Case Analysis Acme Housing India Pvt Ltd & Anr vs State of Maharashtra & Ors 2026 BHC-AS 8418-DB

Synopsis

This judgment, delivered by a Division Bench of the Bombay High Court, resolves a long-standing dispute concerning land previously owned by M/s. Shah Malleable Castings Ltd. and now by the petitioner, Acme Housing. The core controversy stemmed from the interplay between an original order under Section 8(4) of the Urban Land (Ceiling and Regulation) Act, 1976, a subsequent exemption order under Section 20, and a later revised order under Section 8(4). The State sought to enforce the old Section 20 exemption order, leading to a disputed mutation entry and stop-work notices against the petitioner's development project. The High Court quashed the State's actions, holding that the revised Section 8(4) order, which declared a minimal surplus, had superseded the earlier orders, thereby rendering the old Section 20 exemption order "non est." The court directed the deletion of the impugned mutation entry and allowed the petitioner to proceed with its project.

1. Heading for the Judgment

In the High Court of Judicature at Bombay

Civil Appellate Jurisdiction

Writ Petition No. 2612 OF 2021

Acme Housing India Pvt. Ltd. & Anr. ....Petitioners
versus
The State of Maharashtra & Ors. ....Respondents

Coram: Bharati Dangre and Manjusha Deshpande, JJ.

Date of Judgment: 12th FEBRUARY, 2026

2. Legal Framework

This judgment operates within the following constitutional and statutory framework:

• The Constitution of India:
  Article 226: The jurisdiction invoked by the petitioners, empowering the High Court to issue writs of certiorari (to quash illegal orders) and mandamus (to direct performance of a duty).

• The Urban Land (Ceiling and Regulation) Act, 1976 (ULC Act): The central statute governing the dispute. Key provisions include:
  Section 4: Fixed the ceiling limit on vacant land (2000 sq. mtrs. for Thane).
  Section 6: Required persons holding excess vacant land to file a statement.
  Section 8(4): Empowered the Competent Authority to pass an order declaring the vacant land held in excess of the ceiling limit after an inquiry. A revised order can be passed under this section.
  Section 10: Laid down the procedure for the acquisition of surplus land, including notification and vesting.
  Section 20: Granted the State Government power to exempt surplus vacant land from the provisions of Chapter III (acquisition) in the public interest or to avoid undue hardship, subject to conditions.

• The Urban Land (Ceiling and Regulation) Repeal Act, 1999 (ULC Repeal Act): This Act repealed the ULC Act. The State of Maharashtra adopted the Repeal Act on 29.11.2007.
  Section 3: Contains the savings clause. It saves:
  (a) the vesting of any vacant land under Section 10(3) where possession has been taken over.
  (b) the validity of any order granting exemption under Section 20(1) or any action taken thereunder.

• Government Resolution (GR) dated 17.07.1997: A crucial administrative instruction that mandated the cancellation of an existing Section 20 exemption order (especially for industrial use) before a revised Section 8(4) order could be passed, particularly when there was a change in land use.

Related Precedents Cited and Relied Upon:

• Essen Realtors, Pune vs. State of Maharashtra & Ors.  2018(2) Mh.L.J.455: A Division Bench decision holding that when a Competent Authority passes a subsequent order under Section 8(4) holding that the landowner does not hold any excess land, a prior exemption order under Section 20 becomes "non est" and does not need to be formally cancelled.

• Bombay Fibre Industries Private Limited & Anr. vs. State of Maharashtra & Anr.  2018(3) Mh.L.J.404: Another Division Bench decision affirming the principle in Essen Realtors. It held that a Section 20 exemption order ceases to exist when a subsequent Section 8(4) order holds that there is no surplus land, and the savings clause in Section 3 of the Repeal Act only applies to a valid exemption order.

• State of Uttar Pradesh vs. Hari Ram (2013) 4 SCC 280: A Supreme Court decision cited for general principles related to land acquisition and the effect of repealing statutes.

3. Basic Relevant Facts of the Case

1. Original Holdings: M/s. Shah Malleable Castings Ltd. held land in Gut No. 61/1 and 61/2, Village Chitalsar, Thane, admeasuring 54,500 sq. mtrs.

