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  Non-REPORTABLE  

 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.870 OF 2016

(Arising out of SLP(C) No.25972 of 2009) NARAYANRAO JAGOBAJI GOWANDE PUBLIC TRUST                   …APPELLANT

Versus THE STATE OF MAHARASHTRA AND ORS.    …RESPONDENTS

WITH

  CIVIL APPEAL NO.871 OF 2016   (Arising out of SLP(C) No.25821 of 2008)

CIVIL APPEAL NO.872 OF 2016 (Arising out of SLP(C) No.25841 of 2008)

CIVIL APPEAL NOS. 876-877 OF 2016   (Arising out of SLP (C) Nos.25923-24 of 2008)

CIVIL APPEAL NO. 873 OF 2016     (Arising out of SLP (C) No.427 of 2009)

CIVIL APPEAL NO. 874 OF 2016     (Arising out of SLP (C) No.1223 of 2009)

And CIVIL APPEAL NO.875 OF 2016

   (Arising out of SLP (C) No. 10246 of 2009)

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J U D G M E N T         

  Delay condoned. Leave granted.

2. These  appeals  are  directed  against  the  common  

impugned judgment and order dated 29.8.2008 passed by  

the  Division  Bench  of  High  Court  of  Judicature  at  

Bombay, Nagpur Bench, Nagpur in various Writ Petitions  

including Writ Petition No.1034 of 1995, wherein the  

High Court has dismissed all the writ petitions.

3. As all the appeals raise the same question of law,  

for the sake of convenience and brevity, we would refer  

to the facts from the appeal arising out of SLP (C) No.  

25972  of  2009.  Brief  facts  are  stated  hereunder  to  

appreciate the rival legal contentions urged on behalf  

of both the parties:

On 01.01.1937, the Nagpur Improvement Trust Act,  

1936 (hereinafter referred to as the “NIT Act”) came  

into force under which the Nagpur Improvement Trust  

(hereinafter  referred  as  “NIT”)  was  established  and

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incorporated to provide for improvement and expansion  

of Nagpur Town.

4. The State of Maharashtra vide notification dated  

29.06.1939 sanctioned a Civil Station Expansion Scheme  

of 1939 of the NIT.

5. On 28.02.1942, one Smt. Laxmibai Gawande, wife of  

Narayanrao Gawande purchased a piece of land, measuring  

3.59 acres, comprised in Khasra no. 65, Mouza Ajni,  

Nagpur by a registered deed from Vithoba Fakira Teli.  

On 27.04.1944, she executed a Release Deed in favour of  

her husband Narayanrao Gawande whereby he became the  

absolute owner of the said land.  

6. It is an undisputed fact that the land in question  

fell within the Civil Station Expansion Scheme of 1939  

of NIT.  

7. On 11.11.1968, Mr. Narayanrao Gawande applied to  

respondent no.2-NIT for the development of his said  

open  space  land  and  gave  an  undertaking  whereby  he  

agreed to have the layout of the land formed as per the

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plans, suggestions and directions of respondent no.2-

NIT. In this connection, a development agreement was  

executed on the same day between Narayanrao Gawande and  

the NIT, whereby NIT permitted him to develop the said  

land in a planned way in accordance with the approved  

scheme and as per the sanctioned layout plan. In the  

said  layout  plan,  an  area  was  reserved  for  primary  

school, which was a public utility land.

8.   After  the  death  of  Narayanrao  Gawande,  the  

appellant-Narayanrao  Jagobaji  Gawande  Public  Trust  

(hereinafter called the “appellant-trust”) was created  

and the said land became the property of this trust.  

On  21.02.1985,  a  development  agreement  was  executed  

between the appellant-trust and the NIT for ratifying  

the  earlier  development  agreement  dated  11.11.1968  

which included the sanctioned map/plan showing the land  

reserved  for  primary  school/public  utility  purpose.  

Under  the  said  agreement,  the  appellant-trust  was  

permitted  to  develop  the  layout  subject  to  various  

conditions including the following one:

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“Whereas the said Party No.2 shall agree to  transfer the land and or primary school/open  land in the said layout at free of cost for  Party No.1 before release of plots and Party  No.1 shall be free to dispose of this land as  per its rules and regulations.”

