HON’BLE SRI G.S. SINGHVI, THE CHIEF JUSTICE AND HON’BLE SRI JUSTICE G. BHAVANI PRASAD W.A. NOs.1336 and 1338 of 2005 W.A. No.1336 of 2005: Between: Paruchuri Ratnakar Rao, S/o late Venkatnarasaiah, R/o.1-7-1170, Advocates’ Colony, Hanamkonda, Warangal District … Appellant/Petitioner and The State of Andhra Pradesh, rep. by its Principal Secretary, Revenue (UC-II) Department, Secretariat, Hyderabad and three others … Respondents W.A. NO.1338 of 2005: Between: Paruchuri Shiva Rao, S/o late Venkatnarasaiah, R/o 1-7-1170, Advocates’ Colony, Hanamkonda, Warangal District … Appellant/Petitioner and The State of Andhra Pradesh, rep. by its Principal Secretary, Revenue (UC-II) Department, Secretariat, Hyderabad and three others … Respondents :: COMMON JUDGMENT :: Counsel for the appellant/petitioner in both the appeals : Sri B. Adinarayana Rao Counsel for respondents in both the appeals : Government Pleader for Assignment Date: -6-2006 Per G.Bhavani Prasad, J Whether the purchaser of land declared surplus under the Urban Land (Ceiling and Regulation) Act, 1976 (for short ‘the Act’) can claim benefit of the policy contained in G.O.Ms.No.733, Revenue (UC-II) Department, dated 31-10-1988 and seek exemption under Section 20 of the Act is the question which arises for determination in these appeals filed by the appellant against orders dated 7-7-2005 passed by the learned Single Judge in Writ Petition Nos.14662 and 14675 of 2005 respectively whereby he refused to quash final statement issued by Special Officer-cum-Competent Authority, Urban Land Ceiling, Warangal (hereinafter described as ‘Special Officer’) under Section 9 and notifications issued under Section 10 (3) and (6) of the Act in respect of land comprised in Survey No.182/4 belonging to late Sri V. Lakshmaiah. The appellants claim to have purchased 3448.50 square yards of land comprised in Survey No.182/4 situated at Shayampet, Hanamkonda Mandal, Warangal District from V. Veera Swamy @ Kotaiah, V. Veeramallu, V. Veeresham and V. Laxminarayana, all sons of V. Laxmaiah, V. Prabhakar S/o.Veera Swamy @ Kotaiah and V. Mallesham S/o.V. Veeramallu by registered sale-deeds dated 26-8- 1997. In the year 2005, they filed separate writ petitions alleging therein that in the second week of June, 2005, the officials of the office of the Mandal Revenue Officer, Hanamkonda (for short ‘the MRO’) came to their land and attempted to take measurements. On being questioned, they told that the land had been declared surplus by the Special Officer and, they were taking measurements of the land, as per the directions of District Collector, Warangal and the MRO. Immediately thereafter, the appellants approached the Special Officer and came to know that V. Lakshmaiah (father and grandfather of their vendors) had filed declaration under Section 6 of the Act in respect of the agricultural lands admeasuring Ac.0-04 guntas in Survey No.74/C, Ac.0-04 guntas in Survey No.74/D, Ac.0-13 guntas in Survey No.83/B, Ac.0-14 guntas in Survey No.83/C, Ac.0-28 guntas in Survey No.169/C, Ac.1-02 guntas in Survey No.182/4 and Ac.0-02 guntas in Survey No.180/1 in total Ac.5-04 guntas situated at Shayampet, Hanamkonda Mandal, Warangal District. He gave out that he had four major sons at the time of coming into force of the Act. After considering the same, the Special Officer issued final statement on 16-9-1981 under Section 9 of the Act and declared that the land owner, namely, V. Lakshmaiah was holding 18,328 square metres of excess land. This was followed by notification issued under Section 10 (3) of the Act whereby an extent of 889 square metres in Survey No.169/C, 744 square metres in Survey Nos.74/C and 74/D, 2723 square metres in Survey Nos.83/8 and 83/C, 5813 square metres in Survey No.181/4 and 8159 square metres in Survey No.182/4 was declared as surplus land. After sometime, the Special Officer issued notification dated 24-10-1992 under Section 10 (6) of the Act. The possession of the excess land is said to have been taken on 16-11-1998. In the writ petitions filed by them, the appellants prayed for quashing of the final statement dated 16-9-1981 and notifications issued under Section 10 (3) and (6) by contending that in terms of G.O.Ms. No.733, dated 31-10-1988, the land belonging to late Sri V. Lakshmaiah is liable to be exempted. They pleaded that the land in question was neither ‘urban land’ within the meaning of Section 2 (o) nor it could be treated as ‘vacant land’ within the meaning of Section 2 (q) of the Act. The learned Single Judge held that the writ petitions were highly belated and are liable to be dismissed on that ground. He further held that in view of the declaration filed by the original owner under the Act, the land in question will be deemed to be ‘urban land’ and, therefore, it is not open to the purchaser to question the declaration of surplus land by claiming