# MUNICIPAL CORPORATION OF GREATER BOMBAY v. THE INDUSTRIAL DEVELOPMENT AND INVESTMENT CO. PVT. LTD AND ORS

- **Citation:** [1996] Supp. 5 S.C.R. 551
- **Court:** Supreme Court of India
- **Decided:** 1996-09-06
- **Case number:** Civil Appeal No. 286 of 1989
- **Bench:** K. Ramaswamy, S.B. Majmudar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/municipal-corporation-of-greater-bombay-v-the-industrial-development-and-14624
- **Pages:** 31

## Headnote

Land Acquisition :
B
Maharashtra Regional and Town Planning Act, 1966: Section 125, 126 C
and 128.
Public purpose-Acquisition of land--Change in purpose of land
user-Effect of-Held : acquisition must have direct connection with public
purpose for which land was reserved or eannarked-/f public purpose ceased D
to exist, land got dereserved and acquisition under under S.126 became
incompetent-{n such an event fresh notification under S.126 was necessary-/nterested person should be vigilant and watchful to seek judicial review
under Article 226 before acquisition became final and land vested in State
free from all encumbrances-Once proceedings were complete such challenge E
could not be entertained-Per Ramaswamy, J: However, land acquired for a
public purpose may be used for another public purpose-I' er Majmudar, J :
cha~ge of public purpose of land user must be specifically shown in plan and
then a fresh proposal under S.126(1) r/w. S. 40(3)(c) should be issued-Bombay Metropolitan Region Development Authority Act, 1974.
F
Public purpose-Acquisition of /and-Subsequent change in purpose of
land user--lnordinate delay in challenge under Art. 226-Notification issued
under S.126 of Maharashtra Regional and Town Planning Act r/w. S.6 of
Land Acquisition Act reserving land for public purpose of extension of
Sewerage Purification Plant-But before acquisition proceedings culminated G
in award, said land got dereserved and was to be utilised under new plan for
residential-cum-commercial purposes with no special reservation for
Municipal Corporation-Thus public purpose envisaged in original notification got eclipsed-Held : in such an event fresh notification would be neces-
. sary-/nterested person must be vigilant and watchful to impugn under Article
226 the original notification before completion of acquisition proceedings.
H
551
A
B
552
SUPREME COURT REPORTS [1996] SUPP. 5 S.C.R.
Public purpose-Acquisition of land-Scheme of-Held : scheme was
a comp/et~ code under Maharashtra Regi,onal and Town Planning Act-lt
was distinct and independent from that under Land Acquisition Act-S.
126( 1) was a substitute for S.4 of Land Acquisition Act.
Land Acquisition Act, 1894 : Sections 4 and 6.
Public purpose-Acquisition of land-Public purpose ceased to
exist-Held : Per Ramaswamy, J : land acquired may be used for another
public purpose.
Land Acquisition-Landlord accepted award and received compensaC tion-Challenge of acquisition by sitting tenant-Held : per Ramaswamy,
!-Tenant could not challenge notification and declaration--Per Majmudar,
J : in appropriate cases such challenge could be levelled by concerned tenant
having subsisting interest in land.
D
Constitution of India, 1950 : Article 226.
Public purpose : acquisition of land-Change in land user-Challenge
of-Delay and !aches-Acquisition proceedings completed, award passed and
land vested in State free from all encumbrances-field : Proceedings became
final an4 not open to challenge on ground of violation of statutory requireE ments such as non-existence of public purpose-Aggrieved person must approach Court before completion of proceedinw-ft was not the function of
Land Acquisition Officer to see if notified public purpose existed.
Writ petitiort--Maintainability of-Delay and /aches-Acquisition of
land-Notification fo~cquisition proceedings completed and award
F passed-Thereafter, writ petition filed challengi,ng acquisition-Held : High
Court should be loathe to quash notification.
