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Chhabildas vs The State Of Maharashtra Through … on 6 February, 2018

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1607 OF 2018
(ARISING OUT OF SLP (C) NO.3633 OF 2015)

Chhabildas … Appellant

Versus

The State of Maharashtra Ors. … Respondents

JUDGMENT

R.F. NARIMAN, J.

1. Leave granted.

2. The present case concerns a purchase notice issued under

Section 49 of the Maharashtra Regional Town Planning Act, 1966

(hereinafter referred to as “the Act”) and, in particular, the effect of

Sub-section (7) thereof. The aforesaid Section 49 along with other
Signature Not Verified

Digitally signed by
VISHAL ANAND
Date: 2018.02.06
16:37:54 IST
Reason:

1
relevant provisions of the Act, as they stood at the relevant time, are

reproduced hereunder:

Section 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, or

(b) any land is allotted by a plan for the purpose of any
functions of a Government or local authority or
statutory body, or is land designated in such plan as a
site proposed to be developed for the purposes of any
functions of any such Government, authority or body,
or

(c) any land is indicated in any plan as land on which a
highway is proposed to be constructed or included, or

(d) any land for the development of which permission is
refused or is granted subject to conditions, and any
owner of land referred to in clause (a), (b), (c) or (d)
claims–

(i) that the land has become incapable of
reasonably beneficial use in its existing state,
or

(ii) where planning permission is given subject to
conditions that the land cannot be rendered
capable of reasonably beneficial use by the
carrying out of the permitted development in
accordance with the conditions; or

(e) the owner of the land because of its designation or

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allocation in any plan claims that he is unable to sell it
except at a lower price than that at which he might
reasonably have been excepted to sell if it were not
so designated or allocated, the owner or person
affected may serve on the State Government within
such time and in such manner, as is prescribed by
regulations, a notice (hereinafter referred to as “the
purchase notice “) requiring the Appropriate Authority
to purchase the interest in the land in accordance with
the provisions of this Act.

(2) The purchase notice shall be accompanied by a copy of
any application made by the applicant to the Planning
Authority, and of any order or decision of that Authority and of
the State Government, if any, in respect of which the notice is
given.

(3) On receipt of a purchase notice, the State Government
shall forthwith call from the Planning Authority and the
Appropriate Authority such report or records or both, as may
be necessary, which those authorities shall forward to the
State Government as soon as possible but not later than thirty
days from the date of their requisition.

(4) On receiving such records or reports, if the State
Government is satisfied that the conditions specified in sub-
section (1) are fulfilled, and that the order or decision for
permission was not duly made on the ground that the
applicant did not comply with any of the provisions of this Act
or rules or regulations, it may confirm the purchase notice, or
direct that planning permission be granted without condition
or subject to such conditions as will make the land capable of
reasonably beneficial use. In any other case, it may refuse to
confirm the purchase notice, but in that case, it shall give the
applicant a reasonable opportunity of being heard.

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(5) If within a period of six months from the date on which a
purchase notice is served the State Government does not
pass any final order thereon, the notice shall be deemed to
have been confirmed at the expiration of that period.

(6) Omitted.

(7) If within one year from the date of confirmation of the
notice, the Appropriate Authority fails to make an application
to acquire the land in respect of which the purchase notice
has been confirmed as required under section 126, the
reservation, designation, allotment, indication or restriction on
development of the land shall be deemed to have lapsed; and
thereupon, the land shall be deemed to be released from the
reservation, designation, or, as the case may be, allotment,
indication or restriction and shall become available to the
owner for the purpose of development otherwise permissible
in the case of adjacent land, under the relevant plan.

Section 50 – Deletion of reservation of designated land
for interim, draft of final Development plan – (1) The
Appropriate Authority (other than the Planning Authority), if it
is satisfied that the land is not or no longer required for the
public purpose for which it is designated or reserved or
allocated in the interim or the draft Development plan or plan
for the area of Comprehensive development or the final
Development plan, may request–

(a) the Planning Authority to sanction the deletion of such
designation or reservation or allocation from the interim or
the draft Development plan or plan for the area of
Comprehensive development, or

(b) the State Government to sanction the deletion of such
designation or reservation or allocation from the final
Development plan.