The  above  Clause  contained  in  the  said  development  

agreement  (hereinafter called  the “impugned  clause”)  

provides for the transfer of the land earmarked for the  

primary school or other public utility purposes, after  

its  development  in  favour  of  respondent  no.2-NIT  

without payment of any compensation to the land owners.

9. Respondent  no.1-  State  vide  its  order  dated  

05.8.1993 sanctioned the allotment of land from out of  

Khasra  no.  41/1  and  45  Mouza  Somalwada,  Nagpur  in  

favour of respondent no.3-Santaji Mahavidyalaya for the  

construction  of  a  senior  college.  Pursuant  to  the  

aforementioned sanction, respondent no. 2-NIT allotted  

a piece of land in B.D. Thapar layout to Respondent  

no.3-Santaji  Mahavidyalaya.  On  25.02.1994  respondent  

no.3  requested  respondent  no.2-NIT  for  a  change  in  

location of the allotted plot for the construction of  

said senior college. The respondent no.2-NIT, by its

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resolution  allotted  a  land,  measuring  1907.65sq.m,  

comprised in Narayanrao Gawande layout to respondent  

no.3 in exchange of land.

10. Feeling aggrieved by the action of allotment of  

land, comprised in Narayanrao Gawande layout, taken by  

respondent no.2-NIT, the appellant-trust approached the  

High Court by filing Writ Petition No. 1034 of 1995.  

Some  other  writ  petitions  were  also  filed  by  the  

aggrieved  parties.  In  the  said  Writ  Petitions,  the  

aforesaid action of respondent no.2-NIT was challenged  

on  the  ground  of  being  without  jurisdiction  and  

authority  of  law  and  also  being  contrary  to  the  

provisions of the NIT Act. The High Court vide its  

common  judgment  and  order  dated  29.08.2008  has  

dismissed all the Writ Petitions on the ground that the  

respondent  no.2-NIT  is  free  to  allot  the  land  by  

following  due  procedure  of  law  for  public  utility  

purpose. It neither found arbitrariness nor illegality  

in the aforesaid action of the respondent no.2-NIT in  

allotting the said public utility land as reserved in

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the sanctioned layout plan. Hence, these appeals have  

been  filed  urging  various  grounds  questioning  the  

correctness of the common impugned judgment and order  

passed by the High Court.

 11. Mr. Shekhar Naphade, the learned senior counsel  

appearing on behalf of the appellant-trust contended  

that the impugned clause in the development agreement  

dated 21.02.1985, referred to supra, which provides for  

the transfer of developed land by the land owners to  

NIT  free  of  cost  and  without  payment  of  any  

compensation, is void and unenforceable in law in the  

light of the provisions of Sections 23 and 25 of the  

Indian  Contract  Act,  1872.  He  challenged  the  said  

clause of the development agreement on the ground of it  

being hit by Section 25 of the Indian Contract Act,  

1872 as the said agreement is neither registered under  

the provisions of the Registration Act nor stamped as  

per the provisions of the Bombay Stamp Act. In this  

regard he placed strong reliance upon the decision of  

this  Court  in  the  case  of  Central  Inland  Water

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Transport Corpn Ltd & Anr.  v. Brojo Nath Ganguly &  

Anr1. The relevant para 89 cited by the learned senior  

counsel reads thus:

“89…...The principle deducible from the above  discussions on this part of the case is in  consonance with right and reason, intended to  secure  social  and  economic  justice  and  conforms to the mandate of the great equality  clause in Article 14. This principle is that  the  courts  will  not  enforce  and  will,  when  called upon to do so, strike down an unfair  and unreasonable contract, or an unfair and  unreasonable  clause  in  a  contract,  entered  into  between  parties  who  are  not  equal  in  bargaining power….”  

