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CASE NO.:

Appeal (civil) 3703 of 2003

PETITIONER:

M/s. Girnar Traders

RESPONDENT:

State of Maharashtra & Ors

DATE OF JUDGMENT: 27/08/2007

BENCH:

B.N. Agrawal & P.K. Balasubramanyan & P.P. NAOLEKAR

JUDGMENT:

J U D G M E N T

WITH

CIVIL APPEAL NO. 3922 of 2007

[arising out of S.L.P.(C) No. 11446 of 2005]

M/s. S.P. Building Corporation & Anr. \005\005 Appellants

Versus

State of Maharashtra & Ors. \005\005Respondents

P.P. Naolekar, J.

1. We have had the benefit of perusing the judgment

prepared by learned brother P.K. Balasubramanyan, J. in Civil

Appeal No.3703 of 2003 titled M/s. Girnar Traders v. State of

Maharashtra and Others, wherein learned brother has taken

into consideration various decisions of this Court,

including decisions delivered by 3-Judge Benches, and

various aspects considered therein, and thought it proper to

refer the question regarding interpretation and applicability of

Section 11A introduced into the Land Acquisition Act, 1894

(for short \023the LA Act\024) by Amendment Act 68 of 1984 to the

Maharashtra Regional and Town Planning Act, 1966 (for short

\023the MRTP Act\024) for consideration by a larger Bench. A 3-

Judge Bench of this Court in Nagpur Improvement Trust

v. Vasantrao and Others, (2002) 7 SCC 657 and U.P. Avas

Evam Vikas Parishad v. Jainul Islam and Another,

(1998) 2 SCC 467, on interpretation of the provisions of the

Acts under challenge, has held that the LA Act was

incorporated in those statutes, that is, they were cases of

legislation by incorporation and, therefore, the amendment

brought about subsequently in the LA Act would not apply to

the statutes in question. However, beneficial amendment of

payment of compensation under the amended provisions of

the LA Act was made applicable and the owner of the land was

held to be entitled to the beneficial payment of compensation.

It appears, it was so held to save the Acts from the vice of

arbitrary and hostile discrimination. There does not appear to

be any justifiable reason for not applying this principle so far

as it relates to the acquisition of land. If the land is not

acquired within the stipulated time, then the whole

proceedings in acquisition comes to an end, and thereby the

owner of the land would be entitled to retain his land which

appears to be the superior right than the owner\022s right

to get the compensation for acquisition of his land. A 2-

Judge Bench of this Court in State of Maharashtra and

Another v. Sant Joginder Singh Kishan Singh and

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Others, 1995 Supp. (2) SCC 475 has held that Section 11A of

the LA Act is a procedural provision and does not stand on the

same footing as Section 23 of the LA Act. We find it difficult to

subscribe to the view taken. Procedure is a mode in which the

successive steps in litigation are taken. Section 11A not only

provides a period in which the land acquisition proceedings

are to be completed but also provides for consequences,

namely, that if no award is made within the time stipulated,

the entire proceedings for the acquisition of the land shall

lapse. Lapsing of the acquisition of the land results in owner

of the land retaining ownership right in the property and

according to us it is a substantive right accrued to the owner

of the land, and that in view thereof we feel Section 11A of the

LA Act is part of the law which creates and defines right, not

adjective law which defines method of enforcing rights. It is a

law that creates, defines and regulates the right and powers of

the party. For this and the other reasons assigned by our

learned brother, we are in agreement with him that the

question involved requires consideration by a larger Bench

and, accordingly, we agree with the reasons recorded by my

learned brother for referring the question to a larger Bench.

However, on consideration of the erudite judgment prepared

by our esteemed & learned brother Balasubramanyan, J.,

regretfully we are unable to persuade ourselves to agree to the

decision arrived at by him on interpretation of Section 127 of

the MRTP Act and also reference of the case to a larger Bench.

Section 127 of the MRTP Act is a special provision and would

be attracted in the peculiar facts and circumstances

mentioned in the Section itself. The Section provides a

procedure for the land owner to get his land de-reserved if

steps are not taken by the State Government within the

stipulated period and the relief which the owner of the land is

entitled to is also provided therein. The steps to be taken for

acquisition of land as provided under Section 127 of the MRTP

Act have to be taken into consideration keeping in mind the

time lag between the period the land is brought under

reservation and inaction on the part of the State to acquire it.

Section 127 of the MRTP Act is a unique provision providing

remedial measure to the owner of the land whose land is

under the planning scheme for a long period of time, which

would be interpreted in the facts and circumstances of each

individual case. It does not have any universal application

and, therefore, the applicability thereof would depend on the

facts of each case. S.L.P.(C) No.11446 of 2005 titled M/s. S.P.

Building Corporation and Anr. v. State of Maharashtra and

Others, is required to be decided by this Bench only and,

therefore, we propose to decide it as follows:

2. Leave granted.

3. The brief facts necessary for deciding the questions

raised in this appeal are that appellant No.1 is a partnership

firm registered under the Indian Partnership Act, 1932 and

is the owner of an immovable property, i.e. a piece of land,

bearing City Survey No.18/738, admeasuring about 5387.35

sq.yds. situated at Carmichael Road, Malabar Hill Division,

Mumbai-400026.

4. On 7.7.1958, Bombay Municipal Corporation had

issued a declaration under Section 4(1) of the Bombay Town

Planning Act, 1954 (hereinafter referred to as \023the Act of

1954\024), expressing its intention to prepare a development plan

for the area under its jurisdiction and published a

development plan in accordance with the provisions of the said

Act on 9.1.1964. The plan was submitted by the Corporation

to the Government of Maharashtra for sanction on 8.7.1964

and on 6.1.1967 the Government of Maharashtra accorded

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sanction to the development plan which pertained to \021D\022 Ward

of the Corporation area and the plan came into force on

7.2.1967. The land of the appellant was notified for

development as \021Open Space and Children\022s Park\022. On

11.1.1967, the Maharashtra Regional and Town Planning Act,

1966 (hereinafter referred to as \023the MRTP Act\024) repealed the

Act of 1954 saving the proceedings already initiated under the

Act of 1954.

5. Proceedings were taken up for acquisition of the land.

Since no award was made as per Section 11A of the Land

Acquisition (Amendment) Act, 1984 which came into force on

24.9.1984, the acquisition proceedings were declared by the

Land Acquisition Officer to have lapsed. Later on a revised

development plan sanctioned by the State Government on

6.7.1991 came into effect on 16.9.1991. On 3.2.1998 the

appellants served notice through their advocates under

Section 127 of the MRTP Act asking for re-notifying the

property or to release the said property from reservation and

accord sanction/approval to develop the property by the

owner. In reply, the Municipal Corporation, Greater Mumbai

informed the appellants that purchase notice issued by their

advocates was invalid as ten years had not expired since the

sanction of the revised development plan, came into force on

16.9.1991. On 18.10.2000, the appellants again served

purchase notice under Section 127 of the MRTP Act. Again

the Municipal Corporation of Greater Mumbai informed the

appellants that the notice was invalid as the period of ten

years had not lapsed from the date of the revised plan.

