Shramik Co-operative Housing Society vs State of Maharashtra

Headnote:(A) Maharashtra Regional and Town Planning Act, 1966 - Section 126(1)(b) - Unified Development Control and Promotion Regulations (UDCPR) 2020 - Clause 11.2.4(e) - Constitution of India - Article 300-A - Right to property - Compensation in lieu of land acquisition for public purpose - Transferable Development Rights (TDR) - Doctrine of legitimate expectation and promissory estoppel - Duty of planning authority to honour assurance of TDR - Delay and laches not a bar when compensation is due -

(B) Constitutional and statutory obligation to compensate landowners - Section 126(1)(b) of MRTP Act provides for grant of FSI or TDR against surrender of land - Article 300-A protects right to property as a constitutional right - Planning authority cannot retract from promise of TDR once acted upon -

(C) Delay and laches - Principle from Kukreja Construction Company vs. State of Maharashtra (2024 SCC OnLine SC 2547) - When compensation is determined in form of TDR, it is payable even without representation; delay does not defeat claim - (Paras 12-17)

Facts of the case:
The petitioner-society and its members were owners of certain land. The respondent municipal corporation acquired part of that land for a 24-meter Development Plan road under the IRDP scheme. By communication dated 02/08/2001, the corporation assured grant of TDR in lieu of compensation. Subsequently, TDR certificates were issued to members in 2017, 2018, and 2020. However, by letter dated 05/12/2024, the corporation rejected the request for TDR on unsustainable grounds. The society filed a writ petition seeking quashing of the rejection and direction to grant TDR.

Findings of Court:
The court found that the land had been used for public purpose and no compensation was paid. The assurance of TDR was express and reiterated through certificates. The corporation could not retract from its promise. Relying on Article 300-A and Section 126 of MRTP Act, the court held that the petitioner was entitled to TDR. The doctrine of legitimate expectation and promissory estoppel applied. Delay and laches were not a bar as per the Supreme Court decision in Kukreja Construction Company. The UDCPR Clause 11.2.4(e) also mandated compliance with past commitments. The rejection communication was quashed.

Issues: The main issues were whether the corporation could withdraw its assurance of TDR, and whether the claim was barred by delay and laches.

Ratio Decidendi: The court ruled that once a planning authority has assured TDR in lieu of land surrendered for public purpose and the landowner has acted upon it, the authority is estopped from retracting. The right to compensation is a constitutional right under Article 300-A and statutory right under Section 126 of MRTP Act, and delay does not extinguish such right. The UDCPR regulations reinforce the obligation.

Result: Writ petition allowed. The communication dated 05/12/2024 was quashed and set aside. The respondent corporation was directed to confer TDR as assured and indicated in the certificates. Rule made absolute. No order as to costs.

Legal Category Hierarchy

1. Land acquired for development plan road — Corporation promised Transferable Development Rights in lieu of compensation — Later rejected claim. (Para 2 , 3 , 5 )

2. Petitioner: constitutional/statutory right to compensation, binding assurance; Corporation: delay, non-eligibility. (Para 4 , 6 , 7 , 8 , 9 , 10 , 11 )

3. Writ petition allowed — Impugned communication quashed — Corporation directed to confer TDR as assured. (Para 18 , 19 , 20 )

4. Whether TDR can be granted in lieu of compensation for land acquired for a public purpose under Section 126 MRTP Act and Article 300-A?

Yes, Section 126(1)(b) MRTP Act and Article 300-A require compensation; TDR is a statutory grant in lieu thereof. (Para 13 , 17 )

5. Whether the principles of legitimate expectation and promissory estoppel bind the corporation to its assurance of granting TDR?

Yes, the State and its instrumentalities must act fairly and cannot retract from an assurance after the party has acted upon it. (Para 15 )

6. Whether a claim for compensation in the form of TDR is barred by delay and laches?

No, delay does not arise when compensation is sought; a duty to compensate exists under Article 300-A. (Para 16 , 17 )

7. Whether Clause 11.2.4(e) of UDCPR mandates issuance of Development Rights Certificate for past commitments?

Yes, the regulation requires issuance of DRC when authority has taken possession with a past commitment of granting TDR/DRC. (Para 15 )

ORAL JUDGMENT :

(PER : SACHIN S. DESHMUKH, J.)

1. Heard. Rule. Rule made returnable forthwith. Assistant Government Pleader Mrs. M.H. Deshmukh waives service of notice for the respondent No.1 and Advocate Mr. G.A.Kunte waives service of notice for the respondent No.2. By consent of the parties, the petition is heard finally.

