CHHABILDASversusTHE STATE OF MAHARASHTRA & ORS.

                         [2018] 1 S.C.R. 411                              411


                           CHHABILDAS                                     A
                                  v.
            THE STATE OF MAHARASHTRA & ORS.
                   (Civil Appeal No. 1607 of 2018)
                        FEBRUARY 06, 2018                                 B
          [R. F. NARIMAN AND NAVIN SINHA, JJ.]
      Maharashtra Regional Town Planning Act, 1966 – ss.49, 126,
127 – Obligation to acquire land on refusal of permission or on
grant of permission in certain cases – On facts, appellant’s land
                                                                          C
reserved for public purpose under a development plan – Issuance
of purchase notice u/s.49(1)(e) – State Government confirmed the
purchase notice and stated that proceedings for acquisition of land
would be initiated within one year – Submission of proposal for
acquisition, however, no action taken – Letter by the owner to the
Commissioner that since no action took place, the said proposal           D
has lapsed and thus, the land to be returned to the owner – However,
the Commissioner’s stand that acquisition proposal is in process
and there was no lapse – Writ petition by appellant – Dismissed by
the High Court – Held: Section 49(1) itself states that the purchase
notice must require the appropriate authority to purchase the interest
                                                                          E
in the land “in accordance with the provisions of this Act” – Once
the appropriate authority makes the necessary application to acquire
the land within time u/s.49(7), the Court moves over to ss.126 and
127 – Scheme of ss.126 and 127 makes it clear that if 10 years
have passed from the date of publication of the development plan,
and purchase notice has been served u/s. 127, and no steps have           F
been taken within one year from the date of service of such notice,
all proceedings shall be deemed to have lapsed – Thus, even in
cases covered by s. 49, the drill of s.126(4) and s.127 will have to
be followed, subsequent to the appropriate authority making an
application to acquire the land within the period specified in s. 49(7)
                                                                          G
– In the instant case, 15 years have passed since the date of
publication of the development plan, and over 10 years have passed
since the date of the purchase notice issued u/s.49 – Letter shows
that an application was made within the requisite time period to
acquire the said land – However, since after the said letter nothing
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                                 411
412            SUPREME COURT REPORTS                      [2018] 1 S.C.R.


A     has been done to acquire the appellant’s property, the reservation
      contained in the development plan as well as acquisition proposal
      have lapsed, in order to do complete justice between the parties u/
      Art. 142 – Constitution of India – Art. 142.
            Disposing of the appeal, the Court
B           HELD: 1.1 The object of Section 49 of the Maharashtra
      Regional Town Planning Act, 1966 is 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
C     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. However, the submission that Section 49
      abruptly ends with sub-section (7), after which there are no
      timelines indicated as to what is to happen after the appropriate
      authority makes an application to acquire the land within one year
D     from the date of confirmation of the notice, cannot be accepted.
      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
E     application to acquire the land within time under Section 49(7),
      the Court moves over to Sections 126 and 127 of the Act. [Paras
      12, 13][423-H; 424-A-C]
            1.2 Under Section 126(1)(c), when after the publication of a
      draft regional plan or development or other plan, any land is
F     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
G     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 Section 126(2)
      must be made within a period of one year from the date of
      publication of the plan in question. [Para 14][424-D-F]
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  CHHABILDAS v. THE STATE OF MAHARASHTRA & ORS.                        413


      1.3 A purchase notice may be served under Section 49, after      A
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
                                                                       B
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       C
the date such an application is made. However, if such declaration
is not made within the said period, it would be open for the
aggrieved person to move the Court to direct the State
Government to make the requisite declaration immediately.
Thereafter, Section 127 kicks in. If a declaration under Section 6
                                                                       D
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,         E
the reservation, allotment or designation shall be deemed to have
lapsed. [Paras 15, 16][424-G-H; 425-A-C]
        1.4 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          F
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         G
out u/s.nder Section 126(4), wherein the market value shall be
the market value of the land as on the date of the Section 6
declaration. Ordinarily, such declaration must be made within 1
year of the date of receipt of the requisite application. In case
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414            SUPREME COURT REPORTS                      [2018] 1 S.C.R.


