1. Writ Appeal 791 of 1994 is filed by the respondent/State in the writ petition W.P.19026 of 1988 and Writ Appeal 851 of 1994 is filed by the petitioner in the said writ petition assailing the judgment of the learned single Judge dated 29-3-1994.

2. The writ petitioner/appellant will be referred as petitioner and the State will be referred as respondent for the purpose of convenience.

3. The facts of the case are that the petitioner is the owner of the land admeasuring 24838 square meters in Vijayawada town, Krishna district. He filed a declaration under Section 6 of the Urban Land (Ceiling and Regulation) Act, 1976 (for short 'the Act'). Thereafterwards, the procedure laid down under Sections 8 and 9 of the Act was followed. It was found that the petitioner is holding excess land of Ac.1-44 cents equivalent to 5849 square metres. The petitioner filed a petition under Section 20(1) of the Act seeking exemption stating therein that before the commencement of the Act itself, i.e., on 1-5-1975 he entered into agreement with Messrs. Ushodaya Publications (Private) Limited for lease of the land for a period of thirty-three years for establishment of their industry for publication of the newspaper in Telugu. It is also stated that he has given possession of the land to the said Company, that the lessee has already invested huge amounts in the construction of buildings and on the machinery and they also started publication of newspaper 'Eenadu' from Vijayawada, that the said industry is a small scale industry which has a considerable employment potentiality for local technical candidates, and that it is also the policy of the Government of Andhra Pradesh to encourage small scale industries in various towns and rural areas by giving number of incentives, concessions, central subsidy, State subsidy, power tariff, margin money loan, marketing facilities etc. It is further stated that exemption of the land was given under the Act to encourage establishment of small scale industries and therefore, the petitioner requested that exemption may be granted. It is also the case of the said M/s. Ushodaya Publications that they also filed petitions for exemption before the Government, that the Government has granted exemption as per G.O.Ms. No. 7, Revenue (U.C.1II) Department dated 3-1-1984 and that thereafterwards as the area is not correctly mentioned an errata was issued as per G.O.Ms. NO. 766, Revenue (U.C.III) Department dated 8-5-1984. While granting exemption as per sub-para (i) of para 4 of the said G.O., four conditions were stipulated as per Clauses (a) to (d) under sub-para (i) of para 4 of the said G.O. which are as follows:-

"(a) that it should not be leased out or sold without the permission of the Government;

(b) that the land should be utilized for the purpose for which it is exempted within three years from the date of grant of exemption failing which the exemption granted shall stand cancelled and the said land will be subject to the provisions of the Urban Land (Ceiling and Regulation) Act, 1976;

(c) that the land may be mortgaged to any Bank as defined in Clause (iii) of Sub-section (1) of Section 19 including Andhra Pradesh State Financial Corporation for the purpose of raising finances for the industry;

(d) that the land so exempted above would vest in the Government after the expiry of the aforementioned lease period under the provisions of the said Act."

4. The petitioner challenged in the writ petition that Clause (d) in para 4 of the said G.O. is arbitrary and prayed to issue a writ for deletion of the said Clause. On behalf of the respondent it was contended that the said Clause (d) of para 4 of the impugned G.O. is in consonance with Section 20 and other provisions of the Act, and that State has got power to impose any condition while granting exemption, that there are no merits in the writ petition and that the writ petition is liable to be dismissed.

5. The learned single Judge after elaborately considering the rival contentions and placing reliance on the judgments of the Gujarat High Court in Manilal v. State, and Andhra Pradesh High Court in K. Co-op. Building Society Limited v. Government of Andhra Pradesh, wherein it was held that application for exemption under Section 20 of the Act has to be decided first before the preparation of the draft statement under Section 8 of the Act, quashed the impugned G.O. and remanded the matter to Government to consider it afresh as the application filed under Section 20 of the Act in the present case was not decided first before the preparation of the draft statement under Section 8 of the Act. Against that, the present writ appeals are filed.

6. The learned senior Counsel Sri Parasaran appearing for the petitioner contended that the condition imposed in Clause (d) of para 4 of the impugned G.O. is arbitrary as the cause for which exemption was granted is a public cause, i.e., for establishing a small scale industry, i.e., for publication of Telugu newspaper and freedom to run press and publish newspapers is guaranteed under Article 19 (1) (a) of the Constitution of India and when once the exemption is in the public interest, it cannot be restricted for a period of thirty-three years merely because the agreement between the petitioner and M/s. Ushodaya Publications is for thirty-three years. He also contended that even after thirty-three years M/s. Usodaya Publications may continue their press or if they abandon even before the expiry of thirty-three years, the petitioner may continue the said press or he may publish any other newspaper and therefore, the impugned condition is in violation of Article 14 of the Constitution.

