Supreme Court on Lapsed Land Reservations: Kolhapur Municipal Corporation vs. Vasant Mahadev Patil (2022)

Introduction

Date of the Judgment: 14 February 2022

Citation: Civil Appeal No. 510 of 2022; Civil Appeal No. 511 of 2022

Judges: M.R. Shah, J. and B.V. Nagarathna, J.

Can a municipal corporation be forced to acquire land that is unsuitable for its intended public purpose, especially when the reservation for that purpose has legally expired? This was the central question before the Supreme Court in the case of The Kolhapur Municipal Corporation & Ors. vs. Vasant Mahadev Patil (Dead) Through L.R.s & Ors. The case revolves around a land in Kolhapur, Maharashtra, which was reserved for public purposes but was never acquired within the statutory time frame. The Supreme Court examined whether the High Court was correct in ordering the municipal corporation to acquire the land despite these issues.

The Supreme Court bench, comprising Justices M.R. Shah and B.V. Nagarathna, delivered the judgment. Justice M.R. Shah authored the opinion for the bench.

Case Background

The dispute concerns land bearing R.S. No. 138, measuring 3 Hectors and 65 Ares, located in Kolhapur. The land was owned by the original writ petitioners (the respondents in this appeal). In 1999, the development plan for Kolhapur was sanctioned, and various portions of this land were reserved for public purposes such as parking, a garden, and an extension of a sewage treatment plant. However, the land was not acquired for these purposes.

On 02 January 2012, the landowners served a notice under Section 127 of the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act) to the Kolhapur Municipal Corporation, seeking acquisition of the land. The Municipal Corporation then resolved to acquire the property on 18 February 2012 and submitted a proposal to the State Government on 17 April 2012 for compulsory acquisition. The District Collector directed the proposal to the Special Land Acquisition Officer (SLAO) on 07 July 2012.

Following the enactment of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act of 2013), the Land Acquisition Act, 1894 was repealed. The SLAO directed the Corporation to deposit Rs. 77,65,12,000/- towards compensation on 06 October 2015. The Corporation, unable to pay this amount, requested the landowners to accept Transferable Development Rights (TDR) instead, which the landowners initially agreed to. However, disputes arose regarding the terms of the TDR, particularly concerning the development of the land, which was in a flood-prone area.

The landowners then filed a writ petition before the High Court, seeking a directive for the Corporation to acquire the land and pay compensation. The Corporation argued that the reservation had lapsed under Section 127 of the MRTP Act and that it was financially impossible to acquire the land. They also claimed the land was unsuitable for public purposes due to flooding.

Timeline:

Legal Framework

The case primarily revolves around the interpretation of the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act), particularly Sections 22, 126, and 127.

Section 22 of the MRTP Act outlines the contents of a Development Plan, including provisions for reserving land for public purposes such as schools, hospitals, markets, and open spaces. It states that a Development Plan shall generally indicate the manner in which the use of land in the area of a Planning Authority shall be regulated, and also indicate the manner in which the development of land therein shall be carried out. In particular, it shall provide so far as may be necessary for all or any of the following matters, that is to say:

• (a) proposals for allocating the use of land for purposes, such as residential, industrial, commercial, agricultural, recreational ;
• (b) proposals for designation of land for public purpose, such as schools, colleges and other educational institutions, medical and public health institutions, markets, social welfare and cultural institutions, theatres and places for public entertainment, or public assembly, museums, art galleries, religious buildings and government and other public buildings as may from time to time be approved by the State Government ;
• (c) proposals for designation of areas for open spaces, playgrounds, stadia, zoological gardens, green belts, nature reserves, sanctuaries and dairies ;

Section 126 of the MRTP Act deals with the acquisition of land required for public purposes specified in the plans. It allows the Planning Authority to acquire land by agreement, by granting Floor Space Index (FSI) or Transferable Development Rights (TDR), or by applying to the State Government for acquisition under the Land Acquisition Act, 1894 (now the Act of 2013).

Section 127 of the MRTP Act addresses the lapsing of reservations. It states that if any land reserved for a public purpose is not acquired within ten years from the date the final development plan comes into force, or if a declaration under sub-section (2) or (4) of Section 126 is not published within that period, the landowner can serve a notice to the Planning Authority. If the land is not acquired or steps for acquisition are not commenced within twelve months from the date of such notice, the reservation is deemed to have lapsed.

These provisions are crucial for understanding the timeline and legal requirements for land acquisition under the MRTP Act. The Supreme Court’s interpretation of these sections determined the outcome of the case.