A     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 u/s. 127, and no steps have been taken within a
      period of one year from the date of service of such notice, all
B
      proceedings shall be deemed to have lapsed. Thus, even in cases
      covered by s. 49, the drill of s. 126(4) and s. 127 will have to be
      followed, subsequent to the appropriate authority making an
      application to acquire the land within the period specified in
      s. 49(7). [Para 24][431-B-G]
C             1.5 In the instant case, 15 years have passed since the
      date of publication of the development plan, and over 10 years
      have passed since the 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
D     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 facts, since after the said
      letter nothing has been done to acquire the appellant’s property,
E     the reservation contained in the development plan as well as
      acquisition proposal have lapsed. It is made clear that this is held
      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
F     127 must be followed, i.e. that after 10 years have elapsed from
      the date of 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. [Para 31][433-F-H; 434-A-B]
G           Girnar Traders v. State of Maharashtra (2007) 7 SCC
            555 : [2007] 9 SCR 383; Municipal Corporation of
            Greater Bombay v. Dr. Hakimwadi Tenants Association
            & Ors. (1988) Suppl. SCC 55 : [1988] SCR 21;
            Shrirampur Municipal Council v. Satyabhamabai
            Bhimaji Dawkher (2013) 5 SCC 627: [2013] 2 SCR
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  CHHABILDAS v. THE STATE OF MAHARASHTRA & ORS.                            415


      664; Prakash R. Gupta v. Lonavala Municipal Council                  A
      and others (2009) 1 SCC 514 : [2008] 16 SCR 1067;
      Hasmukhrai V. Mehta v. State of Maharashtra & Ors.
      (2015) 3 SCC 154 : [2014] 11 SCR 377 – referred to.
                        Case Law Reference
      [2007] 9 SCR 383           referred to              Para 17          B

      [1988] SCR 21              referred to              Para 20
      [2013] 2 SCR 664           referred to              Para 22
      [2008] 16 SCR 1067         referred to              Para 25
                                                                           C
      [2014] 11 SCR 377          referred to              Para 27
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1607
of 2018.
      From the Judgment and Order dated 05.12.2014 of the High Court
of Judicature of Bombay Bench at Aurangabad in Writ Petition No.           D
4605 of 2014.
       Vinayak Dixit, Sr. Adv., Nachiketa Joshi, Santosh Kumar, Advs.
for the Appellant.
     Ms. Astha Deep, S. M. Jadhav, Nicholas Chaudhary, Bri Kishore
Sah, M/s. S. M. Jadhav and Company, Satyajit A. Desai, Nishant             E
Ramakantrao Katneshwarkar, Advs. for the Respondents.
      The Judgment of the Court was delivered by
      R. F. NARIMAN, J. 1. Leave granted.
      2. The present case concerns a purchase notice issued under          F
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
relevant provisions of the Act, as they stood at the relevant time, are
reproduced hereunder:
                                                                           G
      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                                               H
416      SUPREME COURT REPORTS                           [2018] 1 S.C.R.


A        (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
B        (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—
C           (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
D               development in accordance with the conditions; or
      (e) the owner of the land because of its designation or 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
E         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.
F     (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
G     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.
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CHHABILDAS v. THE STATE OF MAHARASHTRA & ORS.                              417
               [R. F. NARIMAN, J.]

  (4) On receiving such records or reports, if the State Government        A
  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
                                                                           B
  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.
                                                                           C
  (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.
                                                                           D
  (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
                                                                           E
  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.                                                           F
  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    G
  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

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418      SUPREME COURT REPORTS                         [2018] 1 S.C.R.


A           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
B           Development plan.
      (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:
C     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.
D     (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.
E     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
F     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
G           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 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
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CHHABILDAS v. THE STATE OF MAHARASHTRA & ORS.                              419
               [R. F. NARIMAN, J.]

        down in the Land Acquisition Act, 1894(I of 1894), Floor           A
        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
                                                                           B
        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           C
        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                D
        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      E
  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 contained in the said Act, be deemed to be a declaration        F
  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.                        G
  (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, -                                            H
420      SUPREME COURT REPORTS                            [2018] 1 S.C.R.


A        (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
B            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
C            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
D     which proceedings for acquisition commenced before the
      commencement of the 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
E     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
F     (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
G     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.

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    CHHABILDAS v. THE STATE OF MAHARASHTRA & ORS.                                 421
                   [R. F. NARIMAN, J.]

         Section 127 - Lapsing of reservations. - If any land reserved,           A
         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
                                                                                  B
         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 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          C
         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.
                                                                                  D
      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          E
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              F
aforesaid purchase notice and stated that proceedings for acquisition of
land shall be initiated within one year i.e. before 12th 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        G
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,
1
    ‘Twelve months’ was substituted in place of ‘six months’ by Act 16 of 2009.
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422            SUPREME COURT REPORTS                           [2018] 1 S.C.R.


