THE HONOURABLE SRI JUSTICE A.GOPAL REDDY and THE HONOURABLE SRI JUSTICE N.RAVI SHANKAR W.A.No.805 of 2008 Date of Judgment: -04-2011 Between: Maheswarai Cooperative Housing Society Limited Tarnaka, Secunderabad rep. by its President G.V.Ramakrishna Rao …Appellant And 1. The Special Officer and Competent Authority Urban Land Ceilings, Gagan Vihar, Nampally Station Road, Hyderabad and others. ..Respondents The Court made the following Judgment: THE HONOURABLE SRI JUSTICE A.GOPAL REDDY and THE HONOURABLE SRI JUSTICE N.RAVI SHANKAR W.A.No.805 of 2008 Judgment: (Per Hon’ble Sri Justice A.Gopal Reddy) 1. This Writ Appeal by the petitioner—Society is directed aggrieved by the dismissal order of the learned single Judge in W.P.No.8102 of 2003, dated 18-10-2005 filed questioning the orders of the Commissioner (Appeals)—2nd respondent in Proceedings No.Hyd/46 to 48/92 affirming the order of the Special Officer and Competent Authority, Urban Land Ceiling (ULC), Hyderabad—1st respondent, dated 25-08-1990 and for other reliefs. 2. One Aknoor Durgaiah s/o Rajaiah, P.Mallaiah s/o P.Pedaramaiah and T.Rajalingam s/o Veeraiah are owners of the land bearing Sy.No.124 admeasuring Ac.9.20 equivalent to 38,445.20 square meters situated in Lalaguda village popularly known as Errakunta. Apart from the above land, they also owned vacant lands in Sy.Nos.130, 131, 159 and 160. They filed statements in Form-I under Section 6(1) of Urban Land (Ceiling and Regulation) Act, 1976 (for brevity “ULC Act”) declaring the lands held by them. The Competent Authority after due enquiry issued draft statement under Section 8(1) and notice under Section 8(3) of ULC Act, to which the declarants filed objections. 3. The Special Officer and Competent Authority—1st respondent on considering the objections to the draft statement found them to be holding the land in excess over the ceiling limit and passed final order under 8(4) and issued notification under Section 9 of ULC Act. Aggrieved by the same the declarants filed appeals before the Commissioner (Appeals)—2nd respondent. The writ petitioner— Society entered into an agreement of sale with the declarants for purchase of Ac.8.32 gts. on 06-08-1979 followed by supplemental agreement dated 22-07-1981 with an irrevocable power of attorney dated 27-07-1981 by recording possession. On such agreement of sale, supplemental declarations were filed on 01-03-1983 by the declarants seeking exemption of land under Section 21 of ULC Act which was not considered by the 1st respondent before finalisation of the declarations. On filing appeals by the declarants, the petitioner— Society sought to implead it as necessary party to the appeals and also filed objections. 4. The Appellate Authority having taken note of the objections raised by the writ petitioner—Society rejected the plea of the declarants as well as Society that the land in Sy.No.124 of Lalaguda cannot be treated as vacant land within the meaning of ULC Act and dismissed the appeals. Pending the said appeals, petitioner—Society filed O.S.No.211 of 1998 for specific performance of agreement of sale against the land holders/declarants. On dismissal of appeals, notice under Section 10(5) of ULC Act was issued on 26-01-1992 and above notification was also issued. Hence, the present writ petition is filed by the petitioner—Society. Pending writ petition, the respondents 5 and 6 claim to have purchased 1142 and 710 square yards under registered sale deeds dated 30-03-1995 from the land holders and made applications on 11-11-2003 and 29-04-2004 for regularisation of their possession and impleaded themselves by filing WPMP No.1613 of 2005. Respondents 7 to 14 claiming to have purchased house plots from the land holders ranging from 200 to 300 square yards filed W.P.M.P.No.148 of 2005 stating that they also submitted applications on 11-11-2003 and 29-05-2004 for regularisation of their possession and also filed W.P.Nos.9045, 9063, 9067 of 2003 and batch when the respondents therein tried to demolish their construction which was disposed of by a common order dated 01-05-2003. While the said common order was challenged in W.A.No.1195 of 2004 and batch, the writ petitioner—Society also filed an application seeking leave to file appeal against the common order which was dismissed on 03-08-2004 granting liberty to them to seek appropriate remedy against the respective writ petitioners in a civil court. 