7. It is contended by the learned Government Pleader that under Section 20 and other provisions of the Act the Government has got ample power to impose conditions while granting exemption, that therefore, the impugned Clause (d) of para 4 of the G.O. is quite valid and legal, that the learned single Judge ought not to have set aside the G.O. and remanded the matter on the ground that application filed under Section 20 of the Act was not decided before preparation of draft statement under Section 8 of the Act, that the power provided under Section 20 of the Act is notwithstanding the powers under other provisions of the Act and that therefore, the view of the learned single Judge is not correct.

8. In view of the above said contentions, the important question of law to be considered is whether Clause (d) in para 4 of the G.O. referred to above imposing the said condition is arbitrary and illegal.

9. The admitted facts are that the petitioner is found to have held Ac. 1-44 cents of land in excess of the ceiling limit which is equivalent to 5849 square metres, that he applied for exemption under Section 20 of the Act and that exemption was granted but with certain condition, the validity of which is in dispute.

10. To appreciate the above contentions it is necessary to refer the objects and reasons and some relevant provisions of the Act. The Act was intended to prevent concentration of urban property in the hands of a few persons, to bring about socialisation of urban land in urban agglomerations to subserve the common good by ensuring its equitable distribution, to discourage construction of luxury housing complexes leading to conspicuous consumption of scarce building materials and to ensure the equitable utilisation of such materials and to secure orderly urbanisation.

11. Section 3 of the Act mandates that no person is entitled to hold vacant land in excess of the ceiling limit.

Section 4 of the Act deals with ceiling limit in respect of different areas and different persons.

Section 5 deals with transfer of vacant lands.

Section 6 directs that a person holding excess vacant land has to file a statement giving all the details.

Section 8 deals with preparation of draft statement as regards vacant land held in excess of the ceiling limit.

Section 9 of the Act deals with final statement.

Section 10 deals with acquisition of vacant land in excess of the ceiling limit and vesting of such land in the State.

Section 11 deals with payment of amount of compensation for vacant land acquired.

12. Section 20 provides power to the Government to grant exemption. It is relevant to extract Section 20 of the Act:-

"POWER TO EXEMPT:-(1) Notwithstanding anything contained in any of the foregoing provisions of this Chapter,--

(a) where any person holds vacant land in excess of the ceiling limit and the State Govt., is satisfied, either on its own motion or otherwise, that having regard to the location of such land, the purpose for which land is being or is proposed to be used and such other relevant factor as the circumstances of the case may require, it is necessary or expedient in the public interest so to do, that Government may, by order, exempt subject to such conditions, if any, as may be specified in the order, such vacant land from the provisions of this Chapter;

(b) where any person holds vacant land in excess of the ceiling limit and the State Government, either on its own motion or otherwise, is satisfied that the application of the provisions of this Chapter would cause undue hardship to such person, that Government may by order exempt subject to such conditions if any, as may be specified in the order, such vacant land from the provisions of the Chapter ;

Provided that no order under this Clause shall be made unless the reasons for doing so are recorded in writing.

(2) If at any time the State Government is satisfied that any of the conditions subject to which any exemption under Clause (a) or (b) of sub-section (1) is granted is not complied with by any person, it shall be competent for the State Government to withdraw by order, such exemption after giving a reasonable opportunity to such person for making a representation against the proposed withdrawal and thereupon the provisions of the Chapter shall apply accordingly."

By reading Section 20 it is evident that if the Government is satisfied either on its own motion or on application of the party,. having regard to the location of the land and the purpose for which land is being put to or is proposed to be use and such other relevant factors as the circumstances of the case may require, it is necessary and expedient in public interest for granting exemption, the Government may order exemption subject to such conditions, if any, as may be prescribed in the order. This is one of the grounds for exemption, which is dealt with in sub-section (sic. clause) (a) of Section 20(1) of the Act. The second ground for granting exemption is dealt with in subsection (sic. clause) (b) of Section 20(1) of the Act which provides that in cases where a person holds vacant land in excess of the ceiling limit, the State Government either suo motu or on application of the party is satisfied that the application of the provisions of thc Chapter would cause undue hardship to such person, the Government might order exemption subject to such condition as may be prescribed; the proviso says, no order under this Clause shall be made so unless by recording reasons for doing so. Sub-clause (sic. sub-section) (2) of the above said Section also empowers the Government to withdraw exemption, where the conditions imposed for exemption are not complied with, after giving reasonable opportunity.

