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What is the nature and significance of the planning process for a large Municipal town area? In that process, what is the role of the Municipal Corporation, which is the statutory planning authority? Can the State Government interfere in its decisions in that behalf and if so, to what extent? Does the State Government have the power to issue instructions to the Municipal Corporation to act in a particular manner contrary to the Development Plan sanctioned by the State Government, and that too a number of years after the Municipal Corporation having taken the necessary steps in consonance with the plan? Can the State Government instruct a Municipal Corporation to shift the reservation for a public amenity such as a primary school on a plot of land, and also instruct it to grant a development permission for residential purposes thereon without modifying the Development Plan?

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 REPORTABLE

 IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NOS. 198-199 OF 2000

 Shri Girish Vyas & Anr. ...Appellants

 Versus

 The State of Maharastra & Ors. ...Respondents

 WITH

 CIVIL APPEAL NO. 2450 OF 2000

 Dr. Laxmikant Madhav Murudkar (since deceased)

 Through LRs Mrs. Ranjana Laxmikant Murudkar & Ors. ...Appellants

 Versus

 The State of Maharastra & Ors. ...Respondents

 WITH

 CIVIL APPEAL NOS. 2102-2103 OF 2000

 Shri Manohar Joshi ...Appellants

 Versus

 The State of Maharastra & Ors. ...Respondents

 WITH

 CIVIL APPEAL NO. 2120 OF 2000

 Shri Ravindra Murlidhar Mane ...Appellants

 Versus

 The State of Maharastra & Ors. ...Respondents

 WITH

 CIVIL APPEAL NOS. 2105-2106 OF 2000

 2

 Shri Rama Nath Jha ...Appellants

 Versus

 The State of Maharastra & Ors. ...Respondents

 WITH 

 CIVIL APPEAL NOS. 196-197 OF 2000

 Maruti Raghu Sawant & Ors. ...Appellants

 Versus

 The State of Maharastra & Ors. ...Respondents

 J U D G E M E N T

H.L. Gokhale J.

 What is the nature and significance of the planning process for a 

large Municipal town area? In that process, what is the role of the Municipal 

Corporation, which is the statutory planning authority? Can the State 

Government interfere in its decisions in that behalf and if so, to what extent? 

Does the State Government have the power to issue instructions to the Municipal 

Corporation to act in a particular manner contrary to the Development Plan 

sanctioned by the State Government, and that too a number of years after the 

Municipal Corporation having taken the necessary steps in consonance with the 

plan? Can the State Government instruct a Municipal Corporation to shift the 

reservation for a public amenity such as a primary school on a plot of land, and 

also instruct it to grant a development permission for residential purposes 

thereon without modifying the Development Plan? Could it still be considered as 

 3

an action following the due process of law merely because a provision of 

Development Control Rules is relied upon, whether it is applicable or not? Or 

where the Municipal Corporation is required to take such contrary steps, 

supposedly on the instructions of the concerned Minister / Chief Minister, for the 

development of a property for the benefit of his relative, would such instructions 

amount to interference/mala fide exercise of power? Is it permissible for the 

landowner and developer to defend the decision of the Government in their 

favour on the basis of a provision in the erstwhile Town Planning Scheme as 

against the purpose for which the land is reserved under the presently prevalent 

Development Plan? Is it permissible for the landowner and developer to explain 

and justify such a favourable Government decision by relying upon the authority 

of the Government under another section of the statute which is not even 

invoked by the Government? What inference is expected to be drawn in such a 

situation with respect to the role played by the ministers or the municipal 

officers? What orders are expected to be passed when such facts are brought to 

the notice of the High Court in a Public Interest Litigation? These are some of 

the issues which arise in this group of Civil Appeals in the context of the 

provisions of the Maharashtra Regional and Town Planning Act, 1966 (for short 

MRTP Act) concerning a property situated in Pune Municipal area. 

2. These appeals arise out of two writ petitions in public interest 

leading to concurrent judgments and a common order dated 6th - 15th March 

1999 passed by a Division Bench of the Bombay High Court. These writ petitions 

bearing nos.4433 and 4434 of 1998 were filed respectively by one Vijay Krishna 

 4

Kumbhar, a journalist and one Nitin Duttatraya Jagtap, a Municipal Corporator of 

Pune. The petitions pointed out that a particular plot of land bearing Final Plot 

No.110 (F.P. No. 110 for short), and admeasuring about 3450 sq. meters, 

situated on Prabhat Road in the Erandwana area of the city, was initially 

reserved for a public purpose namely, a garden/playground, and subsequently 

for a primary school. They further pointed out that a number of years after the 

Pune Municipal Corporation (hereinafter referred to as PMC) took all the 

necessary steps to acquire this particular plot of land, the landowner one Dr. 