5. Respondents 1 and 2 filed counter stating that the petitioner —Society purchased the land from the declarants pending proceedings before the 1st respondent which is in violation of provisions of ULC Act and it does not confer any right or title to the petitioner—Society. There case is that as per master plan, the land in Sy.No.124 is partly classified as agricultural land and partly as water body. But the declarants changed the nature and use of the land and converted into housing plots and disposed of the same in favour of third parties, who raised illegal constructions over the land while ULC proceedings are pending before the Competent Authority. As such, the 1st respondent treated the land ‘vacant land’ within the meaning of Section 2(q) of ULC Act. The Competent Authority after considering the objections of the declarants passed an order under Section 8(4) of ULC Act on 25-08-1990. None of the original declarants chose to question the proceedings which went upto the stage of 10(3) of ULC Act and thereby the order declaring the declarants as surplus land holders reached finality. After issuing notice under Section 10(5) of ULC Act, the declarants have filed appeals before the Chief Commissioner of Land Administration which ended in dismissal. The land in Sy.No.124 of Lalaguda is within the municipal limits. Though it is classified as agricultural land, the declarants changed its use, converted into plots and sold the plots to third parties. Therefore, the Competent Authority treated the land as ‘vacant land’ within the meaning of Section 2(q) of ULC Act. The declarants have filed application under Section 21 of ULC Act seeking permission to construct houses for weaker sections, but did not choose to place on record other documents. The sale agreements, if any, entered with the petitioner—Society is only after the commencement of ULC Act and as such alienation is not legal and valid which is contrary to Section 5(3) and 10(4) of ULC Act. The Petitioner—Society has not made any application for exemption under Section 20 of ULC Act. The third parties who raised constructions have approached the 1st respondent seeking regularisation of their possession under G.O.Ms.No.455, dated 29-07-2002, but the petitioner —Society never submitted any such representation. Therefore, petitioners are not entitled to any relief. 6. A reply affidavit has been filed by the petitioner—Society stating that the sale deed could not be obtained from the vendors immediately, since the vendors suppressed the fact of filing suit for declaration of title against them by Mahabubuddin Khan and the plea taken by them has been reproduced in the impugned order which need not be repeated again. 7. The learned single judge observed that the purpose for which the petitioner—Society purchased the land is evident from the writ affidavit and it is for providing house site plots to its members and that even respondents 5 and 6 also claim to have purchased the house plots from the landholders under registered documents for the purpose of constructing dwelling houses. A similar question came up for consideration before this Court in S.SULAKSHANA BAI v. STATE OF A.P.[1] wherein the Division Bench held when the Act came into force from 17-02-1976, the land which was certified to be an agricultural land could not continue to retain its identity as agricultural land even after its user was changed and that it would not be treated as urban land so long as it was mainly used for the purpose of agriculture. It was also held that once the user was changed, it would become automatically vacant land within the meaning of Section 2(q) of ULC Act. Following said decision dismissed the writ petition. Questioning the same the present writ appeal has been filed. 8. Sri K.Ramakrishna Reddy learned senior counsel appearing for the appellant—Society contends that the land, which was purchased by the Society on 06-08-1979, was classified as agricultural land and part of the same was also classified as water body; therefore, the same cannot be declared as ‘vacant land’ within the meaning of Section 2(q) of ULC Act, since no building activity is permissible once it is classified as water body; on coming to know of finalisation of the declarations pending appeals before the Appellate Authority, the members of the petitioner—Society filed application to implead them as respondents, which is evident from the order of the Appellate Authority, but their objections were not properly considered by the Appellate Authority and rejected the appeals; in spite the petitioners put up their claim about purchase of the property, the possession taken by the Competent Authority on dismissal of writ petition is not valid. He also contends that the Division Bench judgment of this court on which learned single Judge relied upon and dismissed the writ petition is no longer good law in view of judgment of the Supreme Court in STATE OF MAHARASHTRA v. E.BILLIMORIA[2]. When the declarants filed declarations under erroneous impression showing Sy.No.124, the Competent Authority cannot treat it as vacant land on mere filing declarations. Even assuming that the same is converted into house plots by the petitioner—Society for sale of land to its members, he contends the same is exempted from the purview of ULC Act as held by this Court in K.B. SURENDRA KUMAR (DIED) AND OTHERS v. SO AND CA, ULC. VIJAYAWADA[3], which was confirmed in appeal and also by the Supreme Court while dismissing SLPs. By placing reliance on the Division Bench judgment of this Court in W.A.No.1763 of 2001 and batch dated 08-10-2010 he contends that once the possession is taken on dismissal of writ petition is illegal, the matter cannot be remitted to the Appellate Authority for deciding the objections, as the entire proceedings gets abated. Therefore, the orders passed by the Competent Authority as well as the Appellate Authority are liable to be set aside. 