6. On 15.3.2002, the appellants addressed yet another

notice to the Municipal Corporation, Greater Mumbai under

Section 127 of the MRTP Act stating therein that ten years\022

period had lapsed on 16.9.2001 and since no proceedings for

acquisition of the land as contemplated under Section 127(1)

of the MRTP Act or under the Land Acquisition Act , 1894

(hereinafter referred to as \023the LA Act\024) having been

commenced nor has any award been made or compensation

paid, the property should be de-reserved. The purchase notice

was served on the Municipal Commissioner, Greater Mumbai

on 19.3.2002.

7. The counsel for respondent-Municipal Corporation

has submitted certain documents before us at the time of

hearing. In pursuance of the purchase notice served on the

Municipal Corporation, Greater Mumbai, a meeting of the

Improvement Committee was called. On 9.9.2002 (document

no.1), the Improvement Committee passed Resolution No.183

recommending the Municipal Corporation to initiate the

acquisition proceedings under the provisions of Section 126(2)

and (4) of the MRTP Act read with Section 6 of the LA Act, as

amended upto date, or in the alternative to recommend

acquisition as provided under Section 126(1) of the MRTP Act.

The rates for acquisition under the LA Act and that under the

provisions of Section 126(1) of the MRTP Act were also

provided for. On 13.9.2002 (document no.2) without there

being any resolution sanctioning acquisition or taking steps

for acquisition, an application was sent by the Chief Engineer

(Development Plan) to the State Government for initiating

acquisition proceedings under Section 126 of the MRTP Act as

amended upto date read with Section 6 of the LA Act.

Thereafter, on 16.9.2002 (document no.3) the Corporation

passed Resolution No.956 whereby sanction was given to

initiate the acquisition proceedings of the land and the

Municipal Commissioner was authorised to make an

application to the State Government under the provisions of

Section 126(2) & (4) of the MRTP Act read with Section 6 of the

LA Act, as amended upto date; and / or, initiate proceedings

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under Section 90(1) & (3) of the Bombay Municipal

Corporation Act, 1888 as amended upto date, for the land

being purchased by the Commissioner on behalf of the

Corporation. After the Resolution was passed, on 17.9.2002

(document no.4) a letter was written by the Chief Engineer

(Development Plan) to the Secretary, Urban Development

Department, Government of Maharashtra informing that the

Corporation have accorded sanction to initiate acquisition

proceedings and for the said purpose authorized the Municipal

Commissioner to make an application to the State Government

as per the provisions of Section 126(1) of the MRTP Act as

amended upto date to issue orders for acquisition of the

property under the MRTP Act read with Section 6 of the LA

Act. The letter dated 17.9.2002 is reproduced herein:-

\023To,

The Secretary,

Urban Development Dept.,

Govt. of Maharashtra,

Mantralaya,

Mumbai-400032

Sub: Acquisition of land bearing C.S.No.18738 of

Malabar Hill division reserved for Children Park.

Ref: i) TPB-4302/572/UD-11 dtd.27.3.02

ii) CHE/ACQ/C/962 dtd. 13.9.2002

Sir,

With reference to above, it is to be mentioned

here that Corporation by their Resolution No. 956 of

16.9.2002 (copy enclosed) have accorded sanction to

initiate the acquisition proceedings for the above

mentioned land reserved for Children\022s Park adm.

approximately 4504.52 sq.mt. and also authorized

the Municipal Commissioner to make application to

State Govt. as per provision of 126(1) of the

M.R.&T.P. Act 1966 as amended upto date to issue

order for the acquisition of property under reference

as provided under the provisions of sec. 126(2) (3)

and (4) of the M.R.&T.P. Act 1966 as amended upto

date read with section 6 of L.A. Act 1894. The

application to State Govt. along with the required

information in the usual proforma in triplicate & three

copies of plans have already been submitted vide

this office letter issued u/no. CHE/ACQ/C/962 dtd.

13.9.2002 (copy enclosed). This is for information

and further necessary action.

Yours faithfully,

Sd/-

CHIEF ENGINEER

(DEVELOPMENT PLAN)\024

Later on the State Government on 20.11.2002 issued a

notification exercising the power conferred by sub-section (4)

read with sub-section (2) of Section 126 of the MRTP Act read

with Section 6 of the LA Act.

8. Having aggrieved by the action of the respondents,

the appellants filed a writ petition in the High Court of

Judicature at Bombay which was registered as Writ Petition

No.353 of 2005 (M/s. S.P. Building Corporation & Anr. vs.

State of Maharashtra and Ors.) challenging the proceedings

initiated by the respondents. It was contended by the

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appellants that under Section 127 of the MRTP Act, no steps

having been taken within the period prescribed, the reservation

is deemed to have lapsed; and secondly, the acquisition

proceedings initiated under the MRTP Act, are deemed to have

lapsed in view of Section 11A of the LA Act, the award having

not been admittedly made within two years from the date of

publication of the declaration. The Division Bench of the

Bombay High Court dismissed the petition on both counts. It

was held by the Bombay High Court that the resolution of the

Improvement Committee passed on 9.9.2002 and the letter

written by the Chief Engineer dated 13.9.2002 would constitute

a `step\022 taken by the Municipal Corporation as provided under

Section 127 of the MRTP Act. The Division Bench relying on a

judgment of this Court in the case of State of Maharashtra

and Another v. Sant Joginder Singh Kishan Singh and

Others, 1995 Supp. (2) SCC 475, has held that Section 11A of

the LA Act as amended is not applicable to the proceedings for

acquisition initiated under the MRTP Act and dismissed the writ

petition.

9. The appellants filed this appeal by way of S.L.P. (C)

No. 11446 of 2005 challenging the order of the Division Bench

of the Bombay High Court. This Court by an order dated

11.7.2005, issued notice and tagged the case along with C.A.

No. 3703 of 2003 wherein a 2-Judge Bench of this Court had

doubted the correctness of the decision rendered by this Court

in Sant Joginder Singh Case (supra) on which the Bombay

High Court has relied, in regard to the applicability of the

newly inserted provision of Section 11A of the LA Act, to the

acquisition under Chapter VII of the MRTP Act. Thus, the

matter has been heard along with C.A. No.3703 of 2003

wherein the only question raised is in regard to the

applicability of the new provision of Section 11A of the LA Act

to the acquisition made under the MRTP Act; whereas, apart

from the said question, in this case we are also required to

decide the scope and ambit of Section 127 read with Section

126 of the MRTP Act for the purposes of de-reservation of the

land reserved under a development plan.

10. The question that requires consideration and

answer in the present case is : Whether the reservation has

lapsed due to the failure of the planning authority to take

steps within the period of six months from the date of service

of the notice of purchase as stipulated by Section 127 of the

MRTP Act; and also the question as regards applicability of

new Section 11A of the LA Act to the acquisition of land under

the MRTP Act.

11. Under Section 2(19) of the MRTP Act, the planning

authority means a local authority and includes other

authorities provided in clauses (a) and (b). The local authority

is defined in Section 2(15) which for the purposes of this case

would be the Municipal Corporation of Greater Mumbai

constituted under the Bombay Municipal Corporation Act.