The State Governme111t issued a notification under Section 126(2) of
the Mahai;ashtra Regional and Town Planning Act, 1966 read with Section ·
G 6 of the Land Acquiring Act, 1894 for acquiring lease-hold land of respon·
dents for a public purpose for extension of Water Sewerage Purification
Plant of the appellant-Corporation as ear-marked in the then Operative
'
Sanctioned Development Plan. However, before acquisition proceedings
qua that the land could culminate into the award, the said land got
de-reserved for that

## Text

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1
MUNICIPAL CORPORATION OF GREATER BOMBAY
A
v.
THE INDUSTRIAL DEVELOPMENT AND INVESTMENT
CO. PVT. LTD AND ORS.
SEPTEMBER 6, 1996
[K. RAMASWAMY AND S.B. MAJMUDAR, JJ.]
Land Acquisition :
B
Maharashtra Regional and Town Planning Act, 1966: Section 125, 126 C
and 128.
Public purpose-Acquisition of land--Change in purpose of land
user-Effect of-Held : acquisition must have direct connection with public
purpose for which land was reserved or eannarked-/f public purpose ceased D
to exist, land got dereserved and acquisition under under S.126 became
incompetent-{n such an event fresh notification under S.126 was necessary-/nterested person should be vigilant and watchful to seek judicial review
under Article 226 before acquisition became final and land vested in State
free from all encumbrances-Once proceedings were complete such challenge E
could not be entertained-Per Ramaswamy, J: However, land acquired for a
public purpose may be used for another public purpose-I' er Majmudar, J :
cha~ge of public purpose of land user must be specifically shown in plan and
then a fresh proposal under S.126(1) r/w. S. 40(3)(c) should be issued-Bombay Metropolitan Region Development Authority Act, 1974.
F
Public purpose-Acquisition of /and-Subsequent change in purpose of
land user--lnordinate delay in challenge under Art. 226-Notification issued
under S.126 of Maharashtra Regional and Town Planning Act r/w. S.6 of
Land Acquisition Act reserving land for public purpose of extension of
Sewerage Purification Plant-But before acquisition proceedings culminated G
in award, said land got dereserved and was to be utilised under new plan for
residential-cum-commercial purposes with no special reservation for
Municipal Corporation-Thus public purpose envisaged in original notification got eclipsed-Held : in such an event fresh notification would be neces-
. sary-/nterested person must be vigilant and watchful to impugn under Article
226 the original notification before completion of acquisition proceedings.
H
551
A
B
552
SUPREME COURT REPORTS [1996] SUPP. 5 S.C.R.
Public purpose-Acquisition of land-Scheme of-Held : scheme was
a comp/et~ code under Maharashtra Regi,onal and Town Planning Act-lt
was distinct and independent from that under Land Acquisition Act-S.
126( 1) was a substitute for S.4 of Land Acquisition Act.
Land Acquisition Act, 1894 : Sections 4 and 6.
Public purpose-Acquisition of land-Public purpose ceased to
exist-Held : Per Ramaswamy, J : land acquired may be used for another
public purpose.
Land Acquisition-Landlord accepted award and received compensaC tion-Challenge of acquisition by sitting tenant-Held : per Ramaswamy,
!-Tenant could not challenge notification and declaration--Per Majmudar,
J : in appropriate cases such challenge could be levelled by concerned tenant
having subsisting interest in land.
D
Constitution of India, 1950 : Article 226.
Public purpose : acquisition of land-Change in land user-Challenge
of-Delay and !aches-Acquisition proceedings completed, award passed and
land vested in State free from all encumbrances-field : Proceedings became
final an4 not open to challenge on ground of violation of statutory requireE ments such as non-existence of public purpose-Aggrieved person must approach Court before completion of proceedinw-ft was not the function of
Land Acquisition Officer to see if notified public purpose existed.
Writ petitiort--Maintainability of-Delay and /aches-Acquisition of
land-Notification fo~cquisition proceedings completed and award
F passed-Thereafter, writ petition filed challengi,ng acquisition-Held : High
Court should be loathe to quash notification.
