Wednesday, 30 October 2019

Whether Municipal corporation is bound to give TDR in exchange of surrender of land for development by land owner?

Considering the aforesaid decision of the Apex Court and the language employed under Section 126(1) (b) of the MRTP Act, we are of the view that the grant of TDR under Section 126(1) (b) accrues or flows from the surrender of the area covered by the Development Plan rights, which is termed as the reservation for public purpose, free of cost and free from all encumbrances. In the absence of such surrender, TDR is not available under the said provision. The intention of the provision is to confer the additional benefit of grant of TDR upon the landowner by way of statutory provision. The surrender is without any option and in the absence of any bargaining power with the landowner. It is the statutory grant. In our view, therefore, the argument on behalf of the respondents, based upon condition No. (1) in the no-objection dated 11-10-2004, and condition No. 5(a) in the sale-deed dated 26-10-2004 to surrender the land under D.P. Road to the Planning Authority free of cost, would neither include the surrender of the Transferable Development Rights nor can be construed to take away in any manner statutory rights conferred by the provision of Section 126(1) (b) of the said Act.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Writ Petition No. 728 of 2017

Decided On: 04.04.2019

The Nirmal Ujwal Credit Co-operative Society Limited Vs.   The State of Maharashtra and Ors.

Hon'ble Judges/Coram:
R.K. Deshpande and S.M. Modak, JJ.

Citation: 2019(5) MHLJ 599


1. Rule, made returnable forthwith. Heard finally by consent of the learned counsels appearing for the parties.

2. The challenge in this petition is to the communication dated 22.09.2014 issued by the Town Planning Department of the Nagpur Municipal Corporation ("the Planning Authority") informing the petitioner-Society that in lieu of handing over of the area of 24-meter wide DP Road free of cost and free from all encumbrances as per the conditions of no-objection dated 11-10-2004, the petitioner-Society shall not be entitled to the Transferable Development Rights. This communication was challenged before the State Government and the claim is rejected on 28-10-2016. Hence, this petition, challenging the said communication and seeking further direction to the respondents to release the Transferable Development Rights (TDR) and Floor Space Index (FSI) in lieu of surrender of rights in the land for public purpose, that is for construction of DP Road for Survey Nos. 15, 16, 18 and 20 of Houza Harpur on Umred Road, Nagpur.

3. On 14-1-2019, we heard the matter at length and passed the order, which is reproduced below:

"Heard the learned counsel appearing for the parties.

The Nagpur Municipal Corporation by its letter dated 11-10-2005 granted permission under Clause 2 of the Notification dated 18-9-2002 for sale of the land in question belonging to Nagpur Vinkar Sahakari Sut Girni Maryadit (Under Liquidation)-Mouza Harpur subject to certain conditions. The first condition imposed reads as under:-

"1. The lands are affected by 24.00 m. wide D.P. Roads. The land under D.P. Roads shall have to be surrendered to Planning Authority i.e. N.M.C. free of cost."

The contention raised by Shri Aney, the learned Senior Advocate assisted by Shri Harode, Advocate appearing for the petitioner is that the aforesaid term which is also contained in the agreement of purchase of land by the petitioner does not create bar for claiming transferable development rights under Section 126(1)(b) of the Maharashtra Regional and Town Planning Act, 1966. Shri Kasat, the learned Advocate for Nagpur Municipal Corporation submits that free of cost in terms of conditions No. 1 reproduced above means free of TDR (Transferable Development Rights) also as contemplated under Section 126(1) (b).

The question requires consideration. Put up this matter on 14.02.2019 at 02.30 p.m. for final disposal by consent of the learned counsel appearing for the parties."

4. In response to the petition and the order passed by this Court, the respondent No. 2-Planning Authority has filed reply on affidavit opposing the claim made by the petitioner. The condition No. (1) in the no-objection dated 11-10-2004, which is also incorporated in Clause No. 5(a) in the sale-deed dated 26-10-2004, under which the petitioner purchased the property in question in auction, relied upon by the respondent No. 2, is identical. Hence, the same is reproduced below:

"The lands are affected by 24.00 m. wide D.P. Roads. The land under D.P. Roads shall have to be surrendered to the Planning Authority i.e. N.M.C. free of cost."

It is urged that the petitioner-Society has waived its right to claim compensation in the land and has agreed to surrender it to the Planning Authority free of cost. According to the respondent No. 2, the waiver of monetary compensation includes waiver of all rights available to the petitioner and hence the claim for grant of TDR based upon Section 126(1) (b) of the Maharashtra Regional and Town Planning Act, 1966 ("the MRTP Act") is not tenable.

5. Shri Aney, the learned Senior Advocate, has relied upon the decision of the Apex Court in the case of Godrej and Boyce Manufacturing Company Limited v. State of Maharashtra and others, reported in MANU/SC/0135/2009 : (2009) 5 SCC 24. The relevant portion relied upon contained in Para 64 is reproduced below:

"64. ... Therefore, surrender of the land in terms of clause (b) of Section 126(1) of the Act cannot be subjected to any further conditions than those already provided for in the statutory provisions. It is of course open to the legislature to add to the conditions provided for in the statute (or for that matter to do away with certain conditions that might be in existence). But it certainly cannot be left in the hands of the executive to impose conditions in addition to those in the statutes for accepting the offer to surrender the designated land."

Our attention is also invited to the provision of Section 126(1) (b) of the MRTP Act urge that surrender of the area covered by DP Road free of cost by itself is enough to confer a statutory right upon the petitioner to get TDR.

6. Section 126(1) (b) of the MRTP Act being relevant, is reproduced below:

"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 113A acquired the land,-

(a)

(b) in lieu of any such amount, by granting the land-owner or the lessee, 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 Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, 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 his cost, as the Final Development Control Regulations prepared in this Act provide,

(c) ..."