A     Jalgaon on 15th 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
      28th 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
B
      stated that, as Section 49(7) was satisfied on the facts of the present
      case, there was no lapse. A writ petition dated 2nd 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
      December, 2014, stating that Section 127 of the Act alone deals with
C     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.
D
             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
E     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,
F     thanks to the reservation made. This being the case, over 10 years having
      lapsed since the date of 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
G     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
H     timelines within which the appropriate authority must make an application
  CHHABILDAS v. THE STATE OF MAHARASHTRA & ORS.                                423
                 [R. F. NARIMAN, J.]

to acquire the land in respect of which a purchase notice has been             A
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.
                                                                               B
       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.
                                                                               C
       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       D
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,              E
designation, allotment, indication or restriction on development of the
land shall be deemed 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           F
      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      G
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.

                                                                               H
424             SUPREME COURT REPORTS                           [2018] 1 S.C.R.


A            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.
B
             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 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,
C     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
D     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
E     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 Section 126(2) must be made
F     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
G
      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
H     appropriate authority making an application to acquire the land. This
  CHHABILDAS v. THE STATE OF MAHARASHTRA & ORS.                                425
                 [R. F. NARIMAN, J.]

should ordinarily be within a period of one year from the date such an         A
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. But the matter does not end here. Thereafter, Section 127           B
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,        C
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         D
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         E
      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.”
       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          F
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
                                                                               G
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,
                                                                               H
426              SUPREME COURT REPORTS                            [2018] 1 S.C.R.


A             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).”
B
              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
C             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 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
D             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
E             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
F             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
G             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
H             shall be available to the owner for the purpose of development.
  CHHABILDAS v. THE STATE OF MAHARASHTRA & ORS.                                   427
                 [R. F. NARIMAN, J.]

      The availability of the land to the owner for the development would         A
      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.”
                                                                                  B
       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:                            C

      “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           D
      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            E
      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           F
      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          G
      for either to acquire the land or to take steps for acquisition of the
      land within a period of six months 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
                                                                                  H
428      SUPREME COURT REPORTS                             [2018] 1 S.C.R.


A     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
B     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
C     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
D     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
E     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
F     requesting the Government to acquire the land, which Government
      may 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
G     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
H     Section 6 of the LA Act. Clause (c) of Section 126(1) merely
  CHHABILDAS v. THE STATE OF MAHARASHTRA & ORS.                               429
                 [R. F. NARIMAN, J.]

      provides for a mode by which the State Government can be                A
      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
                                                                              B
      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        C
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         D
      regional plan, within one year an application has to be moved
      under Clause (c) of Section 126(1) which should culminate into 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        E
      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)        F
      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         G
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:
                                                                              H
430            SUPREME COURT REPORTS                            [2018] 1 S.C.R.


A           “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
B
            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.
            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
C           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
D           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
E           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
F           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
G           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 elapsed from the date of publication of the plan in question, and no
H
  CHHABILDAS v. THE STATE OF MAHARASHTRA & ORS.                              431
                 [R. F. NARIMAN, J.]

steps for acquiring the land have been taken, then once a purchase notice    A
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:                                                              B
      (1) 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   C
         deemed to have lapsed.
      (2) 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       D
          Section 126(4), wherein the market value shall be the market
          value of the land as on the date of the Section 6 declaration.
          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   E
          immediately.
      (3) 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   F
         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).                                         G
       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 of
Section 127, for the reason that there is no period of 10 years in Section
                                                                             H
432             SUPREME COURT REPORTS                            [2018] 1 S.C.R.


A     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
B     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
C     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
D     Market Yard would be initiated within one year from 16th March, 2001.
      Consequently, the Khopoli Municipal Council wrote a letter on 23rd 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
E     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:
F           “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
G           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:
H
  CHHABILDAS v. THE STATE OF MAHARASHTRA & ORS.                               433
                 [R. F. NARIMAN, J.]

      “15. In view of the principle of law laid down by this Court, as        A
      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 allowed to use the land for the last
      more than twenty years, the land will have to be released as the
                                                                              B
      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           C
      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           D
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           E
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, 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        F
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   G
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
                                                                              H
434                SUPREME COURT REPORTS                       [2018] 1 S.C.R.


A     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
      publication of the relevant plan, a second purchase notice must be served
B
      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.


C     Nidhi Jain                                                 Appeal disposed of.




D




E




F




G




H