Supreme Court Upholds Variation of Town Planning Scheme: Mrugendra Indravadan Mehta vs. Ahmedabad Municipal Corporation (10 May 2024)

Date of the Judgment: 10 May 2024
Citation: 2024 INSC 401
Judges: A.S. Bopanna, J and Sanjay Kumar, J

Can a municipal corporation alter a town planning scheme, reducing the land allotted to a landowner, and if so, what recourse does the landowner have? The Supreme Court of India recently addressed this question in a case concerning the Ahmedabad Municipal Corporation and a group of landowners. The core issue revolved around the legality of varying a town planning scheme, specifically regarding the reduction of land allotted to the appellants and the compensation provided for it. The judgment was delivered by a bench of Justices A.S. Bopanna and Sanjay Kumar, with Justice Sanjay Kumar authoring the opinion.

Case Background

The appellants’ father owned land in Ahmedabad. The Ahmedabad Municipal Corporation (the Corporation) implemented Town Planning Scheme No. 6 in 1963, requiring landowners to contribute a portion of their land for public purposes. The appellants’ father contributed 21.40% of his land. In return, he was allotted two final plots: Final Plot No. 2478 and Final Plot No. 463. However, the Corporation could not deliver possession of Final Plot No. 463 due to its occupation by slum dwellers. The scheme was varied in 1983 and again in 1986. In the second variation, Final Plot No. 463 was taken back for slum upgrades, and the appellants were offered Final Plot No. 187, which was smaller by 974 sq. mts. The Corporation offered a compensation of ₹25 per sq. mt. for the reduced area, which the appellants contested as inadequate. They were given possession of Final Plot No. 187 only in 1996, after litigation with its occupants ended.

Timeline

Course of Proceedings

The appellants filed a civil suit in the City Civil Court, Ahmedabad, seeking compensation of ₹1,63,97,673 or, alternatively, allotment of 974 sq. mts. of land. The Trial Court ruled in favor of the appellants, directing the Corporation to allot the remaining 974 sq. mts. of land but rejected the claim for monetary compensation. The Corporation appealed to the High Court of Gujarat, which overturned the Trial Court’s decision. The High Court held that the appellants were not entitled to further land allotment or compensation, as they had accepted the varied scheme and the compensation without protest. The appellants then appealed to the Supreme Court.

Legal Framework

The case is governed by the Gujarat Town Planning and Urban Development Act, 1976 (the Act of 1976). Key provisions include:

• Section 40: Allows the appropriate authority to create Town Planning Schemes, including provisions for laying out land, constructing buildings, and allotting land for public purposes.
• Section 45: Pertains to the reconstitution of plots, allowing for alteration of boundaries and allotment of final plots.
• Section 52: Details the contents of preliminary and final schemes, including the determination of compensation for land used for public purposes.
• Section 54: Provides for an appeal against decisions of the Town Planning Officer regarding compensation.
• Section 67: States that upon the preliminary scheme coming into force, all lands required by the appropriate authority vest in the authority.
• Section 70: Empowers the appropriate authority to apply for variation of a scheme due to error or informality.
• Section 71: States that a town planning scheme may at any time be varied by a subsequent scheme. ‘Notwithstanding anything contained in Section 70, a town planning scheme may at any time be varied by a subsequent scheme made, published and sanctioned in accordance with the provisions of this Act.’
• Section 81: Allows for the transfer of rights from original plots to final plots.
• Section 82: Provides for compensation for property or rights injuriously affected by a Town Planning Scheme.
• Section 105: Bars legal proceedings against the State Government or appropriate authority for actions done in good faith under the Act of 1976.

Arguments

Appellants’ Arguments:

• The appellants argued that the Corporation failed to provide vacant possession of Final Plot No. 463 as initially promised.
• They contended that the subsequent allotment of Final Plot No. 187, which was smaller by 974 sq. mts., was a reduction of their land holding.
• The appellants stated that the compensation of ₹25 per sq. mt. for the reduced area was inadequate, given the prevailing market rates in 1991.
• They claimed that they had suffered significant monetary losses due to the Corporation’s failure to provide possession of the land since 1963.
• The appellants relied on resolutions passed by the Town Planning Committee on 15.10.1986 and the Corporation on 30.10.1986, stating that they were to be allotted the ‘same area’ as in Final Plot No. 463.
• They argued that the Act of 1976 does not contemplate a second reduction in the reconstituted plot area.

