REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3008-3009 OF 2010
PUNE MUNICIPAL CORPORATION & ANR.... APPELLANT (S)
VERSUS
KAUSARBAG COOP. HOUSING SOCIETY... RESPONDENT (S)
LTD. & ANR.
WITH
CIVIL APPEAL NO. 4580 OF 2010
J U D G M E N T
RANJAN GOGOI, J.
The controversy in the present appeals arises out of the claim of the
respondent-writ petitioner, a housing society, to Transferrable Development
Rights (TDR) under the relevant Development Control Regulations (DCR) i.e.
N-2.4 framed under the Maharashtra Regional and Town Planning Act, 1966
(for short “the MRTP Act”). The said claim has been resisted and rejected
by the Pune Municipal Corporation and the State of Maharashtra, the two
appellants in the appeals under consideration, on the ground that the land
in question was not reserved for a public purpose in the development plan
prepared under the MRTP Act and being shown as an existing garden therein,
the claim to TDR has no legal basis. There are additional grounds for the
rejection, details whereof will be, noticed in the course of the narration
to be made hereinafter. The land in question measured about 3.5 acres and
was covered by Survey No.12 (Part) located at Kohdhava Khurd, Pune. The
view of the High Court being in favour of the respondent (writ petitioner)
society, the Pune Municipal Corporation and the State of Maharashtra have
filed the two appeals in question.
The core fact that emerges from the multitude of collaterals and the
exhaustive pleadings of the parties is that the land in question was shown
by the respondent Society itself in the lay out plan submitted by it to the
Pune Municipal Corporation, as reserved for garden. Acquisition of the said
land was initiated in the year 1982 (28.01.1982) under the provisions of
the Land Acquisition Act, 1894 and the same was completed in the year 1987
whereafter possession of the land was taken over on 19.02.1987. In the
draft development plan dated 15.09.1982 that was prepared and published
under the provisions of the MRTP Act, which was subsequently approved and
sanctioned on 05.01.1987, the land was shown as an existing garden. The
close proximity of time between the two parallel process is too significant
to be overlooked. While according to the respondent-writ petitioner the
stage and the manner of the inclusion of the land in the development plan
is of no consequence to the issue arising i.e. entitlement to TDR, the
State contends that the land was acquired under a non-development plan
proposal which would not attract the provisions of the MRTP Act.
The High Court took the view that it cannot be understood as to how there
can be a difference between land “which was part of a development plan
reserved by the Government or a part of the development plan submitted by
the petitioner in which the land in question was shown as a garden”. Laying
emphasis on the relevant DCR i.e. N-2.4.17(ii), the High
Court took the view that no such distinction is disclosed therein and going
by the language of the DCR the respondent Society was entitled to TDR as
compensation for the land was not received by it. The High Court also
noticed the various communications brought on record by the respondent-writ
petitioner to show that, at different stages, the authorities of the
Municipal Corporation as well as those of the State of Maharashtra had
unequivocally indicated the entitlement of the respondent-writ petitioner
to Transferable Development Rights. The High Court also held that the
directions contained in Government Order dated 03.02.2007 to be contrary to
DCR N-.2.4.17 which is an instance of exercise of statutory powers under
the MRTP Act. The said G.O. dated 03.02.2007 had excluded the entitlement
to Transferable Development Rights once an award had been made and
possession of the land had been delivered as in the present case.
We have heard Shri V.A. Mohta, learned senior counsel and Shri Aniruddha P.
Mayee, learned counsel appearing for the appellants and Shri Vinod Bobde
and Shri Shekhar Naphade, learned senior counsels appearing on behalf of
the respondents.
Assailing the order of the High Court, it is contended on behalf of the
appellants that under Section 126 of the MRTP Act grant of TDR against land
acquired under the Land Acquisition Act is not contemplated and grant of
TDR is permissible only when the land is acquired by agreement and it is
further agreed that in lieu of compensation, TDR will be granted and
accepted. It is argued that grant of TDR is a matter of agreement between
the acquiring authority and the land owner and the authority cannot be
directed to grant TDR if it is not so willing asmuch as a land owner cannot
be compelled to accept TDR in the event he opts to accept compensation for
the land acquired. The concept of TDR was brought in by an amendment to
the MRTP Act in the year 1993 whereas the award for acquisition of the land
of the respondent society was passed in the year 1987 and possession
thereof was taken over on 21.2.1987. It is contended that the respondent
society whose land was acquired under the Land Acquisition Act is entitled
to compensation calculated on the market value of the land as on the date
of the Notification under Section 4 of the Land Acquisition Act which was
published in the year 1982. The value of the benefit, if TDR is to be
granted at the present stage, would be grossly disproportionate. Pointing
out the provisions of the Development Control Regulations governing grant
of TDR, it is contended that DCR N-.2.4.1(A) and 2.4.17 are required to be
read harmoniously and not in isolation as has been done by the High Court.
Before DCR N-.2.4.17 can be made applicable, the conditions spelt out under
DCR N-. 2.4.1(A) has to be satisfied, namely, that the land should have
been shown as reserved for a public purpose in the development plan. It is
pointed out that in the present case it was not so done and the land was,
in fact, shown as an existing garden. Therefore, DCR N-.2.4.1(A) is not
applicable thereby ruling out the application of DCR No.2.4.17. It is also
pointed out that the land was acquired under the provisions of the Land
Acquisition Act under a non-development plan proposal to which acquisition
the provisions of Section 126 of the MRTP Act will have no application. In
so far as the G.O. dated 03.02.2007 under Section 154 of the MRTP Act is
concerned, the appellants contend that the said G.O. dated 03.02.2007 is no
way amends DCR No.2.4.17 as held by the High Court; rather the said
directions are merely clarificatory and were issued due to large scale
deviations that have taken place in the matter of grant of TDR.
