contentions, it is necessary to notice
the provisions of the Act to the extent they are relevant:-

D "Section 6. Persons holding vacant land in excess of ceiling limit to
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 prescribed, file a statement before the competent
authority having jurisdiction specifying the location, extent, value
and such other particulars as "may be prescribed· of all vacant lands
E
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 limit which he desires to retain;

F Provided that in relation to any State to which this Act applies in
th~ first instance, the provisions of this sub-section shall have effect
as ifforthe words "Every person holding vacant land in excess of the
ceiling limit at the commencement of this Act", the words, figures
and 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
G commencement of this Act and every person holding vacant land in
excess of the ceiling limit at such commencement", had been
substituted."

"Section 8 Preparation of dr~ft statement as regards vacant land held
H in excess of ceiling limit -
r • I

STATE OF A.P. v. V. VENKATASWARA RAO [PATIL, J.] 543

(I) On the basis of the statemeni filed under Section 6 and after such A
"""· inquiry as the competent authority may deem fit to make the competent
authority sh al I prepare a draft statement in respect of the person who
has Ii led the statement under Section 6.

(2) Every statement prepared under sub-section (I) shall contain the
following particulars, namely : B
(i) the name and address of the person; (ii)the particulars 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 such person;
(iii) the particulars of the vacant lands which such person desires
to retain within the ceiling limit;
c
(iv) the particulars of the right, title or interest of the person in
the vacant land; and
(v) such other particulars as may be prescribed.

(3) The draft statement shall be served in· such manner as may be D
prescribed on the person concerned together with a notice stating that
A
any objection to the draft statement shall be preferred within thirty
days of the service thereof.

(4) The competent zuthority shall duly consider any objection received,
within the period specified in the notice referred to in sub-section (3)
E
or within such further period as may be. specified by the competent
authority for any good and sufficient reason, from the person on
whom a copy of the draft statement has been served under that sub-
section and the competen.t authority shall, after giving the objector a
reasonable opportunity of being heard, pass such orders as it deems F
-.( fit"
r
"Section 9 Final statement After the disposal of the objections, if any,
received under sub-section (4) of Sec. 8 the competent authority shall
make the necessary alterations in the draft statement in accordance
with the orders passed on the objections aforesaid and shall determine G

- "'
the vacant land held by the person concerned in excess of the ceiling
limit and cause a copy of the draft statement as so altered to be
served in the manner referred to in sub-section (3) of Sec. 8 on the
person concerned and where such vacant land is held under a lease,
or a mortgage, or a hire-purchase agreement, or an irrevocable power
H
•

544 SUPREME COURT REPORTS [2004] I S.C.R.

A of attorney, also on the owner of such vacant land." . >-. • ·

"Section 10 Acquisition of vacant land in excess of ceiling limit -

(I) As soon as may be after the service of the statement under Sec.
9 on the person concerned the competent authority shall cause a
B notification giving the particulars of the vacant land held by such
person in excess of the ceiling limit and stating that -
(i) such vacant land is to be acquired by the concerned State ~·
Government; and
(ii) the claims of all persons interested in such vacant land may be
c made by them personally or by their agents giving particulars of
the nature of their interests in such land,

to be published for the information of the general public in the official
Gazette of the State concerned and in such other manner as may be
prescribed.
D
(2) After considering the claims of the persons interested in the vacant
land, made to the competent authority in pursuance of the .i..
notification published under sub-section (I), the competent
authority shall determine the nature and extent of such claims
and pass such orders as it deems fit.
E
(3) At any time after the publication of the notification under sub-
section (1) the competent authority may, by notification published
in the official Gazette of the State concerned, declare that the
excess vacant land referred to in the notification published under
sub-section ( 1) shall, with effect from such date as may be
F specified in the declaration, be deemed to have been acquired by
the State Government and upon the publication of such ).
l
declaration, such land shall be deemed to have vested absolutely
in the State Government free from all encumbrances with effect
from the date so specified.

G (4) During the period commencing on the date of publication of the
notification under sub-section ( l) and ending with the date
specified in the declaration made under sub-section (3), -

(i) no person shall transfer by way of sale, mortgage, gift, lease
11 ·-
or otherwise any excess vacant land (including any part
H thereof) specified in the notification aforesaid and any such
STATE 011 A.P. v. V. VENKATASWARA RAO [PATIL ,.f.) 545

transfer made in contravention of this provision shall be A
deemed to be null and void; and

(ii) no person shall alter or cause to be altered the use of such
excess vacant land.