Arguments

Arguments by the Kolhapur Municipal Corporation:

• The reservation on the land had lapsed due to non-acquisition within the stipulated time under Section 127 of the MRTP Act, rendering the High Court’s order for acquisition invalid.
• The Corporation was facing severe financial constraints and could not afford the compensation amount of Rs. 43,41,29,400/-. The entire budget of the Corporation for land acquisition was only Rs.21 crores.
• The land was unsuitable for public purposes like parking and gardens because it was a flood-affected area with a rivulet, ‘Jayanti Nala’, passing through it. The reserved area was within the High Flood Line.
• The Corporation argued that passing a resolution to acquire the land does not amount to the commencement of acquisition proceedings.
• The Corporation contended that the landowners were not fulfilling their obligations for the grant of TDR as per the Development Control Rules.

Arguments by the Landowners:

• The Corporation was estopped from changing its stand after initially agreeing to acquire the land and offering TDR.
• The landowners had been deprived of using their land for over ten years due to the reservation.
• The General Body of the Corporation had passed a resolution for acquisition, indicating their intention and financial capacity to acquire the land.
• The Corporation had previously offered TDR, and the landowners were now willing to accept it.
• The reservation had not lapsed because the government had not issued a notification in the Official Gazette as per Section 127(2) of the MRTP Act.
• The Corporation was obligated to make provisions for public purposes like parking and gardens in the Development Plan.

[TABLE] of Submissions by Parties

Issues Framed by the Supreme Court

The Supreme Court framed the following key issue for consideration:

Whether a writ of Mandamus can be issued by the High Court in exercise of powers under Article 226 of the Constitution of India directing the authority/Municipal Corporation to acquire the land reserved for a particular purpose and to pay the compensation to the original landowners despite the fact that the reservation is deemed to have lapsed in view of the statutory provisions and that the land which is directed to be acquired and for which the compensation is directed to be paid to the original landowners is unsuitable and unusable for the purposes for which it is reserved?

Treatment of the Issue by the Court:

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered several cases and legal provisions to arrive at its decision. These are categorized below:

On the interpretation of Section 127 of the MRTP Act and the lapsing of reservations:

• Girnar Traders vs. State of Maharashtra and Ors., (2007) 7 SCC 555 – Supreme Court of India: This case clarified the meaning of “steps” for acquisition under Section 127 of the MRTP Act, stating that it must be a step towards actual acquisition, not merely an application to the government.
• Shrirampur Municipal Council, Shrirampur vs. Satyabhamabai Bhimaji Dawkher and Ors., (2013) 5 SCC 627 – Supreme Court of India: This case held that a mere resolution by the Planning Authority or sending a letter to the government does not constitute commencement of acquisition proceedings.
• Chhabildas vs. State of Maharashtra and Ors., (2018) 2 SCC 784 – Supreme Court of India: This case reiterated that if no steps for acquiring land are taken within ten years of the plan and a purchase notice is served, steps must follow within one year, or the acquisition proceedings lapse.

On the obligations of the Planning Authority:

• Municipal Corporation of Greater Mumbai and Ors. Vs. Hiraman Sitaram Deorukhar and Ors., (2019) 14 SCC 411 – Supreme Court of India: This case was cited by the landowners to argue that the Corporation has a duty to make provisions for public purposes in the Development Plan.

On the principle of Approbate and Reprobate:

• Mumbai International Airport Private Limited Vs. Golden Chariot Airport & Anr., (2010) 10 SCC 422 – Supreme Court of India: This case was cited by the landowners to argue that the Corporation cannot change its stand.
• Joint Action Committee of Air Line Pilots’ Association of India (ALPAI) and Ors. Vs. Director General of Civil Aviation and Ors., (2011) 5 SCC 435 – Supreme Court of India: This case was cited by the landowners to argue that the Corporation cannot change its stand.
• Karam Kapahi and Ors. Vs. Lal Chand Public Charitable Trust and Anr., (2010) 4 SCC 753 – Supreme Court of India: This case was cited by the landowners to argue that the Corporation cannot change its stand.

Legal Provisions:

• Section 22 of the MRTP Act: This provision outlines the contents of a Development Plan, including reservations for public purposes.
• Section 126 of the MRTP Act: This section deals with the acquisition of land for public purposes.
• Section 127 of the MRTP Act: This provision addresses the lapsing of land reservations if not acquired within the stipulated time.

[TABLE] of Authorities Considered by the Court

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

✓ Girnar Traders vs. State of Maharashtra and Ors., (2007) 7 SCC 555*: The Court relied on this case to emphasize that “steps” for acquisition must be concrete actions towards acquisition, not just an application to the government.

