Supreme Court: In an appeal filed against the order passed by the Bombay High Court, wherein it was held that a person intending to develop their property at the earliest can take recourse of Section 49 otherwise they would have to wait for a period of 10 years as envisaged under Section 127(1) of the Maharashtra Regional and Town Planning Act, 1966 (‘MRTP Act’), the division bench of JB Pardiwala* and R. Mahadevan, JJ., while setting aside the impugned order, held that the principles underlying in Section 127 of the MRTP Act is either to utilize the land for the purpose for which it is reserved in the timeline given or let the owner utilize the land for the purpose as permissible under the town planning scheme. The reservation shall be deemed to have lapsed if no steps are taken for acquisition of the said land within the prescribed period.
Thus, the Court declared that 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.
Background
On 11-01-1967, the Maharashtra Regional and Town Planning Act, 1966 (‘MRTP Act’) came into force in the State of Maharashtra. The property in question — Vacant plot was originally owned jointly which was a part of the bigger plot. The erstwhile owners had submitted Land Development Plan for development of 2.47 hectare. Respondent 3 herein sanctioned the development plan for residential area and the remaining area was reserved for Government school. On 25-02-1993, the revised development plan for Amravati came into effect in which the property in question was shown as reserved for a private school i.e., for respondent 5. a Public Trust. From 1993 till 2006 no action was taken by the respondents to acquire the property for the private school.
On 04-07-2006, the erstwhile owners served purchase notice under Section 49 of the Act, 1966 on respondent1 calling upon him either to acquire the said property or release it from reservation. On 02-01-2007, respondent 1 confirmed the purchase notice issued by the erstwhile owners. By a letter dated 02-01-2007, the respondent 1 directed the respondent 5 to complete the acquisition proceedings within twelve months from the 02-01-2007 failing which the reservation would lapse and the property would stand released from reservation.
Respondent 1 was aware that the land acquisition proceedings had to be completed within twelve months from 02 01-2007 failing which the property would stand de-reserved by operation of Section 49(7) of the MRTP Act.
On 29-12-2007, i.e., three days before the expiry of the last date of acquiring the property respondent 5 issued a letter to the respondent 7 to commence the land acquisition proceedings under Section 126 of the MRTP Act. On 13-08-2014, the erstwhile owner issued a purchase notice under Section 127 of the MRTP Act to Respondents 1,3,4 and 6 requesting them to acquire their land.
Indisputably, till 2018 respondent 3 did not make any application to acquire the property and no notification under Section 6 of the Land Acquisition Act, 1894 was published by the competent authority. Further no amount towards compensation was deposited by respondent 5 with any authority for the said property. Thus, by operation of Section 49(7) of the MRTP Act reservation of the property lapsed on 02-01-2008 and the erstwhile owners were free to use the same as permissible in law.
On 09-04-2015, the erstwhile owners submitted an application addressed to the respondent 4 seeking permission to construct a boundary wall surrounding the property with a view to prevent encroachment. Respondent 4 vide letter dated 27-08-2015 declined to grant permission to put up the wall on the ground that the property was reserved for respondent 5.
On 30-12-2015 by registered sale deed the erstwhile owners sold the property to the appellants herein. On 16-03-2016 the appellants herein filed a writ petition seeking direction that either respondent 5 shall deposit the amount towards compensation for the land reserved for it since 1993 or declare that the reservation had lapsed under Section 49(7) of the MRTP Act.
The High Court viewed that the person intending to develop his property at the earliest can take recourse of Section 49 of the MRTP Act otherwise he has to wait for a period of 10 years as envisaged under Section 127(1) of the MRTP Act thereof. Section 49 of the MRTP Act is not meant to get the property de-reserved and then to wait for an appropriate time to sell it in the open market. According to the High Court, the appellant being a developer had not taken any steps after purchase, i.e., to issue notice either under Section 49 or under Section 127 of the MRTP Act. Aggrieved, the appellant filed the present appeal.