Respondent’s Arguments (Ahmedabad Municipal Corporation):

• The Corporation argued that the suit was not maintainable and that the Civil Court lacked jurisdiction.
• They contended that the appellants had accepted Final Plot No. 187 and the compensation without protest and had not challenged the second varied scheme.
• The Corporation stated that the original Town Planning Scheme ceased to exist after the variation, and the appellants could not claim rights under it.
• The Corporation submitted that the appellants should have preferred an appeal under Section 54 of the Act of 1976 if they were dissatisfied with the compensation.
• The Corporation argued that the variation of the scheme was done as per the provisions of the Act of 1976.

[TABLE] Showing the Submissions categorized by Main Submissions of all sides:

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues but addressed the following questions:

1. Whether the High Court was correct in setting aside the Trial Court’s order for allotment of land in lieu of the reduced area?
2. Whether the appellants were entitled to compensation for the reduced area of land, and if so, at what rate?
3. Whether the variation of the Town Planning Scheme was valid and binding on the appellants?
4. Whether the appellants were entitled to any relief considering that they had accepted the smaller plot and the compensation without protest?

Treatment of the Issue by the Court

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

Authorities

The Supreme Court considered the following authorities:

Cases:

• State of Gujarat vs. Shantilal Mangaldas and others [1969] 1 SCC 509, Supreme Court of India: The Court discussed that the scheme comes into force, all rights in the original plots are extinguished and, simultaneously therewith, ownership springs in the reconstituted plots.
• Prakash Amichand Shah vs. State of Gujarat and others [1986] 1 SCC 581, Supreme Court of India: The Court observed that on the final scheme coming into force, the lands affected by the said scheme vest in the local authority and that the Town Planning Officer is authorized to determine whether any reconstituted plot can be given to a person whose land is affected by the scheme.
• Ahmedabad Municipal Corporation and another vs. Ahmedabad Green Belt Khedut Mandal and others [2014] 7 SCC 357, Supreme Court of India: The Court noted that a Town Planning Scheme is like consolidation proceedings and that reconstitution of plots is permissible.
• Maneklal Chhotalal and others vs. M.G. Makwana and others AIR 1967 SC 1373, Supreme Court of India: The Court observed that even if an original plot owner is allotted a smaller extent of land in the final plot, it would not amount to deprivation.
• Malluru Mallappa (Dead) through Lrs. vs. Kuruvathappa and others [2020] 4 SCC 313, Supreme Court of India: The Court observed that the first appellate Court is required to set out the points for determination, record the decision thereon and give its own reasoning.
• Santosh Hazari vs. Purushottam Tiwari (Deceased) by LRs [2001] 3 SCC 179, Supreme Court of India: The Court held that a first appeal is a valuable right and the judgment of the first appellate Court must reflect conscious application of mind.
• Laliteshwar Prasad Singh and others vs. S.P. Srivastava (Dead) thru. Lrs. [2017] 2 SCC 415, Supreme Court of India: The Court observed that the mere omission to frame the points for determination would not vitiate the judgment of the first appellate Court.
• G. Amalorpavam and others vs. R.C. Diocese of Madurai and others [2006] 3 SCC 224, Supreme Court of India: The Court held that non-compliance with the provisions of Order 41 Rule 31 CPC may be ignored if there has been substantial compliance.
• Union of India and another vs. Smt. Shanti Devi and others [1983] 4 SCC 542, Supreme Court of India: The Court discussed the return on investment in land.
• N. Nagendra Rao and Co. vs. State of A.P. [1994] 6 SCC 205, Supreme Court of India: The Court discussed the principles of compensation for negligence.
• Bhupendra Kumar Ramanlal and others vs. State of Gujarat and others [1995] 1 GLH 1124 = [1996] AIHC 109, High Court of Gujarat: The Court held that Section 71 of the Act of 1976 provides for the procedure laid down in the Act of 1976 for making a Town Planning Scheme being followed for the purpose of varying a sanctioned scheme.