(5) Where any vacant land is vested in the State Government
B
under sub-section (3), the competent authority may, by notice
in writing, order any person who may be in possession of it
/ ~
to surrender or deliver possession thereof to .the State
Government or to any person duly authorised by the State
Government in this behalf within thirty days of the service
of the notice. c
(6) If any person refuses or fails to comply with an order made
under sub-section (5), the competent authority may take
P.ossession of the vacant land or cause it to be given to the
concerned State Government or to any person duly authorized
by such State Government in this behalf and may for that D
purpose use such force as may be necessary.
"' Explanation - In this section, in sub-section (I) of Sec. 11 and
in Secs. 14 and 23, "State Government" in relation to -
(a) any vacant la~d owned by the Central Government, means the E
Central Government;
(b) any vacant land owned by any State Government and situated in
a Union territory or within the local limits of a cantonment
declared as such under Sec. 3 of the Cantonment Act, 1924 (2
of 1924), means that State Government." F
"Section 11 - Payment of amount for vacant land acquired - (l)
Where any vacant land is deemed to have been acquired by any State
Government under sub-section (3) of Sec. 10, such State Government
shall pay to the person or persons having any interest therein, -
(a) in a case where there is any income from such vacant land, an G
amount equal to eight and one-third times the net average annual
income actually derived from such land during the period of five
ii, consecutive years immediately preceding the date of publication
of the notification issued under sub-section (I) of Sec. IO; or
H
546 SUPREME COURT REPORTS (2004] I S.C.R.

A (b) in a case where no income is derived from such vacant land, an
amount calculated at a rate not exceeding -

(i) ten rupees per square metre in the case of vacant land situated
in an urban agglomeration falling within category A or
category B specified in Sch. 1; and
B
(ii) five rupees per square metre in the case of vacant land situated
in an urban agglomeration falling within category C or
category D specified in that schedule." "' '

"Section 15 - Ceiling limit on future acquisition by inheritance,
C bequest or by sale in execution of decrees, etc. -

(1) If, on or after the commencement of this Act, any person acquires
by inheritance, settlement or bequest from any other person or by
sale in execution of a decree or order of a civil court or of an award
or order of any other authority or by purchase or otherwise, any
D 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 having jurisdiction
specifying the location, value and such other particulars as may be
prescribed of all the vacant lands held by him and also specifying the
E vacant lands within the ceiling limit which he desires to retain.

(2) The provisions of Secs. 6 to 14 (both inclusive) shall, so far as
may be, apply to the statement filed under this section and to the
vacant land held by such person in excess of the ceiling limit."

f ''Section 20 - Power to exempt - ( 1) Notwithstanding anything
contained in any of the foregoing provisions of this Chapter -
(a) where any person holds vacant land in excess of the ceiling limit
and the State Government is satisfied. either on its own motion
or otherwise, that, having regard to the location of such land, the
G purpose for which such land is being or is proposed to be used
and such other relevant factors as the circumstances of the case
may require, it is necessary or expedient in the public interest so
to do, that Government may, by order, exempt, subject to such r.
conditions, if any, as may be specified in the order. such vacant
land from the provisions of this Chapter;
H
STATE OF A.P. v.V. VENKATASWARA RAO [PATIL, J.] 547
(b) where any person holds vacant land in excess of the ceiling limit A
and the State Government, either on its own motion or otherwise,
is satisfied that the application of the provisions of this Chapter
would cause undue hardship to such person, that Government
may by order, exempt, subject to such conditions, if any, as may
be specified in the order, such vacant land from the provisions B
of this Chapter;

Provided that no order under this clause shall be made unless the
reasons for doing so are recorded in writing.

