Supreme Court clarifies land acquisition timelines under Maharashtra Regional Town Planning Act: Chhabildas vs. State of Maharashtra (2018) INSC 96 (6 February 2018)

Date of the Judgment: 6 February 2018
Citation: (2018) INSC 96
Judges: R.F. Nariman, J. and Navin Sinha, J.
Can a land owner be indefinitely deprived of using their land if the government delays acquisition? The Supreme Court addressed this crucial question regarding land acquisition under the Maharashtra Regional Town Planning Act, 1966. The court clarified the timelines for acquiring land after a purchase notice is issued, ensuring that landowners are not left in limbo. This judgment emphasizes the importance of timely action by authorities in land acquisition processes. The judgment was authored by Justice R.F. Nariman.

Case Background

The case revolves around land owned by the Appellant, Chhabildas, in Jalgaon City. On 11th February, 2002, the Development Plan of Jalgaon City was sanctioned, which designated the Appellant’s land for a primary school and playground. On 7th May, 2007, the Appellant issued a purchase notice under Section 49(1)(e) of the Maharashtra Regional Town Planning Act, 1966 (hereinafter referred to as “the Act”), stating that the land’s reservation prevented its sale at a reasonable market price. The State Government confirmed the purchase notice on 12th December, 2007, requiring acquisition proceedings to begin within one year, i.e., by 12th December, 2008, as per Section 49(7) of the Act. Although the Commissioner of Jalgaon submitted a proposal for acquisition to the Collector on 26th September, 2008, and the Collector appointed the SDO to complete the process on 28th January, 2009, no further action was taken. The Appellant, after waiting for several years, wrote to the Commissioner on 15th January, 2014, asserting that the acquisition proposal had lapsed. The Assistant Director of Town Planning, Jalgaon Municipal Corporation, responded on 28th March, 2014, stating that the acquisition was “in process” and that Section 49(7) was satisfied, thus no lapse had occurred. The Appellant then filed a writ petition on 2nd May, 2014, before the Aurangabad Bench of the Bombay High Court, which was dismissed on 5th December, 2014.

Timeline

Course of Proceedings

The Bombay High Court dismissed the Appellant’s writ petition, stating that Section 127 of the Act, which deals with lapsing of reservations, applies only when a person needs to develop their land immediately. The High Court held that since the Appellant had not demonstrated an urgent need for development and the Municipal Corporation had initiated the acquisition process, there was no lapse. The High Court did not find merit in the appellant’s claim of lapsing of the acquisition.

Legal Framework

The Supreme Court examined the following key sections of the Maharashtra Regional Town Planning Act, 1966:

• Section 49: This section outlines the obligation to acquire land when it is designated for public purposes or when planning permission is refused or granted with conditions that render the land unusable. It allows an owner to issue a purchase notice to the State Government, requiring the appropriate authority to purchase the land. Sub-section (7) states that if the appropriate authority fails to apply for land acquisition within one year of the confirmation of the purchase notice, the reservation on the land lapses.

“Section 49 – Obligation to acquire land on refusal of permission or on grant of permission in certain cases. –
(1) Where–
(a) any land is designated by a plan as subject to compulsory acquisition, or
(b) any land is allotted by a plan for the purpose of any functions of a Government or local authority or statutory body, or is land designated in such plan as a site proposed to be developed for the purposes of any functions of any such Government, authority or body, or
(c) any land is indicated in any plan as land on which a highway is proposed to be constructed or included, or
(d) any land for the development of which permission is refused or is granted subject to conditions, and any owner of land referred to in clause (a), (b), (c) or (d) claims–
(i) that the land has become incapable of reasonably beneficial use in its existing state, or
(ii) where planning permission is given subject to conditions that the land cannot be rendered capable of reasonably beneficial use by the carrying out of the permitted development in accordance with the conditions; or
(e) the owner of the land because of its designation or allocation in any plan claims that he is unable to sell it except at a lower price than that at which he might reasonably have been excepted to sell if it were not so designated or allocated, the owner or person affected may serve on the State Government within such time and in such manner, as is prescribed by regulations, a notice (hereinafter referred to as “the purchase notice “) requiring the Appropriate Authority to purchase the interest in the land in accordance with the provisions of this Act.
(7) If within one year from the date of confirmation of the notice, the Appropriate Authority fails to make an application to acquire the land in respect of which the purchase notice has been confirmed as required under section 126, the reservation, designation, allotment, indication or restriction on development of the land shall be deemed to have lapsed; and thereupon, the land shall be deemed to be released from the reservation, designation, or, as the case may be, allotment, indication or restriction and shall become available to the owner for the purpose of development otherwise permissible in the case of adjacent land, under the relevant plan.”

• Section 50: This section allows the appropriate authority to request the deletion of land reservations if the land is no longer required for public purposes.

