REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.831 OF 2020 (@ SLP(C)No. 20585 of 2015)

MOHANDAS AND OTHERS   ... APPELLANT(S)

VERSUS

THE STATE OF MAHARASHTRA AND OTHERS      ... RESPONDENT(S)

J U D G M E N T

K.M. JOSEPH, J.

1. Leave granted.

2. Appellants  are  the  petitioners  before  the  High

Court of Bombay. By the impugned Judgment, the Writ

Petition filed by them stands dismissed.

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3. The  prayers  sought  by  the  appellants  are  as

follows:

“(A) Quash  and  set  aside  the Reservation  No.S-169  in  the  Final Development  Plan  of  Gondia  (Second Revised), whereby the land bearing Survey Nos. 405/1, 406/2, 407/2, 410/2 and 411 of Mouza-Gondia  (Bk.),  Tehsil  &  District- Gondia,  belonging  to  the  petitioners  is reserved  for  Shopping  Complex  and Vegetable Market (Annexure “J”).

(B) Hold  and  declare  that  the  land bearing Survey Nos. 405/1, 406/2, 407/2, 410/2  and  411  of  Mouza-Gondia  (Bk.), Tehsil & District-Gondia, are not reserved for  the  development  of  Shopping  Complex and  Vegetable  market  vide  Reservation No.S-169 in the Final Development Plan of Gondia  (Second  Revised)  and  that  the petitioners are free to use and develop the said land as true lawful and absolute owners thereof as per the user for the adjacent  land  provided  under  the  Final Development  Plan  of  Gondia  (Second Revised) {Annexure “J”}.”  

4. Briefly, their case, before the High Court, is as

follows:

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Appellants are the owners of different plots of

land  totally  admeasuring  0.52  hectares.  They

purchased  the  land  on  02.01.2006.  A  Development

Plan was issued under the Maharashtra Regional and

Town Planning Act, 1966 (hereinafter referred to as

‘the Act’, for short). Under the Development Plan

issued, the entire land owned by the appellants was

reserved  for  construction  of  shopping  complex.

First respondent and the fourth respondent (State

of Maharashtra and the Municipal Council, Gondia),

however,  did  not  take  any  steps.  The  Plan  was

enforced  from  1984.  The  erstwhile  owners  of  the

property  issued  a  notice  dated  09.06.2004  under

Section  127  of  the  Act  calling  upon  the  fourth

respondent  to  initiate  necessary  steps  for

acquiring the land. The Municipal Council held a

meeting  on  15.02.2005.  It  was  alleged  that  the

fourth respondent decided, by Resolution, not to

acquire the land. Reference is placed on letters of

07.04.2005 and 08.04.2005 intimating that the land

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was free to be used and developed in accordance

with the user of adjacent lands. Though a draft

Award  was  made  by  the  Special  Land  Acquisition

Officer,  it  was  dropped  on  account  of  non-

availability of funds. It is the further case of

the appellant that appellant had submitted proposal

for regularization of the layout carved out Plan

over the said land. In the meantime, a revision of

the Development Plan was contemplated and a Draft

Plan  was  published  followed  by  public  notice.

Again,  the  revised  draft  Plan  showed  that  the

appellants  property  was  reserved  for  shopping

complex and vegetable market. Appellants objected

to the same. Appellants were called for hearing by

the  fourth  respondent.  Appellants  immediately

thereafter  approached  the  first  respondent  with

detailed representation. On 15.05.2012, the final

Development Plan of Gondia (Second Revised Scheme)

came into effect. The appellants property is shown

as  reserved  for  shopping  complex  and  vegetable

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market.  It  is  essentially  on  these  facts  and

complaining  of  inaction  on  the  notice  given  by

their predecessors in the interest under Section

127 of the Act and contending that the reservation

in the Development Plan has ceased to exist, the

Writ Petition was filed seeking reliefs, as noted

by  us.  The  Writ  Petition  was  opposed.  The  High

Court, by the impugned Order, dismissed the Writ

Petition.  

5. We have heard the learned Senior Counsel for the

appellants  Shri  Shekhar  Naphade.  We  also  heard  the

learned  Counsel  for  the  first  respondent-State  of

Maharashtra. There was no representation on behalf of

the fourth respondent-Municipal Council.

6. Shri Naphade, learned Senior Counsel pointed out

that the Development Plan, reserving the property of

the appellants, was made way back in the year 1984. A

notice was given within the meaning of Section 127 of

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the  Act.  As  there  was  no  appropriate  action  as

contemplated  under  Section  127,  the  inevitable

consequence is that the property of the appellants must

be freed from the reservation it is subjected to in the

Development Plan.