that the land does not fall within the definition of ‘urban land’ or ‘vacant land’. Along with the appeals, the appellants filed WAMP No.2433 of 2005 in W.A.No.1336 of 2005 and WAMP No.2435 of 2005 in W.A.No.1338 of 2005. By an order dated 21-7-2005, the Division Bench directed the respondents not to disturb the possession of the appellants. On notice, the respondents filed WAVMP No.3620 and 3621 of 2005 for vacating the interim orders. In the affidavit filed by the Special Officer in support of these applications, it has been averred that on receipt of the declaration filed by Sri V. Lakshmaiah under Section 6 (1) of the Act, verification report was obtained from the concerned authorities and then draft statement was issued identifying the excess vacant land measuring 18,328 square metres. The land owner did not raise any objection against the draft statement. Therefore, final order was passed on 16-9-1981 under Section 8 (4). This was followed by issuance of final statement under Section 9. Thereafter, notifications were issued under Section 10 (1) and 10 (3) respectively. After sometime, notice dated 24-12-1991 was issued under Section 10 (5) of the Act and the declarant was asked to voluntarily surrender possession of the excess land. Memos dated 28-7-1992, 27-10-1992 and 27-3-1993 were also issued to the field staff under Section 10 (6) of the Act and they took possession by duly preparing a panchanama and the land was handed over to the MRO on 16-11-1998 for disposal in accordance with law. In the affidavit of the Special Officer it was further averred that with the issuance of notification under Section 10 (3) and notice under Section 10 (5), the surplus land stood vested in the State Government free from all encumbrances, but with a view to defeat the proceedings held under the Act, the heirs of late Sri V. Lakshmaiah colluded with the appellants and sold the land to them. Still further, it has been averred that G.O.Ms.No.733 is not applicable to the appellants’ case because order dated 16-9-1981 passed under Section 8 (4) had become final, since no appeal was filed against the same, and the land owner, namely, V. Lakshmaiah did not question the declaration of surplus land made by the Special Officer. The appellants filed counter-affidavits reiterating their claim for exemption in terms of G.O.Ms.No.733 by contending that the land in question does not fall within the definition of ‘vacant land’ and, as such, there could be no embargo on its transfer. Sri B. Adinarayana Rao, learned counsel for the appellants vehemently contended that the lands in question squarely fall within the scope of G.O.Ms.No.733 dated 31-10-1988, the exemption under which is automatic, as held in Nalla Yakoob v. The Government of Andhra Pradesh[1] and P.S. Rao v. Special Officer and Competent Authority, Urban Land Ceiling, Hyderabad[2], which was upheld by the Supreme Court in Special Officer and Competent Authority, Urban Land Ceilings, Hyderabad v. P.S. Rao[3]. He also relied on M.V.S. Satyanarayana v. Government of Andhra Pradesh[4] and Sarojini v. Government of Andhra Pradesh[5] to contend that when once a blanket exemption under Section 20(1) was granted, obtaining exemption from the authorities under the Act does not arise. He contended that so long as the proceedings under Chapter-III of the Act are not concluded, the exemption under G.O.Ms.No.733 is available not only to the declarant but also to the purchasers. Hence, he argued that irrespective of the long lapse of time since their respective purchases till the writ petitions, the appellants are entitled to the reliefs as a matter of right. The learned Government Pleader for the respondents referred to clarificatory order by the Supreme Court in Special Officer & Competent Authority, ULC v. P.S. Rao[6] and Anne Ramachandra Rao v. Government of Andhra Pradesh[7]. He also relied on Zarina and others v. Special Officer and Competent Authority, Urban Land Ceiling, Vijayawada[8] and P. Ganeswara Rao v. Secretary to Government, Revenue Department Hyderabad[9], apart from the unreported decisions in Writ Appeal No.57 of 2002, dated 01-04-2002[10] and Writ Petition Nos.17759 of 2005 and batch, dated 09-9-2005[11]. He argued that in the light of the principles laid down in the said decisions, firstly the purchases by the appellants contrary to the provisions of the Act are null and void; secondly, the proceedings under Chapter-III of the Act attained finality much before the respective purchases by the appellants disentitling them from claiming any benefit under G.O.Ms.No.733; thirdly, the declarant alone and not the third parties can challenge any proceedings under the Act. The learned Government Pleader, therefore, supported the dismissal of the writ petitions at the admission stage by the learned Single Judge. We have carefully perused the record and gave our