(2) If at any time the State Government is satisfied that any of the
conditions subject to which any exemption under Cl. (a) or Cl. (b) of C
sub-section (I) is granted is not complied with by any person, it shall
be competent for the State Government to withdraw, by order, such
exemption after giving a reasonable opportunity to such person for
making a representation against the proposed withdrawal and thereupon
the provisions of this Chapter shall apply accordingly."
D
The Government Order G.O.Ms. No. 7 Rev. (UC.III) Department dated
984 granting exemption under Section 20( I)(a) of the Act reads:-

"GOVERNMENT OF ANDHRA PRADESH
ABSTRACT
E
Urban Land (Ceiling and Regulation) Act, 1976 Industries -
Vijayawada Urban Agglomeration - Vijayawada village - Exemption
under section 20(1) (a) of the Act for the lands held by Sri V.
Venkateswara Rao, in NTS. No. 142, Block No. 6, Ward No. I of
Patamata (v) Vijayawada leased out in favour of Mis. Ushodaya F
Publications Ltd. Granted-Orders-Issued.

REVENUE (U.C. Ill) Department

G.O. Ms. No. 7 Dated 3.1.1984

I. From Sri V. Venkateswara., Vijayawada application dated G
17.12.1980.
2. From the Chairman, Mis. Ushodaya Publications (P) Ltd. letter
dated 9.9.1981.
3. From the Director of Industries and Commerce letter No. RC.No.
H
•
548 SUPREME COURT REPORTS [2004) I S.C.R.

A 72/ULC/8 l dt. 7.3.1981.
4. From the Commissioner of Land Reforms and Urban Land
Ceilings, Hyderabad, L.Dis. No. UC3/7142/80 dt. 25.8.82.
ORDER

B Whereas Sri Velluri Venkateswara Rao, Vijayawada hold vacant land
measuring 2438.60 sq. mts., in NTS. No. 142, Block-6, Ward-I I of -<( •

Vijayawda Village in Vijayawada Urban Agglomeration which is in
excess of the ceiling limit prescribed in Urban Land (Ceiling and
Regulation Act, 1976 (Central Act, 33/1976. Which also includes in
the extent of 5949 sq. mts. Of land leased out in favour of Mis.
c Ushodaya Publications consequent on an un-regd. lease deed executed
in their favour on the 1st May, 1975 for a period of thirty three years
and hand over the possession of the said extent of land to set up
"EENADU" complex for runnjng the Newspaper industry.

2. And whereas the entire extent of land measuring 2438 sq. mts., is
D
needed to be retained in favour of Sri Valluri Venkeswaa Rao, JO
Vijayawada till the lease period expires consequent upon establishing
the news papers industry by the lease on the lease hold land and
running the business.

3. And where the Government ~onsider it expedient in the public
E
interest to exempt the land mentioned in para two above fi'om the
provisions of Chapter-Ill of the said Act by imposing a condition that
after the lease period expires the lands so exempted would vest in the
Government along with such structures on the said land;

F 4. Now therefore in exercise of the powers conferred by clause (a) of
~
sub-section ( 1) of section 20 of the Urban Land (Ceiling and
Regulation) Act, 1976 (33 of 1976) the Governor of Andhra Pradesh
hereby exempts:
(i) the land measuring 2438 sq. mts., out of 5949 sq. mts. Of leased
G land in favour of Mis. Ushodaya Publications Ltd. in NTS. No.
142, Block Ward 11 of Vijayawada village in Vijayawada Urban
Agglomeration mentioned in para 2 above subject to the condition r,
that the said land should be utilized for the purpose of said
proposed industry and also subject to the following conditions;
(a) that it should not be leased out or sold without the permission of
H
STATE OF A.P. v. V. VENKATASWARA RAO [PATIL, J.) 549
the Government. A
(b) that the land should be utilized for the purpose for which it is
exempted within three years from the date of grant shall stand
cancelled and the said land will be subject to the provisions of
the Urban Land (Ceiling and Regulation) Act, 1976.
(c) that the land may be mortgaged to any bank as defined in clause B
(iii) of sub-section (I) of section 19 including Andhra Pradesh
State Financial Corporation for the purpose of raising finances
for the industry.
( d) that the land so exe1i1pted above would vest in the Govt. after the
expily of the aforemenlioned lease period under the provision of C
the said Act.

