Bombay High Court
Perfect Machine Tools Co. Ltd. vs State Of Maharashtra And Ors. on 17 January, 2008
Equivalent citations: 2008(2)MHLJ404, AIR 2008 (NOC) 1640 (BOM.) = 2008 (2) AIR BOM R 642, 2008 (2) AIR BOM R 642
Author: Swatanter Kumar
Bench: Swatanter Kumar, J.P. Devadhar
JUDGMENT Swatanter Kumar, C.J.
1. Section 126 of the Maharashtra Regional and Town Planning Act, 1966 (hereinafter referred to as "the Act") empowers a planning authority, development authority or, as the case may be, any appropriate authority to acquire land which is required or reserved for any public purpose specified in any plan or scheme framed under the Act and after the publication of a draft regional plan. This acquisition could be by different modes specified under the provisions of the said section. A land which is allotted or designated for any specified purpose in any plan under the Act if not acquired within ten years from the date on which the final regional plan or final development plan comes into force and if the acquisition proceedings of such land under the Land Acquisition Act are not commenced within the said period, it gives a right to the owner or any person interested in the land to serve a notice under Section 127 of the Act on the planning authority, development authority or, as the case may be, any appropriate authority to that effect. If, within six months from the date of service of such notice, the land is not acquired or steps as aforesaid are not taken, the acquisition shall be deemed to have lapsed and land shall be deemed to be released from such reservation, allotment or designation, Section 127 of the Act thus carves out an exception to the proceedings taken under Section 126 of the Act and also provides legal right and consequences which shall flow favourable to the owner/person interested in the land in the event of default of the concerned authority to take steps as contemplated under the provisions of the Act. The short and simple question that requires determination in the facts of the present case is in regard to the judicial interpretation and application of the provisions of Section 127 of the Act. In other words, whether the provisions of Section 127 of the Act are mandatory or directory and whether substantial compliance of the provisions of Section 127 of the Act would provide the owner or person interested in the land with the benefit and consequences as against strict compliance thereof.
2. The petitioner is a Private Limited Company incorporated under the provisions of the Indian Companies Act, 1956. The petitioner is the owner of a leasehold plot of land bearing C.S. No. 464 of Mazgaon Division, Dr. Mascaranhas Road, Mumbai, admeasuring about 1916.02 sq. mtrs., hereinafter referred to as "the said land". According to the petitioner, respondent No. 4, Municipal Corporation of Greater Bombay, is a statutory body and a planning authority under the Act for Greater Bombay. Respondent No. 5 is stated to be the designated officer of respondent No. 4 concerned with the planning and development of the city of Bombay. The said land has been under reservation for playground under the revised sanctioned development plan for the Bombay City from 1991. As no acquisition proceedings were commenced in relation to the said land within the stipulated period of 10 years from the date on which the said development plan came into force, the petitioner through its Advocate on 29th September, 2004 served a notice upon the Corporation under the provisions of Section 127 of the Act. The period of six months as contemplated under Section 127 of the Act expired on 29th March, 2005. The petitioner again through its Architects served a letter upon respondent No. 5 stating that the period of six months had expired and the petitioner had not heard anything from the Corporation. In addition to writing the letter dated 31st March, 2005, vide notice dated 24th September, 2005, the petitioner's Advocates informed the Corporation that the reservation had lapsed and the petitioner was free to deal with the property in accordance with law pursuant to their purchase notice. Thereafter the petitioner also claims that it had submitted plans for the building to be constructed on the said land on 24th September, 2005 and required the Corporation to approve the plans. The petitioner was informed by respondent No. 5 vide their letter dated 8th September, 2006, that Corporation had submitted an application to the State Government through the Urban Development Department on 15th March, 2005 for initiating acquisition of the said land under the provisions of Section 126(1) of the Act. The petitioner obtained the copy of the notification dated 28th June, 2005 and in furtherance to its purchase notice applied to the Municipal Corporation of Greater Bombay under the Right to Information Act, 2005 on 29th November, 2006 for certain documents including certified copy of the Improvement Committee's Resolution sanctioning initiation of acquisition proceedings and copy of the letter submitted by the Chief Engineer to the State Government. In response to this, the petitioner received a letter from respondent No. 4 dated 28th December, 2006 and obtained the copy of the requisite documents. Vide letter dated 9th February, 2007, the petitioner was informed by the Assistant Superintendent-cum-city Survey Officer No. 1 (Bombay City) of a joint measurement of the said land to be held on 23rd February, 2007 in which the petitioner participated, however, as averred in the petition, without prejudice to its rights. The case of the petitioner is that the reservation for a playground has lapsed in accordance with the provisions of Section 127 of the Act and the petitioner is entitled to develop the said land for a residential purpose which is permissible. Thus, the petitioner has prayed that the notification issued by the authorities dated 28th June, 2005 be quashed. The steps for development of the property were not taken within the requisite period and no action was taken for acquiring the said land within the stipulated period of six months in terms of Section 127 of the Act. The letter written by the Corporation to the State Government dated 15th March, 2006 could not in fact and in law validate the proceedings as they had already lapsed.