12. Chapter VII of the MRTP Act deals with land

acquisition. Sections 125 to 129 fall in Chapter VII. Section

125 provides that any land required, reserved or designated in

a 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 LA Act. Section 126 provides three modes of

acquisition of the land included in the town planning scheme

for the public purpose. Section 127 provides for lapsing of

reservation if the land reserved, allotted or designated is not

acquired by agreement within 10 years from the date on which

a final regional plan or final development plan comes into force

or if proceedings for acquisition of land under the MRTP Act or

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under the LA Act are not commenced within such period, then

the owner or any person interested in the land may serve a

notice. If within six months from the date of service of such

notice, the land is not acquired or no steps as aforesaid are

commenced for its acquisition, the reservation, allotment or

designation shall be deemed to have lapsed and the land shall

be deemed to be released from such reservation. Section

128(1) confers the power on the State Government to acquire

the land needed for a public purpose different from any public

purpose under the scheme, or purpose of the planning

authority or development authority or appropriate authority;

the State Government may, notwithstanding anything

contained in the MRTP Act, acquire the land under the

provisions of the LA Act. Section 129(1) empowers the

Collector after the publication of the declaration under Section

126(2) to enter on and take possession of the land under

acquisition after giving a notice of 15 days.

13. Section 127 falling in Chapter VII requires

interpretation in the present case. However, the same cannot

be understood without reference to Section 126 which has an

important bearing while interpreting the words used in Section

127, namely, \023the land is not acquired or no steps as aforesaid

are commenced for its acquisition\024. Therefore, the relevant

provisions to be considered are Sections 126 and 127 of the

MRTP Act. Section 126 of the MRTP Act reads as follows:

\023126. Acquisition of land required for public

purposes specified in plans.- (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

purposes 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, \026

(a) by agreement by paying an amount agreed

to, or

(b) in lieu of any such amount, by granting the

land-owner or the lessee, subject, however, to

the lessee paying the lessor or depositing with

the Planning Authority, Development Authority

or Appropriate Authority, as the case may be,

for payment to the lessor, an amount

equivalent to the value of the lessor's interest

to be determined by any of the said

Authorities concerned on the basis of the

principles laid down in the Land Acquisition

Act, 1894, Floor Space Index (FSI) or

Transferable Development Rights (TDR)

against the area of land surrendered free of

cost and free from all encumbrances, and also

further additional Floor Space Index or

Transferable Development Rights against the

development or construction of the amenity

on the surrendered land at his cost, as the

Final Development Control Regulations

prepared in this behalf provide, or

(c) by making an application to the State

Government for acquiring such land under the

Land Acquisition Act, 1894,

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and the land (together with the amenity, if any, so

developed or constructed) so acquired by agreement

or by grant of Floor Space Index or additional Floor

Space Index or Transferable Development Rights

under this section or under the Land Acquisition

Act, 1894, as the case may be, shall vest absolutely

free from all encumbrances in the Planning

Authority, Development Authority, or as the case

may be, any Appropriate Authority.

(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 49 and except as

provided in section 113A) itself is of opinion that

any land included in any such plan 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:

Provided that, subject to the provisions of sub-

section (4), no such declaration shall be made after

the expiry of one year from the date of publication of

the draft Regional Plan, Development Plan or any

other Plan, or Scheme, as the case may be.

(3) On publication of a declaration under the said

section 6, the Collector shall proceed to take order

for the acquisition of the land under the said Act;

and the provisions of that Act shall apply to the

acquisition of the said land, with the modification

that the market value of the land shall be, --

(i) where the land is to be acquired for the

purposes of a new town, the market value

prevailing on the date of publication of the

notification constituting or declaring the

Development Authority for such town;

(ii) where the land is acquired for the purposes

of a Special Planning Authority, the market

value prevailing on the date of publication of

the notification of the area as an undeveloped

area; and

(iii) in any other case the market value on the

date of publication of the interim development

plan, the draft development plan or the plan

for the area or areas for comprehensive

development, whichever is earlier, or as the

case may be, the date or publication of the

draft town planning scheme :

Provided that, nothing in this sub-section shall

affect the date for the purpose of determining the

market value of land in respect of which

proceedings for acquisition commenced before the

commencement of the Maharashtra Regional and

Town Planning (Second Amendment) Act, 1972:

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Provided further that, for the purpose of clause (ii)

of this sub-section, the market value in respect of

land included in any undeveloped area notified

under sub-section (1) of section 40 prior to the

commencement of the Maharashtra Regional and

Town Planning (Second Amendment) Act, 1972,

shall be the market value prevailing on the date of

such commencement.

(4) Notwithstanding anything contained in the

proviso to sub-section (2) and sub-section (3), if a

declaration is not made within the period referred to

in sub-section (2) (or having been made, the

aforesaid period expired on the commencement of

the Maharashtra Regional and Town Planning

(Amendment) Act, 1993), the State Government may

make a fresh declaration for acquiring the land

under the Land Acquisition Act, 1894, in the

manner provided by sub-sections (2) and (3) of this

section, subject to the modification that the market

value of the land shall be the market value at the

date of declaration in the Official Gazette made for

acquiring the land afresh.\024

Under sub-section (1) of Section 126, after publication of the

draft regional plan, a development or any other plan or town

planning scheme, any land required or reserved for any of the

public purposes specified in any plan or scheme under the

MRTP Act, may be acquired (a) by agreement between the

parties by paying an amount agreed to; or (b) by granting the

land owner or the lessee, Floor Space Index (FSI) or

Transferable Development Rights (TDR) against the area of

land surrendered free of cost and free from all encumbrances

and also further additional Floor Space Index or Transferable

Development Rights against the development or construction

of the amenity on the surrendered land at his cost, as the

Final Development Control Regulations prepared in this behalf

provide; or (c) by making an application to the State

Government for acquiring such land under the LA Act. Sub-

section (2) provides that on receipt of such application or on

its own motion, the State Government would satisfy itself that

the land specified in the application, is needed for a public

purpose and, if it is so found, would make a declaration by

issuing a notification in the Official Gazette in the manner

provided in Section 6 of the LA Act. Proviso is added to sub-

section (2) whereunder a declaration under Section 6 of the LA

Act in the Official Gazette has to be made within one year from

the date of publication of the draft regional plan, development

plan or any other plan or scheme, as the case may be. Sub-

section (3) postulates that on publication of a declaration in

the Official Gazette under Section 6 of the LA Act, the Collector

shall proceed to take orders for the acquisition of the land

under the LA Act and the provisions of that Act shall apply to

the acquisition of the said land with certain modifications as

provided in clauses (i), (ii) and (iii) of sub-section (3) for

determination of the market value on the basis of different

dates. Sub-section (3) makes it abundantly clear that after

publication of the declaration in the Official Gazette under

Section 6 of the LA Act, the entire procedure which shall be

followed will be as provided under the LA Act, that is to say,

from Section 8 onwards upto Section 28 of the LA Act which

deal with acquisition of land under the LA Act.

