Supreme Court settles land reservation issues under MRTP Act: Nirmati Developers vs. State of Maharashtra (2025) INSC 265 (25 February 2025)

Date of the Judgment: 25th February, 2025

Citation: 2025 INSC 265

Judges: J.B. Pardiwala, J., R. Mahadevan, J.

Can a prolonged delay in acquiring reserved land lead to the lapse of its reservation, allowing the owner to utilize it? The Supreme Court addressed this critical question in a case involving Nirmati Developers and the State of Maharashtra, focusing on the interpretation and application of Sections 49, 126, and 127 of the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act). The court examined the obligations of planning authorities to acquire land within specified timeframes and the rights of landowners when such timelines are not met. Justices J.B. Pardiwala and R. Mahadevan delivered the judgment.

Case Background:

The case revolves around a vacant plot of land admeasuring 50,138 sq.ft in Amravati, Maharashtra. Originally owned by Smt Akhtar Bano Rashid, Abdul Majid A. Samad, and Mohammad Sajid A. Samad, the land was part of a larger plot. The municipal authorities had initially sanctioned a development plan for a residential area, but the remaining portion, including the subject land, was reserved for a government school.

On 25-02-1993, a revised development plan under the MRTP Act designated the property for a private school, favoring Respondent No. 5. However, no steps were taken to acquire the land until 2006.

On 04-07-2006, the original owners served a purchase notice under Section 49 of the MRTP Act, urging the authorities to either acquire the property or release it from reservation. This notice was acknowledged on 02-01-2007, with a directive to Respondent No. 5 to complete acquisition within one year, failing which the reservation would lapse.

Despite a request from Respondent No. 5 to Respondent No. 7 on 29-12-2007 to initiate acquisition proceedings under Section 126 of the MRTP Act, no action was taken within the stipulated one-year period, which ended on 02-01-2008.

On 13-08-2014, the previous owners issued another purchase notice under Section 127 of the MRTP Act, again requesting the acquisition of the land. The Respondent No. 6 received a proposal from Respondent No. 5 to acquire the land on 12-06-2015.

On 30-12-2015, the petitioner, Nirmati Developers, purchased the property for Rs.1.26 Crore from the original owners. Subsequently, on 16-03-2016, the appellants filed a Writ Petition seeking directions for Respondent No. 5 to deposit the compensation amount under the new Land Acquisition Act, 2017, and complete the acquisition, or declare the reservation lapsed under Section 49(7) of the Act.

Timeline:

Course of Proceedings:

The High Court disposed of the writ petition, allowing the appellants to take steps available to them under the law. It noted that the original owners had issued a notice under Section 49 of the MRTP Act on 04-07-2006, which was confirmed on 02-01-2007. Since no acquisition steps were taken within one year, the High Court observed that the original owners did not take any development steps and sold the property to the present developer on 31-12-2015.

The High Court emphasized the distinction between Sections 49 and 127 of the MRTP Act, stating that Section 49 is for those who want to develop their property immediately, while Section 127 requires waiting for ten years. The court found that the original owners did not take advantage of the de-reservation for six years, and therefore, the benefits could not accrue to the present petitioners. It granted the petitioner liberty to take such other steps as are open to him in law.

Legal Framework:

The Supreme Court examined the relevant sections of the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act), which govern land acquisition and reservation in Maharashtra. Key provisions include:

Section 49 of the MRTP Act:

This section deals with the obligation to acquire land when permission for development is refused or granted with conditions. It allows landowners to serve a purchase notice to the State Government, requiring the appropriate authority to purchase their interest in the land.

“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…”

Section 126 of the MRTP Act:

This section outlines the process for acquiring land required for public purposes specified in plans. It allows planning authorities to acquire land through agreement, by granting Floor Space Index (FSI) or Transferable Development Rights (TDR), or by applying to the State Government for acquisition under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

“126. Acquisition of land required for public purposes specified in plans (1) When 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…”

Section 127 of the MRTP Act:

This section pertains to the lapsing of reservations. If land reserved for any purpose in a plan is not acquired by agreement within ten years from the date the plan comes into force, the owner can serve a notice to the authorities. If no acquisition or steps for acquisition commence within twelve months of this notice, the reservation is deemed to have lapsed.

“127. Lapsing of reservations. —(1) 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…”

Arguments:

Arguments by the Appellants (Nirmati Developers):

• Lapse of Reservation: The appellants argued that the reservation of the land had lapsed under both Sections 49(7) and 127 of the MRTP Act. They contended that since the land was reserved in 1993 and no acquisition took place, the purchase notice issued on 04-07-2006 under Section 49 triggered a lapse when the authorities failed to acquire the land within one year of the notice confirmation on 02-01-2007.
• Subsequent Purchase Notice: The appellants further argued that the purchase notice issued on 13-08-2014 under Section 127 reinforced the lapse, as no steps were taken to acquire the land within twelve months of this notice.
• Deprivation of Land Use: The appellants emphasized that the authorities had not allowed the original owners to use the land and were now preventing the purchasers from utilizing it, which is unjust and unreasonable.