thoughtful consideration to the submissions of the learned counsel for both parties. Before examining the facts in issue, it is necessary to refer to the provisions and principles governing such situation. The Urban Land (Ceiling and Regulation) Act, 1976 defined ‘urban land’ in Section 2(o) and ‘vacant land’ in Section 2(q) and stated in the explanation to Section 2(o) as to what agriculture includes and what land shall not be deemed to be used mainly for the purpose of agriculture for the purpose of Section 2(o) and Section 2(q). In Chapter-III of the Act, Section 3 prohibited any person holding any vacant land in excess of the ceiling limit prescribed by Section 4. Section 5(1) provided for taking into account the extent of land transferred in any manner by any person holding vacant land in excess of the ceiling limit at any time commencing from the appointed day for calculating the excess vacant land and Sub-Section (2) of Section 5 provided that the transfer of the excess vacant land selected under Sub-Section (1) shall be deemed to be null and void. Sub-Section (3) of Section 5 prohibited transfer of any land by a person holding vacant land in excess of ceiling limit before he furnished a statement under Section 6 and notification is published under Section 10(1). Section 6(1) prescribed filing of a statement by the persons holding vacant land in excess of the ceiling limit before the competent authority and Section 8 provided for preparation of a draft statement by the competent authority in respect of the declarant on the basis of Section 6 statement and after any enquiry. The draft statement shall be served as prescribed calling for objections within 30 days or any extended further period and the competent authority shall pass orders after giving a reasonable opportunity of being heard to the objectors. A final statement determining the vacant land held in excess of the ceiling limit by the declarant shall be made and served on the concerned persons under Section 9. After such service, a notification under Section 10(1) shall be issued calling for any claims by any person interested in the vacant land to be acquired by the State Government and after considering and determining such claims, a declaration under Section 10(3) by a notification published in the official State Gazette shall be made vesting the excess vacant land absolutely in the State Government free from all encumbrances. Any transfer in any manner between the date of Section 10(1) notification and the date of declaration under Section 10(3) was declared null and void by Section 10(4). The competent authority will give notice in writing ordering any person in possession of the vested vacant land to surrender or deliver possession to the State Government or a person authorized by the State Government within 30 days of service of notice under Section 10(5). In case of refusal or failure to comply with the same, the possession can be taken under Section 10(6) using necessary force also. Section 20 gives the power to the State Government to exempt. Under clause (a) of Sub-Section (1), the Government may exempt vacant land subject to such conditions as may be specified, if it is satisfied either on its own motion or otherwise that it is necessary or expedient in the public interest so to do having regard to the location of the land, the proposed user and other relevant factors. Under clause (b) of Sub-Section (1), the exemption subject to such conditions can be considered if the application of provisions of Chapter-III would cause undue hardship to the person holding excess vacant land. In exercise of the power under Section 20(1)(a), the State Government issued G.O.Ms.No.733 Revenue (UC-II) Department, dated 31-10-1988. The Government noticed that large extent of vacant lands and agricultural lands could not be used to subserve the common good, such as construction of buildings in Hyderabad, Visakhapatnam, Vijayawada, Guntur and Warangal urban agglomerations and that in spite of the scarcity of housing accommodation, the entire building activity came to a stand-still within the peripheral areas of five urban agglomerations and thought it necessary and expedient in public interest to avoid the resultant hardship and to subserve the common good to grant a general exemption and consequently stated: “Now, therefore, in exercise of the powers conferred under Section 20(1)(a) of the Urban Land (Ceiling and Regulation) Act, 1976 and of all other powers hereunto enabling and in supersession of all other orders issued previously in this behalf from time to time, the Government of Andhra Pradesh hereby accord: (a) exemption of the vacant land or the agricultural land which is likely to be used for non-agricultural purposes at the option of the holder thereof, or both, to a maximum extent o f five acres situated within the peripheral area