'Land Can't Be Reserved Without Acquisition Indefinitely' : Supreme Court Declares Reservation Of Land Lapsed As Per S.127 MRTP Act

The Supreme Court recently observed that Section 127 of the Maharashtra Regional and Town Planning Act, 1966 requires that the land reserved, for any purpose specified in any plan under this act, should be utilised within the prescribed timeline. Otherwise, the reservation shall be deemed to have lapsed. The Court also observed that the timeline provided under the Act is sacrosanct and has to be adhered to by the State or by the authorities under the State.

“The landowner cannot be deprived of the use of the land for years together. Once an embargo has been put on a landowner not to use the land in a particular manner, the said restriction cannot be kept open-ended for indefinite period.,” the Bench of Justices J.B Pardiwala and R. Mahadevan said.

As per this provision, if any land reserved is not acquired within ten years or if proceedings for the acquisition of such land are not commenced, the owner may serve notice on the appropriate Authority. If the concerned Authority fails to acquire the land within twelve months from the date of such notice, the reservation shall lapse.

The origin of the present case started when the owners of a vacant plot had submitted a Land Development Plan for the development of 2.47 hectares. The same was sanctioned and the remaining area was shown to be reserved for a private school in a revised development plan under the Act, in 1993. Pertinently, from 1993 till 2006 no action was taken by the respondents to acquire the property for the private school.

The owners served purchase notice under Section 49 of the Act to the State. Though the same was confirmed on 02-01-2007, no action was taken till 02-01-2008 (ie. One year after the acknowledgement of the served notice) to commence the acquisition proceedings.

In 2015, the land was sold to the present appellants. Following this, the appellants filed a writ petition seeking direction that either respondent No. 5 (private school) compensate for the land reserved for it since 1993 or declare that the reservation had lapsed. However, the High Court disposed of the same while grating liberty to the appellant to take appropriate steps as per the law. Hence, the present appeal.

It may be noted that as per Section 49(7) of the Act, if within one year from the date of confirmation of the notice, the appropriate Authority fails to make an application to acquire the land, the reservation shall be deemed to have lapsed. Further, the reserved land shall become available to the owner for permissible purposes. Taking this into consideration, the Apex Court said that the reservation lapsed on 02-01-2008.

“It is very unfortunate to note that although the land was reserved almost 33 years back for the benefit of Respondent No.5 yet the said respondent was unable to avail the benefit of the same. It does not make any good sense to keep a plot reserved in a development plan for past 33 years. The Authority did not allow the original owners to use the land and are now not permitting even the purchasers i.e. the appellants – herein to utilize the land.,” the Court added.

Reliance was placed on a plethora of decisions including Chhabildas v. State of Maharashtra and others reported in 2018 INSC 106. Therein, the Court categorically stated that the object of Section 49 is that once a purchase notice is received by the authorities, there is an obligation to acquire land. The timelines contemplated by the section also indicate that the owner or person affected cannot be left to hang indefinitely. Thus, the Court, while keeping in mind the inordinate delay in acquiring the land, held that the reservation had lapsed.

Taking a cue from this, the Court said that when the erstwhile owners sold the land to the appellants in 2015, there was no reservation. Referring to Kolhapur Municipal corporation and Others v. Vasant Mahadev Patil, (2022) 5 SCC 758, the Court highlighted when the reservation is deemed to have lapsed under Section 127(1), it lapses for all purposes. The landowners can use the land as if there were no reservation.

Based on this, the Court said :

“Having regard to the gross delay of almost thirty years even without the aid of Section 127 of the MRTP Act, we would have declared the reservation to have lapsed in exercise of our jurisdiction under Article 142 of the Constitution to do complete justice in the matter.,” the Court marked while disposing of the appeal.

Case Name: Nirmiti Developers vs State Of Maharashtra., CIVIL APPEAL NOS.3238-3239 OF 2025

Citation : 2025 LiveLaw (SC) 248

Click here to read/ download the judgment