(1) The petitioner, m/s canara bank staff cooperative building society ltd. , is seeking a writ of mandamus directing the respondent, the government of andhra pradesh represented by its secretary, department of revenue, to grant exemption under section 20 (1) (a) of the urban land (ceiling and regulation) act, 1976 (herein after referred to as the 'ceiling act'; to the petitionersociety in respect of two extents of land in vijayawada and a consequential declaration that the orders of the respondent dt. 17 - 6 - 83 and 18 - 6 - 83 rejecting the request of the petitioner for exemption from the provisions of the aforesaid act, are arbitrary and illegal.

(2) The petitioner - society consists of 16 members, all employees of the canara bank. The society purchased two extents of urban land 2,252 sq. Metres in r. S. No. 17/1 of vidhayadharapuram, vijayawada from one challapalli sunderamma and 5,012 sq. Metres in rs. No. 17/1a from m. V. J. K. Ramamohana rao, in vijayawada. As the two venders were in possession of land in excess of the ceiling limit prescribed under the urban land ceiling act. No registration could be effected, but only agreements of sale were obtained and the petitioner was inducted into possession. After complying with the necessary formalities for seeking exemption under section 20 (1) (a) of the act as required under g. O ms. No. 136 dt. 28 - 1 - 81 the petitioner made an application to the government on 15 - 1 - 82. The special officer and competent authority under the urban land ceiling act had recommended for granting of exemption, by his proceedings in cc. No. 920/76 dt. 14 - 10 - 82 and the commissioner of land reforms and urban land ceiling, by his proceedings dt. 22 - 11 - 82 also recommended to the government that the request for exemption may be granted. The recommendations of the two authorities were forwarded to the government in november, 1982. But no action was taken. As a last resort, the petitionersociety made a representation to the chief minister on 28 - 4 - 1983, but to no avail. The members of the society obtained loans from the canara bank for construction of houses and in respect of such loans the rate of interest was 3% if the amount sanctioned was utilised within six months, otherwise the interest rate was 6%. As a result of the inaction of the government in not passing the orders on the application made by the society, the members are subjected to the hardship of paying interest at 6%. This land was originally notified for acquisition under the land acquisition act by the collector, krishna at machilipatnam was denotified on 19 - 8 - 82 in his proceedings r. Dis. No. 7101/81 subject to the condtion that the society shall utilise the land for construction of the houses in accordance with the master plan of amara wathi seema urban development authority, vijayawada. The society also paid a fee of rs. 4,530/ - to the municipal corporation, vijayawada, for conversion of the land for non - agricultural purpose, it also deposited a sum of rs. 27,180/ - towards cost of laying roads, providing drainage etc. , in order to obtain sanction for the lay out. The amarawathi seema urban development authority also collected a sum of rs. 4,531/ - towards layout charges from the society. This writ petition was filed on 23 - 5 - 83 for a direction to the government to grant exemption as per the recommendations of the special officer commissioner of land revenue. On 24 - 5 - 83 an interim direction was granted by my learned brother seetharam reddy, j. Directing the respondent to dispose of the application of the petitionersociety within two weeks from the date of receipt of the order, thareafter the government made two orders one on 17 - 6 - 83 and the other on 18 - 6 - 83 in respect of the two extents of land, rejecting the petitioner's request for exemption. The petitioner thereafter filed an application for amending the prayer in the writ petition seeking quashing of the aforesaid two orders and the prayer was accordingly granted by this court on 30 - 6 - 83 in wpmp. No. 7002/83.