The State Governme111t issued a notification under Section 126(2) of
the Mahai;ashtra Regional and Town Planning Act, 1966 read with Section ·
G 6 of the Land Acquiring Act, 1894 for acquiring lease-hold land of respon·
dents for a public purpose for extension of Water Sewerage Purification
Plant of the appellant-Corporation as ear-marked in the then Operative
'
Sanctioned Development Plan. However, before acquisition proceedings
qua that the land could culminate into the award, the said land got
de-reserved for that specified public purpose. With the coming into force
H
of the Bombay Metropolitan Region Development Authority Act, 1974 the
MUNI.CORPN. OF GREAIBR BOMBAYv. JNDL. DEV. AND INVT. CO. PVT. LID.553
said land was ear-marked for residential-cum-commercial purposes, A
under the new development plan, without any special reservation for the
appellant-Corporation.
In the meanwhile the acquisition proceedings in respect of the
aforesaid land continued, award passed and possession was taken by the
appellant-Corporation. The landlord and sitting tenants of the said land B
staked their claim only for additional compensation. The acquired land
got vested in the State Gover~ment and the appellant-Corporation free
from all encumbrances.
The respondents filed a writ petition before the High Court challeng· C
ing the validity of the acquisition of the said land. Single Judge dismissed
the writ petition on the ground of !aches. The Division Bench allowed the
writ petition on the ground that no vested rnghts of third parties were
created. Being aggrieved, the appellant-Corporation preferred the present
appeal.
Allowing the appeal, this Court
HELD : (By the Court)
1. When there is inordinate delay in filing the writ petition and when
D
all steps taken in the acquisition proceedings have become final, the Court E
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 of the Land
Acquisition Act, 1894. But it should be exercised taking all relevant factors
into pragmatic consideration. When the award was passed and possession F
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. Respondents
Nos. 1 and 2 had missed the bus by adopting an indolent attitude in not
challenging the acquisition proceedings promptly. Therefore, the result is G
inevitable that the writ petition is liable to be dismissed on the ground of
gross delay and laches. The Division Bench of the High Court was not right
in interfering with the discretion exercised by the Single Judge dismissing
the writ petition on the ground of !aches. [577-E-G]
State of Tamil Nadu v. L. Krishnan, [1996] 1 SCC 250; State of H
554
SUPREME COURT REPORTS (1996) SUPP. 5 S.C.R.
A Maharashtra v. Digambar, [1995) 4 SCALE 98; The Ramjas Foundation v.
B
c
Union of India, AIR (1993) SC 852 and Ramchand v. Union of India, [1994)
1 sec 44, followed.
{
State of Orissa v. Dhobei Sethi & Anr., (1995) 5 SCALE 1881; Bhoop
Singh 'v. Union of India & Ors., AIR (1992) SC 1414; Aflatoon & Ors. v. Lt.
Governor of Delhi & Ors., AIR (1974) SC 2077; Indrapuri Griha Ninnan
Sahakari Smiti 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 & Anr. v. State of Bihar & Anr., [1980) 2 SCC 83,
relied on.
(per Ramaswamy, J.)
i.1. For the purpose of acquisition of any land undPr Section 126(2)
of the Maharashtra Re11ional and Town Planning Act, 1966 the land sought
to be acquired must have a direct connection with its specification, ear·
D marking or reservation for a specified public purpose in the development
plan itself. Such earmarking etc. is its charter. The absence of public
purpose would be a fetter on exercise of power of acquisition made under
Section 126(2) of the Maharashtra Regional Town Planning (MRTP) Act
or a truncated public purpose. An exercise of eminent domain derives its
E efficacy from the reservation, specification or designation for public pur·
pose 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 concernecl land which is sought to be acquired under the
MRTP Act is snapped off, prior to the completion of acquisition proceed·
ings as per Section 126(2) of the MRTP Act, the entire edifice of acquisition
F
tinder t~at Section would become incompetent. Such is not the case of
acquisition under the Act simplicitor, which has to start after issue of
Section 4 notification u11der the Land Acquisition Act, 1894. [570-E-G]
1.2. By considering the statutory scheme of acquisition under
Section 126 of the MRTP Act general principle of acquisition under the
G Act cannot be applied wholesale for deciding the legality of such statutory.
acquisition under the special scheme of MRTP Act. The scheme for
acquisition of earmarked land under the plan for a specified public
pur"pose thereunder, is a complete scheme or code under the MRTP Act.