as specified in column (3) of Schedule-I to the Urban Land (Ceiling and Regulation) Act, 1976 of the Hyderabad Urban Agglomeration, Visakhapatnam Urban Agglomeration, Vijayawada Urban Agglomeration, Guntur and Warangal Urban agglomerations in excess of the ceiling limit, from the provisions of Chapter III of the said Act; and (b) permission to transfer any such land or part thereof by a person by way of sale, mortgage, gift, lease or otherwise, to the extent of five acres of land in excess of ceiling limit, excluding the area required for roads, hospitals and for other public use.” The Government also decided to suo motu make necessary modifications in the respective master plans to give effect to this order and issued consequential orders in G.O.Ms.No.209 M.A. Housing, Municipal Administration and Urban Development (I-I) Department, dated 01-6-1989. Considering the effect of this general exemption in Nalla Yakoob (1 supra), the learned Single Judge of this Court held: “In view of issuance of G.O.Ms. No.733, dated 31-10-1988, the earlier G.O.Ms. No.323, M.A. dated 17-5-1977 has lost its significance. The liability to surrender the excess land has to be determined now in the context of G.O. Ms.No.733 Revenue (UC-2) Department, dated 31-10-1988 and not otherwise. This G.O. Ms.No.733, dated 31-10-1988 has been issued by the Government in exercise of its powers under Section 20(1)(a) of the Urban Land (Ceiling and Regulation) Act, 1976 enunciating a policy to grant exemption of vacant land in the peripheral area as specified in Column (3) of Schedule-I to the Urban Land (Ceiling and Regulation) Act, 1976 prescribing a maximum of 5 acres of land, that too, after making provision for roads, open spaces, hospitals and school. This is a general exemption granted not contemplating making any application by any individual. This exemption is automatic, provided, two conditions are complied; namely, (1) that the land is in peripheral area; and (2) that the maximum extent is five acres exclusive of the land set apart towards roads, open spaces, school and hospital.” In P.S. Rao’s case (2 supra), another learned Single Judge of this Court was considering the legal impact of G.O.Ms.No.733 and held: ”The G.O. makes it very clear that the land situated in the peripheral area as specified in Column 3 of Schedule I to the Act of the Hyderaban Urban Agglomeration, Visakhapatnam Urban agglomeration, Guntur Urban Agglomeration, Warangal Urban agglomeration in excess of the ceiling limit is exempted from the provisions of Chapter III of the Act. At the threshold, it can be noted that what is assailed before the Court in the present Writ Petition is the validity of the appellate order arising out of the notice of the first respondent under Section 10(5) of the Act. Section 10 falls within Chapter III of the Act. On that count itself, even accepting the argument of the learned Government Pleader for Revenue that the G.O. is applicable prospectively and not retrospectively, even then the petitioner is entitled to exemption inasmuch as he has assailed the validity of the action taken under Section 10(5) of the Act calling upon him to deliver the excess land determined by the second respondent. Added to this, it is well settled position in law that once a statutory authority by exercise of its delegated power frames rules or issues notifications exercising power of exemption, such exemption would form part of the statute itself and such exemption is required to be implemented and worked out with effect from the date of the statute itself.” The Supreme Court was considering the Special Leave Petition against the above referred to decision and the decision of the Division Bench affirming the same, in the Special Officer and Competent Authority, Urban Land Ceilings, Hyderabad’s case (3 supra) and interpreting the relevant provisions of the Act, held: “But, the word “hold” in Section 20(1)(a) or Section 20(1)(b) cannot, in our opinion, have the same meaning that can be attributed to it as in Section 2 (l). The very definition in Section 2(l) states that the sub-section applies unless there is anything in the context which suggests a different meaning to be given. In our view, in the context of Section 20(1)(a) and Section 20(1)(b), the definition given in Section 2(l) cannot be applied. The reason is that such a construction will make Section 20 unworkable and otiose. We have pointed out above that it is not possible to make any meaningful application for exemption under Section 20(1)(a) or (b) unless the exact quantum of excess is determined under Section 10 after following the various provisions of the Act relating to statutory deductions and mode of computation. If the contention of the State referred to above is to be accepted, then the peculiar position will be as follows. As stated by us, before the excess is determined, a