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(2) On receipt of such request from the Appropriate Authority,
the Planning Authority, or as the case may be, the State
Government may make an order sanctioning the deletion of
such designation or reservation or allocation from the relevant
plan:

Provided that, the Planning Authority, or as the case may be,
the State Government may, before making any order, make
such enquiry as it may consider necessary and satisfy itself
that such reservation or designation or allocation is no longer
necessary in the public interest.

(3) Upon an order under sub-section (2) being made, the land
shall be deemed to be released from such designation,
reservation, or, as the case may be, allocation 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.

Section 126 – Acquisition of land required for public
purposes specified in plans. – (1) Where 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 the planning Authority,
Development Authority, or as the case may be, any
Appropriate Authority may, expect as otherwise provided in
section 113A acquire the land,-

(a) by agreement by paying an amount agreed to, or

(b) in lieu of any such amount, by granting the land-owner or
the lessee, subject, however, to the lessee paying the
lessor or depositing with the Planning Authority,
Development Authority or Appropriate Authority, as the
case may be, for payment to the lessor, an amount

5
equivalent to the value of the lessor’s interest to be
determined by any of the said Authorities concerned on
the basis of the principles laid down in the Land
Acquisition Act, 1894(I of 1894), Floor Space Index (FSI)
or Transferable Development Rights (TDR) against the
area of land surrendered free of cost and free from all
encumbrances, and also further additional Floor Space
Index or Transferable Development Rights against the
development or construction of the amenity on the
surrendered land at his cost, as the Final Development
Control Regulations prepared in this behalf provide, or

(c) by making an application to the State Government for
acquiring such land under the Land Acquisition Act,
1894(I of 1894),and the land (together with the amenity, if
any so developed or constructed) so acquired by
agreement or by grant of Floor Space Index or additional
Floor Space Index or Transferable Development Rights
under this section or under the Land Acquisition Act,
1894(I of 1890), as the case may be, shall vest absolutely
free from all encumbrances in the Planning Authority,
Development Authority, or as the case may be, any
Appropriate Authority.

(2) On receipt of such application, if the State Government is
satisfied that the land specified in the application is needed
for the public purpose therein specified, or if the State
Government (except in cases falling under section 49 and
except as provided in section 113A) itself is of opinion that
any land included in any such plan is needed for any public
purpose, it may make a declaration to that effect in the Official
Gazette, in the manner provided in section 6 of the Land
Acquisition Act, 1894 (I of 1894), in respect of the said land.
The declaration so published shall, notwithstanding anything

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contained in the said Act, be deemed to be a declaration duly
made under the said section:

Provided that, subject to the provisions of sub-section (4), no
such declaration shall be made after the expiry of one year
from the date of publication of the draft Regional Plan,
Development Plan or any other Plan, or Scheme, as the case
may be.

(3) On publication of a declaration under the said section 6,
the collector shall proceed to take order for the acquisition of
the land under the said Act; and the provisions of that Act
shall apply to the acquisition of the said land with the
modification that the market value of the land shall be, –

(i) where the land is to be acquired for the purposes of a
new town, the market value prevailing on the date of
publication of the notification constituting or declaring
the Development Authority for such town;

(ii) where the land is acquired for the purposes of a
Special Planning Authority the market value prevailing
on the date of publication of the notification of the area
as undeveloped area; and

(iii) in any other case the market value on the date of
publication of the interim development plan, the draft
development plan or the plan for the area or areas for
comprehensive development, whichever is earlier, or
as the case may be, the date or publication of the draft
Town Planning Scheme:

Provided that, nothing in this sub-section shall affect the
date for the purpose of determining the market value of
land in respect of which proceedings for acquisition
commenced before the commencement of the

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Maharashtra Regional and Town Planning (Second
Amendment) Act, 1972 (Mah. XI of 1973):

Provided further that, for the purpose of clause (ii) of this
sub-section, the market value in respect of land included
in any undeveloped area notified under sub-section (1) of
section 40 prior to the commencement of the Maharashtra
Regional and Town Planning (Second Amendment) Act,
1972 (Mah. XI of 1973), shall be the market value
prevailing on the date of such commencement.

