Compensation For Surrendering Land For Public Purpose Once Determined Is Payable Without Formal Request, Failure Violates Article 300-A: Supreme Court

The Supreme Court on Friday (September 13) ruled that the doctrine of delay and laches does not apply to cases where compensation is being sought for land surrendered for public amenities like DP Roads and compensation must be granted, even if no formal request is made.

“When relief in the nature of compensation is sought, as in the instant case, once the compensation is determined in the form of FSI/TDR, the same is payable even in the absence of there being any representation or request being made. In fact, a duty is cast on the State to pay compensation to the land losers as otherwise there would be a breach of Article 300-A of the Constitution”, the Court held.

A bench of Justice BV Nagarathna and Justice Nongmeikapam Kotiswar Singh allowed appeals by landowners whose writ petitions before the Bombay High Court seeking additional compensation for surrendering land and developing amenities were dismissed due to delay and laches.

The Court noted that the Municipal Corporation of Greater Mumbai had not proven any prejudice due to delays or the creation of third-party rights, which would make TDR claims invalid.

“The decisions referred to by us above would clearly indicate that neither the doctrine of delay and laches nor the principle of abandonment of claim or waiver would apply in these cases. Rather the delay has occurred on the part of the Mumbai Municipal Corporation in complying with the Regulations insofar as these appellants are concerned”, the Court further observed.

The Court set aside the portions of HC judgments dismissing the petitions due to delay but affirming the HC's judgements on merits. The HC had ruled that the 2016 amendment to Regulation 34 of the Development Control Regulations, 1991 (DCR), that limited the additional TDR for developing amenities to 25% of developed area, could not apply retroactively to land surrendered and developed before the amendment.

“Having regard to the earlier judgments of this Court, we find that the reasoning of the High Court on merits in the three impugned decisions discussed above is just and proper which would not call for any interference by this Court”, the Court held.

Facts and Issues

Several petitioners before the Bombay HC had surrendered portions of their land reserved for public purposes (such as roads) to the MCGM. The petitioners constructed amenities like roads on these lands at their own cost. They were supposed to receive compensation in the form of Transferable Development Rights (TDR) and Floor Space Index (FSI) as per section 126 of the Maharashtra Regional and Town Planning Act, 1966 and the DCR.

The petitioners had surrendered the respective amenity developed by them to MCGM. They received additional TDR of 25% of the constructed area as compensation for constructing the amenities at own cost.

However, after the Supreme Court passed judgment in Godrej & Boyce Manufacturing Co. Ltd. v. State of Maharashtra (2009) or Godrej & Boyce I case, the landowners made a representation to MCGM claiming that they were entitled to additional TDR of 100% of the constructed area for the amenities.

The Supreme Court in Godrej & Boyce I held that landowners who construct amenities like roads on surrendered plots are entitled to additional FSI or TDR of 100% of the developed area.

MCGM, citing amendment to the DCR in 2016, declined to grant the full 100% TDR, arguing that as per a notification dated November 16, 2016 amending Regulation 34 of the DCR, the compensation for amenities was limited to 25% of the constructed area.

The amendment to Regulation 34 of DCR effectively overturned the 100% TDR entitlement previously upheld by the Supreme Court in Godrej & Boyce I. The petitioners argued before the HC that the amendment should not apply retrospectively to land already developed and surrendered before the 2016 amendment.

The MCGM argued that the Godrej & Boyce I judgment was per incuriam (given without considering relevant law), as it did not consider Regulation 33, which deals with TDR and FSI for land surrendered for road development.

The Bombay HC rejected MCGM's claim that the Supreme Court's Godrej & Boyce I decision was per incuriam. The HC ruled that the notification dated November 16, 2016, which amended Regulation 34 and limited the TDR to 25%, could not apply retroactively to land surrendered and developed before that date.

However, while the HC allowed some of the petitions, it dismissed petitions filed by the present appellants on the ground of delay and laches. The HC observed that the petitioners, after surrendering their land and constructing the amenities, had waited for several years before applying for 100% additional TDR. Thus, they approached the Supreme Court.

MCGM also filed appeals against two of the judgments in which HC granted 100% TDR.

Verdict

The Supreme Court found the Bombay High Court's ruling on delay and laches to be incorrect.

It referred to Natwar Parikh & Co. Pvt. Ltd., in which MCGM opposed grant of remaining additional TDR to the petitioner for constructing a road, as 25% of the TDR had already been granted, arguing delay and laches. However, the Supreme Court dismissed MCGM's appeal, observing that the petitioner approached MCGM soon after the Godrej and Boyce I judgment was passed.

In Godrej & Boyce II (2023) , the Supreme Court rejected the Bombay HC's conclusion that the appellants had abandoned their claim for additional TDR. In 2010, Godrej & Boyce challenged MCGM's rejection of its TDR request in 1998, after the issue of TDR got resolved by the 2009 ruling in Godrej & Boyce I pertaining to another one of its properties. The Court explained that during the period from 1996 to 2009, its right to claim additional TDR was in "suspended animation" due to ongoing litigation on this issue. Therefore, the delay in asserting their claim did not equate to abandonment.

The Court also cited several other precedents on the issue of delay and laches such as Vidya Devi v. State of Himachal Pradesh and Tukaram Kana Joshi v. Maharashtra Industrial Development Corporation that held that delay in asserting a right does not automatically bar relief, especially if the delay does not create new rights for third parties or if it involves fundamental rights violations.

The Supreme Court allowed the appeals filed by the writ petitioners and directed MCGM to consider their applications for additional FSI/TDR in light of the Godrej & Boyce I judgment.

The Court ordered MCGM to complete the process of granting additional FSI/TDR within three months. The appeals filed by MCGM against grant of 100% additional TRS were also dismissed.

Case no. – Civil Appeal No. 9702 of 2024 with connected cases

Case Title – Kukreja Construction Company & Ors. v. State of Maharashtra & Ors. and with connected cases

Citation : 2024 LiveLaw (SC) 701