14. Sub-section (2) of Section 126 provides for one

year\022s limitation for publication of the declaration from the

date of publication of the draft plan or scheme. Sub-section

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(4), however, empowers the State Government to make a fresh

declaration under Section 6 of the LA Act even if the

prescribed period of one year has expired. This declaration is

to be issued by the State Government for acquisition of the

land without there being any application moved by the

planning/local authority under clause (c) of Section 126(1).

Sub-section (4) of Section 126 authorizes the State

Government to make a declaration for acquisition of the land

under Section 6 of the LA Act without any steps taken by the

planning authority, i.e., Bombay Municipal Corporation.

Under sub-section (4) of Section 126, the State Government

can make a fresh declaration if the declaration under sub-

section (2) of Section 126 was not made within the time

stipulated for acquisition of the land, if it is satisfied that the

land is required for a public purpose, subject to the

modification that the market value of the land shall be the

market value at the date on which the declaration in the

Official Gazette is made for acquisition of the land afresh.

Sub-section (4) is the provision whereunder only the State

Government is authorized and empowered to issue fresh

declaration for acquiring the land under the LA Act.

15. Section 127 of the MRTP Act which requires

consideration in the present case is a provision which

provides, as is clear from its heading itself, for lapsing of

reservation of the lands included in the development plan.

The development authority for utilization of the land for the

purpose for which it is included in the plan has to take steps

and do things within the period stipulated in a particular span

of time, the land having been reserved curtailing the right of

the owner of its user. Section 127 reads as under:

\023127. Lapsing of reservations.- If any land

reserved, allotted or designated for any purpose

specified in any plan under this Act is not acquired

by agreement within ten years from the date on

which a final Regional Plan, or final Development

Plan comes into force or if proceedings for the

acquisition of such land under this Act or under the

Land Acquisition Act, 1894, are not commenced

within such period, the owner or any person

interested in the land may serve notice on the

Planning Authority, Development Authority or as

the case may be, Appropriate Authority to that

effect; and if within six months from the date of the

service of such notice, the land is not acquired or no

steps as aforesaid are commenced for its

acquisition, the reservation, allotment or

designation shall be deemed to have lapsed, and

thereupon the land shall be deemed to be released

from such reservation, allotment or designation and

shall become available to the owner for the purpose

of development as otherwise permissible in the case

of adjacent land under the relevant plan.\024

Section 127 prescribes two time periods. First, a period of 10

years within which the acquisition of the land reserved,

allotted or designated has to be completed by agreement from

the date on which a regional plan or development plan comes

into force, or the proceedings for acquisition of such land

under the MRTP Act or under the LA Act are commenced.

Secondly, if the first part of Section 127 is not complied with

or no steps are taken, then the second part of Section 127 will

come into operation, under which a period of six months is

provided from the date on which the notice has been served by

the owner within which the land has to be acquired or the

steps as aforesaid are to be commenced for its acquisition.

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The six-month period shall commence from the date the owner

or any person interested in the land serves a notice on the

planning authority, development authority or appropriate

authority expressing his intent claiming de-reservation of the

land. If neither of the things is done, the reservation shall

lapse. If there is no notice by the owner or any person

interested, there is no question of lapsing reservation,

allotment or designation of the land under the development

plan. Second part of Section 127 stipulates that the

reservation of the land under a development scheme shall

lapse if the land is not acquired or no steps are taken for

acquisition of the land within the period of six months from

the date of service of the purchase notice. The word `aforesaid\022

in the collocation of the words \023no steps as aforesaid are

commenced for its acquisition\024 obviously refers to the steps

contemplated by Section 126 of the MRTP Act.

16. If no proceedings as provided under Section 127 are

taken and as a result thereof the reservation of the land

lapses, the land shall be released from reservation, allotment

or designation and shall be available to the owner for the

purpose of development. The availability of the land to the

owner for the development would only be for the purpose

which is permissible in the case of adjacent land under the

relevant plan. Thus, even after the release, the owner cannot

utilize the land in whatever manner he deems fit and proper,

but its utilisation has to be in conformity with the relevant

plan for which the adjacent lands are permitted to be utilized.

17. It is an admitted position that on 16.9.1991 the

revised development plan was sanctioned and 10 years have

expired on 15.9.2001 without there being any acquisition or

steps being taken for acquisition of the land in question. On

15.3.2002, the purchase notice under Section 127 was given

by the appellants which was received by the authorities on

19.3.2002. Under the second part of Section 127, the land

was either required to be acquired or steps in that regard have

to be commenced by 18.9.2002. For the first time after the

service of purchase notice, on 9.9.2002 a proposal was made

by the Improvement Committee recommending the Municipal

Corporation for sanction to initiate the acquisition

proceedings. On 13.9.2002 without there being any resolution

by the Municipal Corporation, the Chief Engineer

(Development Plan) sent an application to the State

Government for initiating the acquisition proceedings. For the

first time on 16.9.2002, a resolution was passed by the

Municipal Corporation whereby sanction was given to initiate

the acquisition proceedings of land and the Municipal

Commissioner was authorised to make an application to the

State Government and on 17.9.2002 a letter was sent by the

Chief Engineer (Development Plan) to the Secretary, Urban

Development Department, Government of Maharashtra for

initiating acquisition proceedings. Admittedly, in the present

case, the land was neither acquired nor were the steps taken

within 10 years from the date on which the final regional plan

or final development plan came into force.

18. Shri Shekhar Naphade, Senior Advocate appearing

for the State and Shri Bhim Rao Naik, Senior Advocate

appearing for the Municipal Corporation contended that the

steps were taken on 17.9.2002 when in pursuance of the

resolution passed by the Municipal Corporation of Greater

Mumbai, the Chief Engineer (Development Plan) sent a letter

to the State of Maharashtra enclosing therewith a copy of

Resolution No. 956 dated 16.9.2002, requesting that the steps

be taken for acquisition of the land and this step taken by the

respondents would constitute `steps\022 for the acquisition of the

land under clause (c) of Section 126(1) of the MRTP Act, the

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same having been taken on 17.9.2002 when the period of six

months had not expired, the same to be expired on 18.9.2002

and, therefore, the provision of de-reservation under Section

127 would not apply.

19. It is contended by Shri Soli J. Sorabjee and Shri

U.U. Lalit, learned senior counsel appearing for the appellants,

that the intent and purpose of Section 127 of the MRTP Act is

the acquisition of land within six months or the steps are

taken for acquisition of the land within six months, which

could only be when a declaration under Section 6 of the LA Act

is published in the Official Gazette. It is submitted by the

learned senior counsel that the words \023if within six months

from the date of the service of such notice, the land is not

acquired or no steps as aforesaid are commenced for its

acquisition\024 are not susceptible of a literal construction and

the words have to be given a meaning which safeguards a

citizen against arbitrary and irrational executive action which,

in fact, may not result in acquisition of the land for a long

period to come. It cannot be doubted that the period of 10

years is a long period where the land of the owner is kept in

reservation. Section 127 gives an opportunity to the owner for

de-reservation of the land if no steps are taken for acquisition

by the authorities within a period of six months in spite of

service of notice for de-reservation after the period of 10 years

has expired.