Opposing the aforesaid contentions advanced on behalf of the appellants,
Shri Vinod Bobde and Shri Shekhar Naphade, learned senior counsels
appearing on behalf of the respondent - cooperative housing society in the
two separate appeals have submitted that the object of the amendment made
in the year 1993 (14.10.1993) introducing the concept of TDR was to lessen
the financial burden of the State facing the prospect of making payment of
huge compensation money for acquisition of land in connection with the
Development Plan. Learned counsels have pointed out that in the present
case the land was eventually included in the development plan prepared and
approved under the MRTP Act. The manner of inclusion in the development
plan i.e. as an existing garden or as reserved for a garden would not make
any difference to the claim of TDR. It is argued that, though offered, the
respondent had not accepted any compensation and, in fact, had agitated for
higher compensation under Section 18 of the Land Acquisition Act. While
the matter was so pending the concept of TDR came to be introduced in the
Act and in the year 1997 (05.06.1997) the modified DCR N-2.4 was
introduced. The respondent society abandoned the reference made by it for
higher compensation and initiated proceedings challenging the acquisition.
After the said challenge was negatived, the respondent society, in the
year 2003, lodged a claim for grant of TDR under DCR N-2.4.17 (ii) which
though initially was responded favourably was eventually rejected by
placing reliance on the Government Order dated 03.02.2007. It is further
contended that DCR N-.2.4.17 is a stand alone provision and under
clause (ii) of the said DCR the respondent society is entitled to its claim
of TDR under the MRTP Act though the land had been acquired under Land
Acquisition Act. In this regard, it has been specifically pointed out that
possession of the land was taken from the society in the year 1987 which is
within 12 years prior to 30th September, 1993 as contemplated in DCR N-
2.4.17 (ii). Admittedly, no compensation has been received. It is further
submitted that the Government Order dated 03.02.2007 purports to amend the
DCR which cannot be so done without following the procedure prescribed
under Section 37 of the MRTP Act. The fact that in similar circumstances
TDR had been granted to other land owners has also been pointed out by the
learned counsels appearing on behalf of the respondent housing society.
In so far as the provisions of Section 126(1) (a) (b) and (c) of the MRTP
Act is concerned, Shri Vinod Bobde, learned counsel appearing for the
respondent society in C.A. No.3008-3009 of 2010 has submitted that the
availability of TDR to cases of land acquired under the Land Acquisition
Act after invoking the provisions of Section 126(1) (c) of the MRTP Act
will not be open to be raised either by the State or the Municipal
Corporation once the DCR, particularly DCR N-2.4.17 (ii), had been enacted
and brought into force to confer Transferrable Development Rights for land
acquired under the provisions of the aforesaid Section 126(1) (c) of the
Act by following the process laid down in the Land Acquisition Act. Shri
Bobde has pointed out that once Regulations have been framed contemplating
grant of TDR to such land subjected to acquisition under Section 126
(1)(c), the Government cannot turn around and refuse to be bound by its own
norms much less challenge the same. It is further pointed out by Shri
Bobde that any such plea on the part of the State is not competent in law
and the State cannot seek a decision on the validity of its self professed
norms of governance. So long as the DCR remains its full legal effect must
be given effect to.
As the issues raised before us will have to be answered on the basis of the
true and correct purport and effect of the relevant provisions of the MRTP
Act; those of the Development Control Regulation i.e. DCR N-2.4.1(A) and
2.4.17; and the Government Order dated 03.02.2007, the same may be
extracted at the first instance.
Relevant provisions of the MRTP Act
“22. Contents of Development Plan -
A Development plan shall generally indicate the manner in which the
use of land in the area of the Planning Authority shall be regulated, and
also indicate the manner in which the development of land therein shall be
carried out. In particular, it shall provide so far as may be necessary for
all or any of the following matters, that is to say,-
(a)…………..
(b)………....
(c)………….
(d)……………
(e)……………
(f)……………..
(g)……………..
(h)……………..
(i)…………….
(j)………………
(k)……………….
(l)………………….
(m) - provisions for permission to be granted for controlling and
regulating the use and development of land within the jurisdiction of a
local authority including imposition of fees, charges and premium, at such
rate as may be fixed by the State Government or the Planning Authority,
from time to time, for grant of an additional Floor Space Index or for the
special permissions or for the use of discretionary powers under the
relevant Development Control Regulations, and also for imposition of
conditions and restrictions in regard to the open space to be maintained
about buildings, the percentage of building area for a plot, the location,
number, size, height, number of storeys and character of buildings and
density of population allowed in a specified area, the use and purposes to
which buildings or specified areas of land may or may not be appropriated,
the sub-division of plots the discontinuance of objectionable users of land
in any area in reasonable periods, parking space and loading and unloading
space for any building and the sizes of projections and advertisement signs
and boardings and other matters as may be considered necessary for carrying
out the objects of this Act.”
“Section 126. 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 113-A,/ acquire the land –
(a) by an agreement by paying an amount agreed to or,
(b) in lieu of any such amount, by granting the land-owner or the leasee,
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 this 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.
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 or Transferable Development Rights under this
Section or under the Land Acquisition Act, 1894, as the case may be, shall
vest in the Planning Authority, Development Authority, or as the case may
be, any Appellate Authority.”
Government Order dated 03.02.2007
“Maharashtra Regional & Town
Planning Act, 1966
Directive under Section 154
About TDR.
GOVERNMENT OF MAHARASHTGRA
URBAN DEVELOPMENT DEPARTMENT
MANTRALAYA, MUMBAI – 400 032.
DATED 3rd FEBRUARY, 2007.