3. The respondents have contested the petition and raised legal and factual controversies in relation to the reliefs prayed for by the petitioners. According to the respondents, no proper and valid notice as envisaged under Section 127 of the Act has been served upon the planning authority. Furthermore, the application was made by respondent Nos. 4 and 5 on 15th March, 2005, within six months from the date of the purported notice issued by the petitioner to respondent Nos. 1 to 3 on 29th September, 2004. It is also the case of the respondents that the notification was issued by the Urban Development Department on 28th June, 2005 which was duly published in the Official Gazette of the Government of Maharashtra declaring that the land is needed for a public purpose and the Special Land Acquisition Officer-VII, Bombay and Bombay Suburban District was appointed under Clause (c) of Section 3 of the Land Acquisition Act to perform the functions of the Collector. Not only this, the resolutions passed by the Bombay Municipal Corporation on 7th February, 2005 and other correspondence between the Government Departments have been placed on record. The plans submitted by the petitioner for approval were also rejected vide letter dated 8th September, 2006, wherein the petitioner was informed by the respondents that the land in question was reserved for a public purpose i.e. playground and as such the request for sanction of plans cannot be accepted.
4. A rejoinder was filed on behalf of the petitioner to the reply affidavit filed by the respondents. However, the factual stand taken by the parties is hardly at variance and primarily the decision on the present case shall revolve on the view that the Court may take in regard to serving of a valid and proper notice as contemplated under Section 127 of the Act. In view of this, it will be appropriate to refer to the provisions of Section 127 at the very outset which reads as under.
127. Lapsing of reservation. - If any land reserved, allotted or designated for any purpose specified in any plan under this Act is not acquired by agreement within ten years from the date on which a final regional plan, or final development plan comes into force or if proceedings for the acquisition of such land under this Act or under the Land Acquisition Act, 1894, are not commenced within such period, the owner or any person interested in the land may serve notice on the planning authority, development authority or as the case may be, appropriate authority to that effect; and if within six months from the date of the service of such notice, the land is not acquired or no steps as aforesaid are commenced for its acquisition, the reservation, allotment or designation shall be deemed to have lapsed, and thereupon the land shall be deemed to be released from such reservation, allotment or designation and shall become available to the owner for the purpose of development as otherwise, permissible in the case of adjacent land under the relevant plan.
