Corporation Cannot Retract Promised TDR After Land Acquisition for Public Purpose: Bombay High Court

Promise Broken: Bombay High Court Rules Against Municipal Corporation in Land Compensation Dispute

In a significant verdict reaffirming the sanctity of property rights, the Nagpur Bench of the Bombay High Court has ruled that the Nagpur Municipal Corporation (NMC) cannot unilaterally retract its promise to provide Transferable Development Rights (TDR) to landowners whose land has been acquired for public infrastructure projects. The court’s decision underscores the constitutional obligation of state instrumentalities to act fairly and transparently when exercising acquisition powers.

A Long-Standing Dispute Over Public Infrastructure

The case centers on the Shramik Co-operative Housing Society, whose land at Mouza Zingabai Takli was acquired by the Nagpur Municipal Corporation for the development of a 24-meter road under the Integrated Rural Development Program (IRDP).

The dispute dates back to 2001, when the Corporation assured the Society that, in lieu of monetary compensation, they would be granted TDR. Over the following decades, the Corporation moved ahead, utilizing the land for road construction. Between 2017 and 2020, the Corporation even issued TDR certificates to several members of the Society, acknowledging their entitlement. However, the situation took a turn in December 2024, when the Corporation issued a communication rejecting further TDR requests, citing vague grounds that the petitioner deemed unsustainable.

Legal Battle: The Constitutional Right to Property

Representing the Society, Senior Counsel S.P. Dharmadhikari argued that the Corporation’s about-face was not only an administrative failure but a violation of the constitutional right to property under Article 300-A of the Constitution. The petitioner emphasized that the acquisition, coupled with the statutory framework of the Maharashtra Regional and Town Planning (MRTP) Act, mandated fair compensation.

Conversely, the Corporation argued that the claim was "stale" and "delayed," asserting that the petitioner was no longer eligible for the remaining TDR.

The Court’s Reasoning: Fairness and Estoppel

The Bench, comprising Justices Nitin W. Sambre and Sachin S. Deshmukh, rejected the Corporation’s plea of delay. Relying on the principles of legitimate expectation and promissory estoppel, the court noted that the state cannot invite a citizen to surrender land under a promise only to withdraw that promise after the land has been utilized.

Citing the Supreme Court’s judgment in Kukreja Construction Company v. State of Maharashtra , the High Court held that when the state acquires private property for public use, the duty to pay compensation—whether in cash or through TDR—is absolute.

Key Observations

The judgment offers a firm rebuke to administrative arbitrariness. Key excerpts include:

> "The respondent – Corporation has retracted from its assurance which is reiterated on two successive occasions... Apart from the constitutional and statutory obligation, the same is also impermissible in the light of the fact that the petitioner- Society herein has acted upon the assurance."

> "When relief in the nature of compensation is sought... 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."

> "It is rather apparent that there is no escape route for the Corporation to avoid conferring the TDR upon the members of the petitioner – Society."

The Verdict and Its Implications

The High Court quashed the December 2024 rejection order and directed the Nagpur Municipal Corporation to grant the TDR as promised. By validating the Society’s claim, the court has sent a strong message to municipal bodies: administrative convenience does not exempt authorities from the constitutional and statutory obligations owed to citizens whose property is acquired for the public good.

This ruling serves as a vital precedent for landowners across Maharashtra, reinforcing that once the state commits to specific compensation terms, it is locked into those obligations, regardless of the passage of time or changes in administrative stance.