ORDER
No. TPS/Sankirna-06/CR-527/06/UD-13:- Whereas the provision of Transferable
Development Rights (hereinafter referred to as “the said TDR”) has been
incorporated in the sanctioned Development Control Regulations (hereinafter
referred to as “the said DCR”) with a view to reduce the financial burden
of acquisition of lands reserved for public purposes in the Development
Plan and for early possession of these lands:
And whereas, sanctioned Development Control Regulations of some
Municipal Corporations contain the provision of rules regarding the said
TDR;
And whereas, sanctioned the said DCR of some Municipal Corporations
also have provision to grant the said TDR for the lands acquired either
under Maharashtra Regional& Town Planning Act, 1966 (hereinafter referred
to as “the said Act”), Bombay Provincial Municipal Corporation Act, Private
Negotiation or any other Act and possession of which has already been
delivered to the Municipal Corporation;
And whereas, it has come to the notice of Government that the rule
regarding the grant of TDR such acquired lands have been misinterpreted and
misused;
And whereas, once the possession is delivered after acquisition the
rights of the owner are transferred to the Planning Authority and the
application by the land owner demanding TDR thereafter can be said to be
made without having any rights in the land;
After considering the facts and circumstances referred to above, in
exercise of the powers conferred under Section 154 of the said Act,
Government is pleased to issue directives to all the Municipal Corporations
as follows:
DIRECTIONS
All the Municipal Corporations which have the provisions regarding
grant of Transferable Development Rights (TDR) for the lands which are
acquired under either the MRTP Act, BPMC Act, Private Negotiation or any
other Act shall initiate modification proposal after following procedure
laid down under Section 37 of the said Act so as to replace the provisions
of this regard by new rules as follows:
NEW RULES:
1) Transferable Development Rights (TDR) shall not be permissible once
an award has been declared under the acquisition process and or the
possession has already been delivered to the Municipal Corporation under
any Act.
2) Municipal Corporation shall punish a notice inviting suggestions and
or objections regarding the modification within sixty days from the date of
issue of this order.
3) After completing the procedure laid down under Section 37(1) of the
said Act Municipal Corporation shall submit the said modification proposal
to the Government for final sanction.
4) Pending the approval to the aforesaid modification the new rule
mentioned hereinabove shall come into force with effect from the date of
issue of this notification.
By order and in the name of
Governor of Maharashtra.
Sd/-
(Nandkishor Patil)
Under Secretary to Government”
Development Control Regulation
“N.2.4.1 (A). The owner (or lessee) of a plot of land which is reserved for
a public purpose, or road construction or road widening in the development
plan and for additional amenities deemed to be reservations provided in
accordance with these Regulations, excepting in the case of an existing or
retention user or to any required compulsory or recreational open space,
shall be eligible for the word of transferable Development Rights (TDRs) in
the form of Floor Space Index (FSI) to the extent and on the condition set
out below. Such award will entitle the owner of the land, to FSI in the
form of a Development Right Certificate (DRC) which be (sic. he) may
use for himself or transfer to any other person.
N-2.4.17. Grant of TDR in cases where lands are under acquisition:
(i) Where Land Acquisition has been declared but request was made for TDR
to the Special Land Acquisition Officer after 30th September 1993 i.e. the
date of publication of these draft Development Control Regulation
containing TDR concept.
(ii) Possession of the land has been delivered without having received
part or full compensation under either the Maharashtra and Town Planning
Act, Bombay Provincial Municipal Corporation Act, private negotiation or
under any Act for the time being in force within 12 years prior to 30th
September 1993.”
9. Though there is some controversy on the basic facts, there is also
unanimity to show that the acquisition of the land belonging to the
respondent society was initiated by notification dated 28.01.1982 issued
under Section 4 of the Land Acquisition Act, 1894. It is also clear that
on completion of enquiry under Section 5-A of the Land Acquisition Act,
declaration under Section 6 was published on 2.1.1985. Some further facts
on which there is no dispute and therefore would require to be taken note
of, are that the draft revised development plan which was published on
18.9.1982 showed the land as an existing garden and in the final
development plan which was sanctioned on 5.1.1987, the land was again shown
as “existing garden as per approved layout”. The respondent-writ
petitioner, however, contends that the description of the land as an
existing garden is wrong and what should have been mentioned in the
development plan is that the land was proposed for a garden as possession
of the same was still with the respondent-society on the date of
publication of the final development plan i.e. 5.1.1987. Possession of the
land, as noticed, was taken over on 18.2.1987 whereas the award under the
Land Acquisition Act was made on 22.01.1987.
10. Having considered the matter we are of the view that it will not be
necessary for us to consider the aforesaid perspective highlighted by the
respondent society as the controversy over the entitlement to TDR under the
relevant DCR is capable of being resolved on a wholly different basis to
which aspect of the matter we may now turn.
11. The concept of TDR was introduced for the first time in the MRTP Act
in the year 1993 by an amendment of Section 126(1)(a), (b) and (c) of the
MRTP Act. The modalities for grant of TDR were brought into force by the
amended Development Control Regulation (for short ‘DCR’) N-2.4 with effect
from 5.6.1997. In its simplest form, the concept of TDR involves the
surrender of land reserved for various public purposes in the development
plan free of cost and in exchange thereof grant of TDR entitling the holder
thereof to construct a built up area equivalent to the permissible FSI of
the land handed over by him on one or more plots in the zone specified.
Such rights are transferable. The object behind introduction of TDR, as
admitted by the Pune Municipal Corporation in its various publications, was
to meet the situation faced by the Corporation on being called upon to make
payment of over Rs.1500 crores to take over different sites measuring about
600 hectares which had been reserved for different public purposes in the
development plan.
12. Strictly construed it is the provisions of the Section 126 (1)(a)
read with (b) of the MRTP Act, extracted earlier, which contemplate grant
of TDR and that too only against land acquired by agreement as
distinguished from land which is acquired under the Land Acquisition Act in
exercise of powers under Section 126(1)(c). The latter kind of acquisition
i.e. under the Land Acquisition Act by invoking Section 126(1)(c) of the
MRTP Act however stands on a footing that is different and distinguishable
from the normal process of acquisition under the same Act i.e. the Land
Acquisition Act. This is because in an acquisition under the Land
Acquisition Act made in exercise of power under section 126(1)(c) of the
MRTP Act, the provisions of Section 4 and Section 5A of the L.A. Act are
dispensed with and straightway a notification under Section 6 is to be
issued. The market value of the land, though sought to be acquired under
the Land Acquisition Act, is pegged to the date of publication of the
interim or draft development plan, as may be, and not to the date of
publication of the notification under Section 4 of the Land Acquisition
Act. The above is a subtle but vital difference between the ordinary and
‘normal’ process of acquisition under the Land Acquisition Act and the
process of acquisition under the same Act but in exercise of powers under
Section 126(1)(c) of the MRTP Act that needs to be kept in mind.