(4) Notwithstanding anything contained in the proviso to
sub-section (2) and sub-section (3), if a declaration, is not
made, within the period referred to in sub-section (2) (or
having been made, the aforesaid period expired on the
commencement of the Maharashtra Regional and Town
Planning (Amendment) Act, 1993 (Mah. X of 1994), the
State Government may make a fresh declaration for
acquiring the land under the Land Acquisition Act, 1894
(1 of 1894), in the manner provided by sub-sections (2)
and (3) of this section, subject to the modification that the
market value of the land shall be the market value at the
date of declaration in the Official Gazette, made for
acquiring the land afresh.

Section 127 – Lapsing of reservations. – 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 the
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, the Development Authority or, as the

8
case may be, the Appropriate Authority to that effect; and
if within twelve months 1 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.

3. On 11th February, 2002, the Development Plan of Jalgaon City

was sanctioned by the State Government. The Appellant’s land

bearing Gut No.37/1 adm. 42-R, situated at Mauje Pimprala, was

reserved for primary school and play ground.

4. On 7th May, 2007, the Appellant issued a purchase notice

under Section 49(1)(e) of the Act stating that as their land was

reserved for the aforesaid purposes, the owner was unable to sell it,

except at a price lower than that at which it could reasonably be

expected to sell, if it was not so designated.

5. On 12th December, 2007, the State Government confirmed the

aforesaid purchase notice and stated that proceedings for acquisition

1
`Twelve months’ was substituted in place of `six months’ by Act 16 of 2009.

9
of land shall be initiated within one year i.e. before 12 th December,

2008 as per Section 49(7) of the Act.

6. Within the aforesaid period, the Commissioner, Jalgaon,

submitted a proposal for acquisition of the aforesaid land to the

Collector, Jalgaon on 26th September, 2008. This was followed by a

letter dated 28th January, 2009 issued by the Collector, appointing the

SDO, Jalgaon, to complete the acquisition process as laid down by

the Act. Since nothing further transpired, the owner of the land wrote

a letter to the Commissioner, Jalgaon on 15 th January, 2014, stating

that since no action has taken place in furtherance of the acquisition

proposal, the said proposal has lapsed and that, therefore, the land

should be returned to the owner. On 28 th March, 2014, the Assistant

Director, Town Planning, Jalgaon Municipal Corporation, wrote back

to the owner stating that the land acquisition proposal by the

Municipal Corporation “is in process” and stated that, as Section

49(7) was satisfied on the facts of the present case, there was no

lapse. A writ petition dated 2 nd May, 2014 was then filed by the

owner before the Aurangabad Bench of the Bombay High Court,

which came to be dismissed by the impugned judgment dated 5 th

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December, 2014, stating that Section 127 of the Act alone deals with

lapsing of reservation, and that as the purchase notice was issued

under Section 49, the said Section would apply only when a person

needs to develop his land immediately. In the present case, the

Appellant failed to make out any such urgent need and since the

Municipal Corporation had already moved the State Government for

acquisition of the Appellant’s land, the writ petition was dismissed.

7. Learned counsel appearing on behalf of Appellant before us

has taken us through the aforestated provisions of the Maharashtra

Regional Town Planning Act, 1966 and has argued that after the

appropriate authority makes an application to acquire the land

consequent upon the purchase notice issued under Section 49, either

the land ought to be acquired within a reasonable time therefrom or

should be released from the designation in the Development Plan as

per Section 50 of the Act. The impugned judgment was wholly

incorrect in stating that there was no urgent need. Besides, Section

49 applies to the purchase notice at hand, inasmuch as it is clear that

the owner is unable to sell the land, thanks to the reservation made.

This being the case, over 10 years having lapsed since the date of

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the purchase notice, the owner’s land should be declared to be free

of the designation set out in the Development Plan.

8. On the other hand, learned counsel appearing on behalf of the

Government specifically argued that the schemes of Sections 49 and

127 are totally different. No lapse can take place under Section 49 of

the Act, once Section 49(7) stands satisfied and that, since the owner

has not issued any fresh purchase notice under Section 127 of the

Act, no lapsing can be said to have taken place.

9. The scheme of Section 49 of the MRTP Act is to lay down

timelines within which the appropriate authority must make an

application to acquire the land in respect of which a purchase notice

has been confirmed. The moment any of the conditions specified in

the sub-section (1) are met, the owner or person affected may serve

on the State Government, within the time and manner prescribed by

regulations, a purchase notice requiring the appropriate authority to

purchase the interest in the land in accordance with the provisions of

this Act.