(3) No counter was filed by the government, but the learned government pleader produced the records and argued the muter. Clause (a) of subsection (1) of section20 of the ceiling act confers power on the state government to exempt in respect of any vacant land in excess of the ceiling limit from the operation of the provisions of chapter iii (which concerns with the determination of ceiling limit and acquisition of vacant land in excess of the ceiling limit). It reads : sec. 20. 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 government is satisfied, either on its own motion or otherwise, that, having regard to the location of such land, the purpose for which such land is being or is proposed to be used and such other relevant factors 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 ; when the petitioner submitted the application for exemption under section 20 (i) (a) , g. O. Ms. No. 136 dt. 28 - 1 - 81 contained guide lines for exercise of power under sec. 20 (l) (a) was in force. These guide lines came to be issued pursuant to the directions of the government of india under section 36 of the ceiling act. The guide lines were issued keeping in view that speculative transactions should be curbed and small extents of land should be made available to bonafide houseless members of cooperative housing societies. Whenever the owner holding land in excess of the ceiling limit sells the same to a cooperative housing society he was forbidden from collecting directly or indirectly any amount in excess of what he would be entitled to receive as the price of the land under para 4 (2) of schedule, 1 - a of the urban land (ceiling and regulation) rules, 1976. The cooperative housing society should be a registered one, the extent of land a member of the society was entitled should not exceed 300 sq. Metres and the member or a spouse of the member or any member of the family should not own any other vacant land or dwelling unit in any urban agglomeration to which the act applies. The dwelling unit should be constructed in accordance with the building regulations in force, within a period not exceeding 3 years. The society was forbidden from transferring the land to any other person or any other society. The land owner should complete the transaction of sale in favour of the society within a period of 3 months from the date of issue of the order of exemption by the government. If the land sought to be purchased by a cooperative society was required jbr any other public purpose no exemption in respect of such land should be granted. In brief these are the guidelines incorporated in the aforesaid g. O.

(4) The special officer urban ceilings, at the district level and the commissioner, land reforms at the state level are the authorities charged with the duty of enquiring into the claims of a cooperative society seeking exemption from the state government under sec. 20 (1) (a). It is not in dispute, that after enquiring into the request made by the petitioner society and after satisfying themselves that all the guidelines laid down in g. O. Ms. No. 136 were complied with, both the specical officer and commissioner made positive recommendations to the govt. To grant exemption. But the matter was kept pending with the government, and it was this inaction on the part of the government in refusing to exercise the statutory duty vested in it under sec. 20 (1) (a) that brought the petitioner - society to this court seeking a writ of mandamus. When this court issued an interim direction on 24 - 5 - 83 directing the govt. To dispose of the application of the petitionersociety within 2 weeks from the date of its receipt, the two impugned orders were issued by the government. The file produced before me by the learned govt. Pleader shows that the two authorities viz. , special officer and competent authority urban land ceiling and the commissioner of land reforms urban land ceiling recommended the case of the petitioner for exemption. On page 35 is the letter of the special officer and competent authority, urban land ceiling, vijayawada dt. 14 - 10 - 82 addressed to the secretary to government revenue (u. C. I) dept. Through commissioner of land reforms and urban ceiling wherein he has examined all the aspects relating to the petitioner society. As regards the sale agreement the special officer stated in paragraph no. 5 that

"the sale agreement in this case was entered into on 4 - 1 - 82 this is a genuine agreement and that there is nothing to suspect. In view of the above circumstances i recommend that the exemption sought for under sec. 20 (1) (a) of the act in terms of g. O. Ms. No. 136 may be granted"

. On page 39 is the letter of the commissioner of land reforms and urban land ceiling addressed to the secretary to the government, revenue department on 22 - 11 - 82 in which after adverting to the enquiries made by the special officer and compliance with all the required formalities and conditions for granting exemption, he observed :

"in the circumstances the commissioner, land reforms urban land ceiling recommends the case to the government with a request to grant exemptions as the conditions laid down in g. O. Ms. No. 136 dt. 28 - 1 - 81 have been fulfilled"

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What are the grounds for rejecting the recomendations made by these two competent authorities? the two orders issued on 17 - 6 - 83 and 18 - 6 - 83 in respect of the two extents of land, pursuant to the interim direction made by this court are identical ; as the owners of the two extents of land are two different persons, two separate orders were issued. The material portion of the impugned orders reads:

2. "the government have carefully examined the matter in consultation with the special officer and competent authority urban land ceilings, vijayawada and the commissioner of land reforms and urban land ceilings, hyderabad. They see no reason to entertain the request of the petitioners. The applications cited are rejected accordingly.