Arguments by the Respondent (State of Maharashtra & Corporation):

• Validity of Reservation: The respondents likely argued for the validity of the land reservation for the private school, emphasizing the public interest in providing educational facilities.
• Procedural Compliance: The respondents may have contended that they had initiated steps towards acquisition, even if these steps did not result in actual acquisition within the stipulated timeframes.
• Intention to Acquire: The respondents might have asserted their intention to acquire the land, citing the proposal received by Respondent No. 6 on 12-06-2015 from Respondent No. 5 to acquire the land.

Issues Framed by the Supreme Court:

1. Whether the reservation of the plot in question could be said to have lapsed by efflux of time in view of the provisions under Sections 126 and 127 of the MRTP Act respectively?

Treatment of the Issue by the Court: “The following table demonstrates as to how the Court decided the issues”

Authorities:

The Supreme Court relied on several key cases and legal provisions to arrive at its decision:

1. Chhabildas v. State of Maharashtra (2018 INSC 106) [Supreme Court of India]: This case explained the timelines and obligations under Sections 49 and 127 of the MRTP Act, emphasizing the duty to acquire land within specified periods after a purchase notice is served.
2. Girnar Traders v. State of Maharashtra ((2007) 7 SCC 555) [Supreme Court of India]: This case clarified the scheme of Sections 126 and 127, highlighting the legislative intent to expedite land acquisition and the consequences of failing to take steps within the prescribed timeframes.
3. Shrirampur Municipal Council v. Satyabhamabai Bhimaji Dawkher ((2013) 5 SCC 627) [Supreme Court of India]: This case reiterated the findings in Girnar, emphasizing that steps towards acquisition commence when the State Government takes active steps, such as publishing a declaration under Section 6 of the Land Acquisition Act.
4. Municipal Corpn. of Greater Bombay v. Dr Hakimwadi Tenants’ Assn. (1988 Supp SCC 55) [Supreme Court of India]: This case discussed the interpretation of “no steps as aforesaid are commenced for its acquisition” under Section 127.
5. Bhavnagar University v. Palitana Sugar Mills Pvt. Ltd. (AIR 23 SC 511) [Supreme Court of India]: This case underscored the importance of adhering to statutory obligations and timelines in land acquisition to protect the rights of property owners.
6. Chairman, Indore Vikas Pradhikaran v. Pure Industrial Coke and Chemicals Ltd. ((2007) 8 SCC 705) [Supreme Court of India]: This case highlighted that the right to property is not only a constitutional right but also a human right.
7. Prafulla C. Dave and Ors. v. Municipal Commissioner and Ors. ((2015) 11 SCC 90) [Supreme Court of India]: This case clarified the procedure for lapsing of land reservation under Section 127 of the M.R.T.P. Act, emphasizing the need for a notice from the landowner and a corresponding failure on the part of the authority to take requisite steps.
8. Kolhapur Municipal corporation and Others v. Vasant Mahadev Patil (dead), through LRs & Ors. ((2022) 5 SCC 758) [Supreme Court of India]: This case held that when a reservation lapses under Section 127(1) of the MRTP Act, it lapses for all purposes and for all times to come, and no writ of mandamus can be issued to direct acquisition of that land.
9. Municipal Corpn., Greater Mumbai v. Hiraman Sitaram Deorukhar ((2019) 14 SCC 411) [Supreme Court of India]: This case examined the reservation of land for a garden in a Development Plan and emphasized that land reserved for public park cannot be permitted to be converted for other public purposes.
10. Bangalore Medical Trust v. B.S. Muddappa ((1991) 4 SCC 54) [Supreme Court of India]: This case was relied upon in Municipal Corpn., Greater Mumbai v. Hiraman Sitaram Deorukhar, emphasizing the importance of preserving land reserved for public parks and gardens.

Judgment:

How each authority was viewed by the Court?