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10. On the receipt of the purchase notice as per sub-section (3),

the State Government is to forthwith call from the planning authority

or the appropriate authority such report or records as may be

necessary, which the authority shall then forward to the State

Government as soon as possible but not later than 30 days from the

date of acquisition.

11. In sub-section (4), if the State Government is satisfied that the

conditions specified in sub-section (1) are fulfilled, it may either

confirm the purchase notice; refuse to confirm the purchase notice; or

direct that planning permission be granted with or without conditions.

Under sub-section (5), if the steps contemplated after service of

purchase notice leads to a situation where the State Government

does not pass any orders thereon, the notice shall be deemed to

have been confirmed at the expiration of that period. And finally,

under sub-section (7), if within one year from the date of confirmation

of purchase notice, the appropriate authority fails to make an

application to acquire the land in respect of which the purchase

notice has been confirmed, the reservation, designation, allotment,

indication or restriction on development of the land shall be deemed

13
to have lapsed. Section 49(6), which was deleted by Maharashtra Act

6 of 1976, read as follows:

“Upon confirmation of the notice, the State Government
shall proceed to acquire the land or that part of any land
regarding which the notice has been confirmed, within
one year of the confirmation of the purchase notice, in
accordance with the provisions of Chapter VII.”
It is clear that, under this provision, if within one year from the

confirmation of the purchase notice, the State Government did not

acquire the land, then the consequence would be that the acquisition

shall be deemed to have lapsed. This was a salutary provision, but

seems to have been deleted so that Section 49 cases are brought on

par with Section 126 cases.

12. The object of Section 49 is thus clear that once a purchase

notice is received by the authorities, there arises, as the marginal

note to the Section also indicates, an obligation to acquire land. The

timelines contemplated by the section also indicate that the owner or

person affected cannot be left to hang indefinitely without a decision

to follow up the purchase notice by acquisition of the land in question.

13. However, it has been argued on behalf of the State that Section

49 abruptly ends with sub-section (7), after which there are no

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timelines indicated as to what is to happen after the appropriate

authority makes an application to acquire the land within one year

from the date of confirmation of the notice. In our view, this argument

must be rejected, inasmuch as Section 49(1) itself states that the

purchase notice must require the appropriate authority to purchase

the interest in the land “in accordance with the provisions of this Act”.

This being so, once the appropriate authority makes the necessary

application to acquire the land within time under Section 49(7), we

move over to Sections 126 and 127 of the Act.

14. Under Section 126(1)(c), when after the publication of a draft

regional plan or development or other plan, any land is required or

reserved for a public purpose, the appropriate authority may make an

application to the State Government, for acquiring such land under

the Land Acquisition Act. Under sub-section (2) thereof, on receipt of

such application, if the State Government is satisfied that the land

specified in the application is needed for the public purpose specified

therein, then excepting the cases falling under Section 49, the State

Government may make a declaration under Section 6 of the Land

Acquisition Act, to that effect. However, such declaration under

15
Section 126(2) must be made within a period of one year from the

date of publication of the plan in question.

15. A purchase notice may be served under Section 49, after the

expiry of one year from the date of publication of the plan in question,

in which case Section 126(2) of the Act will not apply. Under Section

126(4), the State Government may make a declaration under Section

6 subject to the modification that the market value of the land shall be

the market value at the date of the declaration in the official gazette

made for acquiring the land. But this does not mean that the State

Government has carte blanche to do as it pleases. Ordinarily, the

State Government is bound to act under Section 126(4) within a

reasonable time from the appropriate authority making an application

to acquire the land. This should ordinarily be within a period of one

year from the date such an application is made. However, if such

declaration is not made within the aforesaid period, it will be open for

the aggrieved person to move the Court to direct the State

Government to make the requisite declaration immediately.

16

16. But the matter does not end here. Thereafter, Section 127 kicks

in. If a declaration under Section 6 of the Land Acquisition Act is not

made within a period of 10 years from the date on which a plan

comes into force under sub-section (4) of Section 126, the owner or

any person interested in the land may serve a purchase notice on the

authorities, and if within one year from the date of service of such

notice, the land is not acquired or no steps are commenced for its

acquisition, the reservation, allotment or designation shall be deemed

to have lapsed.

