Statutory authority cannot recover market value as arrears without express power; undertakings cannot expand exemption enforcement.

The Supreme Court of India noted that under the Urban Land (Ceiling and Regulation) Act, 1976, the competent authority could withdraw an exemption or proceed on breach of conditions, but could not recover the market value of unfulfilled tenements as arrears of land revenue unless the statute expressly authorised that recovery. An undertaking by the landholder could not enlarge statutory power, and failure to withdraw the exemption did not legitimise a monetary demand outside the Act. The later attempt to apply a 5% cap based on Shantistar Builders was rejected because that decision had been treated as prospective and did not alter the exemption conditions in the present matter.

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Issues: (i) Whether the competent authority under the Urban Land (Ceiling and Regulation) Act, 1976 could recover the market value of the unfulfilled tenements as arrears of land revenue when the exemption was not withdrawn. (ii) Whether the decision in Shantistar Builders permitted limiting the exemption condition to 5% of the constructed tenements.

Issue (i): Whether the competent authority under the Urban Land (Ceiling and Regulation) Act, 1976 could recover the market value of the unfulfilled tenements as arrears of land revenue when the exemption was not withdrawn.

Analysis: The statutory scheme under Sections 20 and 21 permits withdrawal of exemption or declaration of excess land upon breach of conditions, but does not confer a power to demand the market value of the balance tenements as money recoverable as arrears of land revenue. The authority is a creature of statute and cannot enlarge its powers by relying on the appellant's undertaking. Failure to withdraw the exemption did not validate a monetary demand outside the Act. The impugned demand was therefore beyond statutory jurisdiction.

Conclusion: The demand for the market value of the remaining tenements was ultra vires the Act and unsustainable, in favour of the assessee.

Issue (ii): Whether the decision in Shantistar Builders permitted limiting the exemption condition to 5% of the constructed tenements.

Analysis: The later plea for a 5% cap was rejected because the cited decision had been treated as prospective in operation and did not alter the conditions governing the exemption in the present case.

Conclusion: The claim for a 5% cap was rejected, against the assessee.

Final Conclusion: The appellate order and the demand raised under the exemption conditions were set aside, and the assessee obtained relief against the recovery.

Ratio Decidendi: A statutory authority cannot recover a monetary amount as arrears of land revenue unless such recovery is expressly authorised by the governing statute, and an undertaking by the affected party cannot expand that statutory power.

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