Urban land ceiling law upheld in substance, but transfer restrictions on built-up property within ceiling area were invalidated.

The Urban Land (Ceiling and Regulation) Act, 1976 was treated as a social welfare measure aimed at preventing concentration of urban land and promoting equitable distribution in line with Article 39(b) and (c). The definition of family, the cap on the amount payable, and the disposal scheme for excess vacant land were upheld as constitutionally supportable and protected by Articles 31-B and 31-C. By contrast, Section 27(1) was read as going beyond the vacant-land ceiling scheme because it restricted transfers of built-up property within the permissible ceiling area and lacked adequate guiding standards, and was invalid to that extent.

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Issues: (i) whether the Urban Land (Ceiling and Regulation) Act, 1976, and the provisions defining family, fixing the maximum amount payable, and governing disposal of acquired vacant land furthered the Directive Principles in Article 39(b) and (c) and were protected by Articles 31-B and 31-C of the Constitution; (ii) whether Section 27(1), insofar as it restricted transfer of built-up property within the ceiling area, was constitutionally valid.

Issue (i): Whether the Act and the provisions defining family, fixing the maximum amount payable, and governing disposal of acquired vacant land furthered the Directive Principles in Article 39(b) and (c) and were protected by Articles 31-B and 31-C of the Constitution.

Analysis: The controlling majority held that the legislation was a measure to prevent concentration of urban land and to secure equitable distribution in furtherance of the Directive Principles. The definition of family in Section 2(f) was treated as a legislative device for ceiling purposes and not as creating unconstitutional discrimination. Section 11(6), which capped the amount payable at two lakhs of rupees, was held not to be illusory or confiscatory. Section 23 was construed as requiring disposal of excess vacant land in a manner that subserved the common good, and the broad language was read in the constitutional setting of public purpose and social welfare. On that approach, the Act substantially furthered Articles 39(b) and (c) and retained the protection of Articles 31-B and 31-C, subject to the partial invalidation of Section 27(1).

Conclusion: The challenge to the Act as a whole, and to Sections 2(f), 11(6), and 23, failed.

Issue (ii): Whether Section 27(1), insofar as it restricted transfer of built-up property within the ceiling area, was constitutionally valid.

Analysis: The majority held that the Act was concerned with vacant land, not with imposing a ceiling on built-up property within the permissible ceiling area. Section 27(1) extended beyond the scheme of the Act by restricting transfers of land with buildings, including property otherwise outside the ceiling regime. The provision also lacked adequate guiding standards for the competent authority's exercise of permission-granting power, rendering it vulnerable as arbitrary.

Conclusion: Section 27(1) was invalid insofar as it imposed a restriction on transfer of any urban or urbanisable land with a building, or a portion of such building, which was within the ceiling area.

Final Conclusion: The legislation was sustained in substance, but the restraint on transfer of built-up property within the ceiling area could not stand.

Ratio Decidendi: A ceiling law directed at vacant urban land may be upheld as a social welfare measure furthering the Directive Principles, but a restriction that goes beyond that scheme and regulates transfers of built-up property within the permissible ceiling area, without adequate statutory guidance, is ultra vires to that extent.

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