7. Section 127 of the Act must be noticed at once. It

reads as follows:

“127.  (1)  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  a  declaration  under  sub- section (2) or (4) of section 126 is not published in the Official Gazette within such  period,  the  owner  or  any  person interested in the land may serve notice, alongwith the documents showing his title or  interest  in  the  said  land,  on  the Planning  Authority,  the  Development Authority  or,  as  the  case  may  be,  the Appropriate Authority to that effect; and if within twelve months] 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

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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.  (2)  On  lapsing  of reservation, allocation or designation of any  land  under  sub-section  (1),  the Government shall notify the same, by an order published in the Official Gazette.]”

8. When the Court pointed out the fact that the High

Court  has  found  that  there  is  a  declaration  under

Section 126(4) of the Act within ten years from 1984,

i.e., on 03.09.1992, the learned Senior Counsel would

point  out  that  even  proceeding  on  the  basis  of  the

same, it is wholly unjust to keep under captivity, as

it  were,  the  valuable  properties  of  the  appellants

seemingly eternally. He further complained that it is

not as if any public purpose is going to be sub-served.

This is a case where the Municipal Council, which is

the Authority, which must make available the funds for

the acquisition of the property, is in dire financial

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straits and is unable to finance the acquisition. The

Municipal Council does not, in fact, want to acquire

the land. The letters issued and referred to by us is

referred to. The appellants are, thus, held hostage and

are at the receiving end of the most unfair treatment

by  paying  obeisance  to  the  letter  of  the  law  as

contained in Section 127 of the Act. He would further

point out that the reasoning of the High Court about

the  effect  of  the  revised  Scheme  coming  into  force

under  Section  38  of  the  Act  is  fallacious  and  goes

against the view of this Court in Bhavnagar University

v.  Palitana Sugar Mill (P) Ltd. and others  1. He also

drew our attention to a recent judgment of this Court

in  Chhabildas v.  State of Maharashtra and others  2. He

would, therefore, contend that this is a fit case where

this  Court  may  reach  justice  to  the  appellants  who

virtually stand deprived of their property within the

meaning of Article 300A of the Constitution of India.

1 (2003) 2 SCC 111

2 (2018) 2 SCC 784

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9. Per contra, the learned Counsel on behalf of the

first respondent pointed out that the impugned judgment

is premised soundly in law. Appellants, who sought to

invoke the provisions of Section 127 of the Act, based

on  notice  issued  by  their  predecessor  in  interest,

have, in the light of the finding that declaration has

been made under Section 126(4) within a period of 10

years  (1992)  of  the  Plan,  issued  in  1984,  stand

deprived of any legal right to the consequences under

Section 127 of the Act following non-compliance with

such notice. He does not dispute the fact that there is

considerable delay.      

10. The legal principles about the provisions which we

are  concerned  with,  is  no  longer  res  integra.  The

effect of the Act has been explained in the decisions

reported in Municipal Corporation of Greater Bombay v.

Dr. Hakimwadi Tenants' Association and others  3,  Girnar

3 (1998) Supp. SCC 55

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Traders v. State of Maharashtra and others  4 [Girnar 2],

Girnar Traders (3) v. State of Maharashtra  5 [Girnar 3]

among  other  cases.  We  will  advert  to  them  in  due

course.

11. Undoubtedly, the scheme of the Act briefly put is

as follows:

The  Act  contemplates  planned  development.

Chapter  II  deals  with  provisions  relating  to

regional plans. Regional Plan is defined in Section

2(25)  as  meaning  a  plan  for  development  or

redevelopment  of  a  region  approved  by  the  State

Government and which has come into operation under

the  Act.  Region  is  in  turn  defined  as  an  area

established to be a region under Section 3 of the

Act.  Development Plan falls under Chapter III of

the Act. The Act contemplates that every Planning

Authority is to prepare the development authority.

4 (2007) 7 SCC 555

5 2011 (3) SCC 1

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Development Plan is defined under Section 2(9) as a

Plan for the development or redevelopment of the

area within jurisdiction of a Planning Authority.

It also includes revision of a development plan and

proposals  of  the  Special  Planning  Authority  for

development  of  land  within  its  jurisdiction.

Development is defined in Section 2(7) in a very

comprehensive way. Planning Authority is defined in

Section 2(19), and after its substitution by Act 5

of 1992, it means a Local Authority and includes a

Special Planning Authority under Section 40 as also

the  Slum  Rehabilitation  Authority  under  Section

3(a)  of  the  Maharashtra  Slum  Areas  Improvement,

Clearance and Regional Act, 1971. Spread over the

various  Sections  of  Chapter  III,  are  elaborate

provisions  including  preparation  of  draft

Development  Plans  and  finalizing  the  same,

implementation, revision and variation of the Plan.

