Land Earmarked For Public Purpose But Not Acquired Within Statutory Period : Supreme Court Upholds Original Owners' Right To Sell

The Supreme Court affirmed ownership rights of land purchasers over land in Thanjavur, Tamil Nadu which was designated for “public purpose” in a 1978 Layout Plan but no steps were taken by the planning authority or the state government to acquire it within the three-year statutory period mandated by the Tamil Nadu Town and Country Planning Act.

Consequently, the land was deemed released from reservation, allowing the original owner to lawfully transfer it.

“Be that as it may, on the core issue, we find that the original owner of the suit property, never lost right, title, interest and usage therein. The deeming provision under Section 38(b) of the Act would operate to release the suit property, as the 3-year period would have lapsed, latest in 1984, counted from the year of revision i.e., 1981, after the initial Layout in the year 1978. The original owner, thus, was competent in law to transfer the suit property to any other person on 20.04.2009 (date of the first Sale Deed). Obviously, nemo dat quad non habet and any transfer of property would carry with it inherently the same restrictions which were existing/passed on to the vendor at the time of passing of the title to the concerned vendee”, the Court held.

A bench of Justice Vikram Nath and Justice Ahsanuddin Amanullah delivered its decision on a long-standing property dispute concerning land in Tamil Nadu designated for public purpose between landowners and a Resident Welfare Association. The Court observed that the land in question had subsequently been designated as mixed residential area.

“In the case at hand, although the Layout (originally 1978 and revised in 1981) shows that it has been earmarked for a public purpose. However, admittedly, nothing happened thereafter in terms of Section 37 of the Act, namely, neither was the land acquired under land acquisition laws nor any agreement was made with the person(s)/owners. Neither the State Government nor Respondent no.3 (Municipality) acted to takeover or gain ownership of the suit property. Clearly, no steps were taken either by the planning authority or the State Government to acquire the land which as per the Act was required to be done within 3 years from publication. This apart, ultimately in the year 2005, the Layout itself was revised showing it as a mixed residential area”, the judgment, passed in August 2024 but made available recently, read.

The Court allowed an appeal the landowners against Madras High Court order dated January 24, 2022.

Background

The dispute centers on a 11,200 square foot plot originally earmarked for public use in the Nachimuthu Nagar housing layout, formed by one Nachimuthu Mudaliar and approved in 1978, with revisions in 1981. After Mudaliar's death, in 2004, his legal heirs sold the suit property to the appellants in 2009. Subsequent transactions in 2013 further divided ownership among the appellants. The conflict arose when the appellants expressed their intention to construct on the land in 2013, prompting the local residents' welfare association (RWA), Nachimuthu Nagar Resident Welfare Association, to file a suit seeking a permanent injunction to prevent such actions.

The Trial Court ruled in favor of the RWA, citing a lack of requisite permissions for altering the land's public purpose designation and holding that the appellants failed to establish legal proof of ownership. The First Appellate Court reversed this decision, dismissing the suit on grounds of the land's non-seizure for public use and valid transfer of title to the appellants. However, the High Court reinstated the Trial Court's decision, restoring the injunction against the appellants. The High Court reasoned that the appellants had failed to comply with Section 38 of the Act, rendering their Sale Deeds illegal.

Supreme Court's Ruling

The Supreme Court analyzed the legal framework under the Tamil Nadu Town and Country Planning Act, particularly Chapter IV, which governs the acquisition, reservation, and release of land for public purposes. Under Sections 36 to 38 of the Act, land designated for “public purpose” can be acquired within 3 years of notification. If no acquisition occurs within this period, the land is deemed released, as per Section 38.

The Court noted that the land was privately owned in 1978 but reserved for public purposes in the layout. However, no acquisition steps under Section 37 or 36 of the Act were taken within the statutory three-year period, which lapsed in 1984. The land was deemed released from reservation after this period.

The Court further noted that the original owner retained full rights to transfer the property, which was lawfully sold to the appellants in 2009. No evidence was presented to prove any violation of the layout conditions or improper usage of the land. The Court held that the RWA's suit lacked any valid cause of action, as the construction of a boundary wall by the appellants did not contravene the layout or master plan, especially since the 2005 revised layout classified the property as part of a mixed residential area. Thus, no cause of action was made out in the RWA's plaint, the Court held.

The Supreme Court concluded that the High Court erred in reinstating the Trial Court's decree. It upheld the First Appellate Court's findings, declaring the appellants' ownership valid.

Case no. – Civil Appeal No. 5875 of 2023

Case Title – Pradhan Babu and Ors. v. Nachimuthu Nagar Kudiyiruppor Nala Sangam and Ors.

Citation : 2024 LiveLaw (SC) 1057