17. The aforesaid scheme of Sections 126 and 127 has been the

subject matter of several judgments of this Court. In Girnar Traders

v. State of Maharashtra, (2007) 7 SCC 555, a three-Judge Bench,

by a majority judgment delivered by Justice Naolekar, framed the

question before the Court thus:

“19. The question that requires consideration and answer
in the present case is: Whether the reservation has
lapsed due to the failure of the planning authority to take
steps within the period of six months from the date of
service of the notice of purchase as stipulated by Section
127 of the MRTP Act; and also the question as regards
applicability of new Section 11-A of the LA Act to the
acquisition of land under the MRTP Act.”

17

18. After setting out Sections 126 and 127, this Court then laid

down the scheme of Section 126, which makes it clear that the

Section 6 notification under the Land Acquisition Act is to be issued,

in cases where acquisition is made under Section 126(1)(c),in

pursuance of an application by an appropriate authority to the State

Government within one year from the publication of the plan in

question, or by way of the State Government making a fresh

declaration beyond a period of one year under Section 126 (4). This

is stated by the Court in paragraph 28 as follows:

“28. Sub-section (2) of Section 126 provides for one
year’s limitation for publication of the declaration from the
date of publication of the draft plan or scheme. Sub-
section (4), however, empowers the State Government to
make a fresh declaration under Section 6 of the LA Act
even if the prescribed period of one year has expired.
This declaration is to be issued by the State Government
for acquisition of the land without there being any
application moved by the planning/local authority under
Clause (c) of Section 126(1).”

19. Insofar as Section 127 is concerned, the Court went on to hold:

“31. Section 127 prescribes two time periods. First, a
period of 10 years within which the acquisition of the land
reserved, allotted or designated has to be completed by
agreement from the date on which a regional plan or
development plan comes into force, or the proceedings
for acquisition of such land under the MRTP Act or under

18
the LA Act are commenced. Secondly, if the first part of
Section 127 is not complied with or no steps are taken,
then the second part of Section 127 will come into
operation, under which a period of six months is provided
from the date on which the notice has been served by the
owner within which the land has to be acquired or the
steps as aforesaid are to be commenced for its
acquisition. The six-month period shall commence from
the date the owner or any person interested in the land
serves a notice on the planning authority, development
authority or appropriate authority expressing his intent
claiming de-reservation of the land. If neither of the things
is done, the reservation shall lapse. If there is no notice
by the owner or any person interested, there is no
question of lapsing reservation, allotment or designation
of the land under the development plan. Second part of
Section 127 stipulates that the reservation of the land
under a development scheme shall lapse if the land is not
acquired or no steps are taken for acquisition of the land
within the period of six months from the date of service of
the purchase notice. The word “aforesaid” in the
collocation of the words “no steps as aforesaid are
commenced for its acquisition” obviously refers to the
steps contemplated by Section 126 of the MRTP Act.

32. If no proceedings as provided under Section 127 are
taken and as a result thereof the reservation of the land
lapses, the land shall be released from reservation,
allotment or designation and shall be available to the
owner for the purpose of development. The availability of
the land to the owner for the development would only be
for the purpose which is permissible in the case of
adjacent land under the relevant plan. Thus, even after
the release, the owner cannot utilise the land in whatever
manner he deems fit and proper, but its utilisation has to
be in conformity with the relevant plan for which the
adjacent lands are permitted to be utilized.”

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20. The Court then went on to consider Municipal Corporation of

Greater Bombay v. Dr. Hakimwadi Tenants Association Ors.,

1988 Supp. SCC 55, and was of opinion that, the observations on the

expression “no steps as aforesaid are commenced for its acquisition”

stipulated under Section 127 were obiter in nature. The majority then

went on to state the law under Section 127 as follows:

“54. When we conjointly read Sections 126 and 127 of
the MRTP Act, it is apparent that the legislative intent is to
expeditiously acquire the land reserved under the Town
Planning Scheme and, therefore, various periods have
been prescribed for acquisition of the owner’s property.