Laxmikant Madhav Murudkar appointed M/s Vyas Constructions, a proprietary 

concern of one Shri Girish Vyas (the appellant in Civil Appeal No.198-199 of 

2000) as the developer of the property. Shri Girish Vyas is the son-in-law of Shri 

Manohar Joshi who was the Chief Minister of Maharashtra from 14.03.1995 till 

January 1999. The petitioners contended that only because of the instructions 

from the Urban Development Department (UDD for short) which was under Shri 

Manohar Joshi, that in spite of the reservation for a primary school, the plot was 

permitted to be developed for private residences flouting all norms and 

mandatory legal provisions. They sought to challenge the building permission 

which was issued by the PMC under the instructions of the State Government, by 

submitting that these instructions amounted to interference into the lawful 

exercise of the powers of the Municipal Corporation, and the same was mala 

fide. After hearing all concerned, the petitions were allowed, and an order has 

been passed to cancel the Commencement (of construction) certificates, and 

Occupation Certificate, and to pull down the concerned building which has been 

 5

constructed in the meanwhile. The State Government has been directed to 

initiate criminal investigation against Shri Manohar Joshi, Shri Ravindra Murlidhar 

Mane, the then Minister of State for UDD, and the then Pune Municipal 

Commissioner Shri Ram Nath Jha.

3. Being aggrieved by this order, the present group of appeals have 

been filed:

(i) Civil Appeal Nos. 198- 199/ 2000 are filed by the developer Shri Girish 

Vyas and his proprietary concern M/s Vyas Constructions. Civil Appeal No. 2450 

of 2000 is filed by the landowner Dr. Laxmikant Madhav Murudkar (since 

deceased) to challenge the judgments and the order in their entirety. Their 

submissions by and large are similar. 

(ii) Civil Appeal Nos. 2102-2103 of 2000 are filed by Shri Manohar Joshi, the 

then Chief Minister, Civil Appeal Nos. 2105-2106 of 2000 are filed by Shri Ram 

Nath Jha who was the then Pune Municipal Commissioner, and Civil Appeal No. 

2120 of 2000 is filed by Shri Ravindra Murlidhar Mane, the then Minister of State, 

UDD. These appeals seek to expunge the adverse remarks against the 

appellants, and the order directing criminal investigation against them. 

(iii) Civil Appeal Nos. 196-197 of 2000 are filed by Maruti Raghu Sawant and 

others who were the tenants in this property. They contend that in the scheme 

prepared by the developer, they were to become owners of their tenements 

whereas under the original reservation, they were to be evicted. 

 6

 We may note at this stage that though the PMC accepts the 

judgment, it has no objection to the tenants continuing as tenants of PMC in the 

building which is constructed for accommodating them on a portion of the very 

plot of land. The tenants, however, contend that if the plot of land is taken over 

by PMC, they will remain mere tenants as against the ownership rights which 

were assured to them by the developer and the landlord, and are, therefore, 

continuing to maintain their appeals.

4. All these appeals are opposed and the impugned judgment and 

order are defended by the original petitioners as well as by the PMC and the 

State Government. It is relevant to note that the State of Maharashtra as well as 

PMC had opposed the writ petitions in the High Court, but they have not filed 

any appeals and have now accepted the judgment and order as it is. Since, all 

these appeals are arising out of the same judgment and order, they have been 

heard and are being decided together, by treating the appeals filed by Shri Girish 

Vyas as the lead appeals.

 Facts leading to these appeals

 Reservation on F.P. No. 110 for a garden

5. Dr. Laxmikant Madhav Murudkar (since deceased), appellant in Civil 

Appeal No. 2450 of 2000 (hereinafter referred to as landowner) owned the 

property bearing F.P. No. 110. The Government of Maharashtra sanctioned a 

Development Plan for Pune City by publishing a notification dated 7.7.1966 in the 

official gazette dated 8.7.1966, which fixed 15.8.1966 as the date on which the 

said plan shall come into force. (The said plan is hereinafter referred to as 1966 

 7

D.P. Plan). Under the said 1966 D.P. Plan, F.P. No. 110-112 were reserved for a 

garden. The Plan was sanctioned in exercise of the power of the State 

Government under Section 10 of the then prevalent Bombay Town Planning Act 

1954 (1954 Act for short). This notification stated that the PMC had passed the 

necessary resolution of its intention to prepare a Development Plan, carried out 

the necessary survey, considered the suggestions received from the members of 

the pubic under Section 9 of the Act, and after modifying the Plan wherever 

found necessary, submitted it to the Government, and thereafter the 

Government having consulted the Director of Town Planning, had in exercise of 

its power under Section 10 (1) and (2) of the Act, sanctioned the Development 

Plan.

