Update: ULC Premium To Be Imposed Only On Surplus Vacant Land And Not Land Held Within Ceiling Limits

In our previous article titled “ULC premium to be imposed only on surplus vacant land and not land held within ceiling limits”1, we examined a judgment passed by the Hon’ble Bombay High Court on 30th March, 2023 in Salim Alimahomed Porbanderwalla and Another vs State of Maharashtra and Another in Writ Petition No. 4849 of 2022 wherein it was held that for land within the ceiling limits i.e. land which the petitioners were always entitled to continue to hold, there cannot be a premium levied, nor can there be a revenue entry relating to Section 20 of the Urban Land (Ceiling on Holding) Act, 1976 (“ULC Act“). The Hon’ble Court had observed that for the surplus vacant land which was exempted under the Section order, the Petitioners had paid the full premium and were therefore entitled to have the revenue entry deleted.

As stated in our earlier article, this judgment held that the only interpretation possible of the 2019 GR which would not render the 2019 GR unconstitutional, would be that the term “entire land” when used for computing premium, means only the land exempted under the Section 20 order.

However, it appears that the competent authorities were still calculating premium on the entire landholding and not just the exempted land on the basis that the Bombay High Court had not struck down the 2019 GR in Porbanderwalla.

Two separate writ petitions2 were therefore filed in the Bombay High Court challenging the demand made by the government authorities under the 2019 GR computed on the basis of the entire land and not just the exempted land in question. In one of the writ petitions, it appears that the petitioner specifically pointed out that the government authorities were persistent in their computation of premium on the entire landholding, even after representations were made to them post the decision of the Bombay High Court in Porbanderwalla.

Two almost identical orders both dated 9th August, 2023 (“Orders“) were passed by the Hon’ble Bombay High Court in the writ petitions.:

  1. The Hon’ble Bombay High Court held that indeed it has not struck down the 2019 GR and it was not asked to. The Hon’ble Bombay High Court held that it has interpreted the 2019 GR and it is the Bombay High Court’s interpretation that binds the government. It further held that, it is not open to the government, after Porbanderwalla, to insist that its own erroneous and possibly unconstitutional interpretation of the 2019 will prevail. The Hon’ble Bombay High Court held that it has no intention of repeating this law again and again.
  2. The Hon’ble Bombay High Court to make it perfectly clear, once and for all held the following:
    1. No demand under the 2019 GR or the later GR of 23rd June 2021 can be made applicable to the land that is retainable, i.e., exempted, and is in the ownership of and has vested in the private owner. We note here that while the word ”exempted” has been used here by the Hon’ble Bombay High Court, in context of the entire judgment, the land that is retainable means the land within ceiling limits and not the exempted land.
    2. The Government has no power to demand a premium for the private party’s own land.
    3. The retention land, i.e., that which was within the ceiling limit permissible under the ULC Act and which was not vacant land, cannot be computed or reckoned for the purposes of computing a premium.
    4. The expression “entire land” in the 2019 GR or the later GR of 23rd June 2021 means the whole of the surplus vacant land not the whole of the land, i.e., not the portion including the retention / retainable land.
    5. Any demand for a premium for the retainable land is illegal, unconstitutional and unlawful.
    6. There cannot be a continuance of the Section 20 order in the revenue entry against the whole of the land.
    7. No revenue entry under Section 20 can apply to the retention land.
    8. Any revenue entry showing the State Government in respect of the retainable / retention land is also illegal.


The Hon’ble Bombay High Court has expressly specified as follows:

  • The Orders are not restricted to the facts of these particular cases.
  • The Orders apply to all cases to which the GRs of 1st August 2019 and 23rd June 2021 are sought to be applied.
  • Consequently, the State Government cannot refuse or fail to follow these Orders.

In view of these explicit directions, it is hoped that the authorities will now stick to the interpretation of the 2019 GR as laid down by the Bombay High Court. This will bring about much needed certainty to stakeholders while estimating these premium payments and reduce the likelihood of multiple proceedings being filed to repeatedly interpret a circular which the Bombay High Court has conclusively already interpreted.


1. https://www.mondaq.com/india/real-estate/1305820/ulc-premium-to-be-imposed-only-on-surplus-vacant-land-and-not-land-held-within-ceiling-limits

2. Modern Paints v. State of Maharashtra & Anr. (Writ Petition (L) No. 20916 of 2023) and Jemini Pradip Salot & Ors. v. State of Maharashtra & Anr. (Writ Petition (L) No. 20587 of 2023)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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