5. Section 125 of the Maharashtra Regional and Town Planning Act deals with compulsory acquisition of land and its utilization for development purposes and exceptions thereto. Section 125 of the Act talks of compulsory acquisition of land for the purposes of regional plan, development or town planning. Whereas Section 126 specifies the provisions relating to land required or to be reserved for any public purpose as specified in the plan in the scheme under the Act. This acquisition could be by three different modes; viz. by agreement, by paying an amount agreed or in lieu of any such amount by granting landowner or the lessee an amount equivalent to the value of the lessor's interest to be determined by the authorities on the basis of the principles laid down in the Land Acquisition Act, 1894, of Floor Space Index or transferable development rights and lastly by making application to the State Government for acquiring the land under the provisions of the Land Acquisition Act. The scheme of these provisions relate to the power of the State for compulsory acquisition and the methodology which the State Government is expected to follow in relation to the statutory provisions for grant of compensation of the acquired land to its owner by one of the modes. Section 127 of the Act carves out an exception to the provisions of Sections 125 and 126. The exception is in the form of a deeming provision. If the land reserved, allotted or designated for the purpose specified in the plan is not acquired, by the Authority specified, within ten years from the date on which the Regional plan comes into force or proceedings under the Land Acquisition Act are not taken within the said period, any person having an interest has a right to serve a notice on the Planning Authority or Appropriate authority and if within six months from the date of service of such notice land is not acquired or no steps are commenced for its acquisition, the reservation, allotment or designation shall be deemed to have lapsed and the land shall be deemed to be released from such reservation etc. giving free right to the owner of the land to utilize the land and to develop the property as he may like. In other words, if within the stipulated time, application of the owner of the land or a person interested is filed and if there is default on the part of the concerned authorities in complying with the provisions of the statute, then certain consequences which would be beneficial to the owner may follow. This is a legal fiction created by the statute and the deemed provisions become operative by themselves.
6. It is a settled canon of law that the legislature is quite competent to create the legal fiction, in other words, to enact a deeming provision for the purposes of assuming existence of a fact which does not really exist provided the declaration of non-existing fact as existing does not offend the constitution. The legal fiction, thus, could be enacted without using express words. The Court while interpreting such a provision has to ascertain for what purpose the fiction is created and then Court may even assume all those facts and consequences which are incidental or inevitable corollaries to the giving effect to the fiction. The Courts, however, have to take definite precaution that while construing the fiction it is not to be extended beyond the purpose for which it is created or beyond the language in the section by which it is created. The concept of legal fiction was stated by James, LJ.
When a statute enacts that something shall be deemed to have been done, which in fact and in truth was not done, the Court is entitled and bound to ascertain for what purposes and between what person the statutory fiction is to be resorted to.
7. The scope of Section 127 takes in its ambit the consequences of default by concerned authorities that is where they failed to acquire the land and utilize the same for the purpose for which it was reserved or notified and despite service of the notice as contemplated under Section 127 still failed within the period of six months to take appropriate steps. After the deeming fiction comes into effect the land shall automatically be released from such acquisition/reservation without passing of any order to that effect or without any specific act on the part of the authorities. Such situation beneficial to the owner or a person interested comes into existence on its own and as a result of default or inaction in compliance by the appropriate authority of the statutory provisions of the Act. To acquire the benefit of the provisions resulting from a legal fiction, it would be obligatory upon the part of the beneficiary to comply with the requirements of the statutory provisions strictly. Conditions postulated under this provision would be mandatory and not merely directory since the default has the effect of taking the land outside the ambit of acquisition/reservation. Thus, the compliance of the requirements of the provisions would be a condition precedent to the invocation of the right granting such benefit. The interested person should serve a notice on the Planning Authority, Development Authority or the appropriate authority as the case may be. The notice should state that despite its reservation, notification and after coming into force of the final development plan for 10 years, the land has not been acquired. The person should assert his right and still if within six months from the date of service of such notice the land is not acquired or no steps as stated in the section are commenced, then alone, the land shall be deemed to be released from such reservation and would be available to the owner.
8. With reference to the provisions of Section 127, the contention raised on behalf of the respondents is that the Planning Authority, as stated under this provision, would be a local authority as defined under Section 2(19) would be the Corporation and the notice ought to have been served as contemplated under this provision upon the Principal Officer of the Municipal Corporation. As the notice was neither addressed nor served on the said authority, it will be violation of the provisions of Section 127 of the Act which are imperative and thus, the petitioner would not be entitled to any benefit. However, according to the petitioner, no format has been prescribed under Section 127 of the Act of the notice in question and substantial compliance to the provisions would be sufficient to receive the benefits under the deemed fiction particularly when the requisite period has lapsed.
