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Shridhar C. Shetty (Deceased) Thr. LRs. v. Addl. Collector and Competent Authority

Civil Appeal · 2020 INSC 529Decided 2 Sept 2020
Civil Appeal No. 2019 of 2010
Justice Rohinton Fali Nariman · Justice Navin Sinha

Background

The appellant (a builder) was granted exemption under the Urban Land (Ceiling and Regulation) Act, 1976 to construct tenements on two plots, on condition that 20% of the built-up area (ultimately 14 tenements) be handed over to government nominees from weaker sections. He developed only one of the two plots, handed over just seven tenements, and relied on a "No Objection Certificate" to argue his obligation was complete, while also arguing that a later development agreement shifted liability for the shortfall onto the builders he had brought in. The competent authority instead of withdrawing the exemption for breach, raised a demand of over Rs 51 lakh (market value of the remaining seven tenements) as arrears of land revenue, which was upheld by the High Court.

Decision Breakdown

The Supreme Court agreed that the appellant had breached the conditions of the composite exemption and that the "No Objection Certificate" was conditional, not absolute, and could not absolve him; it also rejected his attempt to shift liability to the builders, since he was the applicant who obtained the exemption and gave the relevant undertakings. However, on the pure legal question of remedy, the Court held that the Urban Land Ceiling Act only empowered authorities to withdraw the exemption (with consequences under the Act) or prosecute for breach under Section 38(4): it gave the competent authority no statutory power to instead demand the cash market value of undelivered tenements as "arrears of land revenue." Since this demand fell outside the Act's actual powers, it was unsustainable and arbitrary, regardless of the undisputed breach, and the appeal was allowed.

Lesson Learnt

A government authority can only recover dues or impose consequences using the specific powers a statute actually grants it, even where a citizen has clearly broken the conditions of a government order, authorities cannot invent new remedies (like a cash demand) that the law never provided for.

Official source (sci.gov.in)View Judgment (PDF)

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