Section 43 of the Act speaks about restrictions on

the  development  of  land  upon  the  declaration  of

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intention to prepare a Development Plan. Section 45

speaks  about  the  power  to  grant  or  refuse

permission for the Application under Section 44 to

develop the land.  

Chapter V deals with Town Planning Schemes. The

word ‘Scheme’ has been defined as including a Plan

relating to Town Planning Scheme.   

12. Bearing  these  provisions  in  mind,  we  come  to

Chapter VII. Provisions under the said Chapter relate

to land acquisition. Section 125 of the Act provides

that  any  land  acquired,  reserved  or  designated  in

Regional  Plan  or  Development  Plan  or  Town  Planning

Scheme, inter alia, shall be deemed to be land needed

for  public  purpose,  under  the  Right  to  Fair

Compensation  and  Transparency  in  Land  Acquisition

Rehabilitation  and  Settlement  Act,  2013  (Prior  to

29.08.2015, undoubtedly, the words were under the Land

Acquisition  Act,  1894,  as  far  as  the  last  part  is

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concerned). Sections 4 to 15 of the 2013 Act is not

made applicable in respect of the said lands. Section

126 of the Act deals with the mode of applying the law

relating to acquisition in regard to a draft Regional

Plan  or  Development  Plan  or  any  other  Plan  or  Town

Planning Scheme. Sub-Section (1) contemplates acquiring

land either by agreement or the basis of granting of

other rights including Transferable Development Right

(TDR). Lastly, the Authority can apply to the State

Government  for  acquiring  such  land  under  the  law

relating  to  land  acquisition.  Sub-Section  (2)

contemplates action on the part of the State Government

on  receipt  of  application  under  Sub-Section  (1).  It

contemplates a declaration by the State Government. It

provided,  inter alia, that the declaration was to be

deemed to be a declaration under the Land Acquisition

Act, 1894 and after the amendment, as it stands now,

under Section 19 of the Right to Fair Compensation Act,

2013.  After  substitution  by  Act  10  of  1994,  no

declaration was to be made after expiry of one year

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from  the  date  of  publication  of  the  draft  Regional

Plan, Development Plan or any other Plan or Scheme.

Sub-Section (3) of Section 126 of the Act provides for

the Collector to proceed to take order for acquisition

of the land. Sub-Section (4) of Section 126 of the Act,

reads as follows:

“126(4)Notwithstanding  anything contained  in  the  proviso  to  sub-section (2) and subsection (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  5[(Amendment)  Act, 1993)], the State Government may make a fresh declaration for acquiring the land under the Land  Acquisition Act, 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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13. Then, there is Section 127 which deals with lapsing

of  reservation,  inter  alia, which  we  have  already

referred to above.     

14. We may also notice Section 49 of the Act. Section

49 of the Act deals with a notice to acquire land in

certain situations. The situations are set out in sub-

Section (1). It includes a situation where any land,

for the development of which permission is refused and

owner  falls  under  any  of  clauses  in  (a),  (b),  (c),

claims  that  the  land  have  become  incapable  of

reasonably  beneficial  use  in  its  existing  state  or

where permission is granted subject to conditions which

render the land not capable of reasonably beneficial

use.  Under  sub-Section  (4),  the  State  Government  to

which the purchase notice under the Section is to be

addressed is to take the decision either accepting or

refusing  the  purchase  notice.  Sub-Section  (5)  deals

with a deemed confirmation of a purchase notice failing

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response within six months by the Government on the

notice. Sub-Section (7) of Section 49 reads as follows:

“49(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.”

15. In  Municipal Corporation of Greater Bombay v.  Dr.

Hakimwadi Tenants' Association and others  6, this Court,

inter alia, held as follows:

6 (1998) Supp. SCC 55

16

“11. Section 127 of the Act is a part of  the  law  for  acquisition  of  lands required for public purposes, namely, for implementation  of  schemes  of  town planning.  The  statutory  bar  created  by Section 127 providing that reservation of land  under  a  development  scheme  shall lapse  if  no  steps  are  taken  for acquisition of land within a period of six months from the date of service of the purchase notice, is an integral part of the machinery created by which acquisition of land takes place. The word “aforesaid” in the collocation of the words “no steps as  aforesaid  are  commenced  for  its acquisition” obviously refer to the steps contemplated by Section 126(1). The effect of a declaration by the State Government under sub-section (2) thereof, if it is satisfied that the land is required for the  implementation  of  a  regional  plan, development  plan  or  any  other  town planning scheme, followed by the requisite declaration to that effect in the official Gazette, in the manner provided by Section 6  of  the  Land  Acquisition  Act,  is  to freeze the prices of the lands affected. The  Act  lays  down  the  principles  of fixation  by  providing  firstly,  by  the proviso  to  Section  126(2)  that  no  such declaration under sub-section (2) shall be made after the expiry of three years from the  date  of  publication  of  the  draft regional  plan,  development  plan  or  any other  plan,  secondly,  by  enacting  sub- section  (4)  of  Section  126  that  if  a declaration is not made within the period