It is a distinct and inde11endent scheme as compared to general .~cheme of
H acquisition under the Land Acquisition Act. Section 126(1) of the MRTP
•
MUNl.CORPN. OF GREATER BOMBAY v. !NOL DEV. AND INVT. CO. PVT. LTD. 555
Act is a substitute for Section 4 notification under the Act. Once a proposal A
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 State Government a notification
under· Section 126(2) read with Section 6 of the Act gets issued. As there
is no provision for notification under Section 4 of the Act for such B
acquisition under the MRTP Act no Section SA inquiry under the Land
Acquisition Act is contemplated under the MRTP Act. It is also not
necessary to have such an inquiry made after the proposal for acquisition
is moved under Section 126(1) of the _MRTP Act by concerned planning
authority; The requirement, designation, reservation or earmarking of any
land for ac<1uisition for any specified public purpose as indicated in the C
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) proposal gets issued by the D
concerned planning authority and which itself becomes a substitute for
Section 4(1) notification under the Act. Section 128 of the MRTP Act
provides t,hat if the State .Government wants to acquire lands for any
purpose ·other than the one for which the land is designated in any plan
I
or scheme then it has to resort to notification under the Act which would
naturally be followed by Section SA enquiry as per the said Act subject to E
Section 17 of that Act, and then only the State can issue declaration under
Section 6 of the Act independently of the provisions of the MRTP Act. In
such cases, as acquisition has no nexus with the development plan, objectors get opportunities to object to such acquisition for the public purpose
mentioned in the notification, as Section SA of the Act would then get F
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 Sections 16 and 17 of the Act, then as provided by
Section 128(2) of the MRTP Act, the relevant plan or scheme which
includes the land in question shall be deemed to be _suitably varied by
reason of acquisition of the said land. [S69-A-B; E-H; S70-A-C)
·
G
2.1. 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 earmarked, designated or reserved
land in the subsequent plan prepared and approved under the Bombay H
556
SUPREME COURT REPORTS [1996] SUPP. 5 S.C.R.
A Metropolitan Region Development Authority Act, 1974, does not subserve
any public purpose llithin the earmarked, designated or reserved public
purposes, necessarily, the public purpose envisaged under Section 126
outlives its purpose and gets eclipsed. Public purpose envisaged in original
''·~I
B
c
approved plan no longer survives. Since further proceedings for acquiring
the land, in such circumstances, would not be for public purpose but must
be for any private purpose unless saved by the special law, i.e., MRTP Act
or BM RDA 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
Sectioh 16 or 17 free from all encumbrances. [571-E-F; 572-A-C]
. 2.2. On payment of compensation by the Corporation to the Land
D Acquisition Officer, statutorily the Corporation gets transfer of possession
from the State and the acquired property vests in the Corporation free from
all enchmbrances. Thereby the Corporation becomes the absolute owner of
the land free from all encumbrances including tenancy rights, if any, held
by the respondents. It would be no function of the Collector (Land AcquisiE tion Officer) to keep inquiring whether the notified public purpose remains
in existence. His duty and authority is to pass award under Section 11 after
follolling the procedure under Sections 9 and 10; file the award in the office
of the Collector under Section 12(1); pay compensation under Section 31
or dep~sit it in the Court and to make reference, if the application under
Section 1.8 was filed as per law and this binds his authorities. Therefore,
F
the validity of the notification under Section 126 of the MRTP Act or
declaration under Section 6 of the Act needs necessarily to be impugned by
interested persons 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 allolling the acquisition proceedG ings 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 would not be entertained. On the other hand, if he enlists
vigil and avails of the remedy of judicial review before the acquisition
H
proceedings reach finality, necessarily the High Court would enquire
(
MUNI.CORPN. OFGREATERBOMBAYv. JNDL.DEV.AND INVf. CO.PVf.LID. 557
whether the public purpose under Section 126 of the MRTP Act was subA
sisting so as to enable the Land Acquisition Officer to take further steps
under Section 9 and 10 and to mark 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 B
different and always stands on a different perspective, and is independent
of the special scheme envisaged under MRTP or BMRDA Acts, as the case
may be. One cannot be and should not be confrn;ed with another. They stand
poles apart. [572-G-H; 573-A; C-H]
3. However, the land acquired for a public purpose may be used for C
another public purpose on account of change or surplus thereof. The acquisition validily 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 the case of
the 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 D
no specific plan as such placed on the record, but so long as the land is used
by the Corporation for any designated public purpose, namely, residentialcum-commercial purpose for its employees, the Later public purpose
remains to be valid public purpose in the light of the change of the user of
the land as per the revised plan. The acquired land could be used by the
Corporation for residential-cum-commercial purpose for its employees
other than those working in the Sewerage 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 the duty of the
Land Acquisition Officer to see whether the public 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 the appellant-Corporation free from all encumbrances including
tenancy rights held by the respondents. Possession and title validly vesting
E
F
in the State, becomes absolute under Section 10 of the Act and thereafter the
proceedings under the Act do not become illegal and the land cannot be G
revested in the 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 t~e Constitution may quash it on legal and valid grounds.
