http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 14  

PETITIONER: MUNICIPAL CORPORATION OF GREATERBOMBAY

       Vs.

RESPONDENT: THE INDUSTRIAL DEVELOPMENT &INVESTMENT CO. PVT. LTD. & ORS.

DATE OF JUDGMENT:       06/09/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. MAJMUDAR S.B. (J)

CITATION:  JT 1996 (8)    16

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T      K. Ramaswamy, J.      This appeal  by Special  leave arises from the judgment and order  dated July  14, 1988 in Appeal No. 120 of 1988 of the Bombay  High Court  reversing the judgement and order of the learned Single Judge and quashing the award passed under Section 11 of the Land Acquisition Act, 1894 (for short ’the Act’) and  the notification  dated 6th September 1972 issued under Section  6 of  the Act read with Section 126(2) of the Maharashtra Regional  and Town  Planning Act (for short, the MRTP Act’)  as inoperative.  It was  held that  the land  in question could  not be  acquired under  the Act. It was also further declared  that all steps taken for taking possession and vesting  of plot  of land  bearing CS  No. 503,  Dharavi Division, Bombay,  in  pursuance  of  the  said  award  were illegal.      A few  relevant  facts  leading  to  these  proceedings deserve to  be noted  at the  outset. On  6th January 1967 a draft development  plan for "G" Ward of the Bombay Municipal Corporation was  sanctioned by  the State  of Maharashtra in exercise of  its powers  under Section 31 sub-section (1) of the MRTP  Act. The  said draft  development plan was earlier prepared  by   the  then  planning  authority,  namely,  the Municipal Corporation  of Bombay as per the provisions found in Chapter III of the MRTP Act dealing with the preparation, submission and  sanction to  development plan.  It is not in dispute between the parties that necessary gamut enjoined by Sections 21  to 30  of the  MRTP Act was gone through by the then planning  authority functioning  under the Act and that ultimately culminated  into the sanctioned draft development plan by the State Government under Section 31(1) of the MRTP Act as aforesaid. This sanctioned draft development plan for "G" Ward  of the  Municipal Corporation  of Bombay came into force on  7th February,  1967. It  is also  not  in  dispute between the  parties that  city survey  No. 503  Dharvi with which we  are concerned  in the  present proceedings  formed

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 14  

part of  the said  Ward "G"  and, therefore,  was  naturally covered by  the aforesaid  sanctioned development  plan. The said city  survey plot  No. 503  Dharvi is  a large piece of land owned  by the  6th respondent, the Provident Investment Co. Ltd.  which belongs to the Government of Madhya Pradesh. Some portion  of the  said  land,  to  be  precise  an  area admeasuring 20,397  sq. yds.  was  leased  out  by  the  5th respondent to  1st respondent  herein. It was using the same for the  business of  manufacture  of  art  silk  and  rayon textiles  and   processing  of   textiles.  The   appellant, Municipal Corporation  of Greater  Bombay which was original 3rd  respondent   in  the   writ  petition   has  a   Sewage Purification Plant  at Dharavi.  With the  increase  in  the population and  the area  under control  of  the  appellant- Corporation it became necessary to extend the Dharavi Sewage Purification Works.  In the  year 1963,  it was decided at a meeting  of   the  Standing   Committee  of  the  appellant- Corporation  to  acquire  City  Survey  No.  503.  The  said requisite proposal  was  taken  note  of  in  the  aforesaid Development Plan  prepared under  the MRTP  Act. In the said plan, City  Survey No.  503  was  designated  and  shown  as reserved for  extension of  the Dharavi  Sewage Purification Works. As  noted above, the said plan came into force w.e.f. February 7,  1967. On the basis of the aforesaid reservation of this  land in  the said plan for the extension of Dharavi Sewage  Purification   Works  belonging  to  the  appellant- Corporation,  the   appellant-Corporation,  being  the  then planning authority  sought to  acquire the said land for the purpose of extension of Dharavi Sewage Purification Plant as per Section  126(1) of the MRTP Act and the State Government of Maharashtra  being satisfied  that the  land specified in the application  was needed  for the  public purpose therein specified, issued  the requisite  notification dated July 6, 1972 under  Section 126(2) of the MRTP Act read with Section 6 of  the Act.  The said  provisions of  Section 126 read as under :      "126 (1) When 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  purpose  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,  except as otherwise      provided in  Section 113A,  acquire      the land]  either by  agreement  or      make an  application to  the  State      Government for  acquiring such land      under  the  Land  Acquisition  Act,      1894.      (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  113A  itself  is  of      opinion] that  any land included in      any such plan is needed declaration      to  that  effect  in  the  Official      Gazette, in  the manner provided in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 14  

