Supreme Court of India
Satellite Developers Ltd vs The State Of Maharashtra & Ors on 27 April, 2017Author: A Sikri

Bench: A.K. Sikri, Abhay Manohar Sapre







This appeal has a chequered history with many rounds of
litigations. At the same time, it may not be necessary to take a detailed
stock of various litigations. It is simply because of the reason that the
controversy is substantially narrowed down, which we are called upon to
decide in these proceedings. However, a glimpse of the events that have
taken place since the start of the dispute may be spelled out in order to
have an idea of the nature of the dispute that had initially arisen and how
the controversy has remarkably shrunk and stands before us in a totally
truncated form. The short list of dates and event, therefore, would
suffice, which we reproduce below:

On September 16, 1991, the appellant claimed rights over the property being
C.S. No. 1/255 on Foras Road, Tardeo Division, Mumbai, admeasuring 10,394
sq.mts. Under the Maharashtra Regional and Town Planning Act, 1966
(hereinafter referred to as the ‘MRTP’ Act), the Municipal Corporation of
Greater Bombay can requisition the land for development for the purposes
specified under the said Act. In respect of the aforesaid land, a Draft
Development Plan (DDP) was prepared by the Municipal Corporation in the
year 1991. Under the said Plan, 3548.52 sq.mts. of land was reserved for
recreation ground, 1355 sq.mts for maternity home and 5491.4 sq.mts. for
housing the dishoused. However, later the reservation for recreation
ground was reduced to 2000 sq.mts. The MRTP Act further provides for
acquisition of such land, by agreement or under the Land Acquisition Act,
1894 in order to enable the Municipal Corporation to develop the land as
per the DDP. If the steps in this behalf are not taken within the
stipulated period, it results into lapsing of the land reserved for
development. This was so provided under Section 127 of the MRTP Act, which
reads as under:
“127. Lapsing of reservation: 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 (1 of 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

On February 06, 2003, the appellant served upon the respondent Corporation
a purchase notice under Section 127 of the MRTP Act and called upon the
Corporation to initiate acquisition proceedings in respect of land reserved
for recreational ground. On February 27, 2004, Notification under Section
6 of the Land Acquisition Act, 1894, read with Section 126 of the MRTP Act
was issued by respondent No.1. On June 21, 2006, by notice under Sections
9 and 10 of the Land Acquisition Act, respondent No.4 called upon the
appellant to furnish details required as per the notice issued and also to
record objections in respect of measurement of the subject land. On
September 22, 2006, the appellants gave their No Objection for handing over
the subject land against monetary compensation. On April 22, 2010, the
appellant filed Writ Petition No. 1184 of 2010 wherein a prayer is made for
a declaration of lapsing of the reservation. The appellant, however, also
prayed for an alternative order in the nature of a direction to the
respondents to acquire the land.

On July 21, 2010, the High Court disposed of the writ petition directing
respondent No.4 to pass the final award within a month and granted liberty
to the appellant to revive the writ petition in case of non-compliance by
respondent No.4. It may be mentioned herein that the appellant had made a
statement that it will not press prayer (a) in the writ petition for de-
reservation of the subject land. The operative portion of the order of the
High Court in this behalf reads as under:
“4. We, therefore, dispose of the petition with a direction that
respondent No.4 shall pass the award on or before 31st October, 2010 and
make payment of compensation in accordance with the award within a month

5. In case the respondent No.4 does not comply with the aforesaid time
limit, the petitioner will be at liberty to move this Court for appropriate
directions. Liberty is also granted to the petitioner to revive the
petition. This direction is given in view of the assurance from the
petitioner’s Counsel that petitioners will furnish the required documents
to the authorities within reasonable time limit.”

Thereafter, on October 25, 2010, the High Court extended the time for
passing of the award by respondent No.4 till December 31, 2010 and further
extended the time to pay the compensation to January 31, 2011. On March
31, 2011, the Municipal Corporation sought further three months time to
comply with the above-mentioned order dated July 21, 2010. The High Court
directed that 50% of the award amount be deposited in the Court.
Respondent No.3 had signed an award on October 31, 2011 for 2000.25 sq.mts.
of land to be acquired. The final compensation as per the award is
Rs.14,48,19,014/- and proper documents were required to be submitted.

On July 17, 2012, the appellant filed another writ petition bearing No.
1600 of 2012 with a prayer to quash the award dated October 31, 2011 passed
by respondent No.4 on the ground that the appellant was never called on
before signing of the award and neither was the compensation amount paid by
the Municipal Corporation to respondent No.3 as per the provisions of the
Land Acquisition Act. Significantly, the appellant, apart from seeking
orders of quashing of the award and de-reservation of the subject land,
again sought to be compensated in terms of the Award. In spite of repeated
extensions sought by the Municipal Corporation, it failed to pay the
compensation to the appellant, as directed by the High Court by its order
dated July 21, 2010.