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 H
558
SUPREME COURT REPORTS (1996) SUPP. 5 S.C.R.
A the declaration under Section 6 do not stand lapsed. The High Court,
therefore, was not right in exercise of power under Article 226 of the Constitution in granting declarations or in making order of injunction against
the appellants pending writ petitions. It is equally settled law that a tenant
ca~not challenge the' notification under Section 4 and declaration under
B
c
Section 6 of the Act when the· landlord himself had accepted the award and
received compensation. (574-H; 575-A-H; 576-A-B]
Gulam Mustafa & Ors. v. State of Maharashtra & Ors., [1976) 1 SCC
800; Mangal Oram & Ors. v. State of Orissa & Anr., (1977) 2 SCC 46 and
State of Maharashtra v.Mahadeo Deoman Rai, (1990) 3 SCC 579, followed.
' Collectors of 24 Parganas & Ors. v. Lalit Mohan Mullick & Ors.;' (1986)
2 SCC 138; Ram Lal Sethi & Anr. v. State of Haryana & Ors., (1990) Supp.
'l
SCC 11; Satendra Prasad Jain & Ors. v. State of U.P. & Ors., (1993) 4 SCC
369 ~ndAwadh Bihari Yadav & Ors. v. State of Bihar & Ors., (1995) 6 SCC
D 31, relied on.
·(per Majmudar, J. partly concurring) :
- l
1. The respondent-writ petitioners can be said to have waived their
obj~ctions to the acquisition on the ground of extinction of public purpose
E
by their own inaction, lethargy and indolent conduct. The view taken by the
Division Bench of the High Court in this case that because of their inaction
no vested rights of third parties are created is incorrect for the reason that
because of the indolent conduct of the writ petitioners land got acquired,
award was passed, compensation was handed over to various claimants
F
including the landlord. Reference applications came to be filed for larger
compensation by claimants including writ petitioners themselves. The acquired land got vested! in the State Govt. and the Municipal Corporation
free from all encumbrances as enjoined by Section 16 of the Land Acquisi-
'
tion. Act. Thus right to get more compensation got vested in diverse
claimants by passing of the award, as well as vested right was created in
G favour of the Municip,al Corporation by virtue of the Land in the State
Gov~rnment for being handed over to the Corporation. All these events
could not be wished away by observing that no third party rights were
creat~d by them. The wrrit petition came to be filed after all these events had
taken place. Such a writ petition was clearly stillborn due to gross delay and
H laches. (580-G-H; 581-A-D]
·
'
MUNI.CORPN. OF GREATER BOMBAY v. INDL. DEV. AND INVT. CO. PVT. LID. 559
2. Even though the proposal under Section 126(1) is for acquisition A
of land for specified public purpose, if the planning authority wants to
acquire the land subsequently for any other public purpose earmarked in
the modified scheme as has happened in the present case that is if the
appellant Corporation which had initially proposed to acquire the land for
extension of sewerage treatment plant wanted subsequently to acquire the B
same land for its staff quarters then such a purpose must be specifically
indicated in the plan meaning thereby that the land must be shown to be
reserved for the staff quarters of the Corporation and then the Special
Planning Authority which had become the appropriate planning authority,
i.e., B.M.R.D.A. would be required to issue a fresh proposal under Section
126(1) read with Section 40(3)(e) and Section 116 of the M.R.T.P. Act and C
follow the gamut thereafter. So long as that was not done the earlier
proposal under Section 126(1) and the consequential notification by the
State Government under Section 126(2) which had lost their efficacy could
not be revitalised. [578-D-G]
3. It is not possible to subscribe to the general observation that a D
sitting tenant of the land which comes to be subjected to acquisition
proceedings under Sections 4 and 6 of the Land Acquisition Act, 1894 in
no case can challenge the said acquisition proceedings. In appropriate
cases such a challenge can be levelled by the concerned tenant having
sufficient subsisting interest in the land. Therefore, on merits the Single E
Judge as well as the Division Bench had rightly held that respondent's writ
petition had good case on merits. [578-G-H]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 286 of
1989.
