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

J U D G M E N T

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

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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

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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

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case may be, the Appropriate Authority to that effect; and if  within twelve months1 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.   

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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 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 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 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

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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

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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

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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.  

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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.”

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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

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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

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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

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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

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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.

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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

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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.

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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

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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

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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 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,

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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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