Case BriefsSupreme Court

Supreme Court: In a case where the Bombay High Court had directed Kolhapur Municipal Corporation to acquire an unusable land under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and compensate the landowners, the bench of MR Shah* and BV Nagarathna, JJ has held that when land is found to be unsuitable and unusable for the purposes for which it has been reserved, Corporation cannot be compelled to pay a huge compensation for such a useless and unsuitable land.

The dispute is with respect to the land ad-measuring 3 Hectors and 65 Ares in Kolhapur. The development plan for the City of Kolhapur was sanctioned on 18.12.1999. Different portions of the land in question were reserved in the sanctioned development plan for various public purposes namely, parking, garden, extension of sewage treatment plant etc. By Resolution dated 18.02.2012, the General Body of the Municipal Corporation resolved to acquire the said property and accordingly on 17.04.2012, a proposal was submitted by the Municipal Corporation to the State Government for compulsory acquisition of the subject property.

However, the subject land is flood affected through which a rivulet named ‘Jayanti Nala’ passes, making it unsuitable for the public purposes for which it was reserved. Further, it was argued that unless and until the substantial development is carried out, the land in question was not usable at all. The reserved area is coming within High Flood Line and every year for a period of fifteen days to one month, the said area gets flooded during rainy season.

As the land in question was not acquired and/or used for the public purposes for which the same was reserved under the sanctioned development plan, the original landowners served a notice under Section 127 of the Maharashtra Regional and Town Planning Act, 1966.

It is also to be noted that the reservation had lapsed as a mere Resolution being passed by the General Body of the Corporation to acquire the land and sending a letter to the Collector to acquire the land, without any further steps being taken under the Land Acquisition Act, namely no declaration under section 6 thereof being issued within a period of one year from the receipt of the said purchase notice, would result in the reservation as deemed to have lapsed.

The Supreme Court observed that once the reservation of land under the Development Plan is deemed to have lapsed by operation of law and it is released from reservation, no writ of Mandamus could have been issued by the High Court directing the Corporation to still acquire the land and to issue a declaration under Section 19 of the Act of 2013 (as in the meantime, the Land Acquisition Act, 1894 has been repealed and Act of 2013 has been enacted).

“Once by operation of law, the reservation is deemed to have lapsed, it is lapsed for all purposes and for all times to come.”

The Court also held that the High Court was not justified in directing the Municipal Corporation to acquire the land in question and to issue a declaration under Section 19 of the 2013 Act and to pay compensation under the Act of 2013 as right from the very beginning it was stated in the counter before the High Court that the land in question was not suitable and/or usable for the purposes for which it has been reserved.

“… as such at the time when the planning was made and the land in question was put under reservation for public purposes, a duty was cast upon the Planning Officer to consider whether the land, which will have to be acquired and for which the compensation is to be paid is really suitable and/or usable for the public purposes for which it is reserved. Otherwise, every landowner will see to it that though his land is not suitable and/or not very valuable, is put under reservation and the same is acquired by the Corporation and/or the Planning Authority and thereafter he is paid the compensation.”

It was, hence, held that no Corporation and/or the Planning Authority and/or the Appropriate Authority can be compelled to acquire the land which according to the Corporation/Planning Authority is not suitable and/or usable for the purposes for which it is reserved. Any other interpretation would lead to colourable and fraudulent exercise of power and cause financial burden on the public exchequer.

Under the Act of 2013, the Corporation was required to pay a huge sum of Rs. 77,65,12,000/- by way of compensation under the Act of 2013. According to the Corporation, when the entire annual budget for acquisition was Rs. 21 crores, it was beyond their financial position and/or budgetary provision to pay such a huge compensation, that too, for the land which is not suitable and/or useable for the purposes for which it has been reserved.

In such circumstances, the Court observed that while under MRTP Act, the financial constraint cannot be the sole consideration to acquire the land for the purposes for which it has been reserved namely public purposes, however, at the same time, when such a huge amount of compensation is to be paid and there would be a heavy financial burden, which as such is beyond the financial capacity of the Corporation, such a financial constraint can be said to be one of the relevant considerations, though not the sole consideration before embarking upon reservation of a particular extent of land for development.

The Court also held that a landowner is entitled to TDR in lieu of compensation with respect to the land reserved provided the land to be acquired is suitable and/or usable by the Corporation. However, once it is found that the land is not usable and/or suitable for the purposes for which it has been reserved, the Corporation cannot still be compelled and directed to acquire the land and grant TDR in lieu of amount of compensation.