From the Judgment and Order dated 14.7.88 of the Bombay High
Court in W.P. No. 1683 of 1983.
S.K. Dholakia, b.N. Mishra and Ms. Promila Choudhary for the
Appellant.
D.R. Dhanuka, V.A. Bobde, R.F. Nariman, S.V. Kamdar, S.J. Parek,
Pratap Venugopal and K.J. John for the Respondents.
The Judgments/Order of the Court were delivered :
F
G
K. RAMASWAMY, J. This appeal by special leave arises from the H
560
SUPREME COURT REPORTS [1996] SUPP. 5 S.C.R.
A judgment and order dated July 14, 1988 in Appeal No. 120 of 1988 of the
Bombay High Court reversing the Judgment 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)
B of the Maharashtra Regional and Town Planning Act (for short, the
'MR!P Act') as inoperative. It was also held that the land in question could
not be acquire~ 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.
c
' A. few relevant facts leading to these proceedings deserve ta 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
D 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 Sect,ions 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 sancE
tioned 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 DharaVi with which we are concerned in the
F
present proceedings formed part of the said Ward 'G' and, therefore, was
naturally covered by the aforesaid sanctioned development plan. The said
city survey plot No. 503 DharaVi is a large piece of land owned by the 6th
respondent, the ProVident Investment Co. Ltd. which belongs to the
Government of Madhya Pradesh: Som.e portion of the said land, to be
precise an area admeasuring 20, 397 sq. yds. was leased out by the 5th
G 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 Sewage Purification Plant at
DharaVi. With the increase in the population and the area under control
H of the appellant-Corporation it became necessary to extend the DharaVi
MUNLCORPN.OFGREAIBRBOMBAY>.INDLDEV.ANDINVT.CO.PVT.LID.(KRAMASWAMY,J.J 561
Sewage Purification Works. In the year 1963, it was decided at a meeting A
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 B
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
c
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is required or reserved for any of the public purposes specified in any
plan qr scheme under this Act at any time the Planning Authority,
Development Authority, or as the case may be, (any Appropriate E
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
F
in cases falling under Section 49 (and except as provided in section
113A) itself is of opinion) that any land included in any such plan G
is needed for any public purpose, it may make a declaration to
that effect in the Official Gazette, in the manner provided in
section 6 of the Land Acquisition Act, 1894, in respect of the said
land. The declaration so published shall, notwithstanding anything_
contained in the said Act, be deemed to be a declaration duly
made under the said section :
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SUPREME COURT REPORTS [1996] SUPP. 5 S.C.R.
Provided that, no such declaration shall be made after the
expiry of three years from the date of publication of the ~aft
~egional plan, Development plan or any other plan."
. .
