Cessation of land exemption governs deemed acquisition, barring reworking of ceiling excess on the notified date.

Land exempted under Section 81(1)(k) of the Kerala Land Reforms Act continued to enjoy exemption on the notified date, but once the proviso operated and the exemption ceased from the date fixed by the Collector, Explanation I to Section 87 deemed the land acquired only from that cessation date. Section 87 thus operated independently on the basis of the later cessation date, and Section 85 could not be invoked again to treat the land as excess land held on the notified date. The High Court's view was sustained and the appeal failed.

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Issues: Whether land exempted under Section 81(1)(k) of the Kerala Land Reforms Act, which was in force on the notified date, ceased to be exempted only prospectively from the date fixed by the Collector so as to attract Explanation I to Section 87, and whether proceedings could again be taken under Section 85 by treating the excess land as held on the notified date.

Analysis: Section 81(1)(k) grants exemption to land belonging to or held by an industrial or commercial undertaking and set apart for industrial or commercial use, but the proviso causes the exemption to cease if the land is not actually used within the time specified by the District Collector. Explanation I to Section 87 provides that where exempted land is in force on the notified date, it is to be deemed to have been acquired after that date from the date on which the exemption ceases. On the plain language of the provision, the cessation date, and not the notified date, governs the deemed acquisition. Section 87 therefore operates in its own field, and the mechanism of Section 85, which applies to excess land determined as on the notified date, cannot be invoked once the case falls within Section 87.

Conclusion: The exemption ceased only from the date fixed by the Collector, and Explanation I to Section 87 applied. Proceedings could not be taken again under Section 85 by treating the land as excess on the notified date.

Final Conclusion: The High Court's view was sustained, and the appeal failed.

Ratio Decidendi: Where exempted land continues to enjoy exemption on the notified date but the exemption later ceases under the proviso to the exemption clause, Explanation I to Section 87 deems the land to have been acquired only from the date of cessation, and Section 85 cannot be used to rework ceiling excess as on the notified date.

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