[Kolhapur Municipal Corporation v. Vasant Mahadev Patil, 2022 SCC OnLine SC 179, decided on 14.02.2022]


*Judgment by: Justice MR Shah


Counsels

For Corporation: Senior Advocate Aparajita Singh

For Original Landowners: Senior Advocate C.U. Singh

Kerala High Court
Case BriefsHigh Courts

Kerala High Court: The Bench of P.B.Suresh Kumar, J., held that the Rule 12(9) of the Kerala Conservation of Paddy Land and Wetland Rules to the extent it provides for levy of a fee for the area of buildings exceeding 3000 square feet proposed in un-notified lands is prima facie ultra vires the provisions of the Conservation of Paddy Land and Wetland Act, 2008.

Factual Matrix of the Case

The petitioner was a builder who owned a land within the limits of Kochi Corporation (the Corporation) measuring 17.62 Ares, of which 6.93 Ares was “un-notified land” in terms of the provisions of the Act. The predecessors of the petitioner had applied for permission under Section 27A(1) of the Act to utilise the said land for other purposes, and the application had been allowed by the competent authority by the order Ext.P2. Later, pursuant to the said order, the said extent of land had been reclassified in the revenue records as ‘purayidom’ as provided for under Section 27C of the Act. It was submitted by the petitioner that since a portion of the land where the petitioner had proposed to put up the building was un-notified land and since the petitioner was using the said land for construction of the building after prior approval of the authority, the petitioner was obliged to pay fee at the rate of Rs.100 per square foot for the area of the building exceeding 3000 square feet in terms of Rule 12(9) of the Rules.

It was also stated by the petitioner that earlier for obtaining Ext.P2 order, his predecessors had paid the fee payable in terms of the said rule for the land covered by the application as there was no proposal then to put up any building in the land. It was alleged by the petitioner that the Corporation was now insisting the petitioner to pay fee for the area of the building exceeding 3000 square feet. The petitioner argued that Section 27A being a provision in the Act empowering the competent authority to grant permission to utilize un-notified lands for other purposes, which levy a fee on the basis of the area of the building proposed in the land could not be construed as one consistent with Section 27A and one contemplated by the legislature. Therefore, the same should be declared ultra vires to the provisions of the Act.

Opinion and Findings of the Court

Rule 12(9) is the provision that prescribes fee payable for grant of permission under Section 27A (1) of the Act to utilize lands falling under the definition of ‘un-notified land’ for residential, commercial or other purpose. The schedule to the Rules provides that fee shall be payable for the extent of the land covered by the application at the rates prescribed therein and at the rate of Rs.100/- per square foot for the area of building exceeding 3000 square feet proposed in the land. The Bench opined that the long title of the Act indicate beyond doubt that the Act was brought into force with a view to promote growth in the agricultural sector and to sustain ecological system. Similarly, the grant of permission under Section 27A to utilise un-notified land for residential or commercial or other purposes levy of a fee for the same which could not be said to be ultra vires the provisions of the Act.

On the pointed question as to whether such a fee could be levied having regard to the area of the building proposed in such lands, the Bench opined that,

“The permission being one for utilisation of un-notified lands for residential or commercial or other purposes, after ensuring that user of the same would not in any manner undermine the object of the Act, the area of the building, if any, proposed by the applicant in the land is irrelevant and extraneous in the context of the statute, and levy of a fee for such permission on the basis of the area of the building proposed in the land cannot therefore be construed as one consistent with Section 27A and one contemplated by the legislature.”

Placing the reliance on Bharathidasan University v. All-India Council for Technical Education, (2001) 8 SCC 676, wherein it was held by the Supreme Court that when the power to make regulations is confined to certain limits, the courts are bound to ignore those  found to be not made within its confines but outside them, when the question of their enforcement arises; the Bench held that the Rule, to the extent it provides for levy of a fee for the area of buildings exceeding 3000 square feet proposed in un-notified lands, appears to be prima facie ultra vires the provisions of the Act and hence, is void and unenforceable.

Opining that it is true that every rule is presumed to be intra vires and in a challenge against the rule on the ground an interim order is normally not issued, the Bench said, but it is also settled that if the Court finds that the rule is ex facie ultra vires the provisions of the Act, there cannot be an impediment in granting an interim relief in the matter as held by the Supreme Court in Health for Millions v. Union of India, (2014) 14 SCC 496. For the reasons aforesaid, the petitioner was held to be entitled to the interim relief and the Corporation was directed to process his application without insisting payment of the fee in terms of the Rule which was impugned in the writ petition.

[Abad Builders Pvt. Ltd. v. State of Kerala, 2021 SCC OnLine Ker 2308, decided on 17-05-2021]


Kamini Sharma, Editorial Assistant has put this report together 

Appearance before the Court by:

Counsel for the Petitioner: B.G.Harindranath

Counsel For The State: Additional Advocate General