Section 20 exemption under the Urban Land Act can lift transfer restrictions where substantial undue hardship is shown.

Section 20 of the Urban Land (Ceiling & Regulation) Act, 1976 exempts vacant land from Chapter III restrictions, including the prohibition on transfer in Sections 5(3) and 10(4), when a valid exemption order is made subject to its terms. Clause (b) is available to relieve substantial undue hardship caused by the chapter's application, and that hardship is not confined to narrow non-economic cases. The requirement to record reasons in writing makes the exercise of power reviewable, while exemption conditions and withdrawal power under sub-section (2) act as safeguards. In group housing situations, an absolute bar on transfer may defeat the statutory object.

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Issues: Whether an exemption granted under Section 20 of the Urban Land (Ceiling & Regulation) Act, 1976, particularly under clause (b) of sub-section (1), can permit transfer of excess vacant land and whether the earlier view that such transfer is impermissible was correct.

Analysis: Section 20 begins with a non-obstante clause and exempts the vacant land from the provisions of Chapter III, subject to conditions, if any, specified in the exemption order. The restriction on transfer contained in Sections 5(3) and 10(4) is part of Chapter III and therefore ceases to apply when valid exemption is granted under Section 20. Clause (a) is directed to exemption in the public interest on stated relevant factors, while clause (b) is intended to relieve a person from undue hardship caused by the application of Chapter III. The phrase "undue hardship" cannot be confined so narrowly as to exclude every economic hardship, though the hardship must be substantial and must be shown on the facts of each case. The proviso requiring reasons recorded in writing reinforces the need for a judicious and reviewable exercise of power, and conditions attached to exemption, along with the power of withdrawal under sub-section (2), are adequate safeguards against misuse. In a case such as group housing, an absolute prohibition on transfer may frustrate the object of the enactment.

Conclusion: The earlier view that Section 20(1)(b) does not permit exemption for transfer of excess vacant land was incorrect. A valid exemption under Section 20, including under clause (b), can operate to lift the statutory restriction on transfer, subject to the conditions of the exemption and judicial scrutiny of the recorded reasons.

Final Conclusion: The impugned restriction founded on the contrary view could not be sustained, and the petitioner was entitled to relief consistent with the construction placed on Section 20.

Ratio Decidendi: An exemption granted under Section 20 of the Urban Land (Ceiling & Regulation) Act, 1976 exempts the land from the restrictions in Chapter III, including the prohibition on transfer, and clause (b) may validly apply where the application of the chapter causes substantial undue hardship, provided reasons are recorded and conditions are imposed.

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