(emphasis supplie~)
Pursuant to the said notification notices under Section 9 of the Act
were issu~d on March 14, 1973 to the concerned interested parties inviting
claims f?r compensation. As the respondents 1 and 2 were in possession
of the lan,d as tenants, they naturally put forward their claims for compensation. It is in evidence that in 1979, respondents 1 & 2 were also heard in
C
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 of these proceedings. On January 26, 1975 an Act
D 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,
E 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
p
City Survey No. 503, Dharavi got covered by the Bombay Metropolitan
Regi;in as.indicated in the said schedule. Under the BMRDA Act, as per
Section 3, ~he 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
G within the trieaning of the term 'local authority' as defined by the Bombay
General da~ses Act, 1904. As per Chapter IV of the BMRDA Act, diverse
functions were to be performed by the said authority. The said BMRDA
had, undei Section 12(l)(c), to formulate and sanction schemes for the
developme~t of the Metropolitan Region or any part thereof. Under
H MRTP Act, the term 'planning authority' was defined by Section 2 sub-sec-
MUNL CORPN. OF GREATER BOMBAY••. INDL DEV. AND INVT. CO. PVT. LID. ( K. RAMASWAMY, J.J 563
tion (19) to mean a local authority and it included a Special Planning A
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 l(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 of Maharashtra OJ} January 26, 1975.
B
As per sub-section (3) of Section 40 of the MRTP Act, on the
constitution of the aforesaid planning authority for 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, C
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 D
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 the City Survey No. 503 E
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 due consideration given F
by the State Government, the said proposals were approved by the State
Government as per Section 115 sub-section (2) of the MRTP Act read with
Section 40 sub-section 3( d) on April 19, 1979 and they were published as
per Section 40 sub-section (5) of the MRTP Act· in Government Gazette
on May 3, 1979 and accordingly they became final.
Section 40 of the MRTP Act with its relevant sub-clauses reads as
under:
G
"40. (1) The State Government may, by notification in the Official
Gazette, for any undeveloped area specified in the notification (in H
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SUPREME COURT REPORTS [ 1996] SUPP. 5 S.C.R.
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
C
Development Authority Act, 1974, to be the Special Planning
·Authority for developing the notified area.
,
(2) ........... .
(3) On the constitution of the Special Planning Authority, the
D
provisions of Chapter VI of this Act shall, subject to the provisions
of this section andl 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 :
E
F
G
H
(a) ........... .
'(b) ........... .
(c) ........... .
( 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 propos,tls 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 modifica-
'
ti on.
(2) Before submitting the proposals to the State Government, the
Special Planning Authority shall carry out a survey and prepare an
MUNI. CORPN.OFGREATERBOMBAY,. INDL DEV.ANDJNVT. CO.Pvr. L1D. ( K RAMASWAMY,J.J 565
existing land-use map of the area, and prepare and publish the A
draft proposals for the lands within its jurisdiction together with a
notice in the Official Gazette and local newspapers in such manner
as a 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 of being
heard modify its 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.
(t) for section 117, the following 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
B
c
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E
F
40, any owner of the land may, by notice in writing served on the G
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 H
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SUPREME COURT REPORTS [1996] SUPP. 5 S.C.R.
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,
I or any draft or final town planning scheme, or any building byelaws or regulations, which 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 plan or scheme
, applicable to and in force in the notified area or any part thereof
shall stand modified by the 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 holcl:,;g 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, 1967 now got covered by the Bandra-Kurla
' '
.
Complex, plan as per the new Sanctioned Development Plan for BandraKurla 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 recommended by their consultants. All the sewage from Bandra east and
Kurla etc. will be collected and pumped to this plant and after
H
treatment it will be let into the deep-sea out fall sewer. The present
..
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MUNL C'ORPN. OF GREATER BOMBAY•·. INDL DEV. ANDINVT.CO.PVT.LID. f K RAMASWAMY,J.J 567
sewage treatment plant at Sio11 will be discontinued. The requireA
. ment 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 B
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, Khadakvasla, as tentatively shown on the layout C
_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 D
said planning proposals. It is, therefore, obvious that Dharavi Sewage
Purification plant had to be dismantled and shifted to Block 'A' at the place
indicated for it in the approved plan. So far, the City Survey No.