    section   6 of the Land Acquisition      Act, 1894,  in respect  of the said      land. The  declaration so published      shall, the  said Act,  be deemed to      be a  declaration duly  made  under      the said section :      Provided that,  no such declaration      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."      Pursuant to the said notification notices under Section 9 of  the Act were issued on March 14, 1973 to the concerned interested parties  inviting claims for compensation. As the respondents 1  and 2  were in  possession  of  the  land  as tenants,  they   naturally  put  forward  their  claims  for compensation. It  is in evidence that in 1979, respondents 1 & 2  were also  heard in  support of  their  claim  petition seeking appropriate  compensation for  acquisition of  their rights over the land sought to be acquired.      In the  meantime, two important events took place which have a  direct bearing  on the  result these proceedings. On January 26,  1975 an  Act  called  the  Bombay  Metropolitan Region Development Authority Act, 1974 (hereinafter referred to as  "BMRDA Act")  came into  force. That  was an  Act for forming Greater  Bombay and certain areas round about Bombay Metropolitan Region,  to provide for the establishment of an Authority for  the purpose  of planning,  co-ordinating  and supervising the proper, orderly and rapid development of the area in  that Region  and of  executing plans,  projects and schemes for  such development,  and to  provide for  matters connected therewith.  As per schedule 1 of the said Act, the Bombay Metropolitan  Region consisted  of the  whole of  the area of  the Greater Bombay in the parts of Thane and Colaba Districts within  the specified  boundaries. It is not again in dispute  between the  parties  that  the  aforesaid  City Survey  No.   503.  Dharavi   got  covered   by  the  Bombay Metropolitan Regions  indicated in  the said schedule. Under the BMRDA  Act, as  per Section  3, the State of Maharashtra Region as  indicated in  the said  schedule. Under the BMRDA Act, as  per Section 3, the State of Maharashtra constituted an authority named as Bombay Metropolitan Region Development Authority (hereinafter  referred  to  as  ’BMRDA’).  As  per Section 3,  sub-section  (3)  of  the  said  Act,  the  said Metropolitan Authority  was to  be  deemed  to  be  a  local authority within  the meaning  of the term ’local authority’ as defined  by Bombay  General Clauses  Act,  1904.  As  per Chapter IV  of the  BMRDA Act,  diverse functions were to be performed by  the said  authority. The said BMRDA had, under Section 12(1)(c),  to formulate  and sanction scheme for the development of  the Metropolitan Region or any part thereof. Under MRTP Act, the term ’planning authority’ was defined by Section 2  sub-section (19) to mean a local authority and it included  a   Special  Planning   Authority  constituted  or appointed under Section 40 of that Act. On coming into force of BMRDA  Act, the  State Government  exercising  its  power under Section  40 sub-section  (1)(c) of  the MRTP  Act  had appointed  BMRDA   as  a   Special  Planning  Authority  for development of  the notified  area, namely, the metropolitan area notified  under BMRDA  Act. The  said notification  was issued by the State Maharashtra on January 26, 1975.      As per  sub-section (3)  of Section 40 of the MRTP Act, on the  constitution of the aforesaid planning authority for

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 14  

the metropolitan area of Bombay the provisions of Chapter VI of MRTP  Act dealing  with ’New  Towns’  got  attracted  for operation by the said Special Planning Authority, i.e. BMRDA by a  notification dated  March 31, 1977 issued by the Urban Development  and   Housing  Department  of  the  Maharashtra Government the  State Government  appointed BMRDA  to be the Special Planning  Authority for  Kurla Taluq  in Bombay sub- district and Dharavi area of the Bombay city as they were in a neglected condition and needed to be planned and developed in a  comprehensive manner.  In exercise of its powers under Section 40  sub-section 3(d)  read with  Section 115  of the MRTP Act, it submitted to the State Government its proposals for the  development of  the area  put  under  its  planning jurisdiction,  after   following  the  procedure  prescribed therein on  March 7,  1977 for the approval. It is again not in dispute  between the  parties that  City Survey  No.  503 Dharavi was  covered by  the said  notification. Once  these proposals for  development of the area known as Bandra Kurla complex were  received by  the State  Government  after  the Special Planning  Authority had  followed the  procedure  of Section 115  sub-section (2)  of  the  MRTP  Act  read  with Section 40  sub-section 3(d)  of the said Act, after the due consideration  given  by  the  State  Government,  the  said proposals were  approved by  the  State  Government  as  per Section 115 sub-section 3(d) on April 19, 1979 and they were published as per Schedule 40 sub-section (5) of the MRTP Act in Government  Gazette on  May 3,  1979 and  according  they became final.      Section 40  of the  MRTP Act  with  its  relevant  sub- clauses reads as under :      "40 (1)  The State  Government may,      be  notification  in  the  Official      Gazette, for  any undeveloped  area      specified in  the notification  (in      this  Act   referred  to   as  "the      notified area") either -      (a) ... .... .... ....      (aa).... .... .... ....      (b) .... .... .... ....      or      (c) appoint the Bombay Metropolitan      Region    Development     Authority      established   under    the   Bombay      Metropolitan   Region   Development      Authority  Act,  1974,  to  be  the      Special Planning  Act, 1974,  to be      the Special  Planning Authority for      developing the notified area.      (2) ... ... ... ... ... ...      (3)  On  the  constitution  of  the      Special  Planning   Authority,  the      provisions of  Chapter VI  of  this      Act   shall,    subject   to    the      provisions  of   this  section  and      section 41,  apply mutatis mutandis      to the  Special Planning  Authority      as they  apply  in  relation  to  a      Development Authority,  as  if  the      notified  area  were  a  new  town,      subject    to     the     following      modification, namely :-      (a) ... ... ... ... ....      (b) ... ... ... ... .....      (c) ... ... ... ... .....