13. DCR N-2.4.1(A) gives effect to the provisions of Section 126(1)(a)
and (b) brought in by the amendment to the MRTP Act in 1993. It entitles
the owner or a lessee of a plot of land, which is reserved for a public
purpose in the development plan, to the award of TDR in lieu of
compensation upon surrender of the land free of cost. If, DCR No.N-2.4 had
not contemplated any further situations for grant of TDR the argument
advanced on behalf of the appellants would have merited serious
consideration. However, DCR N-2.4.17, extracted above, contemplates two
other situations for grant of TDR. Under DCR N-2.4.17(ii) in situations
where possession of land had been delivered without receipt of part or full
compensation payable under the MRTP Act, Bombay Provincial Municipal
Corporation Act, private negotiations or under any Act and such event had
occurred within 12 years prior to 30.9.1993 (date of publication of the
draft DCR containing the TDR concept) claims for grant of TDR are required
to be entertained. DCR N-2.4.17 extends the frontiers outlined under
Section 126(1)(a) and (c) and makes the grant of TDR applicable to an
extended class of cases wherein acquisition of land is made not only under
the MRTP Act but also under other enactments including the L.A. Act. Such
an extension appears to be in consonance with the object behind the
introduction of the concept of TDR by the amendment of the MRTP Act of
1993. Having regard to the clear language contained in DCR N-2.4.17(ii)
and the object sought to be achieved by the introduction of TDR, we do not
see as to how grant of TDR can be confined only to cases of lands which
have been reserved in the development plan and not to lands acquired under
the Land Acquisition Act which land eventually becomes a part of the
finally approved and sanctioned development plan. The above would also
lead to the conclusion that DCR N-2.4.17 is capable of operating
independently and is not contingent on the existence of the conditions
mentioned in DRC N-2.4.1(A).
14. The matter needs to be viewed from another perspective. The difference
between acquisition under the L.A. Act by resort to the provisions of
Section 126(1)(c) of the MRTP Act and acquisition dehors the said provision
of the MRTP Act has already been noted. If under DCR N-2.4.17, TDR can be
granted in cases of acquisition under the MRTP Act obviously acquisition
under the LA Act upon invocation of Section 126(1)(c) would be included.
In such a situation, reference to any other Act in DCR N-2.4.17 would
include the L.A. Act so as to bring land covered by the normal process of
acquisitions under the L.A. Act within the fold of DCR N-2.4.17. The
acquisition of the land belonging to the respondent society would,
therefore, be clearly covered by the provisions of DCR N-2.4.17.
15. “Making of DCR or amendments thereof are legislative functions.”[1]
The Government Order dated 3.2.2007, though claimed to be clarificatory by
the appellants, really, seeks to prohibit the grant of DCR under DCR N-
2.4.17 so far as lands in respect of which Award under the Land Acquisition
Act had been passed or possession of which has been taken over. This is
contrary to the clear intent behind DCR N-2.4.17. The Government Order
itself acknowledges the necessity of following the procedure prescribed by
Section 37 of the MRTP Act before the aforesaid modification could become
effective. Yet, surprisingly the Government Order goes on to state that,
“Pending approval of the aforesaid modification the new rule mentioned
hereinabove shall come into force with effect from the date of issue of
this notification”. The Government Order in question, having been issued
under Section 154 of the MRTP Act, therefore, cannot override the DCR N-
2.4.17 as the directions under Section 154 of the MRTP Act would be in the
nature of administrative instructions (Laxminarayan R. Bhattad and Others
Vs. State of Maharashtra and Another[2]). Admittedly, at the relevant
point of time, the requisite process under Section 37 of the MRTP Act had
not been completed.
16. Underlying the arguments advanced on behalf of the appellants is a
fundamental issue that would require a brief mention. The present case
discloses a somewhat disturbing course of action adopted by the State in
seeking to disown and challenge its own professed standards laid down in
the form of a DCR by tangentially contending the same to be incompetent in
law. Such a course of action by the State seeking to depart from its self-
professed norms is neither permissible nor would the Court require to
consider the same. The DCR governing the grant of TDR though may have gone
beyond what is contemplated under the MRTP Act, the State and its
authorities cannot be permitted to request the Court to collaterally
adjudge the validity of the said norms laid down by the State itself. It
is for the State to effect necessary corrections as deemed proper and not
search for an escape valve through a judicial verdict. Such a course of
action is jurisprudentially impermissible. So long as the DCR holds the
field all executive actions must be within the four corners thereof. We can
usefully remind ourselves of the observations of Justice Frankfurter in
Viteralli Vs. Seaton[3] approved in R.D. Shetty Vs. International Airport
Authority[4] :
“An executive agency must be rigorously held to the standards by which it
professes its action to be judged. ..Accordingly, if dismissal from
employment is based on a defined procedure, even though generous beyond the
requirements that bind the agency, that procedure must be scrupulously
observed…This judicially evolved rule of administrative law is now firmly
established and, if I may add, rightly so. He that takes the procedural
sword shall perish with the sword.”
17. For the above-stated reasons, the conclusion is obvious. The
rejection of the claim of the respondent Society to TDR under the MRTP Act
read with DCR N-2.4.17 is seriously flawed. We, therefore, set aside the
same; affirm the order dated 15.9.2009 of the Bombay High Court in the writ
petition filed by the respondent Society and consequently dismiss the
appeals filed by the Pune Municipal Corporation and the State of
Maharashtra.
……………………………J.
[RANJAN GOGOI]
..………………..………..J.
[M.Y.EQBAL]
New Delhi;
October 09, 2014.
-----------------------
[1] Pune Municipal Corporation and Anr. Vs. Promoters and Builders
Association and Anr. [(2004) 10 SCC 796]
[2] (2003) 5 SCC 413
[3] 3.L Ed.2d. 1012
[4] (1979) 3 SCC 489
-----------------------
26
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3008-3009 OF 2010
PUNE MUNICIPAL CORPORATION & ANR.... APPELLANT (S)
VERSUS
KAUSARBAG COOP. HOUSING SOCIETY... RESPONDENT (S)
LTD. & ANR.