✓ Shrirampur Municipal Council, Shrirampur vs. Satyabhamabai Bhimaji Dawkher and Ors., (2013) 5 SCC 627*: The Court followed this precedent to clarify that a mere resolution or letter does not constitute the start of acquisition proceedings.

✓ Chhabildas vs. State of Maharashtra and Ors., (2018) 2 SCC 784*: The Court reiterated the importance of adhering to the time limits for acquisition and the consequences of failing to do so.

The Supreme Court overturned the High Court’s decision, stating that the High Court was wrong to issue a writ of Mandamus to acquire the land. The Supreme Court emphasized that once a reservation lapses under Section 127 of the MRTP Act, the land is released from reservation, and the owner is free to use it subject to the provisions of the MRTP Act. The Court also noted that the land was unsuitable for the intended public purpose due to flooding and the presence of a rivulet.

The Court further held that the landowners could not claim TDR because they had previously refused it before the High Court and the land was not suitable for the public purpose for which it was reserved. The Court also stated that the principle of approbate and reprobate applied to both parties, and the landowners could not change their stance.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Statutory Compliance: The Court emphasized the importance of adhering to the statutory timelines and procedures outlined in the MRTP Act, particularly Section 127, regarding the lapsing of land reservations.
• Suitability of Land: The Court gave significant weight to the fact that the land was unsuitable for the intended public purpose due to its flood-prone nature and the presence of a rivulet.
• Financial Constraints: The Court acknowledged the financial constraints of the Municipal Corporation as a valid consideration, especially when the land was unsuitable for public use.
• Legal Precedents: The Court relied on previous judgments, especially Girnar Traders, Shrirampur Municipal Council and Chhabildas, to interpret the legal provisions and determine the steps required for land acquisition.
• Principle of Approbate and Reprobate: The Court applied this principle to both parties, preventing the landowners from claiming TDR after previously refusing it and preventing the Corporation from changing its stance after initially agreeing to acquire the land.

[TABLE] of Sentiment Analysis of Reasons Given by the Supreme Court

Fact:Law Ratio

Logical Reasoning

Key Takeaways

• Lapsing of Reservations: Land reservations for public purposes automatically lapse if not acquired within ten years of the final development plan, or if acquisition steps are not commenced within one year of a purchase notice from the landowner.
• Suitability of Land: Planning authorities must ensure that land reserved for public purposes is suitable for that purpose. Unsuitable land cannot be acquired simply because it is reserved.
• Financial Constraints: While financial constraints are not the sole consideration, they can be a relevant factor in deciding whether to acquire land, especially if the land is unsuitable.
• TDR: Landowners are not automatically entitled to TDR if they have previously refused it or if the land is unsuitable for the intended public purpose.
• Importance of Statutory Compliance: Strict adherence to the statutory timelines and procedures outlined in the MRTP Act is crucial for land acquisition.

Potential Future Impact:

• This judgment reinforces the importance of timely action by planning authorities in acquiring land for public purposes.
• It provides clarity on the interpretation of Section 127 of the MRTP Act and the consequences of failing to adhere to its provisions.
• It highlights the need for planning authorities to conduct thorough surveys and assessments to ensure that reserved land is suitable for the intended public purpose.
• It protects municipal corporations from being forced to acquire unusable land, thus preventing unnecessary financial burdens on the public exchequer.

Directions

The Supreme Court set aside the High Court’s order, thereby dismissing the original writ petition filed by the landowners. The Court also declared that the reservation of the land for public purposes was deemed to have lapsed.

Development of Law

The ratio decidendi of this case is that a High Court cannot issue a writ of mandamus directing a municipal corporation to acquire land and pay compensation when the land reservation has lapsed under Section 127 of the MRTP Act and the land is unsuitable for the intended public purpose. This judgment reinforces the principles established in earlier cases like Girnar Traders, Shrirampur Municipal Council, and Chhabildas, clarifying the interpretation of Section 127 and the consequences of failing to adhere to its provisions. The judgment also clarifies that a mere resolution by the Corporation does not amount to commencement of acquisition proceedings. The Court also emphasized that landowners cannotclaim TDR if they have previously refused it or if the land is unsuitable for the intended public purpose. The principle of approbate and reprobate was also applied to both parties, preventing them from changing their stances.

This case further solidifies the legal framework surrounding land acquisition and town planning in Maharashtra, ensuring that municipal corporations are not compelled to acquire unsuitable land and that landowners are not unduly deprived of their land rights due to lapsed reservations. The judgment promotes a more balanced approach, considering both the public interest and the rights of landowners.