(BY ORDER AND IN THE NAME OF THE GOVERNOR OF
ANDHRA PRADESH)

R. K.ODAMA RAMA REDDY D
DEPUTY SECRETARY TO GOVERNMENT."

Jn the light of the contentions urged before us, .the only question that
arises for consideration is whether the condition contained in clause (d) of
para 4 of the Government Order could be sustained.
E
Section 3 of the Act declares that no person shall be entitled to hold
any vacant land in excess of ceiling limit. Ceiling limit is prescribed under
Section 4. Under Section 6, every person holding vacant land in excess of the
ceiling limit at the commencement of the Act was required to file statement
before the competent authority giving particulars and also specifying the F
vacant lands within the ceiling limit which he desired to retain. Section 8
refers to preparation of draft statement as regards vacant land held in excess
of ceiling limit. Under Section 8(2)(iii) the particulars of vacant lands which
a person desires to retain within the ceiling limit are to be given. Under sub-
section 3 of Section 8, draft statement shall be served on the person concerned
together with notice inviting objections. After considering the objections, the G
competent authority after hearing the person shall pass the order. Under
Section 9, final statement would be issued as to vacant land held by the
person concerned in excess of the ceiling limit. Under Section 10( I), the
competent authority shall cause a notification giving the particulars of the
vacant land held by such person in excess of the ceiling limit stating that
H
550 SUPREME COURT REPORTS [2004] 1 S.C.R.
,,.._ ~

A such vacant land is to be acquired by the State Government and the claims
of all persons interested in such vacant land may be made by them giving
particulars of the nature of their interest in such land. Under sub-section (3)
of Section I0, the competent authority may by notification published in the
official gazette declare that excess vacant land referred to in the notification
published under sub-section (I), with effect from such date as may be specified
B in the declaration, be deemed to have been acquired by the State Government
and upon the publication of such declaration such land shall be deemed to ...,
have vested absolutely in the State Government free from all encumbrances
with effect from the date so specified. As per Section 15, if on or after the
commencement of the Act, any person acquires any vacant land together
c with the extent of the vacant land if already held by him exceeds the aggregate
ceiling limit, then he shall within three months of such acquisition file a
statement before the competent authority. Under sub-section (2) of Section
15, the provisions of Sections 6 to 14 are made applicable to the statement
filed under Section 15(1 ). Section 20 deals with the power of exemption.

-.
Under the said Section notwithstanding anything contained in any of the
D foregoing provisions of Chapter Ill (which contains Sections 3 to 24), the
State Government may by order, exempt such vacant land from the provisions ;.
of Chapter 111. Under Section 20(2), the State Government has power to
withdraw by order such exemption on being satisfied that any of the conditions
subject to which any exemption was granted was not complied with by any
E person.
As can be seen from the provisions referred to hereinabove, the person
holding excess land is given option to express the lands he desires to retain
within the ceiling limit; he is also given right to file objections under Section
8 before making a final statement under Section 9. Under Section 10(1), after
F service of statement under Section 9 on the person concerned, giving particulars
of the excess land held by such person in excess of the ceiling limit, the
competent authority shall cause a notification stating that such land is to be
acquired by the concerned State Government. After publication of notification
under Section I0( I), the competent authority by notification published in the
official gazette shall declare that the excess land be deemed to have been
G acquired by the State Government and upon such publication of declaration
such land shall be deemed to have vested absolutely in the State Government
free from all encumbrances from the date specified. r,
Under Section 20, the State Government notwithstanding anything
contained in any of the foregoing provisions of Chapter Ill is conferred with
H
STATE OF A.I'. v. V VENKATASWARA RAO [PATIL . .I.] 551
- ...(
the power to exe111pt excess vacant land from the provisions of the said A
Chapter containing Sections 3 to 24. The G.O. Ms. No. 7 in the present case
exempted the excess vacant land in question from the provisions of Chapter
Ill of the Act by imposing condition including a condition that after the lease
period expires, the land so exempted. would vest in the Government along
with structures. Since the excess land was not acquired and no notification
was pub Iished in the official Gazette declaring that the excess land in question
B
) ..,. be dee111ed to have been acquired by the State Government, it could not be
deemed to have vested absolutely in the State Government free from all
encumbrances under Section I0(3) of the Act as on the date the exemption
order was issued. After the expiry of the lease period, in the normal course,
the land would revert back to the L.R. of respondent Venkataswara Rao, in c
the absence of vesting the land in the State absolutely, subject to the provisions
of Chapter Ill to the extent they are applicable. If on account of reverting the
land to the respondent in Civil Appeal No. 5956 of 1997 and respondent No.
2 in Civil Appeal Nos. 5957-5959 of 1997 and his holding exceeded the
ceiling limit, the provisions contained in Section 15 get attracted. In such a
D
case, as per Section 15(2), the provisions of Sections 6 to 14 shall, so far as
may be, apply to the statement filed under the said Section. The person
concerned could avail the rights and protections available to him under Sectio1is
8 to I 0 including exercise of option or choice in the matter of retaining the
land within the ceiling limit. If the condition contained in clause (d) of para
4 of the Government Order is sustained, it has the effect of taking away the E
rights and protections available under Sections 6 to 14 as far as they apply
The Division Bench of the High Court by the impugned order has held that
the said condition was not valid and could not be sustained for the reasons
stated therein. With regard to the reasons given by the Division Bench of the
High Court in setting aside the said condition, we have some reservations to
F
accept. Be that as it may. In the light of what is stated above, we hold that
the condition contained in para 4( d) of the Government Order cannot be
sustained. it is true as contended on behalf of the appellant that the State
Government is empowered to impose conditions while granting exemption
under Section 20 but such conditions cannot run contrary to or defeat the
provisions of the Act. Conditions may be imposed to serve the object and G
purpose of the Act and the exemption order itself. One more thing to be
..;
noticed is that safeguard is made under sub-section (2) of Section 20 by
;<
stating that if any of the conditions imposed while granting exemption are
violated, the State Government is entitled to withdraw the exemption granted.
As already stated above, further after the expiry of lease period if the vacant H
I
I