Legal Provisions:

• Gujarat Town Planning and Urban Development Act, 1976: Sections 40, 45, 52, 54, 67, 70, 71, 81, 82, and 105.
• Gujarat Town Planning and Urban Development Rules, 1979: Rules 16, 17, 26, and 37.

[TABLE] of authorities considered by the court and HOW:

Judgment

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

How each authority was viewed by the Court?

• The Supreme Court relied on State of Gujarat vs. Shantilal Mangaldas and others [1969] 1 SCC 509* to explain the statutory readjustment of rights in a Town Planning Scheme.
• The Supreme Court followed Prakash Amichand Shah vs. State of Gujarat and others [1986] 1 SCC 581* to support the point that lands vest in the local authority on the final scheme coming into force.
• The Supreme Court followed Ahmedabad Municipal Corporation and another vs. Ahmedabad Green Belt Khedut Mandal and others [2014] 7 SCC 357* to explain that a Town Planning Scheme is like consolidation proceedings.
• The Supreme Court followed Maneklal Chhotalal and others vs. M.G. Makwana and others AIR 1967 SC 1373* to support the point that allotment of a smaller extent of land would not amount to deprivation.
• The Supreme Court distinguished Malluru Mallappa (Dead) through Lrs. vs. Kuruvathappa and others [2020] 4 SCC 313* and Santosh Hazari vs. Purushottam Tiwari (Deceased) by LRs [2001] 3 SCC 179*, holding that non-compliance with Order 41 Rule 31 CPC is not fatal if there has been substantial compliance.
• The Supreme Court followed Laliteshwar Prasad Singh and others vs. S.P. Srivastava (Dead) thru. Lrs. [2017] 2 SCC 415* to support the point that the mere omission to frame the points for determination would not vitiate the judgment of the first appellate Court.
• The Supreme Court followed G. Amalorpavam and others vs. R.C. Diocese of Madurai and others [2006] 3 SCC 224* to explain that non-compliance with the provisions of Order 41 Rule 31 CPC may be ignored if there has been substantial compliance.
• The Supreme Court distinguished Union of India and another vs. Smt. Shanti Devi and others [1983] 4 SCC 542* and N. Nagendra Rao and Co. vs. State of A.P. [1994] 6 SCC 205*, noting that the principles of compensation would have had application if the claim for damages was supported by evidence.
• The Supreme Court followed Bhupendra Kumar Ramanlal and others vs. State of Gujarat and others [1995] 1 GLH 1124 = [1996] AIHC 109*, agreeing that Section 71 of the Act of 1976 provides for the procedure for varying a sanctioned scheme.

What weighed in the mind of the Court?

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

• The appellants’ acceptance of the varied scheme and the compensation without protest.
• The lack of evidence presented by the appellants to support their claim for higher compensation.
• The statutory power of the Corporation to vary a Town Planning Scheme under Section 71 of the Act of 1976.
• The principle that rights in original plots are extinguished upon the implementation of a varied scheme.
• The fact that there is no guaranteed right to a plot of the same area after the implementation of a Town Planning Scheme.

[TABLE] ranked based on percentage to show the ranking of sentiment analysis of reasons given by the Supreme Court:

Fact:Law Ratio:

The Court weighed the factual aspects of the case, such as the appellants’ acceptance of the varied scheme and their failure to provide evidence, more heavily than the legal arguments.

Logical Reasoning:

Conclusion

The Supreme Court upheld the High Court’s decision, ruling against the appellants. The Court emphasized that the appellants had accepted the smaller plot and the compensation without protest, which foreclosed their right to challenge the allotment or seek more compensation. The Court also affirmed the Corporation’s power to vary a Town Planning Scheme under Section 71 of the Act of 1976. This judgment underscores the importance of timely legal action and the need for landowners to challenge any perceived injustice in the implementation of Town Planning Schemes. The Court also emphasized that the rights in original plots are extinguished upon the implementation of a varied scheme, and there is no guaranteed right to a plot of the same area after the implementation of a Town Planning Scheme.