Supreme Court resolves land dispute in favor of development: Satellite Developers vs. State of Maharashtra (27 April 2017)

Can a land owner develop a reserved land if the authorities fail to acquire it within a stipulated time? The Supreme Court addressed this question in a dispute between Satellite Developers and the State of Maharashtra. The core issue revolved around the acquisition of land reserved for public purposes under the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act). The court, while acknowledging the delay, allowed development of the land based on a modified policy.

Citation: [Not Available in Source]

Judges: A.K. Sikri, J. and Abhay Manohar Sapre, J.

Case Background

The case involves a land dispute concerning property in Mumbai, specifically C.S. No. 1/255 on Foras Road, Tardeo Division, which is owned by Satellite Developers Limited (the appellant). On September 16, 1991, the appellant asserted their rights over the land, which measured 10,394 sq.mts. The Municipal Corporation of Greater Bombay (the Corporation) had prepared a Draft Development Plan (DDP) in 1991, reserving parts of the land for various public purposes. Initially, 3548.52 sq.mts. was marked for a recreation ground, 1355 sq.mts for a maternity home, and 5491.4 sq.mts for housing the dishoused. Later, the reservation for the recreation ground was reduced to 2000 sq.mts.

The MRTP Act allows the Corporation to acquire such reserved land, either by agreement or under the Land Acquisition Act, 1894. If the acquisition is not completed within a specified timeframe, the reservation lapses under Section 127 of the MRTP Act. This section allows the owner to serve a notice to the planning authority, and if no action is taken within six months, the land is released from reservation.

Timeline

Course of Proceedings

The appellant initially filed Writ Petition No. 1184 of 2010 in the High Court, seeking a declaration that the land reservation had lapsed. However, they also requested an alternative order directing the respondents to acquire the land. The High Court disposed of this writ petition on July 21, 2010, directing the respondent to pass the final award by October 31, 2010, and make payment within a month. The appellant was given liberty to revive the writ petition if the order was not complied with.

The High Court extended the deadline for passing the award to December 31, 2010, and the payment to January 31, 2011. Subsequently, the Municipal Corporation sought further time, and the High Court directed that 50% of the award amount be deposited in the Court. An award was signed on October 31, 2011, for the acquisition of 2000.25 sq.mts. of land, with a compensation of Rs. 14,48,19,014.

On July 17, 2012, the appellant filed another writ petition (No. 1600 of 2012), seeking to quash the award, alleging that they were not consulted before the award was signed and that the compensation was not paid. Despite repeated extensions, the Municipal Corporation failed to pay the compensation.

The High Court finally heard and decided Writ Petition No. 1184 of 2010 on May 08, 2013. The court noted the respondents’ lack of diligence but refused to grant the prayer for de-reservation, stating that the appellant had waived the effect of their notice under Section 127 by following up on the acquisition proceedings. The High Court also noted that the validity of the award could be argued in Writ Petition No. 1600 of 2010.

The present appeals were filed against the High Court’s judgment dated May 08, 2013.

Legal Framework

The case primarily revolves around Section 127 of the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act). This section deals with the lapsing of land reservations if the land is not acquired within a specified period.

Section 127 of the MRTP Act states:

“127. Lapsing of reservation: 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 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, Development Authority or as the case may be, Appropriate Authority to that effect; and if within six 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.”

This provision allows a landowner to serve a notice to the planning authority if the land is not acquired within ten years of the final development plan. If no acquisition or steps for acquisition are initiated within six months of this notice, the reservation lapses, and the land becomes available for development.

Arguments

The appellant, Satellite Developers, argued that the Draft Development Plan (DDP) had lapsed due to the Corporation’s failure to acquire the land within the stipulated time under Section 127 of the MRTP Act. They initially sought a declaration that the reservation had lapsed. However, they also expressed willingness to develop the land if a favorable arrangement could be reached.

The Municipal Corporation, on the other hand, referred to a Notification dated May 10, 2016, issued by the Urban Development Department of the Government of Maharashtra. This notification proposed a 70/30 policy, where the owner could develop 70% of the land and hand over the remaining 30% to the planning authority free of cost. The Corporation sought to settle the matter based on this policy.