9. The learned Government Pleader for Revenue appearing for respondents 1 to 4 contends that once the property which is shown as agricultural land in the master plan and sold as house plots by the vendor of the petitioner—Society and also laid plots by the petitioner— Society, the land will become ‘vacant land’ within the meaning of Section 2(q) of ULC Act. The final statement under Section 8(4) and notification under Section 9 of ULC Act have become final on dismissal of appeals filed by the declarants. Since the petitioner— Society has not filed any appeal questioning the final order under Section 8(4) and notification under Section 9 of ULC Act mere filing implead petition in the appeal and on non-consideration of the same, the petitioner—Society cannot challenge the order passed by the Appellate Authority, confirming the order of the Competent Authority, in the writ petition, more so, when the declarants have not chosen to challenge the same. 10. Sri L.Prabhakar Reddy, learned counsel appearing for the respondents 7 to 14 submits that the said respondents who purchased individual plots from the original land holders during year 1994 to 2004 constructed houses and obtained regularisation of their occupation in G.O.Ms.No.455 by paying requisite amount to the Municipal Corporation as the land vested with the Government on declaring it as excess ‘vacant land’ and taking possession. The petitioner—Society entered into an agreement of sale and obtained irrevocable attorney from the land holders; one of the parties to the GPA died in the year 1993 whereas the suit for specific performance was filed in the year 1998. The respondents filed W.P.Nos.9045, 9051, 9065, 9066, 9067 and 9450 of 2003; 2745, 36161 of 1998 and 9083 and 21804 of 2000 when the official respondents tried to demolish the houses constructed by them and obtained interim order to protect their possession. On disposal of writ petitions W.A.No.1195 of 2004 was filed by the association, which was allowed on 03-08-2004. The petitioner— Society who filed writ appeal with leave was refused. On dismissal of W.P.No.2745 of 1998 possession was taken by the Competent Authority on 14-03-2008 under a cover of Panchanama pursuant to Section 10(5) notice issued on 26-09-2002. Once the possession is taken, proceedings under ULC Act will not get abated, when the land owners themselves have not questioned the dismissal order and mere filing implead petition the writ petitioners cannot question the dismissal order having not filed any appeal against the orders under Section 8(4) and 9 of ULC Act which have become final. The interim direction pending writ petition was only not to allot land in favour of third parties pending disposal of writ petition. In support of his submission reliance is placed on the judgment of the Supreme Court in OMPRAKASH VERMA v. STATE OF A.P.[4]. He further contends that on taking possession of the vacant land respondents filed application for regularisation of their possession and they have paid the amount also as per G.O.Ms.No.455, dated 29-07-2002. 11. Admittedly, the petitioner—Society purchased the land from the declarants for providing house site plots to its members and by the time the Society purchased the property the vendor of the petitioner— Society filed declarations under Section 6 of ULC Act. In the declaration filed by the declarants they have shown the land as agricultural land and also partly water body. 12. Section 2(q) of ULC Act defines “vacant land” as under: (q) "vacant land" means land, not being land mainly used for the purpose of agriculture, in an urban agglomeration, but does not include- (i) land on which construction of a building is not permissible under the building regulations in force in the area in which such land is situated; (ii) in an area where there are building regulations, the land occupied by any building which has been constructed before, or is being constructed on, the appointed day with the approval of the appropriate authority and the land appurtenant to such building; and (iii) in an area where there are no building regulations, the land occupied by any building which has been constructed before, or is being constructed on, the appointed day and the land appurtenant to such building: Provided that where any person ordinarily keeps his cattle, other than for the purpose of dairy farming or for the purpose of breeding of live-stock, on any land situated in a village within an urban agglomeration (described as village in the revenue records), then, so much extent of the land as has been ordinarily used for the keeping of such cattle immediately before the appointed day shall not be deemed to be vacant land for the purposes of this clause. 