“Section 50 – Deletion of reservation of designated land for interim, draft of final Development plan – (1) The Appropriate Authority (other than the Planning Authority), if it is satisfied that the land is not or no longer required for the public purpose for which it is designated or reserved or allocated in the interim or the draft Development plan or plan for the area of Comprehensive development or the final Development plan, may request–
(a) the Planning Authority to sanction the deletion of such designation or reservation or allocation from the interim or the draft Development plan or plan for the area of Comprehensive development, or
(b) the State Government to sanction the deletion of such designation or reservation or allocation from the final Development plan.
(3) Upon an order under sub-section (2) being made, the land shall be deemed to be released from such designation, reservation, or, as the case may be, allocation and shall become available to the owner for the purpose of development as otherwise permissible in the case of adjacent land, under the relevant plan.”

• Section 126: This section provides the mechanism for acquiring land for public purposes specified in plans. It allows the appropriate authority to apply to the State Government for acquisition under the Land Acquisition Act, 1894.

“Section 126 – Acquisition of land required for public purposes specified in plans. – (1) Where after the publication of a draft Regional Plan, a Development or any other plan or Town Planning Scheme, any land is required or reserved for any of the public purposes specified in any plan or scheme under this Act at any time the planning Authority, Development Authority, or as the case may be, any Appropriate Authority may, expect as otherwise provided in section 113A acquire the land,-
(c) by making an application to the State Government for acquiring such land under the Land Acquisition Act, 1894(I of 1894),and the land (together with the amenity, if any so developed or constructed) so acquired by agreement or by grant of Floor Space Index or additional Floor Space Index or Transferable Development Rights under this section or under the Land Acquisition Act, 1894(I of 1890), as the case may be, shall vest absolutely free from all encumbrances in the Planning Authority, Development Authority, or as the case may be, any Appropriate Authority.
(2) On receipt of such application, if the State Government is satisfied that the land specified in the application is needed for the public purpose therein specified, or if the State Government (except in cases falling under section 49 and except as provided in section 113A) itself is of opinion that any land included in any such plan is needed for any public purpose, it may make a declaration to that effect in the Official Gazette, in the manner provided in section 6 of the Land Acquisition Act, 1894 (I of 1894), in respect of the said land. The declaration so published shall, notwithstanding anything contained in the said Act, be deemed to be a declaration duly made under the said section:
Provided that, subject to the provisions of sub-section (4), no such declaration shall be made after the expiry of one year from the date of publication of the draft Regional Plan, Development Plan or any other Plan, or Scheme, as the case may be.”

• Section 127: This section deals with the lapsing of reservations. If land reserved for public purposes is not acquired within ten years from the date the final plan comes into force, the owner can serve a notice to the authorities. If no steps for acquisition are commenced within one year of this notice, the reservation lapses.

“Section 127 – Lapsing of reservations. – If any land reserved, allotted or designated for any purpose specified in any plan under this Act is not acquired by agreement within ten years from the date on which a final Regional Plan, or final Development Plan comes into force or if the proceedings for the acquisition of such land under this Act or under the Land Acquisition Act, 1894 (1 of 1894), are not commenced within such period, the owner or any person interested in the land may serve notice on the Planning Authority, the Development Authority or, as the case may be, the Appropriate Authority to that effect; and if within twelve months from the date of the service of such notice, the land is not acquired or no steps as aforesaid are commenced for its acquisition, the reservation, allotment or designation shall be deemed to have lapsed, and thereupon, the land shall be deemed to be released from such reservation, allotment or designation and shall become available to the owner for the purpose of development as otherwise, permissible in the case of adjacent land under the relevant plan.”

Arguments

Appellant’s Arguments:

• The Appellant argued that after the appropriate authority applies to acquire the land following a purchase notice under Section 49, the land should either be acquired within a reasonable time or released from the development plan’s designation as per Section 50 of the Act.
• The Appellant contended that the High Court was incorrect in stating that there was no urgent need for development. Section 49 applies because the owner is unable to sell the land due to the reservation.
• The Appellant submitted that since more than 10 years had passed since the purchase notice, the land should be declared free from the designation in the Development Plan.

State’s Arguments:

• The State argued that the schemes of Sections 49 and 127 are different. No lapse can occur under Section 49 once Section 49(7) is satisfied.
• The State contended that since the owner had not issued a fresh purchase notice under Section 127 of the Act, no lapsing could be said to have taken place.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue was whether the land reservation had lapsed due to the delay in acquisition, despite the initial application being made within the time frame of Section 49(7) of the Maharashtra Regional Town Planning Act, 1966. The court also considered the interplay between Sections 49, 126, and 127 of the Act.

Treatment of the Issue by the Court

The following table demonstrates how the Court addressed the issues:

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court held that the land reservation in the present case had lapsed due to the inordinate delay. The Court clarified the interplay between Sections 49, 126, and 127 of the Maharashtra Regional Town Planning Act, 1966, establishing the following:

How each authority was viewed by the Court?