The intent and purpose of the provisions of Sections 126
and 127 has been well explained in Municipal Corpn. of
Greater Bombay case. If the acquisition is left for time
immemorial in the hands of the authority concerned by
simply making an application to the State Government for
acquiring such land under the LA Act, 1894, then the
authority will simply move such an application and if no
such notification is issued by the State Government for
one year of the publication of the draft regional plan under
Section 126(2) read with Section 6 of the LA Act, wait for
the notification to be issued by the State Government by
exercising suo motu power under sub-section (4) of
Section 126; and till then no declaration could be made
under Section 127 as regards lapsing of reservation and
contemplated declaration of land being released and
available for the landowner for his utilisation as permitted
under Section 127. Section 127 permitted inaction on the
part of the acquisition authorities for a period of 10 years
for de-reservation of the land. Not only that, it gives a
further time for either to acquire the land or to take steps
for acquisition of the land within a period of six months

20
from the date of service of notice by the landowner for de-
reservation. The steps towards commencement of the
acquisition in such a situation would necessarily be the
steps for acquisition and not a step which may not result
into acquisition and merely for the purpose of seeking
time so that Section 127 does not come into operation.

55. Providing the period of six months after the service of
notice clearly indicates the intention of the legislature of
an urgency where nothing has been done in regard to the
land reserved under the plan for a period of 10 years and
the owner is deprived of the utilisation of his land as per
the user permissible under the plan. When mandate is
given in a section requiring compliance within a particular
period, the strict compliance is required therewith as
introduction of this section is with legislative intent to
balance the power of the State of “eminent domain”. The
State possessed the power to take or control the property
of the owner for the benefit of public cause, but when the
State so acted, it was obliged to compensate the injured
upon making just compensation. Compensation provided
to the owner is the release of the land for keeping the
land under reservation for 10 years without taking any
steps for acquisition of the same.

56. 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. The step taken under the section
within the time stipulated should be towards acquisition of
land. It is a step of acquisition of land and not step for
acquisition of land. It is trite that failure of authorities to
take steps which result in actual commencement of
acquisition of land cannot be permitted to defeat the
purpose and object of the scheme of acquisition under the
MRTP Act by merely moving an application requesting the
Government to acquire the land, which Government may

21
or may not accept. Any step which may or may not
culminate in the step for acquisition cannot be said to be
a step towards acquisition.

57. It may also be noted that the legislature while
enacting Section 127 has deliberately used the word
“steps” (in plural and not in singular) which are required to
be taken for acquisition of the land. On construction of
Section 126 which provides for acquisition of the land
under the MRTP Act, it is apparent that the steps for
acquisition of the land would be issuance of the
declaration under Section 6 of the LA Act. Clause (c) of
Section 126(1) merely provides for a mode by which the
State Government can be requested for the acquisition of
the land under Section 6 of the LA Act. The making of an
application to the State Government for acquisition of the
land would not be a step for acquisition of the land under
reservation. Sub-section (2) of Section 126 leaves it open
to the State Government either to permit the acquisition or
not to permit, considering the public purpose for which the
acquisition is sought for by the authorities. Thus, the steps
towards acquisition would really commence when the
State Government permits the acquisition and as a result
thereof publishes the declaration under Section 6 of the
LA Act.”

21. The scheme of Section 126(2) and (4) was again reiterated in

paragraph 61 as follows:

“61. Proviso to sub-section (2) of Section 126 prohibits
publication of the declaration after the expiry of one year
from the date of publication of draft regional plan,
development plan or any other plan or scheme. Thus,
from the date of publication of the draft regional plan,
within one year an application has to be moved under
Clause (c) of Section 126(1) which should culminate into

22
a declaration under Section 6 of the LA Act. As per the
proviso to sub-section (2) of Section 126, the maximum
period permitted between the publication of a draft
regional plan and declaration by the Government in the
Official Gazette under Section 126(2) is one year. In other
words, during one year of the publication of the draft
regional plan, two steps need to be completed, namely, (i)
application by the appropriate authority to the State
Government under Section 126(1)(c); and (ii) declaration
by the State Government on receipt of the application
mentioned in Clause (c) of Section 126(1) on satisfaction
of the conditions specified under Section 126(2). The only
exception to this provision has been given under Section
126(4).”