9. The notice under Section 127 is to be served by the interested person in the land on the Planning Authority, Development Authority or as the case may be on the appropriate authority to that effect. The consequences will follow only after no steps or action is taken within six months from the date of service of such notice. Section 136 of the Act provides the mode of service. All documents including notices and orders required by the Act or any other rules and regulations made thereunder to be served upon any person shall be deemed to be duly served, where it is to be served on the Secretary or Principal Officer of the local statutory authority if the document is addressed to that authority is sent by Registered Post to such office or delivered at such office. Section 127 would, thus, require the service of the notice on the appropriate authority in the modes specified under Section 136. Section 2(19) of the Act defines Planning Authority as under:
(19) "Planning Authority" means a local authority; and includes, -
(a) a Special Planning Authority constituted or appointed or deemed to have been appointed under Section 40;
(b) in respect of the slum rehabilitation area declared under Section 3C of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971, the Slum Rehabilitation Authority appointed under Section 3A of the said Act;
10. In terms of Section 40, the State Government by notification in the Official Gazette has to nominate and appoint a Planning Authority. There is no dispute to the fact that the Municipal Corporation of Greater Mumbai has been duly nominated or notified to be the Planning Authority for Greater Mumbai. The notice, thus, should have been addressed to the Principal Officer, Municipal Corporation of Greater Mumbai and delivered at the office of the said Corporation. The petitioner had addressed his notice dated 29th September, 2004 to the Chief Engineer, Development Plan, Municipal Corporation of Greater Mumbai. This notice was stated to be a purchase notice under Section 127 of the MRTP Act and certain documents were submitted. On 31st March, 2005, the petitioner had then served on the same authority the purchase notice under Section 127 stating that the period of six months had expired and nothing was heard and no steps have been taken and enquiry was made whether any steps for acquisition has been taken. Both these notices admittedly, were not addressed to the Principal Officer of the Planning Authority viz. the Municipal Corporation of Greater Mumbai. It may be noticed that even copy of the said notices under Section 127 of the Act was not addressed to the prescribed authority in terms of the above statutory provisions.
11. It may also be noticed that vide letter dated 8th September, 2006, the Chief Engineer had informed the petitioner that pursuant to the notice dated 29th September, 2004, application had already been made to the State Government through the Urban Development Department on 15th March, 2005 requesting the State Government to issue an appropriate orders for initiating acquisition of the property in question. On 28th June, 2005, the Under Secretary to the Government of Maharashtra, Urban Development Department had issued the notification duly stating and notifying that the land was needed for public purpose viz. the play ground and Special Land Acquisition Officer (7), Mumbai was appointed to perform the functioning of Collector for taking all proceedings after the issuance of the requisite notification. This notification and order was issued by order and in the name of the Governor of Maharashtra.
12. In the light of the above facts, it is clear that there is no compliance to the statutory provision embodied in the language of Section 127 of the Act. These provisions cannot be termed strictly as directory but would be mandatory as their compliance provides great benefit to the land owner or a person interested in the land and takes the land in question outside the ambit of reservation/development plan. Notice ought to be addressed to the prescribed authority and should be served by the registered post or delivered at the office and also the period of ten years and six months respectively specified under the Act should lapse before the person could claim any benefits from the default of the authorities concerned. On the plain reading of the provisions, it is obvious that it does not lie in the discretion of the applicant to serve the notice on the authorities which he thinks proper and in a manner considered proper by the applicant. It is obligatory upon the person to comply strictly with the provisions of the section as it divest the other party i.e. the Planning Authority of any right to carry out any development on that land. The deemed legal fiction of serious consequences cannot be said to be operative without strict compliance of the mandatory provisions. Maxwell correctly notices that it is impossible to lay down any general rule for determining whether a provision is imperative or directory. "No universal rule," said Lord Campbell L.C., "can be laid down for the construction of statutes, as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of Justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed. In other words, the Court has to consider the attendant circumstances, obligations and liabilities arising out of the compliance of such provisions, the subject-matter of which case would have to be examined. The provisions of a general clause or a clause of general nature may receive a liberal construction and could be said to be direct compliance but where the rights of the parties are sought to be disturbed on a legal fiction, the strict compliance would be imperative. Where the whole aim and object of the legislature would be plainly defeated if the command to do the thing in a particular manner did not imply a prohibition on doing it in any other, no doubt can be entertained as to the intention. The mere use of the words 'may serve notice on the Planning Authority' by itself per se would not render the provisions as directory in their nature and substance. The legislative intention is to bring the default to the notice of the competent authority (Planning Authority) and that the particular authority has still failed to take action or take steps for acquisition etc. within six months thereafter then alone the deeming fiction of law or deemed lapse would come into play. The purpose of the provision of Section 127 of the Act does not admit of such construction that Court should be inclined to hold that directory compliance to the provision would be sufficient to entitle the parties of statutory benefit. It is a matter of common knowledge that a letter addressed to the wrong officer though in the same Corporation may not be dealt with for months together as they may genuinely be under the impression that they are not expected to deal with the notice and in any case, may not be exactly aware of the consequences flowing from such default as it is only and squarely falls within the exclusive jurisdiction of the Principal Officer of the Planning Authority.