WITH
CIVIL APPEAL NO. 4580 OF 2010
J U D G M E N T
RANJAN GOGOI, J.
The controversy in the present appeals arises out of the claim of the
respondent-writ petitioner, a housing society, to Transferrable Development
Rights (TDR) under the relevant Development Control Regulations (DCR) i.e.
N-2.4 framed under the Maharashtra Regional and Town Planning Act, 1966
(for short “the MRTP Act”). The said claim has been resisted and rejected
by the Pune Municipal Corporation and the State of Maharashtra, the two
appellants in the appeals under consideration, on the ground that the land
in question was not reserved for a public purpose in the development plan
prepared under the MRTP Act and being shown as an existing garden therein,
the claim to TDR has no legal basis. There are additional grounds for the
rejection, details whereof will be, noticed in the course of the narration
to be made hereinafter. The land in question measured about 3.5 acres and
was covered by Survey No.12 (Part) located at Kohdhava Khurd, Pune. The
view of the High Court being in favour of the respondent (writ petitioner)
society, the Pune Municipal Corporation and the State of Maharashtra have
filed the two appeals in question.
The core fact that emerges from the multitude of collaterals and the
exhaustive pleadings of the parties is that the land in question was shown
by the respondent Society itself in the lay out plan submitted by it to the
Pune Municipal Corporation, as reserved for garden. Acquisition of the said
land was initiated in the year 1982 (28.01.1982) under the provisions of
the Land Acquisition Act, 1894 and the same was completed in the year 1987
whereafter possession of the land was taken over on 19.02.1987. In the
draft development plan dated 15.09.1982 that was prepared and published
under the provisions of the MRTP Act, which was subsequently approved and
sanctioned on 05.01.1987, the land was shown as an existing garden. The
close proximity of time between the two parallel process is too significant
to be overlooked. While according to the respondent-writ petitioner the
stage and the manner of the inclusion of the land in the development plan
is of no consequence to the issue arising i.e. entitlement to TDR, the
State contends that the land was acquired under a non-development plan
proposal which would not attract the provisions of the MRTP Act.
The High Court took the view that it cannot be understood as to how there
can be a difference between land “which was part of a development plan
reserved by the Government or a part of the development plan submitted by
the petitioner in which the land in question was shown as a garden”. Laying
emphasis on the relevant DCR i.e. N-2.4.17(ii), the High
Court took the view that no such distinction is disclosed therein and going
by the language of the DCR the respondent Society was entitled to TDR as
compensation for the land was not received by it. The High Court also
noticed the various communications brought on record by the respondent-writ
petitioner to show that, at different stages, the authorities of the
Municipal Corporation as well as those of the State of Maharashtra had
unequivocally indicated the entitlement of the respondent-writ petitioner
to Transferable Development Rights. The High Court also held that the
directions contained in Government Order dated 03.02.2007 to be contrary to
DCR N-.2.4.17 which is an instance of exercise of statutory powers under
the MRTP Act. The said G.O. dated 03.02.2007 had excluded the entitlement
to Transferable Development Rights once an award had been made and
possession of the land had been delivered as in the present case.
We have heard Shri V.A. Mohta, learned senior counsel and Shri Aniruddha P.
Mayee, learned counsel appearing for the appellants and Shri Vinod Bobde
and Shri Shekhar Naphade, learned senior counsels appearing on behalf of
the respondents.
Assailing the order of the High Court, it is contended on behalf of the
appellants that under Section 126 of the MRTP Act grant of TDR against land
acquired under the Land Acquisition Act is not contemplated and grant of
TDR is permissible only when the land is acquired by agreement and it is
further agreed that in lieu of compensation, TDR will be granted and
accepted. It is argued that grant of TDR is a matter of agreement between
the acquiring authority and the land owner and the authority cannot be
directed to grant TDR if it is not so willing asmuch as a land owner cannot
be compelled to accept TDR in the event he opts to accept compensation for
the land acquired. The concept of TDR was brought in by an amendment to
the MRTP Act in the year 1993 whereas the award for acquisition of the land
of the respondent society was passed in the year 1987 and possession
thereof was taken over on 21.2.1987. It is contended that the respondent
society whose land was acquired under the Land Acquisition Act is entitled
to compensation calculated on the market value of the land as on the date
of the Notification under Section 4 of the Land Acquisition Act which was
published in the year 1982. The value of the benefit, if TDR is to be
granted at the present stage, would be grossly disproportionate. Pointing
out the provisions of the Development Control Regulations governing grant
of TDR, it is contended that DCR N-.2.4.1(A) and 2.4.17 are required to be
read harmoniously and not in isolation as has been done by the High Court.
Before DCR N-.2.4.17 can be made applicable, the conditions spelt out under
DCR N-. 2.4.1(A) has to be satisfied, namely, that the land should have
been shown as reserved for a public purpose in the development plan. It is
pointed out that in the present case it was not so done and the land was,
in fact, shown as an existing garden. Therefore, DCR N-.2.4.1(A) is not
applicable thereby ruling out the application of DCR No.2.4.17. It is also
pointed out that the land was acquired under the provisions of the Land
Acquisition Act under a non-development plan proposal to which acquisition
the provisions of Section 126 of the MRTP Act will have no application. In
so far as the G.O. dated 03.02.2007 under Section 154 of the MRTP Act is
concerned, the appellants contend that the said G.O. dated 03.02.2007 is no
way amends DCR No.2.4.17 as held by the High Court; rather the said
directions are merely clarificatory and were issued due to large scale
deviations that have taken place in the matter of grant of TDR.