12. He  further  contended  that  respondent  no.1-State  

cannot acquire any land by incorporating a clause like  

the  impugned  clause  contained  in  the  development  

agreement, in the instant case, which has been executed  

between itself and the land owners to the effect that  

the land owners shall transfer the land developed by  

them  for  public  utility  purpose,  free  of  cost  and  

without  getting  any  compensation  from  the  NIT.  In  

support of the aforesaid contention he placed strong  

reliance upon the decisions of this Court in Pt. Chet  

1  (1986) 3 SCC 156

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Ram  Vashist  v. Municipal  Corporation  of  Delhi2 and  

Yogendra Pal & Ors. v. Municipality, Bhatinda & Ors3.

13. It was further contended by him that in view of  

Section 76 of the NIT Act read with Rule 3 of the NIT  

Land Disposal Rules, 1983, respondent no.1-State should  

not have sanctioned the allotment of land in favour of  

respondent no.3. Section 76 of the NIT Act provides for  

disposal of any land vested in or acquired by Trust  

subject to rules, if any, made by the State Government.  

However,  in  the  present  case,  respondent  no.2  has  

allotted  a  piece  of  land  comprised  in  Narayanrao  

Gawande layout in favour of respondent no.3 when the  

said piece of land was neither vested in nor acquired  

by respondent no.2-NIT.

14. It  was  further  contended  by  the  learned  Senior  

counsel that the High Court has erred in holding that  

the  appellant-trust  had  received  consideration  for  

transfer of the said land in the form of benefits. He  

further  submitted  that  release  of  the  said  land  2  (1995) 1 SCC 47 3  (1994) 5 SCC 709

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reserved in the layout plan from acquisition and grant  

of  permission  to  sub-divide  the  plots  cannot  be  

considered to be a consideration. He further submitted  

that  the  ground  as  noted  above  was  not  taken  by  

respondent no.1 before the High Court and therefore,  

the same ought not to have been considered by it.

15. It was further contended by him that the High Court  

has  failed  to  appreciate  the  scope  and  scheme  of  

various provisions of NIT Act, particularly Sections  

26, 39, 45, 58, 59 and 68.

16. While contending further, he drew the attention of  

this Court towards various provisions under chapter IV  

of  the  NIT  Act  dealing  with  Improvement  Schemes.  

Section 26 of the NIT Act deals with the matters to be  

provided for improvement schemes. Further, Section 27  

of  the  NIT  Act  provides  for  various  kinds  of  

improvement schemes which include a street scheme under  

its clause (d). Section 31 of the NIT Act specifically  

deals with Street scheme. Section 31 (2)(a) stipulates  

that the Trust can even acquire a land, which in its

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opinion, is necessary for the execution of a street  

scheme. Under Section 44 of the NIT Act, power is given  

to the State Government to sanction, reject or return  

improvement  scheme.  Once  an  improvement  scheme  is  

sanctioned  by  the  State  Government,  a  final  

notification  in  that  regard  is  issued  by  it  under  

Section 45 (1)(a) of the NIT Act. He further submitted  

that in item 2 of the Schedule appended to the NIT Act  

it is provided that publication of notification under  

the provisions of Sections 39 and 45 of the NIT Act  

shall  have  the  same  effect  as  a  notification  under  

Sections  4(1)  and  6  respectively  of  the  Land  

Acquisition Act, 1894. He further submitted that it has  

already  come  on  record  that  the  notification  under  

Section 45 of the NIT Act in respect of “Ajni Street  

Scheme”,  was  published  and  the  entire  land  covered  

under the said street scheme including the land owned  

by the appellant-trust was under acquisition for the  

execution of the said street scheme.

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17. The  learned  senior  counsel  further  drew  the  

attention of this Court towards Section 58 of the NIT  

Act. The aforesaid Section deals with the acquisition  

by agreement and empowers the Trust to enter into an  

agreement  with  any  person  for  the  acquisition,  by  

purchase, lease or exchange of any land within the area  

comprised in a sanctioned scheme. He further submitted  

that  Section  58  of  NIT  Act  does  not  in  any  manner  

provides  for  opting  to  acquire  a  part  of  the  land  

covered under the scheme and a part of land being left  

un-acquired  either  by  agreement  or  by  compulsory  

acquisition.  In  the  light  of  aforesaid,  if  at  all,  

respondent no.2-NIT intended to acquire the land of the  

appellant-trust under the aforesaid Section, it could  

not  have  acquired  the  said  land,  by  development  

agreement, without acquiring the entire land (measuring  

about  13.45  acres).  Further,  assuming  that  NIT  can  

acquire a part of land by agreement under Section 58 of  

the  NIT  Act,  then  it  ought  to  have  acquired  the  

remaining land by compulsory acquisition and nothing  

like this has happened in the instant case.

