A) ABSTRACT / HEADNOTE

This case concerns a 50,138 sq. ft. plot in Amravati shown as reserved for a private school in the revised Development Plan of 1993. The original owners served a purchase notice under Section 49 on 4-7-2006; the State confirmed the notice on 2-1-2007 and directed the acquiring trust to complete acquisition within twelve months. No acquisition or deposit of compensation occurred by 2-1-2008.

The owners later sold the land (30-12-2015) to the appellants who, in March 2016, challenged continued reservation seeking either deposit of compensation or a declaration that reservation had lapsed under Section 49(7). The High Court declined relief, holding that the benefit of the earlier Section 49 notice could not be claimed by the purchaser because the original owners had not utilized the de-reservation and had sold the land. The Supreme Court reversed.

It held that once Section 49(7) timelines were not complied with (appropriate authority failed to apply to acquire within one year of confirmation), the reservation legally lapsed on 2-1-2008 and the land became available for permissible development. The Court further explained the interplay between Sections 49, 126 and 127 of the Maharashtra Regional & Town Planning Act, 1967 (MRTP Act), reaffirmed the sacrosanct nature of statutory timelines (ten years + one year / twelve months), and observed that prolonged inaction (here ≈ thirty years since reservation) may justify relief under Article 142 to do complete justice.

Keywords: de-reservation; Section 49 MRTP Act; Section 127 MRTP Act; lapse of reservation; Article 142.

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGMENT

The gist is a contest between statutory protection of public-purpose reservations and the proprietors’ right not to be left indefinitely disabled from using their land. The MRTP Act creates a two-tier timeline: a regime under Section 49 for owners suffering immediate hardship (purchase notice → confirmation → acquiring authority must apply within one year) and a scheme under Sections 126–127 where a reservation may be released if no acquisition occurs within statutory windows (ten years from plan publication and an additional notice + 12 months to commence acquisition).

The present dispute arises because the original reservation dated from the 1993 revised Development Plan; authorities remained inactive for years; the owners served Section 49 notice in 2006 that was confirmed on 2-1-2007; acquisition steps were not completed by 2-1-2008; the owners sold the land to appellants in 2015; purchasers sought declaration of lapse or deposit of compensation.

The High Court took a restrictive view that a Section 49 benefit could not enure to a purchaser where the original owner had not used the land post-de-reservation and had sold it; the Supreme Court re-examined the statutory scheme and jurisprudence and concluded that the statutory timelines operate to produce lapse by efflux of time where the prescribed procedural steps are not taken. The Court reaffirmed prior precedents and the protective object of Sections 126–127: to avoid indefinite fetters on private property.

D) FACTS OF THE CASE

The property Survey No. 81/3 (New) in Mouza Rajapeth, Amravati (50,138 sq.ft.) formed part of a larger 2.47 hectare layout submitted by the owners; the municipal authority sanctioned residential development but reserved 50,138 sq.ft. for a school (Reservation No.195) in the 1993 revised Development Plan. From 1993 to 2006 no acquisition steps were taken by the beneficiaries/authorities. On 4-7-2006 the previous owners served a purchase notice under Section 49; the State confirmed the notice on 2-1-2007 and directed respondent trust to complete acquisition within twelve months.

The trust moved to initiate proceedings on 29-12-2007 but did not carry acquisition to fruition by 2-1-2008, nor did it deposit compensation with LAO. Owners later (13-8-2014) served a Section 127 notice on authorities; on 30-12-2015 the previous owners sold the land to present appellants for Rs. 1.26 crore. Appellants filed writ on 16-3-2016 seeking either deposit/compensation or declaration of lapse under Section 49(7).

High Court recorded inaction and declined the substantive relief, reasoning that the original Section 49 process could not benefit the purchaser who had not taken steps under either Section 49 or Section 127 after purchase. Supreme Court reversed, holding lapse occurred by operation of Section 49(7) on 2-1-2008.

E) LEGAL ISSUES RAISED

i. Whether reservation of the plot lapsed by virtue of Section 49(7) where the appropriate authority failed to apply to acquire the land within one year of confirmation of purchase notice.
ii. Whether Sections 126 and 127 operate to cause lapse of reservation after statutory periods (ten years + notice + twelve months) and how they interact with Section 49.
iii. Whether the purchaser (appellant) can invoke a previously served Section 49 notice by an earlier owner or is obliged to serve fresh notice under Section 49 or 127 after purchase.
iv. Whether, in extraordinary delay (≈ thirty years), the Court may invoke Article 142 to declare lapse even absent strict statutory triggers.

F) PETITIONER/APPELLANT’S ARGUMENTS

i. The appellants urged that the statutory machinery had failed and the reservation had lapsed by operation of Section 49(7) when no application to acquire was made within one year of confirmation (2-1-2008).
ii. They contended that purchasers stand entitled to the legal consequence of lapsing; the statutory fiction of release should not be rendered illusory by administrative inertia.
iii. Alternatively, appellants invoked Section 127 and the long delay since 1993 to show that reservation should be deemed to have lapsed and that they must be allowed to use the land permissibly.