13. In the case of Girnar Traders v. State of Maharashtra and Ors. , the Supreme Court held that the provisions of Section 127 were intended to balance eminent dominant power of State and compliance of these provisions was expected to be strict compliance. The period specified under the section is to be adhered to and the Planning Authority would have to be the corporation and not an Improvement Committee. The real and true intention of the Legislature has to be seen and on a plain literal interpretation, the Court should read and modify the language without causing any injustice wherever it is necessary to avoid the manifestly result in injustice.
14. This is the special provision and is an exception to the general rule of compulsory acquisition. Thus, the application of rule of strict compliance would be the obvious provision. The Division Bench of this Court in the case of C.V. Shah and A.V. Bhat v. State of Maharashtra held as under:
22. Section 136 of the MRTP Act, 1966 provides, inter alia, that any notice required under the MRTP Act may be served upon the Principal Officer of the local authority and if such notice is addressed to the Principal Officer of the local authority that shall be deemed to be duly served on the local authority. It is not in dispute that the Commissioner is the Principal Officer of the Municipal Corporation. The contention that the expression "any person" in Section 136 does not include the Planning Authority is wholly fallacious. The expression "any person" is too wide and comprehensive and includes both natural and unnatural person. That would include the local authority is clear from Clause (a) of Sub-section (1) of Section 136 itself. We may immediately notice here that the Planning Authority is defined as 'local authority' in Section 2(19) and the 'local authority' in Section 2(15) means, inter alia, the Municipal Corporation constituted under the Bombay Provincial Municipal Corporations Act, 1949 (For short, 'BPMC Act'). That the Pune Municipal Corporation is the Municipal Corporation constituted under the BPMC Act is not in doubt.
23. Moreover, Section 152 of the MRTP Act, 1966 also provides that the powers and functions of the Planning Authority shall inter alia for the purposes of Section 136 be exercised and performed in the case of Municipal Corporation by the Municipal Commissioner or such other officer as he may be appointed in this behalf. Thus, the notice contemplated in Section 127 of the MRTP Act, 1966 on the Planning Authority if served on its Principal Officer is a good service.
15. The counsel for the petitioner relied upon the judgment of the Supreme Court in the case of Jute and Gunny Brokers Ltd. v. Union of India and Ors. to contend that service on a managing agent has been treated and held to be service on Principal Officer of the Company and on that analogy, the service was held to be valid particularly when it was replied to by the said authority. We are not impressed with this contention. The case relates to the service as contemplated under Order 29 Rule 2 of the Code of Civil Procedure and on ratio decidendi, the law would not be applicable to the facts of the present case. Under Rule 2A of Order 29, the service could be affected on a Corporation or a statutory body on the Secretary or any director or either Principal Officer of the Corporation. The Supreme Court had taken the view keeping in view the liberal language used by the Legislature in those provisions. In contradistinction to that, the provision of Section 127 of the Act read with Sections 2(19) and 136 of the Act makes it mandatory that notice should be served upon the Principal Officer of the Planning Authority viz. the Municipal Corporation of Greater Mumbai.