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  18. It  was further  contended by  the learned  counsel  

that Section 68 of the NIT Act empowers the Trust to  

abandon  the  acquisition  of  the  land  which  is  

subsequently  discovered  to  be  unnecessary  for  the  

execution of the scheme on the terms and conditions  

stipulated therein. He further submitted that from the  

perusal of both the provisions of Sections 58 and 68 of  

the NIT Act, it is clear that the development agreement  

in question has been entered into between the parties  

under Section 68 of the NIT Act as all the conditions  

required  under  the  said  Section  are  fulfilled.  He  

fortified his aforementioned submission by emphasizing  

upon clause 2(ii)(b) of the development agreement which  

reads thus:

“b)  If  and  when  any  improvement  scheme  for  development of the area in which the aforesaid  Kh.  No.  65  of  Mouza  Ajni  is  situated  is  sanctioned by the State Government, the party  no. 2 shall be liable to pay the betterment or  abandonment charges which may be assessed on  the plots in accordance with the provisions of  the Nagpur Improvement Trust Act.”  

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19. He further contended that once a scheme is declared  

and  notification  akin  to  Section  6  of  the  Land  

Acquisition Act, 1894 is issued in this regard, the  

entire land covered under the scheme has to be acquired  

by NIT and no provision of the NIT Act permits the  

release of any land, partly or wholly, by NIT from  

acquisition, except in a case where the said land is  

subsequently  discovered  to  be  unnecessary  for  the  

execution of the scheme as contemplated under Section  

68 of the NIT Act which empowers the abandonment of  

acquisition.  He  further  submitted  that  there  is  no  

other provision in the NIT Act which empowers the NIT  

to  release  the  land  on  the  terms  and  conditions  

contained in the development agreement and particularly  

the condition contained in the impugned clause. The  

fact of the matter, in the instant case, clearly shows  

that the land of the appellant-trust which was included  

in  the  approved  scheme  by  the  State  Government  was  

subsequently  discovered  to  be  unnecessary  for  the  

execution of the said scheme by the NIT.   

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20. It was further contended that a bare perusal of the  

development agreement reveals that all the terms and  

conditions  of  the  development  agreement,  except  the  

condition contained in the impugned clause, relate to  

development of the property. There is no relevance of  

the condition contained in the impugned clause with the  

development purpose as contemplated under sub-section  

(1) of Section 68 of NIT Act. Therefore, in the light  

of  aforesaid,  the  NIT  does  not  have  any  power,  

whatsoever,  to  incorporate  such  condition  in  the  

development agreement, which is not only unilateral but  

also unconscionable. Thus, the said condition cannot be  

made binding upon the appellant-trust and consequently,  

the same cannot be enforced against it.  

21. It was further submitted that NIT has no power to  

acquire, by transfer or otherwise, land  de hors the  

provisions  of  the  NIT  Act  in  lieu  of  charging  the  

betterment  contribution from  the appellant-trust.  He  

further submitted that Section 68(4) of the NIT Act  

provides  that  when  an  agreement  is  executed  in

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pursuance of sub-section (1) to Section 68 of the NIT  

Act, the proceedings for the acquisition of land shall  

be deemed to be abandoned. Section 68(5) of the NIT Act  

provides that the provisions contained in Sections 70-

74 of the NIT Act shall apply mutatis mutandis for the  

assessment  of  betterment  charges,  its  levy  and  

recovery. Further, as per Section 70 of the said Act,  

NIT is required to pass a resolution determining such  

betterment  contribution.  Once  such  a  resolution  is  

passed, the execution of the scheme, by a legal fiction  

under sub-section (1) to Section 70 of the NIT Act, is  

deemed  to  have  been  completed  and  the  betterment  

contribution is then, calculated as per the procedure  

prescribed therein. He further submitted that nothing  

has been placed on record by NIT to show that any such  

resolution  has  been  passed  assessing  the  betterment  

contribution under Section 70(1) of NIT Act. He further  

submitted that the development agreement in question  

itself  provides  for  the  payment  of  the  betterment  

charges,  in  future,  on  such  conditions,  from  such  

persons,  as  may  be  assessed  in  accordance  with  the

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provisions of the NIT Act. For this purpose, the clause  