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 14  

    (d) for  section 115  the following      shall be substituted, namely :-      115.   (1)   A   Special   Planning      Authority shall,  from time to time      submit to  the State Government its      proposals for  the  development  of      land (being  land either  belonging      to, or  vesting in,  it or acquired      or proposed  to be  acquired  under      section   116),   and   the   State      Government may,  after consultation      with the Director of Town Planning,      approve such  proposals either with      or without modification.      (2) Before submitting the proposals      to  the   State  Government,    the      Special  Planning  Authority  shall      carry out  a survey  and prepare an      existing land-use  map of the area,      and prepare  and publish  the draft      proposals for  the lands within its      jurisdiction together with a notice      in the  Official Gazette  and local      newspapers in  such manner  as  the      Special  Planning   Authority   may      determine, inviting  objections and      suggestions from  the public within      a period  of not  more than 30 days      from the  date  of  notice  in  the      Official   Gazette.   The   Special      Planning Authority may if it thinks      fit,  give  individual  notices  to      persons  affected   by  the   draft      proposals.      (3) The Special Planning Authority      may  after duly considering the      objections or suggestions, received      by it, if any, and after giving an      opportunity to persons affected by      such draft proposals, if necessary,      and then submit them to the State      Government for its approval. The      orders of the State Government      approving such proposals shall be      published in the Official Gazette.      (e) for  section 116, the following      shall be substituted, namely :-      116.   Every    Special    Planning      Authority shall  have the powers of      a Planning Authority under this Act      as provided  in Chapter VII for the      purposes  of  acquisition  of  such      land in  the notified  area  as  it      considers to  be necessary  for the      purpose of development in that area      either by  agreement or  under  the      Land Acquisition  Act, 1894, or any      land adjacent to such area which is      required for the development of the      notified area  and any land whether      adjacent to  that area or not which      is  required   for  provision   for      services  or   amenities  for   the      purposes of the notified area.      (f) for  section 117, the following

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 14  

    shall be substituted, namely :-      117. Where  any land  has not  been      acquired within  a  period  of  ten      years from the date of notification      under sub-section  (1)  of  Section      40, any  owner of  the land may, be      notice in  writing  served  on  the      Special Planning Authority, require      it to acquire his interest therein;      and thereupon,  the  provisions  of      section 127  providing for  lapsing      of  reservations   shall  apply  in      relation to such land as they apply      in relation  to land reserved under      any plan under this Act.      (4) In preparing and submitting its      proposals for  developing any  land      under section  115 and in approving      them  under   that   section,   the      Special Planning  Authority and the      State   Government    shall    take      particular  care   to   take   into      consideration the provisions of any      draft or final Regional Plan, draft      or final  development plan,  or any      draft  or   final   town   planning      scheme, r  any may  already  be  in      force in  the notified  area or  in      any part thereof.      (5)   Where   any   proposals   for      development   of   any   land   are      approved by  the  State  Government      under section  115, the  Provisions      of the  proposals approved  by  the      State Government  shall  be  final,      and shall prevail, and be deemed to      be in force, in such notified area;      and to  that extent  the provisions      of any  such force  in the notified      area  or  any  part  thereof  shall      stand   modified    by    proposals      approved by the State Government."      A conjoint  reading of  the aforesaid  provisions would show that  by May 3, 1979 instead of the original sanctioned draft development  special plan   for  ’G’  Ward  which  was holding the  field from  February 7,  1967 a new development general plan  for Bandra-Kurla  area  became  operative.  As noted earlier, City Survey No. 503 Dharavi which was earlier under the  ’G’ Ward  of Bombay Municipal Corporation and was covered by  Sanctioned Development  Plan of  January 6, 1966 now got  covered by  the Bandra-Kurla Complex, plans per the new Sanctioned  Development Plan  for Bandra-Kurla  complex, the earlier  reservation made in connection with City Survey No. 503  Dharavi which  was earmarked  to  be  utilised  for locating the  extended Dharavi  Sewage Purification Work got altered and in its place a new area comprising Block ’A’ was earmarked for  location of a new sewage treatment plant. The said relevant  proposal is  found in  the booklet  captioned "Bandra Kurla  Complex" in Chapter VI thereof containing the detailed proposals.  So far  as Block  "A" is  concerned, in paragraph 7.1 (v) it has been provided as under :      (v)    The     Bombay     Municipal      Corporation is  planning to provide      a  sewage  treatment  plant  to  be      located   near    ’A’   Block    as