2. Initial Surplus Declaration (1985): Under the ULC Act, the Competent Authority passed an order under Section 8(4) on 25.07.1985, declaring 20,622.80 sq. mtrs. as surplus.

3. Section 20 Exemption (1986): Based on the 1985 surplus declaration, the State granted an exemption under Section 20 on 21.01.1986, exempting 35,156.18 sq. mtrs. for industrial use.

4. Change in Development Plan (1991): Thane's development plan was sanctioned, rezoning the land from "Industrial" to "Partly Residential" and other reservations.

5. Revised Section 8(4) Order (1997): Due to the change in land use, the owner applied for a revised order. On 20.11.1997, the Competent Authority passed a revised Section 8(4) order, recalculating the surplus land to be only 114.72 sq. mtrs. from Gut No. 61/2. The order explicitly stated that the earlier Section 8(4) order (1985) was set aside and, referencing the 1997 GR, that the Section 20 exemption order stood cancelled.

6. Proceedings under Repeal Act: Notifications under Section 10 were issued for the 114.72 sq. mtrs., but possession was not taken. When the ULC Act was repealed in 2007, the State cancelled these acquisition notifications in 2010.

7. Development and Mutation: The petitioner (Acme Housing), having acquired the land, obtained approvals for a rental housing project. In 2017, a mutation entry (No. 1052) reflecting the Section 20 exemption was made, but it was deleted in 2019 upon the petitioner's request, based on the 1997 revised order.

8. The Disputed U-Turn (2021): Following a political complaint, the Competent Authority reversed its position. It directed the restoration of a mutation entry (No. 1125) reflecting the 1986 Section 20 exemption, claiming it was still valid. This led to stop-work notices from the Municipal Corporation, prompting the present writ petition.

4. Issues in the Judgment

The primary issues framed and addressed by the court were:

1. Effect of Revised Order: What is the legal effect of a revised order passed under Section 8(4) of the ULC Act on a pre-existing exemption order granted under Section 20 of the same Act, which was based on the original, now-superseded Section 8(4) order?

2. Validity of State's Action: Whether, in light of the revised Section 8(4) order of 1997, the State's actions in 2021—directing the mutation entry (No. 1125) and issuing stop-work notices based on the 1986 Section 20 exemption order—were legal and sustainable.

3. Applicability of Savings Clause: Whether the savings clause under Section 3(1)(b) of the ULC Repeal Act protects the 1986 exemption order even after the revised Section 8(4) order has been passed.

5. Ratio Decidendi (The Reasoning of the Court)

The court's reasoning was systematic and anchored in a harmonious reading of the ULC Act, the Repeal Act, and binding precedents.

• Inter-dependence of Orders: The court held that an exemption order under Section 20 is not an independent instrument. Its very existence depends on a valid declaration of surplus land under Section 8(4). Section 20 empowers the government to exempt "such vacant land" (i.e., the surplus land declared under Section 8(4)). If the foundational Section 8(4) order is modified or set aside, the exemption order built upon it cannot stand independently.

• Effect of the Revised Section 8(4) Order: The revised order dated 20.11.1997 explicitly set aside the 1985 Section 8(4) order. It recalculated the surplus and found only 114.72 sq. mtrs. of excess land. By operation of law and in line with the 1997 GR, this revision rendered the 1986 Section 20 exemption order "non est" (non-existent) for the vast majority of the land. The condition in the revised order requiring the company to obtain a "revised order" from the Industries Department was a clear acknowledgment that the old exemption was no longer valid.

• Rejection of State's Contradictory Stand: The court found the State's argument—that the 1986 exemption order survived because it was never formally cancelled—to be "palpably fallacious." It noted that the Competent Authority itself had passed the revised order mentioning the cancellation of the exemption. The State could not blame the petitioner for not seeking cancellation when the revised order itself had already triggered that legal consequence.

• Binding Precedent: The court applied the ratio of Essen Realtors and Bombay Fibre Industries. It quoted extensively from these judgments, which held that a subsequent Section 8(4) order finding no excess land renders a prior Section 20 exemption order "unnecessary," "irrelevant," and "non est." The savings clause in Section 3 of the Repeal Act only protects valid exemption orders; it does not revive orders that have ceased to exist.