Analysis and Decision
The Court took note of Kishor Maganlal Vyas v. State of Maharashtra1 wherein it was held that normal procedure for de-reservation is Section 127, wherein the local authority gets 10 years to acquire the property. However, to mitigate the hardship caused to a genuine needy owner, a provision has been made in Section 49 of the Maharashtra Regional and Town Planning Act, 1966 (‘MRTP Act’) and hence, a specified class of owners emerging therein can only take recourse to it.
The Court observed that after a lapse of six years following the reservation, the previous owner had neither developed the property nor sold it. As a result, the property remained unchanged, and recourse to Section 49 of the MRTP Act was deemed improper. The de-reservation was seen as a strategy to secure the best possible price after a prolonged waiting period. Section 127 of the MRTP Act provides a reasonable timeframe for the acquiring body to act and acquire the property. Consequently, de-reservation under this Section could benefit the purchaser as well. However, the same cannot be said for de-reservation under Section 49 of the MRTP Act. Section 49 addresses the personal needs of the owner and does not extend to benefit the purchaser, such as the petitioner in this case.
The Court therefore held that the purchaser from the previous owner had not taken the necessary steps under either Section 49 or Section 127 of the MRTP Act. Thus, it found no case made out warranting review.
The Court after referring to Sections 49, 126 and 127 of the MRTP Act, and the decision in Chhabildas v. State of Maharashtra, (2018) 2 SCC 784 concluded that the scheme of Sections 126 and 127 respectively would leave nobody in doubt, for the reason that if a period of 10 years has elapsed from the date of publication of the plan in question, and no steps for acquiring the land have been taken, then once a purchase notice is served under Section 127, steps to acquire the land must follow within a period of one year from the date of service of such notice, or else the land acquisition proceedings would lapse.
The Court remarked that “it is very unfortunate to note that although the land was reserved almost 33 years back for the benefit of Respondent 5, yet the said respondent was unable to avail the benefit of the same”.
The Court said that it does not make any good sense to keep a plot reserved in a development plan for the past 33 years. The Authority did not allow the original owners to use the land and are now not permitting even the purchasers i.e. the appellants to utilize the land.
Thus, the Court invoked Article 142 of the Constitution to do complete justice having regard to the long and inordinate delay in acquiring the land.
The Court highlighted that when the erstwhile owners sold the land to the appellants on 30-12-2015, there was no reservation.
Further, the Court emphasised that the principles underlying in Section 127 of the MRTP Act is either to utilize the land for the purpose for which it is reserved in the timeline given or let the owner utilize the land for the purpose as permissible under the town planning scheme. The reservation shall be deemed to have lapsed if no steps are taken for acquisition of the said land within the prescribed period.
The bench concluded that the respondents had failed to take any action after receiving the notice, thereby allowing the landowner to be deprived of using the land for an extended period. The bench remarked that once a restriction is placed on the landowner, it cannot remain open-ended indefinitely. The statute, specifically under Section 126 of the MRTP Act, prescribes a ten-year period for the acquisition of land, with an additional year granted to the landowner to serve a notice for acquisition prior to the amendment by Maharashtra Right to Public Services Act, 2015.This timeline is considered sacrosanct and must be strictly adhered to by the State and the authorities concerned.
Consequently, the bench allowed the appeals, set aside the impugned order passed by the High Court, and declared that the reservation of the plot in question had lapsed due to the efflux of time in accordance with Sections 126 and 127 of the MRTP Act. Additionally, considering the gross delay of nearly thirty years, the bench stated that it would have exercised its jurisdiction under Article 142 of the Constitution even without the aid of Section 127 to declare the reservation lapsed to ensure complete justice in the case.
[Nirmiti Developers v. State of Maharashtra, 2025 SCC OnLine SC 438, decided on 25-02-2025]
*Judgment Authored by: Justice J.B. Pardiwala
Advocates who appeared in this case:
For Petitioner(s): Mr. Gagan Sanghi, Adv., Mrs. Farah Hashmi, Adv., Mr. Rameshwar Prasad Goyal, AOR
For Respondent(s) : Mr. Nitin Lonkar, Adv., Mr. Siddharth Dharmadhikari, Adv., Mr. Aaditya Aniruddha Pande, AOR, Mr. Suhaskumar Kadam, Adv., For M/s. Black & White Solicitors, AOR
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1. Writ Petition No. 506/2011