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referred to in sub-section (2), the State Government  may  make  a  fresh  declaration but, in that event, the market value of the land shall be the market value at the date of the declaration under Section 6 and not the market value at the date of the  notification  under  Section  4,  and thirdly, by Section 127 that if any land reserved, allotted or designated for any purpose  in  any  development  plan  is  not acquired by agreement within 10 years from the date on which a final regional plan or development plan comes into force or if proceedings  for  the  acquisition  of  such land under the Land Acquisition Act are not  commenced  within  such  period,  such land shall be deemed to be released from such reservation, allotment or designation and become available to the owner for the purpose of development on the failure of the Appropriate Authority to initiate any steps for its acquisition within a period of six months from the date of service of a  notice  by  the  owner  or  any  person interested  in  the  land.  It  cannot  be doubted that a period of 10 years is long enough.  The  Development  or  the  Planning Authority  must  take  recourse  to acquisition  with  some  amount  of promptitude in order that the compensation paid  to  the  expropriated  owner  bears  a just relation to the real value of the land as otherwise, the compensation paid for  the  acquisition  would  be  wholly illusory. Such fetter on statutory powers is in the interest of the general public and the conditions subject to which they

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can  be  exercised  must  be  strictly followed.”

(Emphasis supplied)

16. In  Girnar  Traders v.  State  of  Maharashtra  and

others  7,  the  majority  view  was  that  a  literal

interpretation of Section 127 of the Act would result

in injustice. The question, which was posed, actually

was what is required to be done by the Authority on

receipt of a notice under Section 127 of the Act from

the owner of land subjected to restrictions by way of a

Development  Plan,  inter  alia.  The  dissenting  Judge,

P.K. Balasubramanium, J., took the view that all that

is required to be done when a notice is issued under

Section 127 of the Act was that the Authority under the

Act was to make an application for acquisition under

the Land Acquisition Act and nothing more. The learned

Judge went on to hold that the Authority cannot set in

motion proceeding under the Land Acquisition Act while

7 (2007) 7 SCC 555

19

acting under Section 126 (1) of the Act. The majority

view, however, was that resorting to the plain meaning

of the words would cause palpable injustice. The Court

took the view as follows:

“54.  … 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 dereservation 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 from the date of service of notice by the

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landowner  for  dereservation.  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.”

(Emphasis supplied)

17.  Thus,  it  was  concluded  that  the  steps  towards

acquisition  would  really  commence  when  the  State

Government  permits  acquisition,  and  as  a  result

thereof, publishes the declaration under Section 6 of

the Act. The Constitution Bench of this Court in Girnar

3 (supra), has taken note of the view of the majority

judgment in course of its judgment which,  inter alia,

dealt with the question as to whether Section 11A of

the Land Acquisition Act applies to proceedings under

the Act under the chapter relating to acquisition. This

Court took the view that Section 11A does not apply.

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18. In  Shrirampur  Municipal  Council v.  Satyabhamabai

Bhimaji  Dawkher  8,  the  question  which  was  considered,

before a Bench of three learned Judges was, whether

reservation  of  lands  would  lapse  if  no  steps  were

commenced within six months under Section 127 of the

Act.  This  Court  found  no  conflict  between  Municipal

Corporation  of  Greater  Bombay (supra) and  Girnar  2

(supra). This Court held as follows:

“29. 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, by really doing complete justice on the facts of that case

8 (2013) 5 SCC 627

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under Article 142 of the Constitution of India.

30. In  the  present  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 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  publication  of  the  relevant  plan,  a second purchase notice must be served in

23

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.”

19. Finally, the Court also held as follows:

“45. In  our  view,  the  observations contained  in  para  133  of Girnar Traders (3) [Girnar  Traders  (3) v. State  of Maharashtra, (2011) 3 SCC 1] unequivocally support  the  majority  judgment  in Girnar Traders  (2) [Girnar  Traders  (2) v. State of Maharashtra, (2007) 7 SCC 555] .”