2(ii)(b)  of  the  development  agreement  (supra)  

stipulates that the appellant-trust shall bind itself  

to incorporate a clause in the sale deed of each plot  

to the effect that the plot is sold subject to the  

responsibility  of  the  purchaser  to  pay  betterment  

charges to NIT in accordance with the provisions of the  

NIT Act.

22.  It was further submitted by him that the NIT Act  

is a self-contained Act and there is no need to place  

reliance upon the provisions of Maharashtra Regional &  

Town Planning Act, 1966 and Nagpur Corporation Act,  

1948.  He contended that the High Court has erred in  

not  holding  the  impugned  clause  in  the  development  

agreement as void and unenforceable in law as the same  

is opposed to the public policy and contrary to law  

laid down by this Court in various cases.  

23. He further submitted that the finding recorded by  

the High Court that the terms and conditions of the  

development agreement were neither unconscionable nor

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void and that there was no inequality of bargaining  

power between the parties, is completely perverse in  

the light of the facts and circumstances of the instant  

case.  He  further  submitted  that  respondent  no.2-NIT  

enjoys a monopoly status as regards the permission to  

develop the land under the NIT Act. NIT exerts pressure  

on such land owners who desire to develop their land  

and  compels  them  to  incorporate  such  void  and  

unconscionable  clauses  in  the  development  agreement  

executed between itself and the land owners, like the  

impugned clause in the instant case.  

24. Per contra, Mr. V. Giri, the learned senior counsel  

appearing  on  behalf  of  the  respondents  sought  to  

justify the impugned judgment and order passed by the  

High Court on the ground that the same is well founded  

both  on  facts  and  law  and  is  not  vitiated  in  law.  

Therefore,  no  interference  of  this  Court  with  the  

impugned  judgment  is  required  in  exercise  of  its  

appellate jurisdiction.

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25. It was contended by Mr. Giri that when the parties  

entered  into  development  agreement,  they  were  fully  

aware of the nature of the transaction, conditions and  

respective  obligations  incorporated  therein.  On  the  

basis of the same, the appellant-trust has commercially  

exploited the said land. There was no objection raised  

by it at any point of time while entering into such  

agreement and even thereafter, when the appellant-trust  

and such other persons who, based upon the development  

agreements got the benefit out of the same. He further  

submitted that the entire development agreement has to  

be  read  as  a  whole.  It  is  very  clear  from  the  

provisions of the Indian Contract Act, 1872 that the  

consideration of any such agreement is permissible and  

valid in law and not to defeat the provisions of any  

law.  The  same  is  neither  fraudulent  nor  opposed  to  

public policy.

26. It  was  further  contended  by  the  learned  senior  

counsel  that  there  was  no  inequality  of  bargaining  

power with the appellant-trust at the time of getting

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the development scheme sanctioned. In this regard, he  

placed strong reliance upon the decisions of this Court  

in  Premsingh  and  Others v.  Birbal  and  others4 and  

Yamunabai Anantrao Adhav v.  Anantrao Shivrj Adhav5 to  

press upon the point that there is no need of a court  

decree to set aside an agreement, like the development  

agreement in the instant case (as the impugned clause  

therein  is  not  void  ab  initio)  especially  when  the  

agreement as well as the clause in question are amply  

clear and there has been no ambiguity regarding the  

same  at  any  point  of  time.  Thus,  the  terms  and  

conditions  of  the  said  development  agreement  are  

binding upon the parties.  