3. The special officer and competent authority, urban land ceilings, vijayawada is requested to take necessary further action to take over the said land under the provisions of the urban land ceilings act". A reading of the orders impugned gives the impression that the government has carefully examined the matter in consultation with the special officer and commissioner of land reforms and therefore, there was no reason to entertain the request of the petitioner. This does not appear to be true. The file produced before me does not support what has been stated in the impugned orders. Consultation does not mean referring to the recommendations of the concerned authorities and rejecting the same without giving any reasons as to in what respects the recommendations are not accepted. The note file discloses that the concerned deputy secretary after setting out all the facts and the recommendations made by the two authorities (special officer and the commissioner) submitted the file to the principal secretary who on 25 - 11 - 82 recommended that the request for exemption may be accepted.

The file was then marked to the chief minister and thereafter till 15 - 1 - 83 nothing happened on 15 - 1 - 83 the file was circulated to the revenue minister who on 17 - 1 - 83 endorsed "please discuss". Evidently after discussion the revenue minister noted at para 11 as follows :

"since a policy decision is being taken whether or not to follow the present guidelines, with modifications, the file is returned. It may be recirculated after a policy decision is taken duly re - examining the proposals in the light of the decision taken"

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Thereafter the file started moving only when the interim direction was issued by this court. Paragraph 18 on page 7 of the note file is relevant and it reads:

"in the policy note it is suggested to reject all the exemption cases filed under g. O. Ms. No. 136 dt. 28 - 1 - 81'and to allot the lands to h. U. D. A. The same principle may be adopted in this case"

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The consequence of this noting was the rejection of the request for exemption: the revenue minister signed the note file on 10 - 6 - 83 approving the aforesaid paragraph no. 18. It is, therefore, very clear that the rejection of the request was not as a consequence of consultation with the two authorities viz. , special officer and the commissioner of land reforms, but because of what was contained in the policy note. The policy note had not by then assumed any concrete form. The rejection of the request was not because of the non - compliance with any of the conditions laid down in g. O. Ms. No. 136, nor was it because of any lapse detected in the recommendations made by the two authorities viz. , the special officer and the commissioner, land reforms. The file produced before me does not disclose what the policy decision was. The learned government pleader says that the policy decision came out in the form g. O. Ms. No. 964 dt. 27 - 6 - 83 which lays down that all requests for exemption should be rejected and the land should be taken over by the government. This g. O. Ms. No. 964 dt. 27 - 6 - 83 was struck down by a division bench of this court in katya cooperative building society ltd. Vs. Govt. Of a. P. The government preferred an appeal to the supreme court against the aforesaid judgment of the division bench and the supreme court in c. M. P. No. 32854 - 48/84 (c. A. 15/85/83) s. L. P. 13289/35/84 dt. 11 - 2 - 85 passed the following order :

"interventions applications allowed. Till the disposal of the matters there will ,be stay of the consideration of the application by the authority. The state government should not distribute the land also till the disposal of the matters and the respondents shall also not make any construction on the land. These matters are adjourned to 11 - 3 - 85 to be listed at the bottom of the list"

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It appears the appeals are still pending in the supreme court.