Opposing the aforesaid contentions advanced on behalf of the appellants,
Shri Vinod Bobde and Shri Shekhar Naphade, learned senior counsels
appearing on behalf of the respondent - cooperative housing society in the
two separate appeals have submitted that the object of the amendment made
in the year 1993 (14.10.1993) introducing the concept of TDR was to lessen
the financial burden of the State facing the prospect of making payment of
huge compensation money for acquisition of land in connection with the
Development Plan. Learned counsels have pointed out that in the present
case the land was eventually included in the development plan prepared and
approved under the MRTP Act. The manner of inclusion in the development
plan i.e. as an existing garden or as reserved for a garden would not make
any difference to the claim of TDR. It is argued that, though offered, the
respondent had not accepted any compensation and, in fact, had agitated for
higher compensation under Section 18 of the Land Acquisition Act. While
the matter was so pending the concept of TDR came to be introduced in the
Act and in the year 1997 (05.06.1997) the modified DCR N-2.4 was
introduced. The respondent society abandoned the reference made by it for
higher compensation and initiated proceedings challenging the acquisition.
After the said challenge was negatived, the respondent society, in the
year 2003, lodged a claim for grant of TDR under DCR N-2.4.17 (ii) which
though initially was responded favourably was eventually rejected by
placing reliance on the Government Order dated 03.02.2007. It is further
contended that DCR N-.2.4.17 is a stand alone provision and under
clause (ii) of the said DCR the respondent society is entitled to its claim
of TDR under the MRTP Act though the land had been acquired under Land
Acquisition Act. In this regard, it has been specifically pointed out that
possession of the land was taken from the society in the year 1987 which is
within 12 years prior to 30th September, 1993 as contemplated in DCR N-
2.4.17 (ii). Admittedly, no compensation has been received. It is further
submitted that the Government Order dated 03.02.2007 purports to amend the
DCR which cannot be so done without following the procedure prescribed
under Section 37 of the MRTP Act. The fact that in similar circumstances
TDR had been granted to other land owners has also been pointed out by the
learned counsels appearing on behalf of the respondent housing society.
In so far as the provisions of Section 126(1) (a) (b) and (c) of the MRTP
Act is concerned, Shri Vinod Bobde, learned counsel appearing for the
respondent society in C.A. No.3008-3009 of 2010 has submitted that the
availability of TDR to cases of land acquired under the Land Acquisition
Act after invoking the provisions of Section 126(1) (c) of the MRTP Act
will not be open to be raised either by the State or the Municipal
Corporation once the DCR, particularly DCR N-2.4.17 (ii), had been enacted
and brought into force to confer Transferrable Development Rights for land
acquired under the provisions of the aforesaid Section 126(1) (c) of the
Act by following the process laid down in the Land Acquisition Act. Shri
Bobde has pointed out that once Regulations have been framed contemplating
grant of TDR to such land subjected to acquisition under Section 126
(1)(c), the Government cannot turn around and refuse to be bound by its own
norms much less challenge the same. It is further pointed out by Shri
Bobde that any such plea on the part of the State is not competent in law
and the State cannot seek a decision on the validity of its self professed
norms of governance. So long as the DCR remains its full legal effect must
be given effect to.
As the issues raised before us will have to be answered on the basis of the
true and correct purport and effect of the relevant provisions of the MRTP
Act; those of the Development Control Regulation i.e. DCR N-2.4.1(A) and
2.4.17; and the Government Order dated 03.02.2007, the same may be
extracted at the first instance.
Relevant provisions of the MRTP Act
“22. Contents of Development Plan -
A Development plan shall generally indicate the manner in which the
use of land in the area of the Planning Authority shall be regulated, and
also indicate the manner in which the development of land therein shall be
carried out. In particular, it shall provide so far as may be necessary for
all or any of the following matters, that is to say,-
(a)…………..
(b)………....
(c)………….
(d)……………
(e)……………
(f)……………..
(g)……………..
(h)……………..
(i)…………….
(j)………………
(k)……………….
(l)………………….
(m) - provisions for permission to be granted for controlling and
regulating the use and development of land within the jurisdiction of a
local authority including imposition of fees, charges and premium, at such
rate as may be fixed by the State Government or the Planning Authority,
from time to time, for grant of an additional Floor Space Index or for the
special permissions or for the use of discretionary powers under the
relevant Development Control Regulations, and also for imposition of
conditions and restrictions in regard to the open space to be maintained
about buildings, the percentage of building area for a plot, the location,
number, size, height, number of storeys and character of buildings and
density of population allowed in a specified area, the use and purposes to
which buildings or specified areas of land may or may not be appropriated,
the sub-division of plots the discontinuance of objectionable users of land
in any area in reasonable periods, parking space and loading and unloading
space for any building and the sizes of projections and advertisement signs
and boardings and other matters as may be considered necessary for carrying
out the objects of this Act.”
“Section 126. 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 113-A,/ acquire the land –
(a) by an agreement by paying an amount agreed to or,
(b) in lieu of any such amount, by granting the land-owner or the leasee,
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 this 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.
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 or Transferable Development Rights under this
Section or under the Land Acquisition Act, 1894, as the case may be, shall
vest in the Planning Authority, Development Authority, or as the case may
be, any Appellate Authority.”
Government Order dated 03.02.2007
“Maharashtra Regional & Town
Planning Act, 1966
Directive under Section 154
About TDR.
GOVERNMENT OF MAHARASHTGRA
URBAN DEVELOPMENT DEPARTMENT
MANTRALAYA, MUMBAI – 400 032.
DATED 3rd FEBRUARY, 2007.