20. In  Bhavnagar  University (supra),  the  case  arose

under the Gujarat Town Planning and Urban Development

Act,  1976.  Therein,  this  Court  considering  the

provision similar to the provisions of the Act (Section

20 of the Act in the said case corresponded to Section

127  of  the  Act),  took  the  view  that  though  under

Section  21  of  the  Gujarat  Act,  a  duty  was  cast  to

revise the Development Plan, the rights of the owners

24

under Section 20(2) of the Act would not be taken away.

We need only refer to paragraph 38 of the judgment,

which reads as follows:

“38. Section  21  does  not  envisage that despite the fact that in terms of sub-section  (2)  of  Section  20,  the designation of land shall lapse, the same, only because a draft revised plan is made, would automatically give rise to revival thereof. Section 20 does not manifest a legislative intent to curtail or take away the right acquired by a landowner under Section 22 of getting the land defreezed. In the event the submission of the learned Solicitor-General  is  accepted  the  same would completely render the provisions of Section 20(2) otiose and redundant.”

(Emphasis supplied)

21. In  Prafulla  C.  Dave  and  others v.  Municipal

Commissioner and others  9, this Court, again, considered

the provisions of Section 127 of the Act. The facts

therein may be noticed briefly as follows:

9 (2015) 11 SCC 90

25

There  was  a  Development  Plan  notified  on

08.07.1966.  The  land  of  the  appellant  was  kept

under reservation for a garden. The land was not

acquired under any of the modes in Section 126 of

the  Act  prior  to  the  sanction  of  the  revised

Development  Plan  dated  05.01.1987.  The  finally

revised  Development  Plan  dated  05.01.1987  was

preceded by a draft revised Plan published in 1982.

No notice under Section 127 of the Act was issued

by the owner or any person interested in the land

prior to the purchase of the land by the appellants

from  the  original  owners  in  the  year  1989.  The

appellant  served  notice  dated  05.10.1989.  On  a

direction  by  the  High  Court,  the  notice  under

Section 127 of the Act was found premature by the

Authority as it was issued before completion of ten

years  from  the  date  of  the  revised  Development

Plan.  The  contention  of  the  respondent-Municipal

Commissioner was that a revised Plan under Section

38  tantamounted  to  a  complete  Development  Plan

26

under Sections 21 to 30 of the Act. The period of

ten  years  under  Section  127  of  the  Act  would

necessarily run from the date of coming into force

of  such  revised  Plan.  The  contention  of  the

respondent  also  was  that  under  the  Gujarat  Act,

certain provisions found in the Act are absent and

Bhavnagar  University (supra)  was  distinguished,

inter  alia.  This  Court  proceeded  to  hold  in

Prafulla C. Dave (supra), inter alia, as follows:  

“21. … It is, therefore, clear that the lapsing of the reservation, allotment or  designation  under  Section  127  can happen  only  on  the  happening  of  the contingencies  mentioned  in  the  said section. If the landowner or the person interested himself remains inactive, the provisions  of  the  Act  dealing  with  the preparation of revised plan under Section 38 will have full play. Action on the part of the landowner or the person interested as  required  under  Section  127  must  be anterior  in  point  of  time  to  the preparation of the revised plan. Delayed action on the part of the landowner, that is,  after  the  revised  plan  has  been finalised  and  published  will  not invalidate the reservation, allotment or

27

designation  that  may  have  been  made  or continued in the revised plan. …”  

(Emphasis supplied)

22. In  a  recent  judgment,  considering  a  case  under

Section 49 of the Act, a Bench of two learned Judges in

Chhabildas  (supra)  has  considered  the  interplay  of

Sections 49, 126 and 127 of the Act. The Court took the

view as follows:

“14. 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

28

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.

15. 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.”

29

23. This  Court,  however,  noticed  the  judgment  in

Hasmukhrai V. Mehta v. State of Maharashtra and others  10

and held as follows:

“29. 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, by really doing complete justice on the facts of that case under Article 142 of the Constitution of India.

30. In the present 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.

10 (2015) 3 SCC 154

30

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  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.”

31

24. Shri Naphade, learned Senior Counsel, inspired by

the  views  expressed  by  this  Court  in  Hasmukhrai  V.

Mehta (supra)  Chhabildas (supra),  would  submit  that

this is a case where the Development Plan was finalized

under Section 31 of the Act in the year 1984, more than

35 years. Neither is there any sign of land of the

appellants being acquired nor are the appellants being

extricated from the rigor of the reservation made of

their lands. Under the Development Plan, the land of

the  appellants  is  reserved  for  use  as  a  shopping

complex and a vegetable market.

