Supreme Court Orders Consideration of Rehabilitation or Compensation for Occupants Under Town Planning Scheme: Jaffar Ali Nawab Ali Chaudhari vs. Municipal Corporation of Greater Mumbai (2023)

Date of the Judgment: November 6, 2023
Citation: 2023 INSC 988
Judges: Justice Vikram Nath and Justice Rajesh Bindal
Can a long-term occupant of land, who has been paying taxes, be denied consideration for rehabilitation or compensation when the land is affected by a Town Planning Scheme? The Supreme Court of India addressed this question in a recent case, emphasizing the need to consider the rights of such occupants. This judgment highlights the importance of fair treatment and due process in urban development. The bench comprised Justice Vikram Nath and Justice Rajesh Bindal.

Case Background

The appellants in this case were successors to Nawab Ali Suleman, who had been in possession of a property since 1976. The Municipal Corporation of Greater Mumbai had even assessed the property for tax. The dispute began when the Municipal Corporation issued a notice on February 20, 2001, to Nawab Ali Suleman under Section 314 read with Section 394 of the Mumbai Municipal Corporation Act, 1888. This notice was challenged in a civil suit, which was decided in favor of the occupants on March 27, 2003, restraining the Corporation from taking any action.

Subsequently, the Corporation issued fresh notices on January 17, 2004, and June 22, 2007, under Section 89 read with Section 165 of the Maharashtra Regional and Town Planning Act, 1966. Despite a reply from the occupant, the Corporation ordered the surrender of the plot on June 25, 2007. This order was challenged in another civil suit. During the pendency of the suit, Nawab Ali passed away, and the appellants were brought on record as his legal representatives. The Trial Court ruled in favor of the appellants on September 29, 2011, declaring the notices and order illegal. However, the High Court of Judicature at Bombay overturned this decision, leading to the present appeal before the Supreme Court.

Timeline

Course of Proceedings

The litigation began with a notice issued by the Municipal Corporation of Greater Mumbai to Nawab Ali Suleman, the predecessor of the appellants, under Section 314 read with Section 394 of the Mumbai Municipal Corporation Act, 1888. This notice was challenged in Civil Suit No. 1226 of 2001, which was decreed in favor of the occupants. Subsequently, the Corporation issued fresh notices under Section 89 read with Section 165 of the Maharashtra Regional and Town Planning Act, 1966, leading to another civil suit, Suit No. 2608 of 2007. The Trial Court decreed this suit in favor of the appellants, but the High Court of Judicature at Bombay reversed this decision in First Appeal No. 686 of 2018, leading to the present appeal before the Supreme Court.

Legal Framework

The case involves the interpretation and application of the following legal provisions:

• Section 314 and Section 394 of the Mumbai Municipal Corporation Act, 1888: These sections pertain to notices issued by the Municipal Corporation regarding unauthorized constructions or encroachments. The specific text of these sections is not provided in the judgment.
• Section 89 and Section 165 of the Maharashtra Regional and Town Planning Act, 1966: These sections deal with the powers of the planning authority to remove or alter any structure that does not conform to the development plan. The specific text of these sections is not provided in the judgment.
• Town Planning Scheme: The Town Planning Scheme, notified on August 1, 1994, and subsequent circulars issued by the Municipal Corporation, provide for the rehabilitation or compensation of occupants affected by the scheme.

The legal framework is set within the context of urban planning and the rights of occupants affected by development schemes. The Constitution of India guarantees the right to property and livelihood, which are relevant in this context.

Arguments

The appellants argued that they were entitled to rehabilitation or compensation based on the Town Planning Scheme notified on August 1, 1994, and subsequent circulars issued by the Municipal Corporation. They emphasized their long-term possession of the property since 1976, which was also supported by a census certificate dated May 24, 1978. The appellants contended that their genuine claim was not being considered despite their undisputed possession.

The Municipal Corporation, on the other hand, argued that the suit filed by the appellants was not maintainable due to the bar under Section 149 of the Act. They also claimed that the appellants’ claim was highly belated and could lead to a flood of similar claims. The Corporation contended that there was no error in the High Court’s order.

The innovativeness of the argument lies in the appellants’ reliance on the Town Planning Scheme and their long-term possession as a basis for their claim, despite the legal challenges raised by the Corporation.

Issues Framed by the Supreme Court

The main issue before the Supreme Court was:

1. Whether the appellants were entitled to consideration of their claim for allotment of an alternative site or compensation for the premises in their use and occupation.

Treatment of the Issue by the Court

The following table demonstrates how the Court decided the issue:

Authorities

The court considered the following authorities:

Judgment

The Court considered the following authorities:

• Town Planning Scheme (notified on 01.08.1994) and subsequent circulars were considered by the Court to determine the rights of the occupants.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the undisputed fact that the appellants had been in possession of the property since 1976 and that the Town Planning Scheme provided for rehabilitation or compensation for such occupants. The Court emphasized the need to consider the appellants’ claim, rather than getting caught up in procedural technicalities.

The court’s reasoning is summarized in the following logical flowchart:

The Court did not consider any alternative interpretations, focusing solely on the need to implement the Town Planning Scheme and protect the rights of long-term occupants.

The Supreme Court allowed the appeal and set aside the High Court’s order. The Court directed the Municipal Corporation to consider the appellants’ claim for rehabilitation or compensation within three months. The decision was based on the undisputed fact of the appellants’ possession since 1976 and the provisions of the Town Planning Scheme.

The Court stated, “The only prayer of the appellants is that their claim for rehabilitation or payment of compensation be considered in terms of the Town Planning Scheme. The same has not been considered.”

The Court further added, “Instead of relegating the parties to litigate further, in our view, the present appeal can be disposed of with a direction to the Corporation to consider the claim of the appellants in terms of the Town Planning Scheme either for rehabilitation or payment of compensation.”

The Court concluded, “The needful shall be done within a period of three months from the date of receipt of copy of the order.”

There was no minority opinion in this case.

Key Takeaways

• Long-term occupants of land, who have been paying taxes, have a right to have their claims for rehabilitation or compensation considered under Town Planning Schemes.
• Municipal Corporations must adhere to the provisions of Town Planning Schemes and circulars, ensuring fair treatment of occupants.
• The Supreme Court prioritizes the substantive rights of occupants over procedural technicalities in cases involving urban development.

Directions

The Supreme Court directed the Municipal Corporation to consider the claim of the appellants for rehabilitation or payment of compensation within three months from the date of receipt of a copy of the order.

Development of Law

The ratio decidendi of this case is that long-term occupants of land, who have been paying taxes, have a right to have their claims for rehabilitation or compensation considered under Town Planning Schemes. This reaffirms the importance of considering the rights of occupants in urban development and planning. There is no change in the previous position of the law.

Conclusion

The Supreme Court’s decision in Jaffar Ali Nawab Ali Chaudhari vs. The Municipal Corporation of Greater Mumbai emphasizes the need for Municipal Corporations to consider the claims of long-term occupants of land for rehabilitation or compensation under Town Planning Schemes. The court prioritized the substantive rights of the appellants over procedural technicalities, directing the Corporation to consider their claim within three months.