The appellant responded to the Municipal Corporation’s proposal by stating they were ready to develop 40% of the plot as a Recreation Garden for the city at their own cost, if 60% of the balance plot was made available for their development. They also requested that 100% of the FSI/development potential of the entire plot be allowed on the 60% and any open space deficiency in the planning of the building be condoned without payment of any premium.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was how to resolve the dispute, considering the appellant’s claim that the reservation had lapsed under Section 127 of the MRTP Act and the Municipal Corporation’s proposal based on the 70/30 policy.

Treatment of the Issue by the Court

Authorities

The Supreme Court did not explicitly cite any specific cases or books in its judgment. However, the judgment makes reference to the following legal provisions:

• Section 127 of the Maharashtra Regional and Town Planning Act, 1966: This provision deals with the lapsing of land reservations if the land is not acquired within a specified period.
• The Land Acquisition Act, 1894: This Act provides the procedure for acquiring land for public purposes.
• Article 142 of the Constitution of India: This article empowers the Supreme Court to pass orders necessary for doing complete justice in any cause or matter pending before it.

Judgment

The Supreme Court, while acknowledging that the 70/30 policy was not strictly applicable, used it as a yardstick to resolve the dispute. The Court noted the Municipal Corporation’s default and, exercising its powers under Article 142 of the Constitution, allowed the appellant to develop 60% of the land and hand over the remaining 40% to the Planning Authority free of cost. The Court also stated that the appellant would not be called upon to pay any penalties, and the award passed in the case would not come in the way of the parties.

What weighed in the mind of the Court?

The Supreme Court’s decision was influenced by several factors. The Court noted that the Municipal Corporation had defaulted in certain respects, which weighed in favor of the appellant. The Court also considered the fact that both parties were willing to resolve the dispute, and the 70/30 policy could be used as a basis for settlement. The Court also took into account that the appellant was not pressing its challenge based on Section 127 of the MRTP Act.

The Court’s reasoning was based on a combination of the facts of the case and the legal provisions. The Court emphasized the need to do complete justice and used its powers under Article 142 of the Constitution to achieve this.

Logical Reasoning

The Court did not explicitly state that the reservation had lapsed. Instead, it focused on finding a practical solution that would be fair to both parties. The Court’s decision was influenced by the fact that the Municipal Corporation had not acquired the land within the specified time, and the appellant was willing to develop the land.

The Court stated:

“Strictly speaking, the Policy is not applicable in the instant case. However, both the parties want that to be the basis for resolving the controversy.”

“Having regard to the peculiar facts of this case and that the Municipal Corporation has defaulted in certain respects, we are of the view that ends of justice would be sub-served if we allow the owner/ appellant to develop the reservation of 60% of land and after handing over it to the Planning Authority free of cost, then remaining 40% land is allowed to be developed as per the adjoining use…”

“This order is passed in exercise of our powers under Article 142 of the Constitution and without treating this as a precedent.”

The Court’s decision was based on the specific facts of the case and was not intended to set a precedent.

Key Takeaways

• Landowners can negotiate with authorities for development if acquisition is delayed.
• The Supreme Court can use its powers under Article 142 to achieve complete justice.
• The 70/30 policy can be used as a basis for settlement in land disputes.
• Municipal Corporations need to act diligently in land acquisition.

Directions

The Supreme Court directed that the appellant could develop 60% of the land and hand over the remaining 40% to the Planning Authority free of cost. The Court also stated that the appellant would not be called upon to pay any penalties and the award passed in the case would not come in the way of the parties.

Development of Law

The ratio decidendi of this case is that the Supreme Court can exercise its powers under Article 142 of the Constitution to modify existing policies and find a solution that is fair to both parties. This case does not set a precedent but demonstrates the Court’s willingness to use its powers to achieve complete justice.

Conclusion

The Supreme Court resolved a long-standing land dispute between Satellite Developers and the State of Maharashtra by allowing the appellant to develop 60% of the land and hand over 40% to the Planning Authority free of cost. The decision was based on a modified version of the 70/30 policy and the Court’s powers under Article 142 of the Constitution.