• The 1997 Government Resolution: The court highlighted that the 1997 GR mandated the cancellation of the industrial exemption order before passing a revised Section 8(4) order. The revised order of 1997 was passed with this understanding. The State's attempt to now ignore its own resolution and the order passed in conformity with it was unsustainable.

6. New Legal Framework Established

This judgment does not establish a new legal principle but serves as a powerful reaffirmation and authoritative application of existing law. Its significant contributions are:

1. Clarifying the Doctrine of Merger/Supersession in ULC Matters: It unequivocally establishes that a revised order under Section 8(4) does not just coexist with an older Section 20 order; it supersedes and eclipses the factual and legal basis upon which the older exemption was granted. The two cannot be read in isolation.

2. Limiting the Scope of the Repeal Act's Savings Clause: The judgment clarifies that Section 3(1)(b) of the Repeal Act does not grant perpetual life to every exemption order ever passed. It only saves those that are "valid" and in existence at the time of the repeal. An exemption order that has been rendered "non est" by a subsequent, final determination under the ULC Act itself is not saved.

3. Holding the State to its Own Resolutions and Orders: The court strongly criticized the State for taking contradictory stands and ignoring its own Government Resolution and the orders passed by its own Competent Authority. This reinforces the principle that the State must act consistently and cannot blow hot and cold in the same cause.

7. Examination and Analysis by the Court

The court's analysis was meticulous and displayed a deep understanding of the statutory scheme.

• Historical Tracing: The judgment begins by tracing the entire chronology of events from 1985 to 2021, demonstrating how each administrative action flowed from the previous one. This historical narrative itself exposed the inconsistency of the State's 2021 U-turn.

• Textual and Contextual Interpretation: The court interpreted Section 8(4) and Section 20 in a conjoint manner. It looked at the text ("such vacant land") and the context (exemption is a relaxation from acquisition of surplus land) to conclude that the exemption is parasitic on the surplus declaration.

• Application of Precedent: The court correctly identified that the facts of the present case were "almost identical" to those in Essen Realtors and Bombay Fibre Industries. It adopted the reasoning from these binding coordinate bench decisions, ensuring judicial consistency.

• Scrutiny of State's Affidavit: The court did not merely accept the State's affidavit. It scrutinized it and found its stand to be contradictory and legally untenable, especially given that the affiant was the Competent Authority who had passed the orders in question.

• Use of Government Resolution: The court gave due weight to the 1997 GR, treating it as a key to understanding the procedure to be followed. It highlighted how the State's current stance was in direct violation of its own executive instructions.

8. Critical Analysis and Final Outcome

Critical Analysis:

This judgment is a classic example of judicial review correcting executive overreach and ensuring adherence to the rule of law.

• Strengths: The judgment's greatest strength is its fidelity to the statutory scheme and binding precedents. It effectively uses the principle of stare decisis. By rejecting the State's argument that an order must be "formally cancelled" to be invalid, it adopts a pragmatic and substantive view of the law over a pedantic one. The criticism of the State's "U-turn" based on a political complaint underscores the court's role as a guardian against arbitrary administrative action.

• Correctness: The decision is legally sound. An order under Section 20 cannot exist in a vacuum. To hold otherwise would mean that a person could be bound by an exemption order for land that was never ultimately declared surplus, which would be an absurd and unjust result.

• Impact: This judgment provides much-needed clarity and finality for numerous landowners and developers in Maharashtra who were caught in similar situations, where old ULC exemption orders were being used to stall development despite subsequent revised orders. It protects legitimate investments made in reliance on final administrative orders.

Final Outcome:

The writ petition was allowed. The court issued the following directions:

1. Mutation Entry Quashed: Impugned Mutation Entry No. 1125 was directed to be deleted from the revenue records.

2. Notices Quashed: The impugned stop-work letters/notices issued by Respondent No. 3 (Thane Municipal Corporation) were quashed and set aside.

3. Restoration of Title: The revenue records were directed to be restored in the name of the petitioner for the subject land.

4. Permission to Proceed: Respondents were directed to permit the petitioner to proceed with its development project on the subject land in terms of the permissions and approvals already granted.

5. Costs: No order as to costs.