G) RESPONDENT’S ARGUMENTS

i. Respondents argued the High Court was correct: Section 49 relief is personal to the owner in need (it mitigates hardship) and should not enure to a purchaser who failed to take fresh steps after acquisition.
ii. It was pointed out that later procedural steps (applications, deposit of compensation) were either not taken or incomplete; merely issuing letters did not amount to commencement of acquisition under Section 126.

H) JUDGMENT

The Supreme Court examined statutory language and authoritative precedents (Girnar Traders, Chhabildas, Hasmukhrai, Municipal Corporation/Hakimwadi, Shrirampur Municipal Council) and concluded that statutory timelines are mandatory. The Court held that once the State confirmed the Section 49 purchase notice on 2-1-2007 and failed to ensure that the appropriate authority applied to acquire within one year, Section 49(7) operated to deem the reservation to have lapsed on 2-1-2008.

The Court reiterated that Sections 126 and 127 form a coherent scheme a ten-year protective period from plan publication, followed by a right in the owner to serve notice and obtain de-reservation if acquisition steps are not commenced within the shorter twelve-month window and that mere procedural or perfunctory acts which will not meaningfully commence acquisition cannot be treated as “steps” under Section 127.

The Supreme Court rejected the High Court’s restrictive approach which denied the purchaser benefit of lapse; on the facts the earlier owner’s Section 49 notice had been confirmed and the statutory one-year window expired without acquisition — producing automatic lapse. The Court noted the gross and inordinate delay (≈ thirty years since original reservation) and observed that even absent strict statutory operation it would have exercised Article 142 to do complete justice. Appeals were allowed; High Court order set aside; reservation declared lapsed.

a. RATIO DECIDENDI

The decisive ratio is that statutory timelines in Sections 49(7), 126 and 127 are mandatory and operative: where a purchase notice has been confirmed and the appropriate authority fails to make an application to acquire within one year from confirmation, or where after ten years from plan publication a Section 127 notice is served and acquisition steps are not taken within the twelve-month window, the reservation lapses and the land is released for permissible development.

The Court further held that mere perfunctory actions or preliminary communications that cannot reasonably be expected to culminate in acquisition do not satisfy the requirement of “steps” for acquisition under Section 127.

b. OBITER DICTA

The Court made important observations (obiter) reinforcing that prolonged administrative inaction that leaves owners dispossessed of development rights for decades is incompatible with the statutory balance and with Article 300-A principles. It restated that where delay is gross, the Court can apply Article 142 to do complete justice and effectuate lapse even where statutory technicalities might otherwise obstruct relief. The Court emphasised the protective object of Sections 126–127 to prevent indefinite fetters on property.

c. GUIDELINES 

i. Strict compliance with timelines in Sections 49(7), 126(2)/(4) and 127(1) must be observed by planning and acquiring authorities.
ii. “Steps” towards acquisition under Section 127 mean actions that genuinely commence acquisition (e.g., publication of declaration under Section 6 LA Act) — not perfunctory letters or mere resolutions.
iii. Where a Section 49 notice has been confirmed and the appropriate authority fails to apply within one year, de-reservation automatically follows on expiry and the owner (and successor in title) may lawfully use land as permissible under the plan.
iv. Courts may, in exceptional and prolonged delay, invoke Article 142 to do complete justice and declare lapse where statutory protections otherwise leave owners remediless.

I) CONCLUSION & COMMENTS

The decision restores statutory certainty and prevents administrative inaction from frustrating owners’ property rights indefinitely. It clarifies that the legal consequence of inaction after a Section 49 confirmation is automatic lapse under Section 49(7) if the acquiring authority fails to apply within the prescribed period, and it reaffirms the doctrine from Girnar/Chhabildas that Sections 126–127 impose strict timelines (ten years + one year/12 months) that cannot be circumvented by token steps. Practically, the judgment protects bona fide purchasers (like the appellants) who buy land burdened by stale reservations where statutory conditions for lapse have in fact occurred.

Administratively, the ruling admonishes planning authorities to act promptly or face automatic dereservation a salutary reminder that eminent domain powers must be exercised within the statutory temporal frame and accompanied by compensation when effected. The Court’s invocation of Article 142 (as an alternative route) underscores judiciary’s remedial tools where inordinate delay produces manifest injustice. This case will guide municipal authorities, acquiring bodies and practitioners in interpreting the interplay between Section 49 relief and the longer Section 127 dereservation mechanism, and will likely reduce litigation over stale reservations by emphasizing objective statutory dates and concrete acquisition steps as determinative.

J) REFERENCES

a. Important Cases Referred

i. Girnar Traders v. State of Maharashtra, (2007) 7 SCC 555.
ii. Chhabildas v. State of Maharashtra, (2018) INSC 106 (discussed in judgment).
iii. Hasmukhrai V. Mehta v. State of Maharashtra, (2015) 3 SCC 154.
iv. Municipal Corporation of Greater Bombay v. Dr Hakimwadi Tenants’ Assn., 1988 Supp SCC 55.
v. Bangalore Medical Trust v. B.S. Muddappa, (1991) 4 SCC 54.

b. Important Statutes Referred

i. Maharashtra Regional & Town Planning Act, 1967 — Sections 49, 126, 127 (as construed in judgment).
ii. Land Acquisition Act, 1894 (Section 6 declaration procedure referenced).
iii. Constitution of India, Article 142 (jurisdiction to do complete justice).