Under Section 23 of the TN Land Reforms (Fixation of Ceiling on Land) Act, 1961, no company holding land in excess of the ceiling prescribed could have a vested right in demanding protection u/s 37A, the Madras High Court has held.

The contravention of the section would automatically result in invocation of Sections 7 and 20.

Dismissing a writ petition from NEPC Ltd, Chennai, seeking to set aside the order of respondent in GO Ms No 497 Revenue dated November 12, 2001 and requesting the Commissioner and Director of Land Reforms to direct the Assistant Commissioners, Land Reforms, Erode and Tirunelveli to take necessary action, Mr Justice K. Chandru ruled that Sec 37A of the Act was the only provision under which a commercial or industrial undertaking, after getting permission from the Government, could hold land in excess.

Under Sec 37A(2), the Government was given discretion to grant permission and also to impose such conditions as were necessary except in accordance with Sec 37A.

The petitioner-company was in possession of lands in excess of the land ceiling stipulated. It was first owning 2248.20 acres in Coimbatore and Erode districts. By way of sale, it had transferred substantial lands in favour of other companies. To get over the provisions of the Act, it filed an application dated June12, 1997 u/s 37A. By the order dated December 8, 1998, the Government held that its action was illegal. Hence, the exemption sought u/s 37A could not be granted. The Government also held that u/s 7, it had contravened the provisions of the Act. Hence, further action could be initiated u/s 20.

In response to the petitioner's another representation dated January 29,1999, the Government informed it that there were no new grounds adduced for grant of exemption. Hence, the land could not be allowed to be sold. Itsrequest was rejected.

The petitioner contended that refusal to grant exemption was against the spirit of Sec 37A and Sec 7 and 20 could not be invoked when itsexemption application was pending. The Government ought to have exempted the land by virtue of Sections 3(22) and 3(19) as lands were not used for agricultural purposes. Keeping an application pending for 4 years and later refusing the same was erroneous.

The Judge ruled that the company could not hold any land in excess specified u/s 7. Under Sec 37(a)(5), the Government could also cancel such permission on breach of any conditions imposed. Under Sec 23, if any transfer by way of sale or otherwise made, then such sale was held to be invalid. The contentions raised by the petitioner were misconceived and contrary to law. This Court did not think that the Government, by passing the impugned order, had committed any irregularity or illegality. The writ petition stood dismissed.

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