2. The petitioner - Society and its members are the owners of land bearing Survey Nos.276, 277, 277/2, 277/3, 279/1, 279/2, 279/3, 278, 280/1, 280/2, City Survey No.1298 admeasuring area about 5.04. H.R. of Mouza Zingabai Takli, Tahsil and District Nagpur (for short hereinafter referred to as “the said land”).

3. The respondent No.2 – Corporation issued Development Plan for Nagpur city and in that process, the land belonging to the petitioner – Society has been impacted on account of 24 meters Development Plan road (D.P. road). The Corporation had proposed the said road of 24 meters under the Integrated Rural Development Program (IRDP) Scheme (Awasthi Nagar Chowk to Borgaon Chowk) for an area admeasuring about approximately 5200 sq. meters, which came to be acquired.

4. Accordingly, the contentions raised on behalf of the petitioner – Society by Mr. S.P. Dharmadhikari, learned Senior Counsel are that the Corporation through its Executive Engineer, building section informed the petitioner - Society that 24 meters of the aforestated area of the land owned and possessed by the petitioner- Society would be impacted in the widening of Development Plan road under the IRDP Scheme. As such in that regard the communication dated 02/08/2001 was issued on behalf of the Corporation committing that in lieu of the compensation the grant of Transferable Development Right (TDR)

would be conferred upon the petitioner- Society herein for surrender of the said land for construction of road under the IRDP Scheme. Admittedly, no compensation was ever offered and only it was assured by virtue of the communication dated 02/08/2001 that the TDR rights would be conferred upon the petitioner- Society. Having assured the conferring of the TDR, which is duly communicated to the petitioner Society herein, it was incumbent upon the respondent – Corporation to act upon the same. Followed by issuance of aforestated communication development rights certificates were issued in favour of the petitioner – Society and its members (page 61 to 70 of the petition) by the respondent – Corporation in the year 2017, 2018 and 2020. Admittedly, the communication dated 02/08/2001 was issued coupled with the issuance of TDR certificates in favour of the members of the petitioner – Society, which is registered under the provisions of the Maharashtra Cooperative Societies Act. Being the lawful owners and possessors of the land in question, it was incumbent upon the respondent – Corporation to act in letter and spirit of the said assurance and issuance of certificates in favour of the petitioner- Society and its members way back in the year 2001 vis-a-vis while issuing the TDR certificates in the year 2017, 2018 and 2020. While accepting and acting in accordance with the assurance of conferring the TDR in lieu of compensation, which is impacted in development plan for 24 meters D.P. road under the IRDP

Scheme, the Corporation ought to have acceded to the request of the petitioner- Society to confer TDR as is assured on two successive occasions. Having assured and eventually issued the TDR certificates it was not open for the respondent – Corporation to retract from its assurance in any case, which was in lieu of compensation for using the land belonging to the petitioner – Society and its members. As stated hereinabove it was not open for the respondent – Corporation to retract from its assurance, however, making a serious departure from the said assurance, the communication dated 05/12/2024 has been issued by the Corporation, rejecting the request of the petitioner - Society to confer the TDR which is already assured on two successive occasions on uns

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2025 Supreme(Online)(Bom) 351922

Shramik Co-operative Housing Society – Appellant
Versus
State of Maharashtra – Respondent

A planning authority is constitutionally and statutorily obligated to compensate landowners for land acquired for public purposes; an assurance of TDR cannot be retracted, and delay does not bar such claim.

Legal Category Hierarchy

Table of Contents

4. Whether TDR can be granted in lieu of compensation for land acquired for a public purpose under Section 126 MRTP Act and Article 300-A?

5. Whether the principles of legitimate expectation and promissory estoppel bind the corporation to its assurance of granting TDR?

6. Whether a claim for compensation in the form of TDR is barred by delay and laches?

7. Whether Clause 11.2.4(e) of UDCPR mandates issuance of Development Rights Certificate for past commitments?

2025 Supreme(Online)(Bom) 351922

Shramik Co-operative Housing Society – AppellantVersusState of Maharashtra – Respondent

A planning authority is constitutionally and statutorily obligated to compensate landowners for land acquired for public purposes; an assurance of TDR cannot be retracted, and delay does not bar such claim.

Legal Category Hierarchy

Table of Contents

4. Whether TDR can be granted in lieu of compensation for land acquired for a public purpose under Section 126 MRTP Act and Article 300-A?

5. Whether the principles of legitimate expectation and promissory estoppel bind the corporation to its assurance of granting TDR?

6. Whether a claim for compensation in the form of TDR is barred by delay and laches?

7. Whether Clause 11.2.4(e) of UDCPR mandates issuance of Development Rights Certificate for past commitments?

Shramik Co-operative Housing Society – Appellant
Versus
State of Maharashtra – Respondent