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 14  

    recommended by  their  consultants.      Al the  sewage from Bandra east and      Kurla etc.  will be  collected  and      pumped  to  this  plant  and  after      treatment it  will be let into  the      deep-sea outfall sewer. The present      sewage treatment plant at sion will      be  discontinued.  The  requirement      for an  area of 35 acres, including      5 acres  to accommodate housing for      essential    staff,     has    been      indicated. The  purification  plant      proper will  be located west of the      ’A’  Block  by  reclaiming  at  the      southern end  of the  land strip at      Bandra. But  the five acres of land      required  for  residential  purpose      for the  essential staff  is to  be      made  available  to  the  Municipal      Corporation   from    the   western      portion  of   Block  ’A’.   Further      reclamation   on   the   west   for      locating  the   purification  plant      will  be   done   by   the   Bombay      Municipal      Corporation       in      consultation with the Central Water      &    Power     Research    Station,      Khadkvasla, as tentatively shown on      the layout plan."           (emphasis supplied)      This clearly shows that May 3, 1979 onwards this sewage treatment plant  was to  be located  in  35  acres  of  land reserved under  Block ’A’ of the said planning proposals. It is, therefore, obvious that Dharavi Sewage Purification plan had to  be dismantled  and shifted to Block ’A’ at the place indicated for  it in  the approved  plan. So far as the City Survey No. 503, with which we are concerned, went in and was found located  under the  new proposals  in Block  ’H’.  The existing  purification   plant  of   the  Bombay   Municipal Corporation  was  found  covered  by  the  said  block  ’H’. Consequently,  the  question  of  its  extension  no  longer remained feasible or possible for the Municipal Corporation. On the contrary, the entire land of Block ’H’ over a part of which the  existing sewerage  plant was  situated was  to be used for  the purpose  shown in  the plan  attached  to  the proposals. A mere look at the plan attached to the proposals would show  that not  only the existing Dharavi Sewage Plant was to be discontinued and shifted to Block ’A’ but the land covered by that plan as well as the other lands of Block ’H’ which also  naturally covered  the disputed  City Survey No. 503 were to be utilised for residential,   commercial,    para-commercial   and   social facilities/purposes. No  part of Block ’H’ area was reserved for  any   special  public   purpose,  unlike   the  earlier reservation of  plot No.  503 Dharavi under 1977 Development Plan.      The result  was that  after May 3, 1979 City Survey No. 503 got  de-reserved from  the  earlier  public  purpose  of locating the  extension of Dharavi Sewage Purification Plant and the  entire Block  ’H’ was  to be utilised under the new plan for residential, commercial, para-commercial and social facilities  by  its  local  residents  without  any  special reservation for  the Municipal Corporation. Normally, on its so happening,  the earlier notification issued under Section 126 sub-section  (2) read with Section 6 of the Act lost its

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 14  

utility, vitality  and necessity.  As we  have seen earlier, Section 126(2)  read  with  Section  126(1)  requires  as  a condition precedent  to acquisition of any land which can be proposed under  Section 126(1),  that there  must exist  the fact situation  that such  land is  earmarked,  required  or reserved for  any of  the public  purposes specified  in any plan or  scheme under  the Act.  Section 125 of the MRTP Act states that  any land  required, reserved  or designated  in Regional plan,  Development plan or town planning scheme for a public purpose or purposes including plans for any area of comprehensive development  or for  any  new  town  shall  be deemed to  be land  needed for  a public  purpose within the meaning of the Act, 1894. A conjoint reading of Sections 125 and 126(1),  therefore, shows  that a planning authority can propose acquisition  of only  that land  which is  required, reserved or  designated in  the  development  plan  for  any public purposes  and it  is such  a proposal  which  can  be accepted by  the State  Government under  sub-section (2) of Section 126  on being  satisfied with  the land specified in the application  as  needed  for  public  purpose  specified therein.  Consequently,  any  planning  authority  proposing action under  Section 126(2)  by the  State Government  must show that  the land  which it  is proposing  to  acquire  is required,  reserved   or   designated   in   the   concerned development plan  for public  purpose and if the land is not so required, reserved or designated in the plan for a public purpose it cannot be subjected to proceedings of acquisition under Section  126(10 read  with Section  126(2).  Once  the specification of  public purpose  concerning the  given land ceases to exist because of the de-reservation under the plan so far  as that  land is  concerned, it  cannot be  acquired under Section  126(1)  read  with  Section  126(2)  for  the planning authority  by the  State Government,  without being required reserved  or designated  for any  public purpose in the revised development plan.      It has  to be kept in view that Section 126 sub-section (1)  of   the  MRTP  Act  is  a  substitute  for  Section  4 notification under  the Act. Once a proposal for acquisition of land earmarked in development plan for a specified public purpose is  moved by  the planning  authority as per Section 126(1),  on   acceptance  of  such  proposal  by  the  Stage Government a  notification under  Section 126(2)  read  with Section 6  of the  Act gets issued. It has to be appreciated that as there is no provision for notification under Section 4 of  the Act  for such  acquisition under  the MRTP  Act no Section  5A  enquiry  under  the  Land  Acquisition  Act  is contemplated under the MRTP Act. It is also not necessary to have such an enquiry made after the proposal for acquisition is moved  under Section  126(1) of the MRTP Act by concerned planning authority,  for the  obvious reason that earmarking of the concerned land for specified public purpose under the development plan,  which is  the basis  of proceedings under Section 126  sub-section (1)  of the MRTP Act, is for public purpose and  has already  been done after hearing objections of persons  concerned at  the stage  of preparation  of  the draft development plan.      If we  turn to Chapter III of the MRTP Act, we find the entire machinery is provided for preparation, submission and sanction of  development plan proceeding from Section 21 and ending with  Section 31. These provisions, in short, provide for preparation  of draft  development plan  by the planning authority inviting  objections of  persons concerned against such proposals,  hearing of  objections (3)  by the Planning Committee and  then submitting  its report  to  the planning authority which  ultimately gets  the proposals  approved by