Writ Petition No. 1184 of 2010 was finally heard and decided on May 08,
2013. The High Court, after narrating the aforesaid events, found that the
respondents did not act with due diligence, even after service of notice
upon them under Section 127 of the Act. At the same time, the High Court
was of the view that since the remedy under Article 226 of the Constitution
of India was in the nature of prerogative remedy and the extraordinary
jurisdiction of the High Court was purely discretionary, in the facts of
the present case, it was not necessary to exercise the jurisdiction under
Article 226 of the Constitution. The High Court, therefore, refused to
grant prayer (a) based on notice dated February 06, 2003 given by the
appellant to the respondents under Section 127 of the MRTP Act. In the
process, the High Court observed that the appellant had waived the effect
of its notice under Section 127 inasmuch as it was regularly following up
with the respondents to complete the acquisition proceedings and claim
compensation against the same. The High Court has also held that as Writ
Petition No. 1600 of 2010 was pending, the question regarding validity of
the award can be argued therein.

The present appeals were filed questioning the validity of the aforesaid
judgment dated May 08, 2013 passed by the High Court. The matter was taken
up from time to time. As pointed out in the beginning, since the
controversy has been narrowed down, because of the positive attitude shown
by both the parties, it is not necessary to discuss the legal nuances.

The Municipal Corporation has placed on record the Notification dated May
10, 2016 issued by the Urban Development Department of the Government of
Maharashtra. It has offered to settle the matter on the terms contained in
the said Notification. This Notification provides for a 70/30 policy
whereby the Chief Officer may allow the owner to develop the reservation on
70% of the land and after handing over it to the planning authority free of
cost then remaining 30% land may be allowed to be developed as per
adjoining use, subject to the following terms/conditions:
The owner shall be entitled to develop remaining 30% land for the uses
permissible in adjoining zone with full permissible FSI of the entire plot
and permissible TDR potential of the entire plot.
The Municipal Chief Officer, if required, shall allow the TDR for the
unutilised FSI if any (after deducting in-situ FSI as mentioned in
Sr.No.(i) above) which shall be utilised as per the TDR utilisation
No reservation shall allow to be developed partly.

Time was given to the appellant to respond to the said suggestion. The
appellant, while maintaining that the DDP had lapsed in view of the
provisions contained in Section 127 of the Act, responded to the aforesaid
proposal of the Municipal Corporation vide it is letter dated December 26,
2016 by stating that the appellant was ready to consider developing 40% of
the plot as a Recreation Garden for the city at their own cost if 60% of
the balance plot is available to it for development, subject to two
conditions, viz., (i) as per MCGM policy, 100% of FSI/ development
potential of the entire plot is allowed to be constructed on the 60%; and
(ii) any open space deficiency in the planning of the building thereon be
condoned without payment of any premium therefor.

When the matter was heard, both the parties were agreeable to resolve the
dispute, but pressed their respective stance. The appellant submitted that
the proposal quoted in its letter dated December 26, 2016 be accepted,
whereas the Municipal Corporation impressed upon this Court to dispose of
the matter in terms of Notification dated May 10, 2016. While taking their
respective positions in the manner aforesaid, Mr. Sidharth Luthra, learned
senior counsel appearing for the appellant, and Mr. Mukul Rohatgi, learned
Attorney General appearing for the Municipal Corporation, agreed that they
would leave it to the Court to take any appropriate and suitable decision
in the matter.

We have considered the matter. Strictly speaking, the Policy is not
applicable in the instant case. However, both the parties want that to be
the basis for resolving the controversy. For this reason, the appellant is
not pressing its challenge predicated on Section 127 of the MRTP Act.
However, at the same time, it wants some modification of policy terms in
its favour. This constructive approach of both the parties commends to us.
Having regard to the peculiar facts of this case and that the Municipal
Corporation has defaulted in certain respects, we are of the view that ends
of justice would be sub-served if we allow the owner/ appellant to develop
the reservation of 60% of land and after handing over it to the Planning
Authority free of cost, then remaining 40% land is allowed to be developed
as per the adjoining use, subject to the conditions that are mentioned in
the Policy dated May 02, 2016.

This order is passed in exercise of our powers under Article 142 of the
Constitution and without treating this as a precedent. It may not be
considered as tweaking with the Policy as the same is, otherwise, not
applicable. That is taken as a yardstick for resolving the dispute as both
the parties agreed for it. We also make it clear that the appellant would
not be called upon to pay any penalties and the award passed in the case
would not come in the way of the parties.

The civil appeal is disposed of in the aforesaid terms.
No costs.


APRIL 27, 2017.


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