27. It  was  further  contended  by  him  that  since  the  

parties  have  already  acted  upon  the  terms  and  

conditions  of  the  said  development  agreement,  the  

entire  agreement  is  required  to  be  considered  in  

totality.  He  further  submitted  that  there  is  no  

justification of reading any clause by severing it in  

4  (2006) 5 SCC 353 5  (1988) 1 SCC 530

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isolation or in part(s) to examine and consider the  

legal  submissions  made  on  behalf  of  the  appellant-

trust.  It  was  further  submitted  that  it  is  a  well  

settled principle of law that a party to an agreement  

cannot  be  allowed  to  approbate  and  reprobate  after  

availing  the  benefit  from  it.  In  support  of  this  

contention he placed strong reliance upon the decision  

of this Court in the case of New Bihar Biri Leaves Co.  

& Ors v. State of Bihar & Ors6. The relevant paragraph  

48 cited by him reads thus:

“48. It is a fundamental principle of general  application  that  if  a  person  of  his  own  accord, accepts a contract on certain terms  and  works  out  the  contract,  he  cannot  be  allowed to adhere to and abide by some of the  terms  of  the  contract  which  proved  advantageous to him and repudiate the other  terms  of  the  same  contract  which  might  be  disadvantageous  to  him.  The  maxim  is  qui  approbat  non  reprobat (one  who  approbates  cannot  reprobate).  This  principle,  though  originally  borrowed  from  Scots  Law,  is  now  firmly  embodied  in  English  Common  Law.  According to it, a party to an instrument or  transaction cannot take advantage of one part  of a document or transaction and reject the  rest. That is to say, no party can accept and  reject the same instrument or transaction (Per  Scrutton, L.J., Verschures Creameries Ltd. v.  

6  (1981) 1 SCC 537

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Hull & Netherlands Steamship Co.; see Douglas  Menzies v.  Umphelby;  see  also  stroud’s  judicial  dictionary,  Vol.  I,  p.  169,  3rd  Edn.)”

 28. The learned senior counsel drew the attention of  

this Court towards Section 58 of the NIT Act which  

reads thus:

“The Trust may enter into an agreement with  any person for the acquisition, by purchase,  lease  or  exchange  by  the  Trust  from  such  person, of any land within the area comprised  in the sanctioned scheme.”

It was submitted by him that if the appellant-trust has  

entered into an agreement with the NIT, then, the said  

public utility land can be said to have been acquired  

by  an  agreement  in  view  of  the  exchange  of  not  

implementing  the  scheme  as  per  the  sanctioned  

notification  under  Section  45  of  the  NIT  Act  but  

agreeing to sanction a private layout with regard to  

land comprised within the sanctioned scheme of the NIT.  

Thus, in light of aforesaid, it cannot be said that the  

public utility land, which is being transferred to the

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NIT free of cost, is without any compensation.   

29. On the issue of allotment of land in favour of  

respondent no.3, it was contended by him that NIT does  

not have inherent jurisdiction over any piece of land.  

The NIT gets ownership of a land through the procedure  

as  contemplated  in  the  NIT  Act.  The  NIT  has  been  

established by the State Government for the improvement  

of the city of Nagpur through the implementation of  

various improvement schemes. He further submitted that  

these  schemes  are  framed  by  NIT  from  the  matters  

provided in Section 26 of the NIT Act. These schemes  

are framed by the NIT and published by notification  

under Section 39 of the NIT Act, which is equivalent to  

notification under Section 4 of the Land Acquisition  

Act, 1894. Thereafter, going through the provisions of  

Section  40,41,42,43  and  44  of  the  NIT  Act,  the  

improvement  schemes  are  sanctioned  by  the  State  

Government by a notification issued under Section 45 of  

the NIT Act, which is equivalent to Section 6 of the  

Land Acquisition Act. Section 46 of the NIT Act allows

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the  alteration  of  improvement  schemes  after  its  

sanction. Thus, in the light of aforesaid, he further  

submitted that the High Court has rightly concluded  

that the NIT has a jurisdiction over the areas, which  

are  part  and  parcel  of  notification  issued  under  

Section 6 of the Land Acquisition Act, 1894 equivalent  

to Section 45 of the NIT Act. He further submitted that  

the land in question is definitely a part and parcel of  

the improvement schemes of the NIT sanctioned by the  

State Government under the provision of Section 45 of  

the NIT Act.  