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 14  

the State  Government under Section 30. All these provisions do indicate  that requirement,  designation, reservation  or earmarking of  any land  for acquisition  for any  specified public  purpose   as  indicated  in  the  plan  has  already undergone the process of hearing after the objections of the concerned persons  were considered  and then  such land gets earmarked for  public purpose  in the plan. It is after that stage, therefore,  when  need  to  acquire  such  earmarked, designated or  reserved land  for public  purpose under  the plan arises,  that Section  126(1) proposals  gets issued by the concerned  planning authority and which itself becomes a substitute for  Section 4(1)  notification under the Act. It would  thus,  appear  that  the  scheme  of  acquisition  of earmarked land  under the  plan  for  a  specified    public purpose thereunder,  is  a complete scheme or code under the MRTP Act.  It is distinct and independent scheme as compared to general  scheme of acquisition under the Land Acquisition Act.      In this connection, Section 128 of the MRTP Act also is worth noting.  The said  section provides  that if the State Government wants to acquire lands for any purposes other the one for  which the  land is designated in any plan or scheme then it  has to  resort to  notification under the Act which would naturally be followed by Section 5A enquiry as per the said Act  subject to  Section 17  of that Act, and then only the State  can issue declaration under Section 6 of the said Act independtly  of the  provisions of the MRTP Act. In such cases, as  acquisition has  no nexus  with  object  to  such acquisition  for   the  public  purposes  mentioned  in  the notification, as  Section 5A  of  the  Act  would  then  get attracted to  such  objections.  Thereafter,  if  Section  6 declaration is  issued by  the    State  Government  and  if ultimately the  land gets  vested in  the  State  Government under Section  16 and  17 of  the Act,  then as  provided by Section 128  sub-section (3)  of the  MRTP Act, the relevant plan or  scheme which includes the land in question shall be deemed to  suitably varied  by reason  of acquisition of the said  land.   This  provision   also  would   indicate  that acquisition  as  per  Section  126  stands  on  an  entirely different footing as compared to acquisition of any land for any  public   purpose  as   per  the  general  law  of  land acquisition, namely, the Act, 1894.      It  is,  therefore,  clear  that  for  the  purpose  of acquisition of  any land  under Section  126(2) of  the MRTP Act, the  land sought  to be  acquired must  have  a  direct connection with its specification, earmarking or reservation plan itself.  Such earmarking  etc. is its charter. In other words, absence  of public  purpose  would  be  a  fetter  on exercise of  power of  acquisition made under Section 126(2) of the  MRTP Act  or a truncated public purpose. An exercise of eminent domain derives its efficacy from the reservation, specification or  designation  for  public  purpose  of  the concerned land  as found  in the development plan itself. If this nexus  or linkage  between the  specification  etc.  of public purpose  in the  plan and the concerned land which is sought to  be acquired  under the  MRTP Act  is snapped off, prior to  the completion  of acquisition  proceedings as per Section 126(2)  of the  MRTP  Act,  the  entire  edifice  of acquisition proceedings under Section 126 would crumble down and  the   acquisition  under   that  section  would  become incompetent. Such  is not  the case of acquisition under the Act simplicitor,  which has  to start  after  the  issue  of Section 4  notification. Consequently,  by  considering  the statutory scheme  of acquisition  under Section  126 of  the MRTP Act,  general principle  of acquisition  under the  Act