person will not be able to seek exemption because he does not know what is the actual excess land held and once the excess is determined, he cannot apply because he is not holding the excess land. Thus, the entire object of Section 20 will be frustrated. That is why we say that the definition of the words ‘to hold’ in Section 2(l) cannot be applied in the context of Section 20(1) (a) or Section 20(1)(b). We are, therefore, unable to accept the contention of the learned Counsel for the State that an application for exemption can be maintained only before the excess is determined under Section 10. In our view, the scheme of the Act is to the contrary. The view taken by the High Court following the decision of this Court in T.R. Thandur v. Union of India and others, 1996 (3) SCC 690; Darothi Clare Parreira (Smt.) and others v. State of Maharastra and others, 1996 (9) SCC 633 and State of A.P. represented by Secretary to Government, Revenue Department, Hyderabad v. Valluru Venkateswara Rao, 1997 (3) ALD 669 = 1997(3) ALT 417 (DB), does not call for any interference.” Accordingly, the Supreme Court did not consider it necessary to interfere with the judgment of the High Court which held that Section 20 application is maintainable even if filed after an order of vesting of excess land passed under Section10. The State of Andhra Pradesh filed an application for clarification on the above judgment and in Special Officer and Competent Authority, ULC, Hyderabad’s case (6 supra), the Supreme Court referred to the earlier reasoned order holding that notwithstanding the fact that vesting order was passed under the provisions of the Act, it would be open to the owner of the land whose land had so vested, to seek exemption under the provisions of the Act and the request for clarification as to whether if possession had not been taken pursuant to the order of vesting, the owner of the land had a right to seek exemption from the provisions of the Act under Section 20 or under Section 10 by virtue of the G.O. issued by the Government. The Supreme Court fully endorsed the view expressed by the Division Bench of the High Court, extracted as hereunder: “It will be noticed that in the order of the Division Bench of the High Court, this position has been clearly explained. The Bench said that “the question of retrospectivity of the exemption order does not really arise for the reason that the proceedings under Chapter III of the Act are still pending, may be at the final stage” The Division Bench further observed that: “Be that as it may, in the present case, the exemption order which is of a general nature is under Section 20(1)(a), and it was issued after the vesting order under Section 10(3) of the Act was published. That the exemption could be granted even after vesting, being the proposition definitely laid down by the Supreme Court and this Court, there is no reason why such exemption shall not have the effect of taking the land out of the purview of the Act so long as the proceedings under Chapter III have not been concluded in their entirety.” The Division Bench further observed as follows: “This is yet another consideration which weighs with the Court to hold that the exemption granted under G.O. No.733 will be attracted to any excess land in respect of which at least the proceedings under Chapter III have not yet come to an end”.” The Supreme Court, however, did not decide the situation where possession has been taken over and where third party rights have not intervened. Anne Ramachandra Rao’s case (7 supra) is a case where the purchasers from the declarant who obtained a compromise decree for specific performance from a Civil Court, claimed exemption under G.O.Ms.No.733. The learned Single Judge firstly held: ”The lands demonstrably fall to be considered within the provisions of the Act. In view of Section 5, the transfer of the land in favour of the petitioner is void, such a determination, of the invalidity of the transfer in favour of the petitioner, having already been made by the order of this Court dated 19-12- 1989, while dismissing W.P.No.1934 of 1987 filed by the petitioner. In the circumstances the petitioner derives no title to the land and as such possess no locus standi to claim exemption in respect of the said lands.” After referring to Nalla Yakoob’s case (1 supra) and P.S. Rao’s case (2 supra) confirmed by a Division Bench and further in Special Officer and Competent Authority, Urban Land Ceilings Hyderabad’s case (3 supra), the learned Single Judge extracted the declaration of law by the Supreme Court in Darothi Clare Parreira (Smt.) and others v. State of Maharashtra and others[12] and was of the view that: “In view of the aforesaid clear declaration of law, the process of consideration whether to grant exemption under Section 20, would arise only after determination of the excess land