13. The respondents 5 and 6 have purchased the land under registered sale deeds dated 30-03-1995 when the appeals are pending; whereas respondents 7 to 14 purchased the property from 1994—2005 onwards which are not relevant. 14. It is admitted by the respondents 1 to 4 that in the master plan issued in G.O.Ms.No.319, dated 23-06-1980 for non-municipal areas the land in question in Sy.No.124 is reserved for agricultural and water body and in the declaration filed by the declarants under Section 6 of ULC Act along with exemption application under Section 20 and 21 of ULC Act, seeking exemption for construction of dwelling houses for weaker sections, it is shown in C.C.No.13496/76 partly agricultural in C.C.No.13517/76 partly Kunta and in C.C.No.13518/76 not vacant land. When the said declarations are pending, the petitioner—Society entered into an agreement of sale dated 06-08-1979 and supplemental agreement dated 22-07-1981 where the declarants gave irrevocable attorney to one of the members of the petitioner—Society and GPA holder filed supplemental statement along with exemption application under Section 20 of ULC Act on 01-03-1983 which is evident from the records. The petitioner—Society could not obtain sale deeds from the vendors, for the reason O.S.No.111 of 1975 was filed against the vendor of the petitioner—society which was dismissed on 02-07-1997 against which the plaintiffs filed A.S.No.37 of 1987 which was also dismissed on 16-02-1990; draft statement under section 8(1) of ULC Act was issued on 23-04-1988 by the 1st respondent and orders under Section 8(4) and 9 of ULC Act were issued on 25-08-1990. The Land User Certificate issued by HUDA on 22-01-1983 with regard to Sy.Nos.124, 130 and 131 which is partly earmarked for agricultural and partly for water body. In the Collector’s letter dated 20-12-1997, which was referred to by the 2nd respondent in the impugned order, discloses that Sy.Nos.124 and 123 of Lalaguda village are popularly known as Errakunta since there was water body on the grounds but the same are being converted into layout unauthorizedly. The Government Memorandum No.739/F1/88-1 M.A., dated 25-04-1988 shows that the residents of Nacharam village have represented to the Government to lay a natal road on the tank bund of Errakunta tank to connect their locality to Lalaguda village in the jurisdiction of Municipal Corporation of Hyderabad. The Commissioner reported that the Superintending Engineer (G1) inspected the area and reported that the tank Errakunta and the bund are situated in Sy.Nos.124 and 125 within the boundary of Municipal Corporation of Hyderabad. There is no proper approach road. The Government after considering the inspection report remitted the matter to the Municipal Commissioner to take necessary steps for the formation of road with a culvert as requested by the residents. 15. In the counter the respondents have not denied that Sy.No.124 is partly water body and partly agriculture. In the master plan issued in G.O.Ms.No.319, dated 23-06-1980 it was shown as agricultural land and water body, by the date the petitioners entered into an agreement i.e. 06-08-1979 followed by supplemental agreement dated 22-07-1981 with delivery of possession and irrevocable GPA obtained by the Society in favour of one of its members. Section 19 of ULC Act exempts Chapter III subject to sub- section (1) (e) (v) of Section 19 which reads thus: “(v) any co-operative society being a land mortgage bank or housing co-operative society, registered or deemed to be registered under any law relating to cooperative societies for the time being in force: Provided that the exemption under this clause, in relating to land mortgage bank, shall not apply to any vacant land held by it otherwise than in satisfaction of its dues.” Sub-section (2) of Section 19 reads as under: 2. The provisions of sub-section (1) shall not be construed as granting any exemption in favour of any person, other an authority, institution or organisation specified in sub-section (1) or who possesses any vacant land which is owned by such authority, institution or organisation or who owns any vacant land which in the possession of such authority, institution or organisation; Provided that where any vacant land which is in the possession of such authority, institution or organisation, but owned by any other person, is declared as excess vacant land under this Chapter, such