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 14  

cannot be  applied wholesale  for deciding  the legality  of such statutory acquisition under the special scheme of MRTP Act.      On the  facts of  present cases,  it is  not in dispute that on  July 6,  1972 when  the State of Maharashtra issued requisite notification  for  acquiring  lease-hold  land  of respondent No.1,  situated in  City Survey  No. 503 Dharavi, the said  land was  duly reserved  for a  public purpose for extension of  Dharavi Water  Sewage Plant  of the  Municipal Corporation as  ear-marked in  the then Operative Sanctioned Development Plan  of February 6, 1967. Therefore, on July 6, 1972 was  perfectly valid  and  operative.  However,  before acquisition proceedings  qua that  land pursuant to the said notification could  culminate into  the award, the said land got de-reserved  for that  specified public purpose and went out of  earmarked purpose.  Thus, May  3, 1979 onwards, City Survey NO.  503 which was then merged and comprised as Block ’H’ of  Bandra-Kurla Complex  ceased to  be reserved for the specified public  purpose of being utilised for extension of Sewage Plant  of the Bombay Municipal Corporation. Once that happened and  it was marked in the approved plan under BMRDA Act for residential purposes etc, ordinarily efficacy of the notification  under   Section  126(2)   qua  this  land  got extinguished and  the specified  public purpose  resultantly died down.      It would  be necessary  to emphasise  that to implement the Scheme framed and approved by the state Government under the MRTP  Act, the land was notified under Section 126 as it was for  a public  purpose. If the ear-marked, designated or reserved land  in the  subsequent plan prepared and approved under BMRDA Act, does not subserve any public purpose within the  ear-marked,   designated  or   reserved  land   in  the subsequent plan  prepared and approved under BMRDA Act, does not subserve  any  public  purpose  within  the  ear-marked, designated or  reserved public  purposes,  necessarily,  the public purpose  envisaged under  Section  126  outlives  its purpose and  gets  eclipsed.  Public  purpose  envisaged  in original approved  plan no  longer survives  and if the land sought to  be  acquired  is  diverted  to  or  earmarked  or designated to  a private purpose, necessarily remedy must be either under  Chapter 7  of the  Act or  any relevant law or Section 126  as per  revised and  approved scheme  at  which stage the  owner gets  opportunity to  submit his objections for consideration before submitting the plan for approval by the State Government. Take, for instance, the self same land under the  approved scheme  under MRTP  Act  which  was  for purification of sewerage treatment plant. This was a special Scheme. In  the  general  scheme,    i.e.,  in  Bandra-Kurla scheme, if  the said land was earmarked for private purpose, necessarily  the   original  public  purpose  was  eclipsed. Further proceedings  for acquisition  becomes acquiring  the land, in  such circumstance, would not be public purpose but must be  for any private purpose unless saved by the special law, i.e.,  MRTP Act,  or BMRDA Act, which is not consistent with the  revised plan  would become  necessary.  It  would, therefore, be  necessary for  the interested  person  to  be vigilant and  watchful to  impugn   such notification  under Section 126  in the  High Court under Article 226 before the acquisition becomes final and conclusive under Section 12(1) of the  Act between the Collector (Land Acquisition Officer) and the  interested person  whether or  not he  appeared  or represented before  him and  the lands  stand vested  in the State under Section 16 or 17 free from all encumbrances.      After the award under Section 11 of the Act was made by the Collector  he is  empowered under  Section  16  to  take

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 14  

possession of  the land,  if the  possession was not already taken, exercising  power under Section 17(4). Thereupon, the land shall  vest absolutely  in the Government free from all encumbrances. It  is well settled law that taking possession of the land is by means of a memorandum (panchnama) prepared by  the   Land  Acquisition  Officer  and  signed  by  Panch witnesses  called   for    the  purpose.  Subsequently,  the Collector hands over the same to the beneficiary by means of another memorandum  or panchnama, as the case may be. But in this case  Section 91  of the BMC Act statutorily comes into play which  would indicate that the Land Acquisition Officer while making  award should  intimate  to  the  Commissioner, Municipal  Corporation   of  the   amount  of   compensation determined and all other expenses. The Corporation shall pay over the same to the Land Acquisition Officer.      By operation  of sub-section (2) thereof, the amount of compensation awarded and  all other charges indicated in the acquisition  of   the  property   shall  be   paid  by   the Commissioner; "thereupon the said property shall vest in the Corporation". In  other words, on payment of compensation by the Corporation to the Land Acquisition Officer, statutorily the Corporation  gets transfer  of possession from the State and the acquired property vests in the Corporation free from all  encumbrances.   Thereby  the  Corporation  becomes  the absolute owner  of  the  land  free  from  all  encumbrances including tenancy  rights, if  any alleged to be held by the respondents.      From the  facts of  this case,  it   is clear  that the owner,  a   public  undertaking   of  the   Madhya   Pradesh Government, had  received the  compensation and  handed over the possession  to the  Land Acquisition Officer on March 4, 1983.  The  Land  Acquisition  Officer,  thereby  had  taken symbolic possession of the land of the 5th respondent owner. The owner and the respondents had reference under Section 18 which was pending.      It  would   be  no  function  of  the  Collector  (Land Acquisition Officer)  to keep inquiring whether the notified public purpose  remains in  existence. His  authority is  to pass award  under Section  11 after  following the procedure under Sections 9 and 10; file the award in the office of the Collector  under   Section  12(1);   issue  notice   to  all interested persons  under Section  12(2);  pay  compensation under Section  31 or  deposit it  in the  Court and  to make reference, if  the application under Section 126 of the MRTP Act  or  declaration  under  Section  6  of  the  Act  needs necessarily be  impugned by  interested person  and have  it quashed  before  the  award  proceedings  become  final  and conclusive under  Section 12(1).  If the  interested  person allows the  grass to  grow under  his feet  by allowing  the acquisition proceedings  to go  on and reach its terminus in the award and possession is taken in furtherance thereof and vested  in   the  State  free  from  all  encumbrances,  the slumbering interested  person would be told off the gates of the Court  that his  grievance should not be entertained. On the other hand, if he enlists vigil and avails of the remedy of judicial  review before the acquisition proceedings reach the finality,  necessarily  the  High  Court  would  enquire whether the public purpose under Section 126 of the MRTP Act was subsisting  so as to enable the Land Acquisition Officer to take  further steps  under Sections  9 and 10 and to make the award  under Section 11. This would be so because of the special scheme  and special  law. But  the situation  of the acquisition  pursuant  to  a  notification  published  under Section 4(1)  of the  Act and declaration under Section 6 in this perspective  would be  different and always stands on a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 14  