(5) One of the objects the ceiling act seeks to achieve is prevention of concentration of urban land in the hands of a few persons and speculation and profiteering therein; it also aims equitable distribution of land in urban agglomerations to subserve the common good. Undoubtedly the ceiling act serves 'public interest'. The expression 'public interest', i think, is always understood in centra - distinction to private interest. In every case of welfare legislation the individual whose property is acquired by legislation always suffers "hardship"; but as the constitution itself mandates ushering in of an egalitarian society, the individual's hardship must yeild to the common good. The ceiling act takes note of the fact that if there is undue hardship to an individual holding land in excess of the ceiling limit, the state government may grant exemption under clause (b) of section 20 (1). Clause (a) of section 20 (1) takes note of the fact that urtder certain circumstances granting of exemption in favour of a person holding land in excess of the ceiling limit would be in the public interest. Viewed from a broad perspective the provisions of the ceiling act (other than section 20) subserve the common good but clause (a) of section 20 (1) recognises thefact that the public interest sometimes requires exemption being granted in favour of the person holding land in excess of the ceiling limit. G. O. Ms. No. 136 contains, as already noticed, the guidelines for granting exemption under section 20 (1) (a) and these guide lines were issued pursuant to the directions given by the central government under ssc. 36 of the act. The discretion conferred on the state government under sec. 20 (1) (a) must be exercised and failure to do so would give a valid cause of action to the person affected. The discretion must be exercised within a reasonable time. The state government had slept over the matter althrough. The application was submitted by the petitioner - society in january, 1982. The recommendations of the special officer and the commissioner of land reforms were made on 14 - 10 - 82 and 22 - 11 - 82 respectively. Even then the government exhibited tardiness. It is indefensible. If public interest is to be served by granting exemption the petitioner cannot be deprived of such an exemption. Prima facie the recommendations made by the special officer and the commissioner, land reforms show that granting of exemption would serve the public interest, a duty was cast on the state government to examine the recommendations of the two authorities as stated ; if a contrary decision were to be taken there must be ample material in justification of the same. Otherwise, i think the decision would be bad in the eyes of the law. Had the state government passed final orders after the receipt of the recommendations of the two authorities, it is reasonable to pursume in the light of what the two authorities had stated in their recommendations, the petitioner would have been granted exemption under section 20 (1) (a). By delaying the matteri am unable to discern from the file the factors that contributed to the delay and therefore, it would not be unreasonable to draw the inference that the delay was deliberate the statutory right conferred on the petitioner - society cannot be allowed to be scuttled. This court, therefore, very justifiably, in the circumstances, directed the government on 23 - 5 - 83 in wpmp no. 5804/83 to dispose of the application of the petitioner within two weeks from the date of receipt of that order. It was the duty of the state govt. To consider the application of the petitioner - society with reference to the relevant material concerning the land in question, the compliance with the guidelines laid down in g. O. Ms no. 136, scrutiny of the recommendations made by the the two authorities the special officer and the commissioner and then apply its mind whether granting of exemption would serve the public interest. If consideration of all these factors led to the inference of public interest being served the state government had no option except to grant exemption; if oa the other hand, the inference reached was that no public interest would be served the state government was bound to reject the request. Instead of so doing the state government misdirected itself, and i think delibeately, regarding the exercise of its statutory duty. Because it was contemplating i policy of blanket rejection of all applications for exemption it had imposed upon itself a restraint unwarranted by the circumstances and indefensible from the point of view of the time factor, there being inexcusable delay in the disposal of the application and thus contrived a situation for rejecting the request. By the date of passing of the two impugned orders g o. Ms. No. 136 dt. 28 - 1 - 81 was still in force. G. O. Ms. No. 964 dt. 27 - 6 - 83 was yet to take birth. Due consideration and care in the discharge of statutory duty was thrown overboard by the state government in the present case. The exercise of power fesulting in the passing of the two impugned orders must, therefore, be faulted. Accordingly both the orders must be set aside.

(6) The learned govt. Pleader contends that the order of the supreme court dt. 11 - 2 - 85 extracted suora is in the nature of an injunction to the state government not to consider any applications under section 20 (1) (a). I am unable to agree with this contention. The relevant sentences in the order of the supreme court read :

"till the disposal of the matters there will be stay of the consideration of the application by the authority. The state govt, should not distribute the land also till the disposal of the matters and the respondents shall also not make any construction on the land"

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Because the division bench had struck down g. O. Ms. No. 964 dt. 27 - 6 - 83 and granted a direction to the state govt. " to consider the application of the petitioner for exemption and dispose it of in accordance with the provisions of sec. 20 (1) of the act and the relevant guide lines issued by the central and state govt. In that behalf "the matter was carried in appeal to the supreme court by the state govt. The first sentence in the order of the supreme court extracted above adverting to the "stay of the consideration of the application by the authority" clearly, in my view is referable to the applications of the respondents in the supreme court (petitioners before the high court). The next sentence "the state govt. Should not distribute the land also till the disposal of the matters and the respondents shall also not make any construction on the land" is not a general order but is confined to the matters pertaining to the parties before the supreme court and that is the reason why their lordships of the supreme courts used the specific expression 'the respondents'.

(7) It is further contended by the learned govt. Pleader that g o. Ms. 136 dated 28 - 1 - 81 does not subserve the objects of the act but subverts