20. While interpreting the purpose of Section 127, this

Court in the matter of Municipal Corporation of Greater

Bombay v. Dr. Hakimwadi Tenants\022 Association and

Others, 1988 (Supp.) SCC 55, has said :

\02311. \005 It cannot be doubted that a period of 10

years is long enough. The Development or the

Planning Authority must take recourse to

acquisition with some amount of promptitude in

order that the compensation paid to the

expropriated owner bears a just relation to the real

value of the land as otherwise, the compensation

paid for the acquisition would be wholly illusory.

Such fetter on statutory powers is in the interest of

the general public and the conditions subject to

which they can be exercised must be strictly

followed.\024

The Court also said:

\023While the contention of learned counsel appearing

for the appellant that the words `six months from

the date of service of such notice\022 in Section 127 of

the Act were not susceptible of a literal

construction, must be accepted, it must be borne in

mind that the period of six months provided by

Section 127 upon the expiry of which the

reservation of the land under a Development Plan

lapses, is a valuable safeguard to the citizen against

arbitrary and irrational executive action. Section

127 of the Act is a fetter upon the power of eminent

domain.\024

21. Giving a plain meaning to the words used in the

statute would not be resorted to when there is a sense of

possible injustice. In such a case, the simple application of

the words in their primary and unqualified sense is not always

sufficient and will sometimes fail to carry out the manifest

intention of law-giver as collected from the statute itself and

the nature of subject-matter and the mischiefs to be remedied.

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If the plain words lead apparently to do some injustice or

absurdity and at variance with, or not required by, the scope

and object of the legislation, it would be necessary to examine

further and to test, by certain settled rules of interpretation,

what was the real and true intention of the legislature and

thereafter apply the words if they are capable of being so

applied so as to give effect to that intention. Where the plain

literal interpretation of statutory provision were to manifestly

result in injustice never intended by the legislature, the court

is entitled to modify the language used by the legislature so as

to achieve the intention of the legislature and to produce a

rational construction.

22. Where the legislature has used words in an Act

which if generally construed, must lead to palpable injustice

and consequences revolting to the mind of any reasonable

man, the court will always endeavour to place on such words a

reasonable limitation, on the ground that the legislature could

not have intended such consequence to ensue, unless the

express language in the Act or binding authority prevents

such limitation being interpolated into the Act. In construing

an Act, a construction ought not be put that would work

injustice, or even hardship or inconvenience, unless it is clear

that such was the intention of the legislature. It is also settled

that where the language of the legislature admits of two

constructions and if construction in one way would lead to

obvious injustice, the courts act upon the view that such a

result could not have been intended, unless the intention had

been manifested in express words. Out of the two

interpretations, that language of the statute should be

preferred to that interpretation which would frustrate it. It is

a cardinal rule governing the interpretation of the statutes that

when the language of the legislature admits of two

constructions, the court should not adopt the construction

which would lead to an absurdity or obvious injustice. It is

equally well settled that within two constructions that

alternative is to be chosen which would be consistent with the

smooth working of the system which the statute purported to

be regulating and that alternative is to be rejected which will

introduce uncertainty, friction or confusion with the working

of the system. [See Collector of Customs v. Digvijaysinhji

Spinning & Weaving Mills Ltd. (1962) 1 SCR 896, at page

899 and His Holiness Kesvananda Bharati v. State of

Kerala, AIR 1973 SC 1461].

23. The court must always lean to the interpretation

which is a reasonable one, and discard the literal

interpretation which does not fit in with the scheme of the Act

under consideration.

24. In series of judgments of this Court, these

exceptional situations have been provided for. In

Narashimaha Murthy v. Susheelabai, (1996) 3 SCC 644

(at page 647), it was held that:

\023\005The purpose of law is to prevent brooding

sense of injustice. It is not the words of the law but

the spirit and eternal sense of it that makes the law

meaningful\005.\024

In the case of American Home Products Corporation v.

Mac Laboratories Pvt. Ltd. and Another, AIR 1986 SC

137 (at page 166, para 66), it was held that:

\023 .. It is a well-known principle of

interpretation of statutes that a construction should

not be put upon a statutory provision which would

lead to manifest absurdity or futility, palpable

injustice, or absurd inconvenience or anomaly. \005\024

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Further, in the case of State of Punjab v. Sat Ram Das,

AIR 1959 Punj. 497, the Punjab High Court held that:

\023To avoid absurdity or incongruity,

grammatical and ordinary sense of the words can,

in certain circumstances, be avoided.\024

25. Many a times, it becomes necessary to look into the

true intention of the legislature in order to give a proper effect

to the statutory provisions and in order to achieve the actual

intended goal behind the legislation. In the case of Tirath

Singh v. Bachittar Singh and others, AIR 1955 SC 830 (at

page 833, para 7), it was held by the Court that:

\023\005Where the language of a statute, in its

ordinary meaning and grammatical construction,

leads to a manifest contradiction of the apparent

purpose of the enactment, or to some inconvenience

or absurdity, hardship or injustice, presumably not

intended, a construction may be put upon it which

modifies the meaning of the words and even the

structure of the sentence\024.

The same has been upheld by the Supreme Court in

Commissioner of Income Tax, Bangalore v. J.H. Gotla,

AIR 1985 SC 1698 and in Andhra Cotton Mills Ltd. v.

Lakshmi Ganesh Cotton Mill, (1996) 1 ALT 537 (AP).

Similarly, in the case of State of Rajasthan v. Leela Jain

and Others, AIR 1965 SC 1296 (at page 1299, para 11), it was

held that:

\023\005Unless the words are unmeaning or absurd, it

would not be in accord with any sound principle of

construction to refuse to give effect to the provisions

of a statute on the very elusive ground that to give

them their ordinary meaning leads to consequences

which are not in accord with the notions of

propriety or justice\005\024

26. Learned senior counsel appearing on both sides

have strongly relied on the decision of this Court in Municipal

Corporation of Greater Bombay v. Dr. Hakimwadi

Tenants\022 Association and Others, 1988 (Supp.) SCC 55. It

is contended by the learned senior counsel for the appellants

that the decision squarely covers the proposition of law

wherein it has been held that the development or the planning

authority must take recourse to acquisition with some amount

of promptitude in order that the compensation paid to the

expropriated owner bears a just relation to the real value of

the land; and that the period of six months provided by

Section 127 upon the expiry of which the reservation of the

land under a development plan lapses, is a valuable safeguard

to the citizens against the arbitrary and irrational executive

action. Section 127 of the Act is a fetter upon the power of

eminent domain. On the other hand, the learned senior

counsel for the State submits that if we read para 11 of the

above judgment, it is clearly held that the steps for

commencement of the acquisition obviously refer to the steps

contemplated by Section 126(1) which means the step taken of

making an application under clause (c) of Section 126(1) of the

MRTP Act and has contended that this Court had already

observed that after the service of notice from the owner or any

person interested in the land as provided under Section 127 of

the MRTP Act, the steps taken within six months of such

service, included any step taken by the appropriate authority

for the acquisition of land as contemplated under the

provisions of Section 126 (1) of the MRTP Act. It has been

further contended that such observation of this Court is

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binding as precedent.