25. The right would accrue to the owner under Section

127 of the Act to serve notice thereunder only if a

declaration is not published within ten years of the

Development Plan under Section 126(4) of the Act, inter

alia. The High Court has, undoubtedly, noticed that the

final Development Plan came into force on 24.08.1984.

It  further  noticed  that  there  is  a  declaration  or

Notification  under  Section  126(4)  of  the  Act  on

32

03.09.1992.  This  means,  within  ten  years  from

24.08.1984,  there  is  action,  as  contemplated  under

Section 126(4) of the Act. Under Section 127 of the

Act, therefore, any notice which was given may not hold

good going by the letter of the law.

26. In this case, it is clear that the appellants are

governed by the Act. There is no dispute that invoking

Section 38 of the Act that a revised final Development

Plan  has  come  into  effect  from  15.05.2012.  It  is

undoubtedly  true  that  the  reservation  under  the

original Development Plan dated 24.08.1984 would cease

to impact the appellants if the notice under Section

127 of the Act was issued on the passage of ten years

from 24.08.1984 and, if action under Section 127 of the

Act  was  not  taken.  It  is  true  that  notice  dated

09.06.2004 was issued by the predecessor in title of

the  appellants.  This  is  not  a  case  where  there  was

inaction  on  the  part  of  the  previous  owners  of  the

33

property upon the expiry of ten years from the date of

the final Development Plan in 1984. The problem for

appellants, however, is the action on the part of the

respondent issuing declaration under Section 126(4) of

the  Act  on  03.09.1992.  Lapsing  of  reservation

contemplated under Section 127 of the Act will occur

only if the conditions mentioned therein are fulfilled.

The  indispensable  conditions  is  that  after  the

reservation of the land,  inter alia, under any Plan,

for a period of ten years, the land is not acquired by

agreement  within  that  period  or  proceedings  for

acquisition  under  the  Act,  i.e.,  declaration  under

Section 126(4) of the Act, inter alia, is not published

within the said period. If either of the two conditions

exist, a notice is to be issued setting in motion the

process for lapsing reservation. If, before issuance of

notice,  action  is  already  taken  by  issuance  of

notification/declaration by the respondent within ten

years of the final Development Plan, it will render the

notice ineffective in law. The result is that the High

34

Court was right in finding that the appellant was not

entitled to the relief based on lapsing of reservation

under  Section  127  of  the  Act.  This  is  a  case,

therefore,  where  the  Development  Plan  also  stood

revised  under  Section  38  of  the  Act,  bringing  in

consequences, as noticed by this Court in  Prafulla C.

Dave (supra).

27. Therefore,  this  is  a  case  where  the  reservation

under the Plan dated 24.08.1984, which was the final

Development Plan, had not lapsed and it was finally

revised  under  Section  38  of  the  Act.  It  is  not  in

dispute that the property of the appellants had been

reserved  originally  for  the  purpose  of  shopping

complex, and under the revised Development of 2012, for

shopping complex and vegetable market.  

28. The contention of the appellants is, however, that

the draft revised Plan was prepared on 29.11.2007 which

is after 20 years of the publication of the Development

Plan and it was finalized in the year 2012.

35

29. Proceeding on the basis of the contention of the

appellant that since the revised Development Plan was

issued  more  than  20  years  from  the  issuance  of  the

initial  final  Development  Plan  on  24.08.1984,  and

therefore, revised Plan issued on 24.09.2007, is not to

have  effect  even  then  the  original  Development  Plan

issued on 24.08.1984 would continue to hold good. There

is no dispute that reservation under both the Plans in

respect of the appellants properties are the same. In

such  circumstances,  there  can  be  no  merit  in  the

contention.  

30. The contention is not seen taken before the Court.

Section 38 of the Act reads as follows:

“38.  Revision  of  Development  plan:- At least once in 20 [twenty years] from the date on which a Development plan has come  into  operation,  and  where  a Development plan is sanctioned in parts, then at least once in 4[twenty years] from the date on which the last part has come into operation, a Planning Authority may 3 [and shall at any time when so directed by

36

the  State  Government],  revise  the Development plan 4 [either wholly, or the parts separately] after carrying out, if necessary, a fresh survey and preparing an existing land-use map of the area within its  jurisdiction,  and  the  provisions  of sections 5 [* * *] 22, 23, 24, 25, 26, 27, 28, 29, 30 and 31 shall, so far as they can be made applicable, apply in respect of such revision of the Development plan.”