ORDER
No. TPS/Sankirna-06/CR-527/06/UD-13:- Whereas the provision of Transferable
Development Rights (hereinafter referred to as “the said TDR”) has been
incorporated in the sanctioned Development Control Regulations (hereinafter
referred to as “the said DCR”) with a view to reduce the financial burden
of acquisition of lands reserved for public purposes in the Development
Plan and for early possession of these lands:
And whereas, sanctioned Development Control Regulations of some
Municipal Corporations contain the provision of rules regarding the said
TDR;
And whereas, sanctioned the said DCR of some Municipal Corporations
also have provision to grant the said TDR for the lands acquired either
under Maharashtra Regional& Town Planning Act, 1966 (hereinafter referred
to as “the said Act”), Bombay Provincial Municipal Corporation Act, Private
Negotiation or any other Act and possession of which has already been
delivered to the Municipal Corporation;
And whereas, it has come to the notice of Government that the rule
regarding the grant of TDR such acquired lands have been misinterpreted and
misused;
And whereas, once the possession is delivered after acquisition the
rights of the owner are transferred to the Planning Authority and the
application by the land owner demanding TDR thereafter can be said to be
made without having any rights in the land;
After considering the facts and circumstances referred to above, in
exercise of the powers conferred under Section 154 of the said Act,
Government is pleased to issue directives to all the Municipal Corporations
as follows:
DIRECTIONS
All the Municipal Corporations which have the provisions regarding
grant of Transferable Development Rights (TDR) for the lands which are
acquired under either the MRTP Act, BPMC Act, Private Negotiation or any
other Act shall initiate modification proposal after following procedure
laid down under Section 37 of the said Act so as to replace the provisions
of this regard by new rules as follows:
NEW RULES:
1) Transferable Development Rights (TDR) shall not be permissible once
an award has been declared under the acquisition process and or the
possession has already been delivered to the Municipal Corporation under
any Act.
2) Municipal Corporation shall punish a notice inviting suggestions and
or objections regarding the modification within sixty days from the date of
issue of this order.
3) After completing the procedure laid down under Section 37(1) of the
said Act Municipal Corporation shall submit the said modification proposal
to the Government for final sanction.
4) Pending the approval to the aforesaid modification the new rule
mentioned hereinabove shall come into force with effect from the date of
issue of this notification.
By order and in the name of
Governor of Maharashtra.
Sd/-
(Nandkishor Patil)
Under Secretary to Government”
Development Control Regulation
“N.2.4.1 (A). The owner (or lessee) of a plot of land which is reserved for
a public purpose, or road construction or road widening in the development
plan and for additional amenities deemed to be reservations provided in
accordance with these Regulations, excepting in the case of an existing or
retention user or to any required compulsory or recreational open space,
shall be eligible for the word of transferable Development Rights (TDRs) in
the form of Floor Space Index (FSI) to the extent and on the condition set
out below. Such award will entitle the owner of the land, to FSI in the
form of a Development Right Certificate (DRC) which be (sic. he) may
use for himself or transfer to any other person.
N-2.4.17. Grant of TDR in cases where lands are under acquisition:
(i) Where Land Acquisition has been declared but request was made for TDR
to the Special Land Acquisition Officer after 30th September 1993 i.e. the
date of publication of these draft Development Control Regulation
containing TDR concept.
(ii) Possession of the land has been delivered without having received
part or full compensation under either the Maharashtra and Town Planning
Act, Bombay Provincial Municipal Corporation Act, private negotiation or
under any Act for the time being in force within 12 years prior to 30th
September 1993.”
9. Though there is some controversy on the basic facts, there is also
unanimity to show that the acquisition of the land belonging to the
respondent society was initiated by notification dated 28.01.1982 issued
under Section 4 of the Land Acquisition Act, 1894. It is also clear that
on completion of enquiry under Section 5-A of the Land Acquisition Act,
declaration under Section 6 was published on 2.1.1985. Some further facts
on which there is no dispute and therefore would require to be taken note
of, are that the draft revised development plan which was published on
18.9.1982 showed the land as an existing garden and in the final
development plan which was sanctioned on 5.1.1987, the land was again shown
as “existing garden as per approved layout”. The respondent-writ
petitioner, however, contends that the description of the land as an
existing garden is wrong and what should have been mentioned in the
development plan is that the land was proposed for a garden as possession
of the same was still with the respondent-society on the date of
publication of the final development plan i.e. 5.1.1987. Possession of the
land, as noticed, was taken over on 18.2.1987 whereas the award under the
Land Acquisition Act was made on 22.01.1987.
10. Having considered the matter we are of the view that it will not be
necessary for us to consider the aforesaid perspective highlighted by the
respondent society as the controversy over the entitlement to TDR under the
relevant DCR is capable of being resolved on a wholly different basis to
which aspect of the matter we may now turn.
11. The concept of TDR was introduced for the first time in the MRTP Act
in the year 1993 by an amendment of Section 126(1)(a), (b) and (c) of the
MRTP Act. The modalities for grant of TDR were brought into force by the
amended Development Control Regulation (for short ‘DCR’) N-2.4 with effect
from 5.6.1997. In its simplest form, the concept of TDR involves the
surrender of land reserved for various public purposes in the development
plan free of cost and in exchange thereof grant of TDR entitling the holder
thereof to construct a built up area equivalent to the permissible FSI of
the land handed over by him on one or more plots in the zone specified.
Such rights are transferable. The object behind introduction of TDR, as
admitted by the Pune Municipal Corporation in its various publications, was
to meet the situation faced by the Corporation on being called upon to make
payment of over Rs.1500 crores to take over different sites measuring about
600 hectares which had been reserved for different public purposes in the
development plan.
12. Strictly construed it is the provisions of the Section 126 (1)(a)
read with (b) of the MRTP Act, extracted earlier, which contemplate grant
of TDR and that too only against land acquired by agreement as
distinguished from land which is acquired under the Land Acquisition Act in
exercise of powers under Section 126(1)(c). The latter kind of acquisition
i.e. under the Land Acquisition Act by invoking Section 126(1)(c) of the
MRTP Act however stands on a footing that is different and distinguishable
from the normal process of acquisition under the same Act i.e. the Land
Acquisition Act. This is because in an acquisition under the Land
Acquisition Act made in exercise of power under section 126(1)(c) of the
MRTP Act, the provisions of Section 4 and Section 5A of the L.A. Act are
dispensed with and straightway a notification under Section 6 is to be
issued. The market value of the land, though sought to be acquired under
the Land Acquisition Act, is pegged to the date of publication of the
interim or draft development plan, as may be, and not to the date of
publication of the notification under Section 4 of the Land Acquisition
Act. The above is a subtle but vital difference between the ordinary and
‘normal’ process of acquisition under the Land Acquisition Act and the
process of acquisition under the same Act but in exercise of powers under
Section 126(1)(c) of the MRTP Act that needs to be kept in mind.