• Chhabildas v. State of Maharashtra (2018 INSC 106): The Court relied on this case to emphasize the importance of adhering to the timelines specified in Sections 49 and 127 of the MRTP Act.
• Girnar Traders v. State of Maharashtra ((2007) 7 SCC 555): The Court used this case to reinforce the legislative intent behind Sections 126 and 127, which is to expedite land acquisition and prevent prolonged deprivation of land use.
• Shrirampur Municipal Council v. Satyabhamabai Bhimaji Dawkher ((2013) 5 SCC 627): The Court cited this case to highlight that the steps towards acquisition must be active and lead to the publication of a declaration under Section 6 of the Land Acquisition Act.
• Bhavnagar University v. Palitana Sugar Mills Pvt. Ltd. (AIR 23 SC 511): The Court referred to this case to underscore the statutory obligation on the part of the State and the appropriate authorities to revise the development plan and the rights of the owners.
• Chairman, Indore Vikas Pradhikaran v. Pure Industrial Coke and Chemicals Ltd. ((2007) 8 SCC 705): The Court cited this case to emphasize that the right to property is not only a constitutional right but also a human right.
• Prafulla C. Dave and Ors. v. Municipal Commissioner and Ors. ((2015) 11 SCC 90): The Court cited this case to clarify the procedure for lapsing of land reservation under Section 127 of the M.R.T.P. Act, emphasizing the need for a notice from the landowner and a corresponding failure on the part of the authority to take requisite steps.
• Kolhapur Municipal corporation and Others v. Vasant Mahadev Patil (dead), through LRs & Ors. ((2022) 5 SCC 758): The Court cited this case to hold that when a reservation lapses under Section 127(1) of the MRTP Act, it lapses for all purposes and for all times to come.
• Municipal Corpn., Greater Mumbai v. Hiraman Sitaram Deorukhar ((2019) 14 SCC 411): The Court cited this case to hold that land reserved for public park cannot be permitted to be converted for other public purposes.

What weighed in the mind of the Court?:

The Supreme Court’s decision was influenced by several factors, including the prolonged delay in acquiring the land, the failure of the authorities to take timely steps for acquisition, and the deprivation of the landowner’s right to use the property. The Court emphasized the importance of adhering to the timelines prescribed in the MRTP Act to balance the interests of the general public and the rights of individual landowners.

Fact:Law Ratio:

Logical Reasoning:

The Court’s reasoning was based on the following key points:

• The land was reserved for almost 33 years, indicating a significant delay in acquisition.
• The authorities failed to take necessary steps to acquire the land within the timelines prescribed under Sections 126 and 127 of the MRTP Act.
• The original owners and subsequent purchasers were deprived of the right to use the land for an extended period.

The Court emphasized that the principles underlying Section 127 of the MRTP Act aim to ensure that land is either utilized for the purpose for which it is reserved within a reasonable timeframe or allowed to be used by the owner for permissible purposes under the town planning scheme.

The Court quoted:

“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.”

Key Takeaways:

• Timely Acquisition: Planning authorities must adhere to the timelines prescribed in the MRTP Act for acquiring reserved land.
• Lapse of Reservation: Failure to acquire land or initiate acquisition steps within the stipulated timeframes can lead to the lapse of reservation.
• Landowner’s Rights: Landowners have the right to utilize their property if the authorities fail to acquire it within a reasonable period.

Development of Law:

The ratio decidendi of the case is that if land reserved under a development plan is not acquired within the timelines prescribed by the MRTP Act, the reservation lapses, and the landowner is free to use the land for permissible purposes. This decision reinforces the importance of timely action by planning authorities and protects the rights of landowners against prolonged deprivation of land use.

Conclusion:

The Supreme Court’s decision in Nirmati Developers vs. State of Maharashtra underscores the critical need for planning authorities to adhere to the timelines prescribed in the MRTP Act for acquiring reserved land. The judgment clarifies that prolonged delays in acquisition can lead to the lapse of reservation, allowing landowners to utilize their property. This ruling reaffirms the balance between public interest and individual rights in land use planning.

Category:

Parent category: Maharashtra Regional and Town Planning Act, 1966

Child category: Section 49, Maharashtra Regional and Town Planning Act, 1966

Child category: Section 126, Maharashtra Regional and Town Planning Act, 1966

Child category: Section 127, Maharashtra Regional and Town Planning Act, 1966

FAQ:

1. What happens if the government reserves my land for a public purpose but doesn’t acquire it for many years?

   If your land is reserved for a public purpose but not acquired within the timelines specified in the Maharashtra Regional and Town Planning Act (MRTP Act), the reservation may lapse, allowing you to use the land for other permissible purposes.

2. How long does the government have to acquire my land after reserving it?

   The government generally has ten years from the date the final development plan comes into force to acquire your land. If they don’t, you can issue a purchase notice.

3. What is a purchase notice, and how does it help me?

   A purchase notice is a formal notification to the planning authorities, asking them to either acquire your land or release it from reservation. If they fail to act within twelve months of this notice, the reservation is deemed to have lapsed.

4. Can I sell my land if it is reserved for a public purpose?

   Yes, you can sell your land, but the value may be affected by the reservation. If the reservation has lapsed, you can sell the land without the restriction.

5. What steps should I take if the government has reserved my land for a long time without acquiring it?

   You should first check when the final development plan came into force. If ten years have passed, serve a purchase notice to the planning authorities. If they don’t act within twelve months, the reservation lapses.