22. In Shrirampur Municipal Council v. Satyabhamabai Bhimaji

Dawkher, (2013) 5 SCC 627, this Court reiterated the findings given

in Girnar’s case (supra) majority judgment, and held that there was

no conflict between the judgment in Dr. Hakimwadi Tenants

Association (supra) and the majority judgment in Girnar’s case

(supra). This Court thereafter went on to hold:

“42. We are further of the view that the majority in Girnar
Traders (2), (2007) 7 SCC 555 had rightly observed that
steps towards the acquisition would really commence
when the State Government takes active steps for the
acquisition of the particular piece of land which leads to
publication of the declaration under Section 6 of the 1894
Act. Any other interpretation of the scheme of Sections
126 and 127 of the 1966 Act will make the provisions
wholly unworkable and leave the landowner at the mercy
of the Planning Authority and the State Government.

23

43. The expression “no steps as aforesaid” used in
Section 127 of the 1966 Act has to be read in the context
of the provisions of the 1894 Act and mere passing of a
resolution by the Planning Authority or sending of a letter
to the Collector or even the State Government cannot be
treated as commencement of the proceedings for the
acquisition of land under the 1966 Act or the 1894 Act. By
enacting Sections 125 to 127 of the 1966 Act, the State
Legislature has made a definite departure from the
scheme of acquisition enshrined in the 1894 Act. But a
holistic reading of these provisions makes it clear that
while engrafting the substance of some of the provisions
of the 1894 Act in the 1966 Act and leaving out other
provisions, the State Legislature has ensured that the
landowners/other interested persons, whose land is
utilised for execution of the development plan/town
planning scheme, etc., are not left high and dry. This is
the reason why time-limit of ten years has been
prescribed in Section 31(5) and also under Sections 126
and 127 of the 1966 Act for the acquisition of land, with a
stipulation that if the land is not acquired within six
months of the service of notice under Section 127 or
steps are not commenced for acquisition, reservation of
the land will be deemed to have lapsed. Shri Naphade’s
interpretation of the scheme of Sections 126 and 127, if
accepted, will lead to absurd results and the landowners
will be deprived of their right to use the property for an
indefinite period without being paid compensation. That
would tantamount to depriving the citizens of their
property without the sanction of law and would result in
violation of Article 300-A of the Constitution.”

23. It is, thus, clear that the scheme of Sections 126 and 127 would

leave nobody in doubt, for the reason that if a period of 10 years has

24
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.

24. On a conspectus of the above authorities, the following position

in law emerges:

 In all Section 49 cases, where a purchase notice has been

served and is confirmed within the period specified, the

appropriate authority must make an application to acquire the

land within one year from the date of confirmation of the notice.

If it does not do so, the reservation, designation, etc. shall be

deemed to have lapsed.

 If within the period specified in Section 49(7), the appropriate

authority makes the requisite application, then the State

Government may acquire the land by making a declaration

under Section 6 of the Land Acquisition Act as set out under

Section 126(4), wherein the market value shall be the market

value of the land as on the date of the Section 6 declaration.

25
Ordinarily, such declaration must be made within 1 year of the

date of receipt of the requisite application. In case this not

done, it will be open to the aggrieved person to move the Court

to direct the State Government to make the requisite

declaration immediately.

 If 10 years have passed from the date of publication of the plan

in question, and a purchase notice has been served under

Section 127,and no steps have been taken within a period of

one year from the date of service of such notice, all

proceedings shall be deemed to have lapsed. Thus, even in

cases covered by Section 49, the drill of Section 126(4) and

Section 127 will have to be followed, subsequent to the

appropriate authority making an application to acquire the land

within the period specified in Section 49(7).

25. The learned counsel appearing for the State has relied upon

this Court’s judgment in Prakash R. Gupta v. Lonavala Municipal

Council and others, (2009) 1 SCC 514, wherein this Court held that

the scheme contemplated by Section 49 is totally different from that

26
of Section 127, for the reason that there is no period of 10 years in

Section 49 as mentioned in Section 127.

26. This judgment does not carry the matter any further as it is clear

that, once an application is made within the requisite period contained

in Section 49(7), land acquisition must follow in terms of Section

49(1) to purchase the interest in the land, in accordance with the

provisions of the MRTP Act, as indicated above.