27. At this juncture, it will be appropriate for us to refer

some of the judicial pronouncements to illustrate what

constitutes the binding precedent. This Court in Additional

District Magistrate, Jabalpur v. Shivakant Shukla,

(1976) 2 SCC 521 has observed:

\023394. \005The Earl of Halsbury, L.C. said in Quinn v.

Leathem, 1901 AC 495, 506 that the generality of

the expressions which may be found in a judgment

are not intended to be expositions of the whole law

but are governed and qualified by the particular

facts of the case in which such expressions are to

be found. This Court in the State of Orissa v.

Sudhansu Sekhar Misra, (1968) 2 SCR 154, 163,

uttered the caution that it is not a profitable task to

extract a sentence here and there from a judgment

and to build upon it because the essence of the

decision is its ratio and not every observation found

therein\005\024

474. \005when we are considering the observations of

a high judicial authority like this Court, the greatest

possible care must be taken to relate the

observations of a judge to the precise issues before

him and to confine such observations, even though

expressed in broad terms, in the general compass of

the question before him, unless he makes it clear

that he intended his remarks to have a wider ambit.

It is not possible for judges always to express their

judgments so as to exclude entirely the risk that in

some subsequent case their language may be

misapplied and any attempt at such perfection of

expression can only lead to the opposite result of

uncertainty and even obscurity as regards the case

in hand...\024

In Union of India and Others v. Dhanwanti Devi and

Others, (1996) 6 SCC 44, a three-Judge Bench of this Court

has observed as follows:

\0239. \005It is not everything said by a Judge while

giving judgment that constitutes a precedent. The

only thing in a judges\022 decision binding a party is

the principle upon which the case is decided and for

this reason it is important to analyse a decision and

isolate from it the ratio decidendi. According to the

well-settled theory of precedents, every decision

contains three basic postulates - (i) findings of

material facts, direct and inferential. An inferential

finding of facts is the inference which the Judge

draws from the direct, or perceptible facts; (ii)

statements of the principles of law applicable to the

legal problems disclosed by the facts; and (iii)

judgment based on the combined effect of the

above. A decision is only an authority for what it

actually decides. What is of the essence in a

decision is its ratio and not every observation found

therein nor what logically follows from the various

observations made in the judgment. Every judgment

must be read as applicable to the particular facts

proved, or assumed to be proved, since the

generality of the expressions which may be found

there is not intended to be exposition of the whole

law, but governed and qualified by the particular

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facts of the case in which such expressions are to

be found. It would, therefore, be not profitable to

extract a sentence here and there from the

judgment and to build upon it because the essence

of the decision is its ratio and not every observation

found therein. The enunciation of the reason or

principle on which a question before a court has

been decided is alone binding as a precedent. The

concrete decision alone is binding between the

parties to it, but it is the abstract ratio decidendi,

ascertained on a consideration of the judgment in

relation to the subject matter of the decision, which

alone has the force of law and which, when it is

clear what it was, is binding. It is only the principle

laid down in the judgment that is binding law under

Article 141 of the Constitution. A deliberate judicial

decision arrived at after hearing an argument on a

question which arises in the case or is put in issue

may constitute a precedent, no matter for what

reason, and the precedent by long recognition may

mature into rule of stare decisis. It is the rule

deductible from the application of law to the facts

and circumstances of the case which constitutes its

ratio decidendi.

10. Therefore, in order to understand and

appreciate the binding force of a decision it is

always necessary to see what were the facts in the

case in which the decision was given and what was

the point which had to be decided. No judgment can

be read as if it is a statute. A word or a clause or a

sentence in the judgment cannot be regarded as a

full exposition of law. Law cannot afford to be static

and therefore, Judges are to employ an intelligent

technique in the use of precedents\005\024

Similarly, in Director of Settlements, A.P. and Others v.

M.R. Apparao and Another, (2002) 4 SCC 638, a Bench

comprising of three Judges, has observed:

\0237. \005But what is binding is the ratio of the decision

and not any finding of facts. It is the principle found

out upon a reading of a judgment as a whole, in the

light of the questions before the Court that forms

the ratio and not any particular word or

sentence\005A judgment of the Court has to be read in

the context of questions which arose for

consideration in the case in which the judgment

was delivered. An \023obiter dictum\024 as distinguished

from a ratio decidendi is an observation by the

Court on a legal question suggested in a case before

it but not arising in such manner as to require a

decision...\024

This Court in Shin-Etsu Chemical Co. Ltd v. Aksh Optifibre

Ltd. and Another, (2005) 7 SCC 234 has observed:

\02369. \005if the court thinks that an issue does not

arise, then any observation made with regard to

such an issue would be purely obiter dictum. It is a

well-settled proposition that the ratio decidendi of a

case is the principle of law that decided the dispute

in the facts of the case and, therefore, a decision

cannot be relied upon in support of a proposition

that it did not decide. [See also: Mittal Engg.

Works (P) Ltd. v. CCE, (1997) 1 SCC 203 at p. 207

(para. 8); Jagdish Lal v. State of Haryana, (1997)

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6 SCC 538 at p. 560 (para. 17); Divisional

Controller, KSRTC v. Mahadeva Shetty, (2003) 7

SCC 197 at p. 206 (para. 23).]\005\024

28. We will now analyse that whether the observations

of the Court in Municipal Corporation of Greater Bombay

Case (supra) as extracted from paragraph 11 of that Judgment

(supra) constituted binding or authoritative precedent with

respect to the question of law arising in the present case. In

Municipal Corporation of Greater Bombay Case (supra), the

planning authority had published a draft Development Plan in

which land of a trust property was reserved for a recreation

ground. The Development Plan was finalised and sanctioned

by the State Government on 6.1.1967. The final development

scheme came into effect from 7.2.1967. Since no action had

been taken for acquisition of the land until 1.1.1977, the

owners thereof, i.e., the trustees, served a purchase notice

dated 1.7.1977 on Corporation either to acquire the same or

release it from acquisition, and the same was received on

4.7.1977. On 28.7.1977 the Corporation\022s Executive Engineer

wrote a letter to the trustees asking information regarding the

ownership of the land and the particulars of the tenants

thereof. It was also stated that the relevant date under

Section 127 of the MRTP Act would be the date upon which

such information was received. The trustees, by their lawyer\022s

letter dated 3.8.1977, conveyed that the date of six months

stipulated by Section 127 had to be computed from the date of

the receipt from them of the information required and that

Corporation could not make an inquiry at that stage without

taking a decision on the material question. The Executive

Engineer once again wrote to trustees stating that the period

of six months allowed by Section 127 would commence on

4.8.1977, i.e., the date when the requisite information was

furnished. The Corporation passed a resolution dated

10.1.1978 for the acquisition of the land and made an

application to the State Government which on being satisfied

that the land was required for a public purpose issued the

requisite notification dated 7.4.1978 under Section 6 of the LA

Act for acquisition of the land. A petition was filed before the

High Court to quash the aforementioned notification, which

was allowed by the Single Judge and subsequently maintained

by the Division Bench. The contention of the appellant

Corporation before this Court was that the period of six

months after the notice by the owner or any person interested

in the land as specified under section 127, would start from

date when such person had provided the requisite information

to the Corporation.

