Supreme Court: Land Reservation Shall Be Deemed To Have Lapsed If No Steps Are Taken For Acquisition Within Prescribed Period Under MRTP Act
The Supreme Court held that once an embargo has been put on a landowner not to use the land, the said restriction cannot be kept open-ended for an indefinite period.
The Supreme Court has clarified that if the State does not take steps to acquire reserved land within 10 years of publishing the development plan, and the landowner serves a purchase notice under Section 127 of the MRTP Act, the State must act within one year, or the reservation will lapse.
The Court set aside the impugned Order of the Bombay High Court which held that a person intending to develop their property at the earliest can take recourse of Section 49 otherwise they would have to wait for a period of 10 years as envisaged under Section 127(1) of the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act).
A Bench of Justice JB Pardiwala and Justice R Mahadevan held that “It is, thus, clear that the scheme of Sections 126 and 127 respectively would leave nobody in doubt, for the reason that if a period of 10 years has elapsed from the date of publication of the plan in question, and no steps for acquiring the land have been taken, then once a purchase notice is served under Section 127, steps to acquire the land must follow within a period of one year from the date of service of such notice, or else the land acquisition proceedings would lapse.”
Advocate Gagan Sanghi appeared for the Appellants, while Advocate Nitin Lonkar represented the Respondents.
Brief Facts
The case arose from a challenge to the land acquisition process under the MRTP Act. The Appellants, who were the landowners, contended that their land had been reserved for public purposes in a development plan published by the State. However, for more than ten years, the State had taken no steps for acquisition, prompting them to serve a purchase notice under Section 127 of the MRTP Act.
Upon receiving the purchase notice, the State was required to initiate acquisition proceedings within one year. The Appellants argued that since no action was taken within this statutory period, the reservation had lapsed, and the land should be de-reserved.
The Appellants submitted that under Section 127 of the MRTP Act, the failure of the State to initiate acquisition within one year of the purchase notice leads to automatic lapsing of the reservation. They further contended that permitting the State to indefinitely retain land under reservation without compensation would violate their property rights.
Court’s Reasoning
The Supreme Court pointed out that the MRTP Act provides a clear framework wherein the rights of landowners cannot be indefinitely curtailed by prolonged inaction on the part of the State citing its decision in Chhabildas v. State of Maharashtra (2018).
The Bench referred to its decision in Bhavnagar University v. Palitana Sugar Mills Pvt. Ltd. (2002) wherein it was held that “A plain meaning of the said provisions, in our considered view, would lead to only one conclusion, namely, that in the event a notice is issued by the owner of the land or other person interested therein asking the authority to acquire the land upon expiry of the period specified therein viz. ten years from the date of issuance of final development plan and in the event pursuant to or in furtherance thereof no action for acquisition thereof is taken, the designation shall lapse.”
The Court in Bhavnagar University (supra) held that once a purchase notice is served, the State must take steps for acquisition within one year, failing which the reservation lapses automatically. The Court held that the legislative intent behind this provision is to balance urban planning needs with the fundamental rights of landowners.
Finally, the Court relied on its decision in Prafulla C. Dave v. Municipal Commissioner (2015), wherein it was held, “Under Section 127 of the M.R.T.P. Act, reservation, allotment or designation of any land for any public purpose specified in a development plan is deemed to have lapsed and such land is deemed to be released only after notice on the appropriate authority is served calling upon such authority either to acquire the land by agreement or to initiate proceedings for acquisition of the land either under the M.R.T.P. Act or under the Land Acquisition Act, 1894 and the said authority fails to comply with the demand raised thereunder.”
Consequently, the Court held, “Thus, the principles underlying in Section 127 of the MRTP Act is either to utilize the land for the purpose for which it is reserved in the timeline given or let the owner utilize the land for the purpose as permissible under the town planning scheme. The reservation shall be deemed to have lapsed if no steps are taken for acquisition of the said land within the prescribed period.”
Accordingly, the Supreme Court allowed the Appeal holding, “Having regard to the gross delay of almost thirty years even without the aid of Section 127 of the MRTP Act, we would have declared the reservation to have lapsed in exercise of our jurisdiction under Article 142 of the Constitution to do complete justice in the matter.”
Cause Title: Nirmiti Developers Through Its Partners & Anr. v. The State Of Maharashtra & Ors. (Neutral Citation: 2025 INSC 265)
Appearance:
Appellants: Advocates Gagan Sanghi and Farah Hashmi; AOR Rameshwar Prasad Goyal
Respondents: Advocates Nitin Lonkar and Siddharth Dharmadhikari; AOR Aaditya Aniruddha Pande