 30. It was further submitted by him that Pt. Chet Ram  Vashist and Yogendra Pal cases, referred to supra, upon  

which  the  learned  senior  counsel  on  behalf  of  the  

appellant-trust has relied upon are of no relevance to  

the case in hand as the facts and the circumstances of  

the  instant  case  differ  from  the  facts  and  

circumstances of the aforesaid cases.

31. We have carefully heard both the parties at length  

and  have  also  given  our  conscious  thought  to  the

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materials on record and the relevant provisions of law.  

We are of the view that the High Court in its judgment  

and order has rightly held that respondent no.1-State  

and  respondent  no.2-NIT  are  bound  to  stick  to  the  

development plan and scheme. It has placed reliance  

upon the decision of this Court in  Chairman, Indore  

Vikas Pradhikaran v. Pure Industrial Coke & Chemicals  Ltd. & Ors7, wherein this Court, while dealing with the  

aspect of town planning and Articles 300-A and 14 of  

the Constitution of India, has observed as under:

“………The  courts  must  make  an  endeavour  to  strike a balance between the public interest  on  the  one  hand  and  protection  of  a  constitutional right to hold property, on the  other.  For  the  aforementioned  purpose,  an  endeavour should be made to find out as to  whether  the  statute  takes  care  of  public  interest in the matter vis-à-vis the private  interest, on the one hand, and the effect of  lapse and/or positive inaction on the part of  the State and other planning authorities, on  the other.”

Further, the High Court has rightly held thus:

“NIT or such other local authority needs to  consider the purpose, Scheme, development plan  and the circular issued from time to time by  striking  a  balance  of  public  and  private  

7  (2007)  8 SCC 705

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interest.  The  petitioners  are  bound  by  the  agreement and undertaking as given. In fact,  both the parties are bound by the agreements.  In  totality  the  permissible  action  of  respondent NIT is within the frame of law and  the  record.  There  is  no  substance  in  these  petitions.”

32. The High Court has, further, rightly held that the  

impugned  clause  contained  in  the  said  development  

agreement  is  neither  void  nor  illegal  for  want  of  

consideration. It has also been rightly held by it that  

after consideration of whole scheme of the NIT Act,  

particularly, provisions under Sections 29 to 70 and  

121 of the said Act read with the terms and conditions  

of the said development agreement entered into between  

the  parties,  it  is  clear  that  the  said  development  

agreement  creates  reciprocal  rights  and  obligations  

between the parties with some objects. The aforesaid  

objects as cited by the High Court in its judgment and  

order read thus:

“(a)Abandonment of the land from acquisition  of NIT.

(b)Permission  to  develop  the  said  land  and  sanction of a scheme of a layout therein,

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(c)Entrustment of the job of supervision of  such development on NIT,

(d)Transfer  of  the  public  utility  land,  reserved in the said layout to the NIT.

(e)Immediate  and  reciprocal  permission  to  develop the land by making a layout in the  said  land  and  permission  to  sell  plots  therein,  i.e.  permission  for  commercial  exploitation of the land.”  

Thus, seeking abandonment of acquisition of the land as  

provided under Section 68 of the NIT Act is a huge  

benefit which the appellant-trust has gained from the  

agreement. Further, it is not open for the appellant-

trust to avail only the beneficial part of the said  

development agreement to form a layout plan and allow  

the sites to be allotted in favour of allottees, when  

it itself is not willing to discharge the obligation of  

transferring  the  reserved  land  for  public  utility  

purpose, as agreed upon in the development agreement.

33. Further the High Court has rightly observed that  

another benefit derived by the appellant-trust from the  

said development agreement is immediate and reciprocal  

sanction  for  the  development  of  the  said  land  with

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permission  for  the  commercial  usage  of  the  same,  

presuming that there would be no acquisition.