29. In light of the above-mentioned factual matrix, the

question of law involved in the Municipal Corporation of

Greater Bombay Case (supra) was as follows:

\0232. The short point involved in this appeal by

special leave from a judgment of a Division Bench of

the Bombay High Court dated June 18, 1986, is

whether the period of six months specified in

Section 127 of the Act is to be reckoned from the

date of service of the purchase notice dated July 1,

1977 by the owner on the Planning Authority i.e.

the Municipal Corporation of Greater Bombay here,

or the date on which the requisite information of

particulars is furnished by the owner.\024

The Court has answered the above question as follows:

\0237. According to the plain reading of Section 127 of

the Act, it is manifest that the question whether the

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reservation has lapsed due to the failure of the

Planning Authority to take any steps within a period

of six months of the date of service of the notice of

purchase as stipulated by Section 127, is a mixed

question of fact and law. It would therefore be

difficult, if not well nigh impossible, to lay down a

rule of universal application. It cannot be posited

that the period of six months would necessarily

begin to run from the date of service of a purchase

notice under Section 127 of the Act. The condition

pre-requisite for the running of time under Section

127 is the service of a valid purchase notice. It is

needless to stress that the Corporation must prima

facie be satisfied that the notice served was by the

owner of the affected land or any person interested

in the land. But, at the same time, Section 127 of

the Act does not contemplate an investigation into

title by the officers of the Planning Authority, nor

can the officers prevent the running of time if there

is a valid notice\005\024

30. Thus, after perusing the judgment in Municipal

Corporation of Greater Bombay Case (supra), we have

found that the question for consideration before the Court in

the Municipal Corporation of Greater Bombay Case (supra)

has reference to first step required to be taken by the owner

after lapse of 10 years\022 period without any step taken by the

authority for acquisition of land, whereby the owners of the

land served the notice for dereservation of the land. The Court

was not called upon to decide the case on the substantial step,

namely, the step taken by the authority within six months of

service of notice by the owners for dereservation of their land

which is second step required to be taken by the authority

after service of notice. The observations of this Court regarding

the linking of word \021aforesaid\022 from the wordings \021no steps as

aforesaid are commenced for its acquisition\022 of Section 127 with

the steps taken by the competent authority for acquisition of

land as provided under Section 126(1) of the MRTP Act, had

no direct or substantial nexus either with the factual matrix or

any of the legal issues raised before it. It is apparent that no

legal issues, either with respect to interpretation of words \021no

steps as aforesaid are commenced for its acquisition\022 as

stipulated under the provisions of Section 127 or any link of

these words with steps to be taken on service of notice, were

contended before the Court. Thus, observations of the Court

did not relate to any of the legal questions arising in the case

and, accordingly, cannot be considered as the part of ratio

decidendi. Hence, in light of the aforementioned judicial

pronouncements, which have well settled the proposition that

only the ratio decidendi can act as the binding or authoritative

precedent, it is clear that the reliance placed on mere general

observations or casual expressions of the Court, is not of

much avail to the respondents.

31. When we conjointly read Sections 126 and 127 of

the MRTP Act, it is apparent that the legislative intent is to

expeditiously acquire the land reserved under the Town

Planning Scheme and, therefore, various periods have been

prescribed for acquisition of the owner\022s property. The intent

and purpose of the provisions of Sections 126 and 127 has

been well explained in Municipal Corporation of Greater

Bombay Case (supra). If the acquisition is left for a time

immemorial in the hands of the concerned authority by simply

making an application to the State Government for acquiring

such land under the LA Act, 1894, then the authority will

simply move such an application and if no such notification is

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issued by the State Government for one year of the publication

of the draft regional plan under Section 126(2) read with

Section 6 of the LA Act, wait for the notification to be issued by

the State Government by exercising suo motu power under

sub-section (4) of Section 126; and till then no declaration

could be made under Section 127 as regards lapsing of

reservation and contemplated declaration of land being

released and available for the land owner for his utilization as

permitted under Section 127. Section 127 permitted inaction

on the part of the acquisition authorities for a period of 10

years for de-reservation of the land. Not only that, it gives a

further time for either to acquire the land or to take steps for

acquisition of the land within a period of six months from the

date of service of notice by the land owner for de-reservation.

The steps towards commencement of the acquisition in such a

situation would necessarily be the steps for acquisition and

not a step which may not result into acquisition and merely

for the purpose of seeking time so that Section 127 does not

come into operation. Providing the period of six months after

the service of notice clearly indicates the intention of the

legislature of an urgency where nothing has been done in

regard to the land reserved under the plan for a period of 10

years and the owner is deprived of the utilization of his land as

per the user permissible under the plan. When mandate is

given in a Section requiring compliance within a particular

period, the strict compliance is required thereof as

introduction of this Section is with legislative intent to balance

the power of the State of \023eminent domain\024. The State

possessed the power to take or control the property of the

owner for the benefit of public cause, but when the State so

acted, it was obliged to compensate the injured upon making

just compensation. Compensation provided to the owner is

the release of the land for keeping the land under reservation

for 10 years without taking any steps for acquisition of the

same. The underlying principle envisaged in Section 127 of

the MRTP Act is either to utilize the land for the purpose it is

reserved in the plan in a given time or let the owner utilize the

land for the purpose it is permissible under the Town Planning

Scheme. The step taken under the Section within the time

stipulated should be towards acquisition of land. It is a step

of acquisition of land and not step for acquisition of land. It is

trite that failure of authorities to take steps which result in

actual commencement of acquisition of land cannot be

permitted to defeat the purpose and object of the scheme of

acquisition under the MRTPAct by merely moving an

application requesting the Government to acquire the land,

which Government may or may not accept. Any step which

may or may not culminate in the step for acquisition cannot

be said to be a step towards acquisition.

32. It may also be noted that the legislature while

enacting Section 127 has deliberately used the word `steps\022 (in

plural and not in singular) which are required to be taken for

acquisition of the land. On construction of Section 126 which

provides for acquisition of the land under the MRTP Act, it is

apparent that the steps for acquisition of the land would be

issuance of the declaration under Section 6 of the LA Act.

Clause (c) of Section 126(1) merely provides for a mode by

which the State Government can be requested for the

acquisition of the land under Section 6 of the LA Act. The

making of an application to the State Government for

acquisition of the land would not be a step for acquisition of

the land under reservation. Sub-section (2) of Section 126

leaves it open to the State Government either to permit the

acquisition or not to permit, considering the public purpose for

which the acquisition is sought for by the authorities. Thus,

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the steps towards acquisition would really commence when

the State Government permits the acquisition and as a result

thereof publishes the declaration under Section 6 of the LA

Act.

33. The MRTP Act does not contain any reference to

Section 4 or Section 5A of the LA Act. The MRTP Act contains

the provisions relating to preparation of regional plan, the

development plan, plans for comprehensive developments,

town planning schemes and in such plans and in the

schemes, the land is reserved for public purpose. The

reservation of land for a particular purpose under the MRTP

Act is done through a complex exercise which begins with land

use map, survey, population studies and several other

complex factors. This process replaces the provisions of

Section 4 of the LA Act and the inquiry contemplated under

Section 5A of the LA Act. These provisions are purposely

excluded for the purposes of acquisition under the MRTP Act.