authority, institution or organisation shall notwithstanding anything contained in any of the foregoing provisions of this Chapter, continue to possess such land under the State Government on the same terms and conditions subject to which it possessed such land immediately before such declaration. Explanation:- For the purposes of this sub- section, the expression “to possess vacant land” means to possess such land either as tenant or as mortgage or under a hire-purchase agreement or under an irrevocable power of attorney or partly in one of the capacity and partly in any other capacity or capacities.” Therefore, on the date when the Act came into force the land in question is not a vacant land and notified as such in the master plan to come within the definition of Section 2(q). Explanation (ii) to sub- section (1) of Section 6 of ULC Act will attract when the land was converted from agriculture land into non-agriculture purpose, which reads as under: Explanation: In this sub-section “commencement of the Act” mean:-- (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; (iii) where any notification has been issued under clause (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. 16. Even assuming that the petitioner—Society on purchase of property converted the same into house plots, the date on which such conversion took place is the date on which such land becomes vacant land or even if the sale of the property by the owners to the respondents 5 to 14 is taken into consideration, the same can be taken as the date on which land becomes vacant land. The Act comes into force on the date conversion took place. On which date the society is in possession of the property, which is evident from the agreement with delivery of possession and also executing irrevocable attorney. Therefore, the Society deemed to be holding property on the date when the Act came into force i.e. conversion of property from agricultural purpose into non-agriculture purpose. 17. The Government of Andhra Pradesh in Memo No.1623/UCI/80-1, dated 23-02-1981 instructed the Competent Authority to take action when the owner of an agricultural land applies for permission to the concerned local authority for sanction of lay out it ceases to be agricultural land and assumes the character of vacant land and the owner is legally bound to make a declaration under the provisions of the Act and, therefore, if any sale is made, both the owner and purchaser are liable for prosecution as breach of the Act. As regards the agricultural lands sold to a co-operative Housing Society, the Commissioner of Land Reforms and Urban Land Ceilings is informed that such transactions are valid transactions and hence there is no ground to prosecute the landlord as there is no conversion of agricultural land for non-agricultural purpose by the land owner himself. After getting the land registered, the society will take further action to get layouts approved and get the lands converted for non- agricultural purposes. 18. Considering similar facts, this Court in K.B. SURENDRA KUMAR (DIED) AND OTHERS v. SO AND CA, ULC. VIJAYAWADA (3 supra) (by one of us AGR,J.) held that on the date of commencement of the Act if the land is held by a society, the entire Chapter III is not applicable to the above vacant land even assuming that if the land is converted into a non-agricultural purpose by the Society. That is the purport of Chapter III. The land will become vacant land only on the date when it was converted as such. Once the society has no obligation to file a declaration under Section 6 of the Act, there is no bar for the society to sell the said land to its members. 19. After referring to the judgment of this Court in M/s.L.S.& CO. v. STATE OF A.P.[5] with regard to issuance of draft statement and final statement under Sections 8(4) and 9 of the Act respectively and the effect of Rule 5 of the Rules where this Court quashed final statement under Section 8(4) and 9 of ULC Act and consequential proceedings under Section 10(1), 10(3) and 10(5) for not issuing notice to the interested persons. The same was confirmed in W.A.No.963 of 2000 and batch and Civil Appeal Nos.7808, 7806 and 7807 of 2002 filed against the said judgment were also dismissed on merits by the Apex Court on 08-04- 2009. 20. The Supreme Court in STATE OF MAHARASHTRA v. E.BILLIMORIA (2 supra) while interpreting Section 2(q) of ULC Act categorically held that a plain reading of definition under Section 2(q) of ULC Act would show that any land on which construction is not permissible under the building regulations in force in the notified area has to be excluded as it is not a vacant land. 21. The 2nd respondent—Appellate Authority has not taken into consideration, the agreement of sale followed by supplemental agreement evidencing delivery of possession with irrevocable power of attorney executed