different perspective  and is  independent  of  the  special scheme envisaged  under MRTP  Act or  BMRDA Act, as the case may be  of. One  cannot  be  and  should  be  confused  with another. They stand poles apart. What is required is clarity in thinking process. The confusion would land in miscarriage of justice and avoidable frustration of public purpose. Only one exception  in this  behalf would  be kept in mind, i.e., whether the  public purpose envisaged under both the special Act and  the General  Act and  the use  of the acquired land always be  for a  public purpose.  In this  behalf, it is of relevance to  note the  law laid  down by  this Court on the diversion of  the land  acquired for  one public purpose and its use thereof for another.      In Gulam  Mustafa & Ors. Vs. The State of Maharashtra & Ors. [(1976)  1 SCC  800], a  Bench of three Judges had held that "once  the original  acquisition is valid and title had vested in  the municipality, how it used the excess land was no concern  of the original owner and could not be basis for invalidating the  acquisition. There  is no principle of law by  which  a  valid  compulsory  acquisition  stands  voided because long  after the  requiring authority diverts it to a public purpose  other than  one stated  in the  Section 6(3) declaration". The  same view was reiterated by another Bench of three  Judges in  Mangal Oram & Ors Vs. State of Orissa & Anr. [(1977)  2 SCC  46] wherein it was held that "[U]se  of land after  a  valid  acquisition  for  a  different  public purpose will not be invalidate the acquisition."      In State  of Maharashtra Vs. Mahadeo Deoman Rai & Kalal & Ors.  [(1990) 3 SCC 579] yet another Bench of three Judges had held  that requirement of public purpose may change from time to time but the change will not vitiate the acquisition proceeding.   Concerned    authority   should   review   the requirement aspect  periodically in  the prevailing   social context. In  Collectors of  24 Paraganas  & Ors.  Vs.  Lalit Mohan Mullick  & Ors.  [(1986) 2  SCC 138] a Bench of Judges had held  that,  "acquisition  of  the  land  for  a  public purpose, namely,  the use  of the land for rehabilitation of displaced persons,  to be  altered by subsequent development for another  public purpose,  namely, for  construction of a hospital was  as per  Development & Planning Act" In Ram Lal Sethi &  Anr. Vs.  State of Haryana & Ors. [(1990) Supp. SCC 11] the land was acquired for public purpose of construction of road  but exigencies of development necessitated allottee company was  in possession  for 17  years and was not made a party to  the litigation;  allotment was  not shown to be an act of  favoritism. It  was held by the two-Judge Bench that the acquisition was not vitiated on account of change of the user.      It is  thus well  settled legal position  that the land acquired for a public purpose may be used for another public purpose  on  account  of  change  or  surplus  thereof.  The acquisition validly  made does  not become invalid by change of the  user or  change of the user in the Scheme as per the approved plan.  It is  seen that the land in Block ’H’ which was intended  to be  acquired for  original public  purpose, namely,  the  construction  of  Sewage  Purification  Plant, though was  shifted to Block "A", the land was earmarked for residential, commercial-cum-residential  purposes or  partly for residential  purpose etc.  It is  the case  of appellant that the  Corporation intends  to use  the land acquired for construction of  the staff quarters for its employees. It is true that  there  was  no  specific  plan  is  used  by  the Corporation  for  any  designated  public  purpose,  namely, residential-cum-commercial purpose  for its  employees,  the later public  purpose remains  to be valid public purpose in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 14  