The acquisition commences with the publication of

declaration under Section 6 of the LA Act. The publication of

the declaration under sub-sections (2) and (4) of Section 126

read with Section 6 of the LA Act is a sine qua non for the

commencement of any proceedings for acquisition under the

MRTP Act. It is Section 6 declaration which would commence

the acquisition proceedings under the MRTP Act and would

culminate into passing of an award as provided in sub-section

(3) of Section 126 of the MRTP Act. Thus, unless and until

Section 6 declaration is issued, it cannot be said that the steps

for acquisition are commenced.

34. There is another aspect of the matter. If we read

Section 126 of the MRTP Act and the words used therein are

given the verbatim meaning, then the steps commenced for

acquisition of the land would not include making of an

application under Section 126(1)(c) or the declaration which is

to be made by the State Government under sub-section (2) of

Section 126 of the MRTP Act.

35. On a conjoint reading of sub-sections (1), (2) and (4)

of Section 126, we notice that Section 126 provides for

different steps which are to be taken by the authorities for

acquisition of the land in different eventualities and within a

particular time span. Steps taken for acquisition of the land

by the authorities under clause (c) of Section 126(1) have to be

culminated into Section 6 declaration under the LA Act for

acquisition of the land in the Official Gazette, within a period

of one year under the proviso to sub-section (2) of Section

126. If no such declaration is made within the time

prescribed, no declaration under Section 6 of the LA Act could

be issued under the proviso to sub-section (2) and no further

steps for acquisition of the land could be taken in pursuance

of the application moved to the State Government by the

planning authority or other authority. Proviso to sub-section

(2) of Section 126 prohibits publication of the declaration after

the expiry of one year from the date of publication of draft

regional plan, development plan or any other plan or scheme.

Thus, from the date of publication of the draft regional plan,

within one year an application has to be moved under clause

(c) of Section 126(1) which should culminate into a declaration

under Section 6 of the LA Act. As per the proviso to sub-

section (2) of Section 126, the maximum period permitted

between the publication of a draft regional plan and

declaration by the Government in the Official Gazette under

Section 126(2) is one year. In other words, during one year of

the publication of the draft regional plan, two steps need to be

completed, namely, (i) application by the appropriate authority

to the State Government under Section 126(1)(c); and (ii)

declaration by the State Government on receipt of the

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application mentioned in clause (c) of Section 126(1) on

satisfaction of the conditions specified under Section 126(2).

The only exception to this provision has been given under

Section 126(4). In the present case, the amended regional

plan was published in the year 1991. Thereafter, the steps by

making an application under clause (c) of sub-section (1) of

Section 126 for issuance of the declaration of acquisition and

the declaration itself has to be made within the period of one

year from the date of the publication of regional plan, that is,

within the period of one year from 1991. The application

under Section 126(1)(c) could be said to be a step taken for

acquisition of the land if such application is moved within the

period of one year from the date of publication of regional

plan. The application moved after the expiry of one year could

not result in the publication of declaration in the manner

provided under Section 6 of the LA Act, under sub-section (2)

of Section 126 of the MRTP Act, there being a prohibition

under the proviso to issue such declaration after one year.

Therefore, by no stretch of imagination, the step taken by the

Municipal Corporation under Section 126(1)(c) of making an

application could be said to be a step for the commencement

of acquisition of the land. After the expiry of one year, it is left

to the Government concerned under sub-section (4) of Section

126 to issue declaration under Section 6 of the LA Act for the

purposes of acquisition for which no application is required

under Section 126(1)(c). Sub-section (4) of Section 126 of the

MRTP Act would come into operation if the State Government

is of the view that the land is required to be acquired for any

public purpose.

36. The High Court has committed an apparent error

when it held that the steps taken by the respondent-

Corporation on 9.9.2002 and 13.9.2002 would constitute

steps as required under Section 126(1)(c) of the MRTP Act.

What is required under Section 126(1)(c) is that the

application is to be moved to the State Government for

acquiring the land under the LA Act by the planning/local

authority. Passing of a resolution by the Improvement

Committee recommending that the steps be taken under

Section 126(1)(c) or making an application by the Chief

Engineer without there being any authority or resolution

passed by the Municipal Corporation, could not be taken to be

steps taken of moving an application before the State

Government for acquiring the land under the LA Act. The

High Court has committed an apparent error in relying on

these two documents for reaching the conclusion that the

steps for acquisition had been commenced by the Municipal

Corporation before the expiry of period of six months which

was to expire on 18.9.2002. Further, if we look at the letter

dated 17.9.2002 which, as per the counsel for the respondent-

Corporation, is a request made by the Municipal Corporation

to the State Government under clause (c) of Section 126(1), we

cannot agree with the submissions of the respondents. The

letter itself shows that the resolution was passed by the

Municipal Corporation on 16.9.2002 whereby it was informed

that the sanction had been accorded to initiate the acquisition

proceedings for the land in question. The letter also

mentioned that the authorization had been given to the

Municipal Commissioner to make an application to the State

Government as per the provisions of Section 126(1) of the

MRTP Act. Under Section 2(19) read with Section 2(15) with

Section 126(1) of the MRTP Act, the application to the State

Government under clause (c) of Section 126(1) has to be made

by the planning/local authority, i.e. the Municipal

Corporation of Greater Mumbai constituted under the Bombay

Municipal Corporation Act. The Municipal Corporation had

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passed a resolution delegating authority to Municipal

Commissioner for making an application to the State

Government, but the application/letter either dated 13.9.2002

or 17.9.2002 were made to the State Government by the Chief

Engineer (Development Plan). The authority was given by the

Municipal Corporation to the Municipal Commissioner to

make an application to the State Government. No such

application or letter moved by the Municipal Commissioner

has been produced before us. On being asked by this Court,

as many as six documents have been produced before us by

the counsel for the Municipal Corporation who has stated

before us that these documents were also placed before the

Division Bench of the Bombay High Court. Therefore, we have

permitted production of these documents before us. On a

minute and careful scrutiny of the documents produced before

us, we do not find that the application under clause (c) of

Section 126(1) was moved by the officer authorized by the

Municipal Corporation, i.e. the Municipal Commissioner, to

the State Government for acquisition of the land, so that it

could be said that steps as contemplated were taken for the

commencement of acquisition proceedings.

37. In view of our decision on the interpretation and

applicability of Section 127 of the MRTP Act to the facts of the

present case, the appellants are entitled to the relief claimed,

and the other question argued on the applicability of the newly

inserted Section 11A of the LA Act to the acquisition of land

made under the MRTP Act need not require to be considered

by us in this case.

38. For the aforesaid reasons, the impugned judgment

and order dated 18.3.2005 passed by the Division Bench of

the Bombay High Court is set aside and this appeal is allowed.

As no steps have been taken by the Municipal Corporation for

acquisition of the land within the time period, there is deemed

de-reservation of the land in question and the appellants are

permitted to utilise the land as permissible under Section 127

of the MRTP Act.