16. It will be useful to refer to some judgments of different Courts dealing with the service of notice under Section 434 of the Companies Act, 1956. The statutory notice contemplated under that provision was held to be mandatory and it was said that notice must be addressed to the Company itself and the notice addressed to the Managing Director was held to be improper. A notice which was not served on the registered office of the company was also held to be not a good notice. Rajearajeswari Packaging Products v. Dev Fasteners Ltd. (2002) 108 Company Cases, 715 (Mad) and Tata Iron and Steel Co. v. HIM Ispat Ltd. (2002) 108 Company Cases, 537.
17. Even in the case of Vysya Bank Ltd. v. Randhir Steel and Alloys P. Ltd. (1993) 76 Company Cases 244, the Division Bench of this Court held that where the registered office of the company was not functioning and that the company was giving some other address for correspondence, a notice at that address was held to be no good service.
18. In the case of Shalimar Rope Works Ltd. v. Abdul Hussain H.M. Hassan Bhai Rassiwala and Ors. , the Supreme Court held that even for compliance of the provisions of Order 29 Rule 2, Clause (b) the notice or summons should be left at the registered office of the company and summons served on the employees sitting in the registered office of the company who was merely an office assistant in the Sales Department of the company and was not officer of the company duly authorized officer to accept summons on behalf of the company, there was no valid service.
19. The mere fact that the Chief Engineer in his capacity had replied to the notice should be treated to be a deemed service upon the Principal Officer of the company can also not be accepted. Once the law contemplates service, mode of service, service on a person and that too within the specified periods, has to be mandatory. Furthermore, in the fact and circumstances of the present case, the petitioner, in any case cannot take any advantage inasmuch as steps had been taken for acquisition of the said land and notification in that behalf already stands issued.
20. The contention that no format has been prescribed under the statute would leave the petitioner of compliance to the provisions of the Act is also without any merit. Merely because a format has not been specified in the section or in appendix to the rule would in no way absolve the petitioner of his obligation to comply with the statutory requirements. The aforereferred provisions clearly state what should be stated in the notice, on which authority the notice should be served and what should the applicant asked for and how it should be served. Once the provisions are clear, there is no requirement to read these provisions ambiguously. We, therefore, reject this contention.
21. We are not going into the validity or otherwise of the said notification in view of the finding of fact recorded by us that purchase notice served by the petitioner under Section 127 was not in compliance of the provisions of the said section.
22. In the case of Amar Nath Dogra v. Union of India , the Supreme Court had taken the view that provisions of Section 80 of the Code of Civil Procedure require the notice to be served in terms of the section and compliance of this provision was mandatory. It may not be correct to argue that substantial and imperative compliance of the provisions of the section would be a hypertechnical approach. This provision cannot be equated to mere procedural section but is a section which has serious consequences on the rights of the parties. The provisions which are not only capable of but, in fact, vest one party with rights while divest the other, where it can unsettle the settled position, that too resulting from the default of appropriate authorities, then such provision would fall in line with the rule of strict construction. In clear distinction to the provisions of procedural laws simplicitor, the legislature has worded this provision differently and conveyed the intent of the framers of law unambiguously. By deemed fiction of law it alters the right in property, thus, can hardly be equated to the directory provisions of procedural law embodied in codes like Civil Procedure or Criminal Procedure. The notice under Section 127 of the Act, therefore, should essentially contain the material averments contemplated under these provisions, it should be served upon the prescribed authority and in the manner specified therein. It is only thereafter and upon expiry of the statutory period that any beneficial consequences in favour of the applicant will flow. The statute does not specifically or otherwise indicate any diverse rule to satisfy the legal requirements of Section 127. This would further support the approach that acts required under this provision must be done only in the manner specified in law. The service upon any other authority except the specified authority and without specific averments will not be a good notice for the purpose of Section 127 of the Act. The applicant, that is the interested person in the land, therefore, cannot take any benefit of such defective notice.
22-A. Thus, we find no merit in the writ petition which is dismissed. The rule is discharged leaving the parties to bear their own costs.
At the oral request of the learned Counsel appearing for the petitioner, interim protection granted shall continue for a period of eight weeks from today.