the light  of the  change of the user of the land as per the revised approved  plan. It  is true  that  in  the  original scheme the  residential quarters  for the  staff working  in Sewage Purification  Plant were  intended to  be constructed and  the  same  purpose  is  sought  to  be  served  by  the acquisition of  the land  by using  the land  in Block  "A". Nonetheless  the   acquired  land   could  be  used  by  the Corporation for  residential-cum-commercial purpose  for its employees  other   than  those   working   in   the   Sewage Purification Plant.  It would  not, therefore,  be necessary that the  original public  purpose should  continue to exist till the  award was  made and possession taken. Nor is it he duty of  the Land  Acquisition Officer  to see  whether  the pubic purpose continues to subsist. The award and possession taken do not become invalid or ultra vires the power of Land Acquisition Officer.  On taking possession, it became vested in BMC  free from  all encumbrances including tenancy rights alleged to  be held by the respondents. Possession and title validly vesting  in the State becomes absolute under Section 10 of  the Act  and thereafter the proceedings under the Act do not  owner. Only before taking possession, the Government can withdraw from inquiry under section 45 [1] of the Act or High Court  under Article  226 of the Constitution may quash on legal  and valid  grounds. If the award under Section 11A was  not  made  within  two  years  from  the  date  of  the publication of  the declaration under Section 6, as enjoined under Section  11 A of the Land Acquisition Act, whether the notification under  Section 4(1)  would lapse. This Court in Satendra Prasad Jain  & Ors. v. State of U.P. & Ors. [(1993) 4 SCC  369] had held that after the land stood vested in the State, even   if  the authorities  failed to comply with the statutory requirements,  it does  not have the effect on the vesting of land in the State. Thereby the notification under Section 4(1)  and the  declaration under  Section 6  do  not stand lapse.  The same  view was reiterated by another Bench in, Awadh  Bihari Yadav  & Ors.  [(1995) 6 SCC 31]. The High Court, therefore,  was not  right in exercise of power under Article 226  of the Constitution in granting declarations as mentioned in  the beginning or in making order of injunction against the appellants pending writ petitions. It is equally settled law  that a tenant cannot challenge the notification under Section  4 and  declaration under Section 6 of the Act when  the  landlord  himself  had  accepted  the  award  and received compensation.      The next question is : whether the High Court was right in  issuing  the  writ  after  long  lapse  of  time  ?  The respondents, admittedly,  approached the  High Court after a delay of  4  years;  that  too  after  award  was  made  and possession was  taken from  the owner.  It is  seen that the declaration was  published as  long back  as on May 3, 1979. Earlier to  that after  the draft plan was published, notice was given  to all the parties. The respondents, who claim to be tenants,  had not  raised the little finger in making any objection to  the proposed  scheme or  the revised plan. The award was made on February 24, 1983; possession was taken on March 4,  1983, and  on the same day it stood transferred to the BMC.  The writ  petition came  to be filed thereafter on July 4,  1983. The  learned Single  Judge dismissed the writ petition on the ground of laches.      In State  of Tamil  Nadu v.  L. Krishnan  [(1996) 1 SCC 250], a  Bench of  three Judges  of this Court had held that "the delay  in challenging  notification was  fatal and  the writ petitions were liable to be  dismissed on the ground of laches".  Exercise   of  power  under  Article  226  of  the Constitution, after  award was  made, was  held to have been

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 14  

wrongly made.  Delay to make award was not a ground to quash the acquisition proceedings.      In State  of Orissa v. Dhobei Sethi & Another [1995 (5) SCALE 1881],  it was held that on account laches on the part of the  petitioners, the  writ petition  was  liable  to  be dismissed. It  was also  held therein  that  the  subsequent purchaser cannot raise any objection for the validity of the acquisition. The High Court was, therefore, held unjustified in issuing  the  writ  and  quashing  the  notification  and declaration under Sections 4(1) and 6 respectively.      In State  of Maharashtra  v. Digambar  [1995 (4)  SCALE 98], another Bench of three Judges directed dismissal of the writ petition on the ground of laches and held that the High Court had  not  judiciously  and  reasonably  exercised  its discretion in passing the notification under Section 4(1) of the Act.      In The Ramjas Foundation v. Union of India [AIR 1993 SC 852], a  Bench of  three Judges had held that mere retaining the   possession or  delay on  the part  of the authority to pass award  are not  grounds to  challenge the  notification under section  4(1) and declaration under Section 6, and the laches was  held to  be ground to dismiss the writ petition. Accordingly this Court allowed the appeal and  dismissed the writ petition.      In Ramchand  v. Union  of  India  [(1994)  1  SCC  44], another Bench  of three  Judges of  this Court had held that because of  inordinate delay  in approaching the court after entire  process   of  acquisition   was  over   pursuant  to notification  under   Section  4(1)  and  declaration  under Section 6, the court was not justified in quashing the same. Same view was reiterated in Bhoop Singh vs. Union of India & Ors. [AIR  1992 SC 1414], Aflatoon & Ors. v. Lt. Governor of Delhi &  Ors. [AIR  1974 SC  2077], Indrapuri  Griha  Nirman Sahakari Samiti  Ltd. v.  The State of Rajasthan & Ors, [AIR 1974 SC  2085], H.D.  Vora v.  State of  Maharashtra &  Ors. [(1984) 2 SCC 337] and Pt. Girdharan Prasad Missir & Another v. State  of Bihar  & Another  [(1980) 2 SCC 83]. It is thus well settled  law that  when there  is inordinate  delay  in filing the  writ petition  and when  all steps  taken in the acquisition proceedings  have become final, the Court should be loathe to quash the notifications. The High Court has, no doubt,  discretionary   powers  under  Article  226  of  the Constitution to  quash the  notification under  Section 4(1) and declaration  under Section 6. But it should be exercised taking all  relevant factors  into pragmatic  consideration. When the  award was  passed and  possession was  taken,  the Court should not have exercised its power to quash the award which is  a material  factor to  be taken into consideration before exercising the power under Article 226. The fact that no third  party rights were created in the case, is hardly a ground for  interference. The  Division Bench  of High Court was not  right in  interfering with the discretion exercised by the  learned single Judge dismissing the writ petition on the ground of laches.      The appeal  is allowed  with costs  quantified  at  Rs. 10,000/- (Rupees Ten Thousand only)