552 SUPREME COURT REPORTS (2004] I S.C.R.
,.. -
A' land reverts to the contesting respondent and his holding vacant'land exceeds
the ceiling limit, he is bound by the provisions of the Act and the action can
be taken, if need be, against him according to the provisions of the Act in
respect of the excess vacant land. We have to notice one more submission
made on behalf of the appellant that if the condition contained in para 4(d)
of the Government Order is invalid, the very exemption order cannot remain
B in existence. The Government Order granting exemption has imposed other
conditions to serve the purpose of exemption and public interest in terms of ... ,
Section 20. In case those conditions are violated or the land is not used for
the purpose for which exemption was granted, it is open to the State
Government to withdraw the order of exemption under Section 20(2). The
c condition contained in para 4( d) of the order is separable and even after
setting aside the said condition, the Government Order can be validly sustained.
This position gets support from the judgment of this Court in R. Jeevaratnam
v. State of Madras, AIR (1966) SC 951. In that case the order dated October
17, 1950 directed that the appellant be dismissed from service with effect
from the date of his suspension, that is to say, from May 20, 1949. In effect
D
the order contained two parts - (I) the appellant be dismissed and (2) the
dismissal to operate retrospectively as from May 20, 1949. These two parts
of the composite order were severable. This Court while dealing with said
order, observed that "an order of dismissal with retrospective effect is, in
substance, an order of dismissal as from the date of the order with the
E superadded direction that the order should operate retrospectively as from an
anterior date. The two parts of the order are clearly severable. Assuming that
the second part of the order is invalid, there is no reason why the first part
of the order should not be given the fullest effect. The Court cannot pass a
new order of dismissal, but surely it can given effect to the·valid and severable
part of the order."
F
Further this Court in R.MD. Chamarbaugwalla and Anr. v. Union of
India, AIR (1957) SC 628 while dealing with separability of valid and invalid
parts of statute in para 22(2) has stated thus:-

"20(2): If the valid and invalid provisions are so inextricably mixed
G
up that they cannot be separated from one another, then the invalidity
ofa portion must result in the invalidity of the Act in its entirety. On
+-
the other hand, if they are so distinct and separate that after striking r.
out what is invalid, what remains is in itself a complete code
independent of the rest, then it will be upheld notwithstanding that
H the rest has become unenforceable."
STATE OF AP. v. V. VENKATASWARA RAO (PATIL, J.] 553
This being the position, we find no force in this contention advanced on A
behalf of the appellant.

Thus looking to all aspects of the matter and for the reasons recorded
above, in our view, the impugned order does not call for any interference.
Hence, the appeals are dismissed with no order as to costs.
B
V.S.S. Appeals dismissed.