13. DCR N-2.4.1(A) gives effect to the provisions of Section 126(1)(a)
and (b) brought in by the amendment to the MRTP Act in 1993. It entitles
the owner or a lessee of a plot of land, which is reserved for a public
purpose in the development plan, to the award of TDR in lieu of
compensation upon surrender of the land free of cost. If, DCR No.N-2.4 had
not contemplated any further situations for grant of TDR the argument
advanced on behalf of the appellants would have merited serious
consideration. However, DCR N-2.4.17, extracted above, contemplates two
other situations for grant of TDR. Under DCR N-2.4.17(ii) in situations
where possession of land had been delivered without receipt of part or full
compensation payable under the MRTP Act, Bombay Provincial Municipal
Corporation Act, private negotiations or under any Act and such event had
occurred within 12 years prior to 30.9.1993 (date of publication of the
draft DCR containing the TDR concept) claims for grant of TDR are required
to be entertained. DCR N-2.4.17 extends the frontiers outlined under
Section 126(1)(a) and (c) and makes the grant of TDR applicable to an
extended class of cases wherein acquisition of land is made not only under
the MRTP Act but also under other enactments including the L.A. Act. Such
an extension appears to be in consonance with the object behind the
introduction of the concept of TDR by the amendment of the MRTP Act of
1993. Having regard to the clear language contained in DCR N-2.4.17(ii)
and the object sought to be achieved by the introduction of TDR, we do not
see as to how grant of TDR can be confined only to cases of lands which
have been reserved in the development plan and not to lands acquired under
the Land Acquisition Act which land eventually becomes a part of the
finally approved and sanctioned development plan. The above would also
lead to the conclusion that DCR N-2.4.17 is capable of operating
independently and is not contingent on the existence of the conditions
mentioned in DRC N-2.4.1(A).
14. The matter needs to be viewed from another perspective. The difference
between acquisition under the L.A. Act by resort to the provisions of
Section 126(1)(c) of the MRTP Act and acquisition dehors the said provision
of the MRTP Act has already been noted. If under DCR N-2.4.17, TDR can be
granted in cases of acquisition under the MRTP Act obviously acquisition
under the LA Act upon invocation of Section 126(1)(c) would be included.
In such a situation, reference to any other Act in DCR N-2.4.17 would
include the L.A. Act so as to bring land covered by the normal process of
acquisitions under the L.A. Act within the fold of DCR N-2.4.17. The
acquisition of the land belonging to the respondent society would,
therefore, be clearly covered by the provisions of DCR N-2.4.17.
15. “Making of DCR or amendments thereof are legislative functions.”[1]
The Government Order dated 3.2.2007, though claimed to be clarificatory by
the appellants, really, seeks to prohibit the grant of DCR under DCR N-
2.4.17 so far as lands in respect of which Award under the Land Acquisition
Act had been passed or possession of which has been taken over. This is
contrary to the clear intent behind DCR N-2.4.17. The Government Order
itself acknowledges the necessity of following the procedure prescribed by
Section 37 of the MRTP Act before the aforesaid modification could become
effective. Yet, surprisingly the Government Order goes on to state that,
“Pending approval of the aforesaid modification the new rule mentioned
hereinabove shall come into force with effect from the date of issue of
this notification”. The Government Order in question, having been issued
under Section 154 of the MRTP Act, therefore, cannot override the DCR N-
2.4.17 as the directions under Section 154 of the MRTP Act would be in the
nature of administrative instructions (Laxminarayan R. Bhattad and Others
Vs. State of Maharashtra and Another[2]). Admittedly, at the relevant
point of time, the requisite process under Section 37 of the MRTP Act had
not been completed.
16. Underlying the arguments advanced on behalf of the appellants is a
fundamental issue that would require a brief mention. The present case
discloses a somewhat disturbing course of action adopted by the State in
seeking to disown and challenge its own professed standards laid down in
the form of a DCR by tangentially contending the same to be incompetent in
law. Such a course of action by the State seeking to depart from its self-
professed norms is neither permissible nor would the Court require to
consider the same. The DCR governing the grant of TDR though may have gone
beyond what is contemplated under the MRTP Act, the State and its
authorities cannot be permitted to request the Court to collaterally
adjudge the validity of the said norms laid down by the State itself. It
is for the State to effect necessary corrections as deemed proper and not
search for an escape valve through a judicial verdict. Such a course of
action is jurisprudentially impermissible. So long as the DCR holds the
field all executive actions must be within the four corners thereof. We can
usefully remind ourselves of the observations of Justice Frankfurter in
Viteralli Vs. Seaton[3] approved in R.D. Shetty Vs. International Airport
Authority[4] :
“An executive agency must be rigorously held to the standards by which it
professes its action to be judged. ..Accordingly, if dismissal from
employment is based on a defined procedure, even though generous beyond the
requirements that bind the agency, that procedure must be scrupulously
observed…This judicially evolved rule of administrative law is now firmly
established and, if I may add, rightly so. He that takes the procedural
sword shall perish with the sword.”
17. For the above-stated reasons, the conclusion is obvious. The
rejection of the claim of the respondent Society to TDR under the MRTP Act
read with DCR N-2.4.17 is seriously flawed. We, therefore, set aside the
same; affirm the order dated 15.9.2009 of the Bombay High Court in the writ
petition filed by the respondent Society and consequently dismiss the
appeals filed by the Pune Municipal Corporation and the State of
Maharashtra.
……………………………J.
[RANJAN GOGOI]
..………………..………..J.
[M.Y.EQBAL]
New Delhi;
October 09, 2014.
-----------------------
[1] Pune Municipal Corporation and Anr. Vs. Promoters and Builders
Association and Anr. [(2004) 10 SCC 796]
[2] (2003) 5 SCC 413
[3] 3.L Ed.2d. 1012
[4] (1979) 3 SCC 489
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26