13. Thus, the above said Section makes it clear that exemption may be granted in two situations - firstly, where there is public interest to which the land is being put or proposed to be put and secondly, where the applying of the provisions of the Act would cause much hardship to the person. Thus, it is manifest that first part of Section 20 deals with grant of exemption in public interest and the second part deals with granting of exemption to remove hardship to individual who possesses excess vacant land. Further, it is also provided that exemption may be granted subject to such conditions as may be specified in the order. In the present case the impugned G.O. makes it clear that the Government is satisfied that the establishment of the small scale industry for publication of newspaper is in the public interest. Therefore, the Government granted exemption. The question is whether granting exemption only for 33 years as Ushodaya Publications and the petitioner entered into agreement of lease for 33 years, is proper or not. When once the establishment of small scale industry for the purpose of publication of newspaper is in public interest, who establishes that industry is immaterial. If exemption is granted on the condition if 'X' establishes the industry and not if 'Y' establishes it, it amounts to discrimination and exercising such power will result in discrimination and the same is antithesis of the doctrine of equality. Therefore, the imposition of condition under Clause (d) of para 4 of the impugned G.O. that exemption will be in force for 33 years only and thereafter the land reverts to Government is not reasonable.

14. When once exemption is granted for establishment of small scale industry in the public interest, the public interest will continue until that industry continues and the industry may be continued by Ushodaya Publications or somebody else or M/s. Ushodaya Publications may enter into partnership or other arrangement that some person may have major shares or that there may be so much of change in future which we cannot foresee.

15. Therefore, the said Clause (d) of para 4 of the impugned CO. stating that exemption is only for the purpose of establishment of small scale industry for publication of newspaper by M/s. Ushodaya Publications only is not proper and valid. The exemption granted has to be read and understood that the exemption is granted for establishment of small scale industry for publication of newspaper and the condition that it reverts back to Government after 33 years must be deemed to be deleted from the G.O.

16. The learned single Judge allowed the writ petition, set aside the impugned G.O. and remanded the matter on the ground that the application filed under Section 20 of the Act was decided subsequent to preparation of draft statement under Section 8 of the Act. The proposition that application for exemption under Section 20 of the Act has to be decided before preparation of draft statement under Section 8 of the Act is no more a good law in view of the recent judgment of the Supreme Court in Darothi Clare Pareira v. State of Maharashtra wherein it was observed as follows:-

"(A) Urban Land (Ceiling and Regulation) Act (33 of 1976), Sections 10(3), 20, 21-Excess land- Notification vesting it in Government - Issuance - Competent authority need not wait till applications by landowner under Section 20 or Section 21 is disposed of."

"Having regard to the scheme of the Act, it cannot be said that until the application under Section 21 or Section 20 is considered and disposed of, the competent authority has no power to have the notification under Section 10(3) vesting the excess land in the Government published. The very language of Sections 20 and 21 and the exercise of the power thereunder would arise only when the land stands vested in the Government. The power of examination and exemption would arise only when the Government becomes the owner and the erstwhile owner seeks to obviate the hardships under Section 20 or to subserve the housing scheme for weaker sections under section 21 is envisaged thereunder. Thereat, the Government is required to consider whether the proposals made by the erstwhile owner for undertaking the scheme as envisaged under Section 21 or hardships as envisaged under Section 20 for exemption would merit consideration."

By reading the proposition laid down in the above said judgment it is manifest that the power to grant exemption can be exercised even after the land is vested in the Government under Section 10 of the Act. We are of the opinion that the exemption under Section 20 of the Act can be granted even after vesting of the land in Government as per the principle laid down by the Supreme Court in the above decision. Therefore the observation of the learned single Judge that first of all the application for exemption must be disposed of and thereafter proceedings under Section 8 of the Act have to be taken up is not correct.

17. W.A.M.P. 2790 of 1994 in W.A. 851 of 1994 is filed by M/s. Ushodaya Publications (Private) Limited, Hyderabad to implead it as 2nd respondent in the Writ Appeal 851 of 1994. The petitioner was not party in the writ petition nor it filed any other writ petition. The petition is filed after the main writ petition was disposed of. As we discussed supra, the petitioner's interest is not in any way affected by allowing the writ appeal of the writ petitioner. The question as to what are the rights of the implead-petitioner and the writ petitioner are covered by the terms of the agreement between them which is not subject-matter of these writ appeals. Therefore, we do not see any grounds to allow this petition.

18. Writ appeal filed by the writ petitioner, i.e., W.A. 851 of 1994 is allowed as indicated above and the writ appeal W.A. 791 of 1994 filed by the State is allowed to the extent of setting aside the judgment of the learned single Judge in W.P. 19026 of 1988 quashing the impugned G.O., holding that the impugned G.O. is valid except Clause (d) of para 4 of the said CO.

19. W.A.M.P. 2790 of 1994 in W.A. 851 of 1994 is dismissed.