31. What is contemplated under the said provision is

that the Planning Authority  may at least once in 20

years from the date on which a Development Plan has

come  into  operation,  inter  alia,  (the  period  of  20

years been calculated from the date on which, it came

into  operation)  revise  the  Development  Plan.  The

provisions of Sections 22, 23, 24, 25, 26, 27, 28, 30

and  31  were  to  apply  in  this  regard.  The  final

Development  Plan  in  this  case  came  into  force  on

24.08.1984.  The  draft  Revised  Plan  was  issued  on

24.09.2007 and the final revised Development Plan was

issued  with  effect  from  15.05.2012.  The  further

provision  in  Section  38  of  the  Act  is  that  if  the

37

Government  directs  the  revision  of  the  Plan,  the

Planning Authority shall revise the Plan. It may be at

any time. In other words, the scheme would appear to be

that even before the completion of 20 years, it is open

to the Government to direct the Planning Authority to

undertake the revision of an existing Development Plan.

In such a case, the word used is shall and there is no

discretion and the Planning Authority is to revise the

Plan. State Government can issue the direction at any

time without waiting for the period of 20 years. AS far

as the Planning Authority undertaking revision on its

own, it is discretionary. As regards the time limit

being  breached,  in  the  facts  of  this  case,  we  are

unable to agree. It is not stipulated in Section 38 of

the  Act  that  the  revision  must  be  undertaken  and

finalized  immediately  before  the  expiry  of  20  years

from the date of the original final Development Plan. A

period  of  20  years  is  to  run  out  from  original

Development Plan in a case where the Planning Authority

wishes to exercise power of revision of the Plan. That

38

is not the same thing as saying that the revised Plan

is to be brought into force before the expiry of 20

years. In this case, it is also not clear whether the

Planning Authority undertook the revision following the

direction of the Government.

32. The only aspect which remains is whether this is a

case  which  calls  for  the  exercise  of  powers  under

Article 142 of the Constitution of India. The sheet

anchor  of  the  appellants  case  appears  to  be  the

decision of this Court in Chhabildas (supra), which we

have  already  referred  to  above.  In  this  case,  the

declaration has been issued under Section 126(4) of the

Act on 03.09.1992. The effect of the declaration under

Section 126(4) is that the value of the land was to be

determined  with  reference  to  the  date  of  the

declaration.  If  declaration  is  made  under  Section

126(2) of the Act, the valuation is pushed back to the

date of the draft Development Plan. What is actually

contemplated  would  appear  to  be  that  after  the

39

declaration under Section 126(4), the matter must be

followed up with reasonable dispatch. In other words,

under  the  law  relating  to  land  acquisition,  further

steps will be taken culminating in an Award. In this

case, on the other hand it is not in dispute that no

steps were taken for acquiring the land for more than

two decades. It is in the meantime that the revised

Development  Plan  has  come  into  being  on  15.05.2012.

Since no declaration has been made under Section 126(2)

of the Act under the revised Plan and the period has

run  out  as  contemplated  in  the  proviso  to  Section

126(2), the only way out for the respondent would be to

bring out a declaration under Section 126(4) of the

Act.  In  such  an  eventuality,  the  value  of  the

properties would have to be determined with reference

to the date of such declaration under Section 126(4) of

the Act. Therefore, if the property of the appellants

is  to  be  acquired,  the  appellants  would  have  to  be

given the value of the property as on the date on which

40

any such declaration is made under Section 126(4) of

the Act within ten years from 15.05.2012.

33. In  Hasmukhrai  V.  Mehta (supra),  the  case  was

decided under the Act. In the impugned order, the High

Court had dismissed the Writ Petition of the appellant,

inter alia, finding that such Plan was finalized in

March, 2003 and the period of ten years had not elapsed

and no benefit could be given. The Court took note of

the fact that in  T. Vijayalakshmi and others v. Town

Planning Member and another  11, this Court had declared

that the right of a person to construct residential

houses in a residential area is a valuable right and

also  considered  that  the  appellant  had  been  granted

permission and commencement certificate on 03.04.1990

under the Development Plan under which the property of

the appellant was included under the residential zone

and the Plan was also sanctioned. It is thereafter, on

14.01.1999,  the  appellants  were  informed  about  the

11 (2006) 8 SCC 502

41

fresh development scheme including the appellants land

as reserved for agricultural produce market yard. In

these circumstances, inter alia, the Court, taking note

of the fact that since no steps appear to have been

taken till date for the last more than 20 years, either

for acquiring land or purchasing land under the Act,

the lands were to stand released under Section 127 of

the Act.   

34. In the judgment in  Chhabildas (supra), this Court

referred to the aforesaid judgment and holds that the

said judgment lays down that since more than 20 years

have elapsed since the date of purchase notice under

Section 49 of the Act, on the facts of that case, the

lands  will  have  to  be  released  from  acquisition.