27. This Court, in Hasmukhrai V. Mehta v. State of Maharashtra

Ors., (2015) 3 SCC 154, held that where an inordinately long delay

takes place from the date on which the appropriate authority makes

an application to acquire the land (in that case 20 years), the land in

question stands released from reservation.

28. In the aforesaid judgment, the purchase notice under Section

49 of the Act was dated 17th August, 2000. The Director, Town

Planning, wrote a letter to the Chief Officer of the Khopoli Municipal

Council stating that proceedings for land acquisition for an

Agricultural Produce Market Yard would be initiated within one year

from 16th March, 2001. Consequently, the Khopoli Municipal Council

27
wrote a letter on 23 rd April, 2001 to the Agricultural Produce Market

Committee to initiate acquisition proceedings. As nothing was done,

the Appellant ran from pillar to post and ultimately filed a writ petition

in February, 2004, complaining that the Respondents are neither

acquiring the land belonging to the Appellant nor releasing the same

from reservation for the Agricultural Produce Market Yard. The High

Court dismissed the aforesaid writ petition stating that as the

provisions of Section 127 were not attracted, there could be no lapse.

This Court, after referring to Sections 49 and 127 of the Act, held:

“12. We think it pertinent to mention here that APMC,
Respondent 5, even after service of notice, has not cared
to contest this appeal. Also, we think it relevant to mention
that till date no steps appear to have been taken for
acquisition of the land in question or to release the same.
The land of the appellant, in our opinion, cannot be held
up, without any authority of law, as neither the same is
purchased till date by the respondent authorities, nor
acquired under any law, nor the appellant is being allowed
to use the land for the last more than twenty years.”

29. It thereafter referred to Vijayalakshmi v. Town Planning

Member (2006) 8 SCC 502 and Girnar’s case (supra) and then held:

“15. In view of the principle of law laid down by this Court,
as above, we are of the view that in the present case
since neither have steps been taken by the authorities
concerned for acquisition of the land, nor is the land of the
appellant purchased under purchase notice, nor is he

28
allowed to use the land for the last more than twenty
years, the land will have to be released as the appellant
cannot be deprived from utilising his property for an
indefinite period.

xxx xxx xxx

18. Accordingly, we allow the appeal and set aside the
impugned order passed by the High Court. Since no steps
appear to have been taken till date for the last more than
twenty years either for acquisition or for purchase of the
land under the MRTP Act, 1966 by the authorities
concerned, as such, the land in question stands released
from reservation under Section 127 of the MRTP Act.”

30. The aforesaid judgment lays down that since more than 20

years had elapsed since the date of the purchase notice under

Section 49 on the facts of that case, the land will have to be released

from acquisition. No doubt this Court held that over 20 years is an

inordinately long period of delay, and therefore, lapsing has taken

place under Section 127 of the MRTP Act. However, on the facts of

that case, no purchase notice under Section 127 was issued after 10

years had elapsed from the date of publication of the requisite plan.

This being the case, we read the judgment as having allowed a lapse

to take place, in view of the inordinately long delay of over 20 years,

29
by really doing complete justice on the facts of that case under Article

142 of the Constitution of India.

31. In the present case, 15 years have passed since the date of

publication of the development plan, and over 10 years have passed

sincethe date of the purchase notice issued under Section 49.

Considering the fact that there has been no stay at any stage by any

Court, it is clear that an inordinately long period of time has elapsed,

both since the date of publication of the development plan, as well as

the date of the purchase notice served under Section 49. No doubt,

the letter of 26.9.2008 shows that an application was made within the

requisite time period to acquire the aforesaid land. However, on the

facts of this case, since after the aforesaid letter nothing has been

done to acquire the appellant’s property, we are of the view that the

reservation contained in the development plan as well as acquisition

proposal have lapsed. We make it clear that we hold this in order to

do complete justice between the parties under Article 142 of the

Constitution of India. However, in all future cases that may arise

under the provisions of Section 49, the drill of Section 127 must be

followed, i.e. that after 10 years have elapsed from the date of

30
publication of the relevant plan, a second purchase notice must be

served in accordance with the provisions of Section 127, in order that

lapsing can take place under the aforesaid section. With these

observations, the appeal is disposed of.

……………………….J.

(R.F. Nariman)

……………………….J.

(Navin Sinha)
New Delhi;

February 6, 2018.

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