• Girnar Traders v. State of Maharashtra, (2007) 7 SCC 555:* The Supreme Court relied on this case to explain the scheme of Sections 126 and 127, emphasizing the importance of timelines for acquisition and the consequences of inaction. The Court reiterated that steps for acquisition commence with the declaration under Section 6 of the Land Acquisition Act.
• Municipal Corporation of Greater Bombay v. Dr. Hakimwadi Tenants Association & Ors., 1988 Supp. SCC 55: The Supreme Court clarified that the observations in this case regarding the expression “no steps as aforesaid are commenced for its acquisition” were obiter and not binding.
• Shrirampur Municipal Council v. Satyabhamabai Bhimaji Dawkher, (2013) 5 SCC 627: The Supreme Court reiterated the findings in Girnar’s case, emphasizing that steps towards acquisition commence with the State Government’s active steps, leading to a declaration under Section 6 of the Land Acquisition Act.
• Prakash R. Gupta v. Lonavala Municipal Council and others, (2009) 1 SCC 514: The Supreme Court distinguished this case, stating that while it held that the schemes of Sections 49 and 127 are different, it does not negate the fact that land acquisition must follow in terms of Section 49(1) in accordance with the provisions of the MRTP Act.
• Hasmukhrai V. Mehta v. State of Maharashtra & Ors., (2015) 3 SCC 154: The Supreme Court relied on this case to highlight that an inordinately long delay from the date of application to acquire the land results in the land being released from reservation.
• Vijayalakshmi v. Town Planning Member (2006) 8 SCC 502: The Supreme Court referred to this case to support the principle that land cannot be held up indefinitely without acquisition or release.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the inordinate delay in acquiring the Appellant’s land. The Court emphasized that landowners cannot be left in a state of uncertainty indefinitely. The Court also highlighted the need for a balanced interpretation of the Act to ensure that the power of eminent domain is not misused to deprive landowners of their property rights without due process or compensation. The Court’s reasoning was also influenced by the need to do complete justice under Article 142 of the Constitution, given the unique facts of the case.

Logical Reasoning:

The Court considered alternative interpretations, particularly the State’s argument that Section 49 is independent of Section 127. However, the Court rejected this interpretation, emphasizing that the acquisition process must follow the scheme of the Act, including Sections 126 and 127. The Court’s final decision was reached by considering the need to balance the State’s power of eminent domain with the rights of landowners.

The Court held that while the appropriate authority had made an application to acquire the land within the time frame of Section 49(7), no further steps were taken. Given the inordinate delay, the reservation on the land was deemed to have lapsed. The court, however, clarified that in all future cases, the procedure of Section 127 must be followed, i.e., after 10 years from the date of publication of the relevant plan, a second purchase notice must be served under Section 127.

“The object of Section 49 is thus clear that once a purchase notice is received by the authorities, there arises, as the marginal note to the Section also indicates, an obligation to acquire land. The timelines contemplated by the section also indicate that the owner or person affected cannot be left to hang indefinitely without a decision to follow up the purchase notice by acquisition of the land in question.”

“The underlying principle envisaged in Section 127 of the MRTP Act is either to utilise the land for the purpose it is reserved in the plan in a given time or let the owner utilise the land for the purpose it is permissible under the town planning scheme.”

“The steps towards commencement of the acquisition in such a situation would necessarily be the steps for acquisition and not a step which may not result into acquisition and merely for the purpose of seeking time so that Section 127 does not come into operation.”

The Supreme Court’s decision was unanimous, with both Justices R.F. Nariman and Navin Sinha concurring.

Key Takeaways

• ✓ Landowners cannot be indefinitely deprived of using their land if the government delays acquisition.
• ✓ After a purchase notice is confirmed under Section 49, the appropriate authority must apply to acquire the land within one year.
• ✓ The acquisition process must follow the scheme of Sections 126 and 127 of the Maharashtra Regional Town Planning Act, 1966.
• ✓ If ten years have passed since the publication of the plan and no acquisition has taken place, a second purchase notice under Section 127 can be issued.
• ✓ If no steps are taken within one year of the second purchase notice, the reservation on the land lapses.
• ✓ In cases of inordinate delay, the court can exercise its powers under Article 142 of the Constitution to do complete justice.

Directions

The Supreme Court did not issue any specific directions but disposed of the appeal, effectively releasing the Appellant’s land from the reservation.

Development of Law

The ratio decidendi of the case is that while Section 49(7) requires an application for acquisition within one year, it does not operate in isolation. The process must be followed by the scheme of Sections 126 and 127 of the Maharashtra Regional Town Planning Act, 1966. This judgment clarifies that even in cases initiated under Section 49, the timelines and procedures under Section 127 must be followed, ensuring that landowners are not left in limbo due to delays in acquisition. The court has also clarified that in cases of inordinate delay, the court can exercise its powers under Article 142 of the Constitution to do complete justice. This is a departure from the previous position where the State could delay acquisition indefinitely.

Conclusion

The Supreme Court’s judgment in Chhabildas vs. State of Maharashtra clarifies the timelines for land acquisition under the Maharashtra Regional Town Planning Act, 1966. The Court held that while an application for acquisition must be made within one year of a purchase notice confirmation under Section 49, the process must adhere to the scheme of Sections 126 and 127. This ensures that landowners are not indefinitely deprived of their property rights due to delays in acquisition. The judgment provides a balanced approach to the State’s power of eminent domain and the rights of landowners.