Thereafter, this Court proceeds to notice that in the

said case [Hasmukhrai V. Mehta (supra)], no purchase

notice under Section 127 of the Act was issued after

ten years had elapsed. Thereafter, this Court proceeded

to  hold  that  this  being  the  case  the  judgment  was

42

understood as one which was passed under Article 142 of

the Constitution of India in view of the inordinate

delay of over twenty years. Thereafter, Court took note

of  the  facts  of  the  case  before  it  and  found  that

fifteen years had passed since the publication of the

Development Plan and over ten years passed since date

of purchase notice under Section 49 of the Act. The

Court  proceeded  to  invoke  Article  142  of  the

Constitution of India and found that the reservation

and the acquisition proposals stood lapsed. However, it

was  made  clear  that  in  future  cases  that  may  arise

under  Section  49  of  the  Act,  the  procedure  under

Section 127 of the Act must be followed which means

that  after  ten  years  had  lapsed,  a  second  purchase

notice had to be served under Section 127 of the Act in

order  that  lapsing  could  take  place  under  the  said

Section.  

35. Now,  it  is  time  to  consider  the  impact  of  the

letters  dated  6/7.04.2005  issued  by  the  Municipal

43

Council. Therein, it is stated by the Chief Executive

Officer that in the Resolution dated 15.02.2005, the

land reserved no. 137 for shopping complex in Khasra

Nos. 406, 407, 410 and 411, total land measuring 4928

square meters in village Gondia shall not be purchased.

Resolution  dated  15.02.2005  also  appears  to  suggest

that the reservation under Section 127 of the Act is

released. The appellants would appear to contend that

this should by itself cannot decide the matter. As to

whether there is a lapsing of reservation under Section

127 of the Act, would be a matter to be decided in

terms of the said Statute. Also, after the Resolution

in the revised Plan, the reservation is reiterated.

36. The only question is whether it is to be ignored in

deciding whether we should invoke Article 142 of the

Constitution  of  India.  On  24.08.1984,  the  final

Development  Plan  is  published.  On  03.09.1992,  the

declaration  under  Section  126(4)  of  the  Act  was

published. After expiry of ten years from 24.08.1984,

notice was given by the previous owners on 09.06.2004.

44

Thereafter,  draft  revised  draft  Plan  publication  was

made on 29.11.2007. Still, thereafter, on 15.05.2012, a

final revised Development Plan was published. Although,

under  the  original  final  Development  Plan  dated

24.08.1984, the property of the appellants was reserved

for  shopping  complex,  and  under  the  revised  final

Development Plan dated 15.05.2012, the appellants lands

have been subjected to the reservation that it is meant

for use as shopping complex and vegetable market, apart

from issuing the declaration, under Section 126(4) of

the  Act  in  the  year  1992,  there  is  no  declaration

issued under the revised Plan dated 15.05.2015. While,

it is true that the original final Development Plan

came  into  force  on  24.08.1984  and  the  revised

Development Plan came into force in the year 2012, one

crucial  fact  cannot  be  overlooked. Admittedly,  the

appellants  purchased  lands  from  the  erstwhile  owners

only  on  02.01.2006.   Therefore,  on  the  facts,

particularly, having regard to the fact that they have

purchased  the  property  apparently  knowing  that  the

45

property was subjected to reservation, and as also we

have  found  that  their  case,  based  on  the  notice  of

previous owners, would not hold good in law and as the

subsequent revision of the Plan has come into force

with effect from 15.05.2012, we do not find that this

is a case where we should exercise our powers under

Article 142 of the Constitution. Appellants cannot be

compared  with  the  appellant  in  Hasmukhrai  V.  Mehta

(supra) as the appellant therein was a person who was

favoured with a permission to develop his land on the

basis that the land was meant for residential purpose

and it was he who went to court and the lapse of twenty

years was in the context found to have a deep impact.

37. The appellants must wait for a period of ten years

under Section 127 of the Act from 15.05.2012 and then

can issue notice contemplated under the Act. That is,

within  a  period  of  little  over  two  years  from  now,

appellants would have a cause of action to give notice

under Section 127 of the Act unless action is already

taken in the meantime. No doubt, we would expect that

46

the respondents would be alive to the object of the

Statute and also the rights of the owners and will not

act  mechanically  and  unfairly  in  the  matter  in  the

future. As far as invoking Section 49 of the Act, we do

not express any view. Leaving open all the remedies

available  to  the  appellants,  the  appeal  shall  stand

dismissed.

38. There shall be no order as to costs.   

.......................J.                    (MOHAN M. SHANTANAGOUDAR)

.......................J.                                (K.M. JOSEPH) NEW DELHI, JANUARY 29, 2020.

47