In terms of the aforesaid provision, if any land is reserved in the Development Plan for any public purpose specified therein, the Appropriate Authority may acquire such land and in lieu of any such amount against the area of land surrendered free of cost and free from all encumbrances, grant the land-owner, the additional FSI or TDR against the development or construction of the amenity on the surrendered land at his cost, as the final Development Control Regulations prepared in this behalf provide. It further states that land (together with the amenity, if any, so developed or constructed) so acquired by agreement or by grant of FSI or additional FSI or TDR under the said Section shall vest absolutely free from all encumbrances in the Planning Authority, Development Authority, or, as the case may be, any Appropriate Authority.

7. The provision of Section 126(1) (b) of the MRTP Act fell for consideration of the Apex Court in the case of Godrej and Boyce Manufacturing Company Limited, cited supra. It was a case where the appellants therein had their plots of land shown in the Development Plan as reserved for roads. They voluntarily surrendered their lands. In addition, they constructed on their respective pieces of land, the development plan roads at their own cost and as per the specifications stipulated in the relevant rules. There was no dispute in regard to the TDR granted to the appellants for surrendered pieces of land. But the parties were in serious controversy over the extent of FSI or TDR for the roads constructed on the surrendered land at the owner's cost. The landowners claimed that for constructing the roads they are entitled to FSI or TDR for the whole of the surface area of the road.

8. In Para 24 of the aforesaid decision, the Apex Court observed that clause (b) in Section 126(1) of the MRTP Act provided for a third mode for land acquisition that is based on the concept of TDR against the area of land surrendered free of cost and free form all encumbrances and a further additional FSI or TDR against the development or constructions of the amenity on the surrendered land by the landowners (or the lessee) at his own cost. In Para 36 of the said decision, an argument on behalf of the appellants was that Section 2(9-A) of the said Act defined "development right" to include the Transferable Development Right and Section 126(1) (b) provided for the grant of FSI or TDR against the development or construction of the amenity on the surrendered land at the owner's cost as the final Development Control Regulations should provide.

9. In Paras 51 and 52 of the said decision, the Apex Court held as under:

"51. Section 126(1)(b) of the Act uses the word "against": it speaks of granting FSI or TDR "against the area of land surrendered" and further additional FSI or TDR "against the development or construction of amenities on the surrendered land". Now, one of the meanings of the word "against" is given as "in return of something" e.g. the exchange rate against Franc" (Chambers 21st Century Dictionary, 1st published in India 1997, reprinted 1999). Webster's Third New International Dictionary gives the meaning of the word "against" as "in exchange for: in return for". Concise Oxford English Dictionary gives one of the meanings of the word as "in exchange for, in return for; as an equivalent or set-off for; in lieu of, instead of."

"52. Thus, on the basis of the language used in Section 126(1)(b) it could be legitimately argued that what is contemplated is to recompense the landowner proportionate to the value of the development or construction of the amenity on surrendered land. But the matter does not stop there. As seen above in Appendix VII to the Regulations Para 5 uses the words "equal to the gross area of reserved plot". Therefore, insofar as the bare land is concerned there is no difficulty. Para 6 of the appendix, however, uses the words "equivalent to the area of the construction/development" and much argument is made on the meaning of the word equivalent."

The Apex Court observed that insofar as the bare land is concerned, there is no difficulty.

In Para 64, the Apex Court proceeds to hold as under:

"64. Having regard to the nature of the law the submission advanced on behalf of the municipal authority would lead to palpably unjust and inequitable results. The landowner whose land is designated in the development plan as reserved for any of the purposes enumerated in Section 22 of the Act or for any of the amenities as defined under Section 2(2) of the Act or Regulation 2(7) [sic Regulation 3(7)] of the Regulations is not left with many options and he does not have the same bargaining position as the municipal authority. Therefore, surrender of the land in terms of clause (b) of Section 126(1) of the Act cannot be subjected to any further conditions than those already provided for in the statutory provisions. It is of course open to the legislature to add to the conditions provided for in the statute (or for that matter to do away with certain conditions that might be in existence). But it certainly cannot be left in the hands of the executive to impose conditions in addition to those in the statutes for accepting the offer to surrender the designated land."

10. Considering the aforesaid decision of the Apex Court and the language employed under Section 126(1) (b) of the MRTP Act, we are of the view that the grant of TDR under Section 126(1) (b) accrues or flows from the surrender of the area covered by the Development Plan rights, which is termed as the reservation for public purpose, free of cost and free from all encumbrances. In the absence of such surrender, TDR is not available under the said provision. The intention of the provision is to confer the additional benefit of grant of TDR upon the landowner by way of statutory provision. The surrender is without any option and in the absence of any bargaining power with the landowner. It is the statutory grant. In our view, therefore, the argument on behalf of the respondents, based upon condition No. (1) in the no-objection dated 11-10-2004, and condition No. 5(a) in the sale-deed dated 26-10-2004 to surrender the land under D.P. Road to the Planning Authority free of cost, would neither include the surrender of the Transferable Development Rights nor can be construed to take away in any manner statutory rights conferred by the provision of Section 126(1) (b) of the said Act.

11. In the result, this petition is allowed. The order dated 22-9-2014 passed by the respondent No. 2 is hereby quashed and set aside. We make it clear that we have not gone into other aspects of the matter, including the extent of TDR, but we have held that the petitioner-Society is entitled to release of TDR or FSI in lieu of the rights in the land surrendered free of cost for the purposes of construction of DP Road for Survey Nos. 15, 16, 18 and 20 of Mouza Harpur on Umred Road, Nagpur.

12. Rule is made absolute in the aforesaid terms. No order as to costs.


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