34. This Court is of the view that the High Court has  

rightly  held  that  the  impugned  clause  in  the  

development agreement is neither void nor opposed to  

the public policy. The High Court has held thus:

“42.When the parties entered into agreement,  they were fully aware of the nature of trans- action, conditions and respective obligations.  There was no objection raised at any point of  time while entering into such agreement and  even  thereafter  when  petitioners  and  such  other persons who based upon the said agree- ment got the benefit out of the same. We can- not read the clauses in isolation. We have to  read the whole agreement in question. It is  very  clear  even  from  the  provisions  of  the Contract Act that the consideration of any  such agreement was permissible and not unlaw- ful and/or not prohibited by law and was not  to  defeat  the  provisions  of  any  law  or  is  fraudulent  and/or  is  immoral  or  opposed  to  public policy.

43.The submissions, that such contract and es- pecially the clause is void, in view of provi- sions  contained  under Section  23/25 of  the Indian Contract Act being opposed to pub- lic policy; violative of fundamental rights of  the  petitioner;  violative  of  the  right  of  property of petitioner/society; because of un- equal bargain power; being forbidden by law

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development plan by Maharashtra Government and as per  

the  provisions  of  the  Maharashtra  Regional  &  Town  

Planning Act, 1966 contained in its Chapter-V i.e.,  

Sections 59-112 and Nagpur Corporation Act, 1948.

  36. The findings recorded on the relevant contentious  

issues by the High Court in the impugned judgment with  

cogent and valid reasons are legal and justifiable.  

Therefore, we do not find any valid reason, whatsoever,  

to interfere with the said impugned judgment and order  

as the same, in our opinion, is a well-considered and  

reasoned  decision.  The  same  does  not  suffer  from  

erroneous  reasoning  or  error  in  law  which  requires  

interference by this Court.

37. For the reasons stated supra, the civil appeals are  

dismissed. The order dated 01.10.2009 granting status  

quo shall stands vacated.                                                                                      …………………………………………………………J.                                [V. GOPALA GOWDA]

                     ……………………………………………………….J.                       [AMITAVA ROY]

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New Delhi, February 4, 2016

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ITEM NO.1B-For Judgment         COURT NO.9               SECTION IX                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS Civil Appeal 870/2016 @ SLP (C) No(s).  25972/2009 NARAYANRAO JAGOBAJI GAWANDE PUB.TRUST              Appellant(s)                                 VERSUS STATE OF MAHARASHTRA & ORS.                        Respondent(s) WITH C.A. No. 871/2016 @ SLP (C) No(s).  25821/2008  C.A. No. 872/2016 @ SLP (C) No(s).  25841/2009

C.A. No. 876-877/2016 @ SLP (C) No(s).25923-25924/2008  C.A. No. 873/2016 @ SLP (C) No(s).  427/2009  C.A. No. 874/2016 @ SLP (C) No(s). 1223/2009  C.A. No. 875/2016 @ SLP (C) No(s). 10246/2009   Date : 04/02/2016 These appeals were called on for pronouncement of  JUDGMENT today. For Appellant(s)                      Mr. Rameshwar Prasad Goyal,Adv.                      Mr. Manish Pitale, Adv.

 Ms. Deeplaxmi S. Matwankar, Adv.                      Mr. Chander Shekhar Ashri,Adv.                      Mr. Shivaji M. Jadhav,Adv. For Respondent(s)  Mr. Satyajit A. Desai, Adv.                      Ms. Anagha S. Desai,Adv.                      Mr. Vimal Chandra S. Dave,Adv.                                            Mr. A. Venayagam Balan,Adv.

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Mr. Kunal A. Cheema, Addl. Govt. Adv.  Mr. Nishant Katneshwarkar, Govt. Adv.  Mr. Yogesh Ahirrao, Adv. Mr. Siddhesh Kotwal, Adv. Ms. Shreya Bhatnagar, Adv. Mr. Raghunatha S., Adv. Mr. Nirnimesh Dubey, Adv.

Hon'ble Mr. Justice V.Gopala Gowda pronounced the  judgment  of  the  Bench  comprising  His  Lordship  and  Hon'ble Mr. Justice Amitava Roy.

Delay condoned. Leave granted. The appeals are dismissed in terms of the signed  

Non-Reportable Judgment.  The  order  dated  01.10.2009  granting  status  quo  

shall stands vacated.  

(VINOD KUMAR) COURT MASTER

(CHANDER BALA) COURT MASTER

(Signed Non-Reportable judgment is placed on the file)