6. Subsequently, the 1954 Act was repealed and replaced by the 

MRTP Act with effect from 11.01.1967. However, by virtue of Section 165 (2) of 

MRTP Act, the 1966 D.P. Plan was saved. Consequently, when the landowner 

applied for the sanction of a layout in F.P. No.110, the same was rejected by 

PMC. Therefore, the landowner served on the State Government a notice dated 

8th May 1979 under Section 49 (1) of the MRTP Act, calling upon it to purchase 

the land and to "commence the proceedings for acquisition". The notice stated 

that the F.P. No.110 was not acquired within the period of 10 years granted to 

the Planning Authority to implement the D.P. (for the Pune Municipal area, PMC 

is the Planning Authority). It further stated that as per his understanding, the 

D.P. was under revision but the reservation on petitioner's F.P. No.110 had not 

been changed, and `the reservation will never be cancelled and the final plot will 

 8

never be handed back' to him. The State Government confirmed the purchase 

notice under Section 49 (4) of the Act by its letter dated 5.12.1979. The 

Government's letter informed the landowner that necessary instructions have 

been issued to the PMC, and he may approach their office.

 Steps for acquisition of F.P. No. 110

7. The standing committee of the PMC thereafter passed a resolution 

on 5.1.1980 to initiate the proposal for acquisition. The PMC then forwarded the 

proposal to the Collector of Pune on 9.5.1980 to take the steps for acquisition. 

On 27.8.1981, the State Government notified the land for acquisition under 

Section 126 of the MRTP Act read with Section 6 of the Land Acquisition Act 

1894 (for short L.A. Act). A Special Land Acquisition Officer (S.L.A.O. for short) 

was appointed to perform the functions of the Collector. A notice informing the 

initiation of the proceedings under the L.A. Act as required under Section 9 

thereof was issued on 8.9.1981 seeking claims for compensation. The 

landowner replied to the notice, but did not challenge the acquisition. He filed 

his claim statement during the acquisition proceeding, and demanded the 

compensation at the rate of Rs. 480 per sq.m, and also that the material 

removed after demolition of the temporary structures (of the tenants) on the 

property should be given to him. Twenty four tenants filed a common claim 

statement and objected to the acquisition, but did not seek any compensation. 

They specifically stated that `there will not be any objection if they are provided 

with alternative accommodation on the land to be acquired'. The S.L.A.O. 

passed his award under Section 11 of the L.A. Act on 12.5.1983. He rejected the 

 9

objections of the tenants, and awarded the compensation of Rs. 100 to each of 

the 25 tenants. He determined the compensation payable to the landowner at 

Rs. 6,10,823/-. On 15.3.1985 the landowner withdrew the amount of 

compensation by furnishing necessary security, though under protest. 

8. After the Award was made by the S.L.A.O. on 12.5.1983 as stated 

earlier, a notice under Section 12 (2) of the L.A. Act was given, to take 

possession of the land on 20.5.1983. Once again, only the tenants objected 

thereto. They filed a suit on 19.5.1983 in the Court of Civil Judge, Senior 

Division, Pune, bearing Suit No. 966 of 1983, to challenge the acquisition and the 

Award. The landowner was joined therein as defendant No. 3. The Court 

granted an interim injunction on 19.6.1983, restraining the authorities from 

taking possession. However, after hearing the parties, an order was passed on 

9.2.1984 vacating the injunction, and returning the plaint for failure to give the 

mandatory notice required under Section 80 of the Code of Civil Procedure. The 

tenants filed an appeal to the District Court against that order, but the same was 

also dismissed. Thereafter, the tenants made a representation to the then 

Minister of State for UDD, pointing out their difficulties, which persuaded him to 

pass an administrative order restraining the authorities concerned from taking 

possession of F.P. No. 110. 

9. It is pertinent to note that all along, the landowner did not 

challenge the acquisition of his land in any manner whatsoever. On the other 

hand, he sought a Reference under Section 18 of the L.A. Act for enhancement 

of the compensation. The District Court dismissed that Reference bearing No. 

 10

273 of 1983 by order dated 15.4.1988, but enhanced the solatium and additional 

amount payable under Section 23(2) and 23(1A) of the L.A. Act. The amount 

payable under the order of the District Court was collected by the landowner, 

though under protest, but he did not prefer the appeal permissible under Section 

54 of the L.A. Act.

 Revision of the D.P. Plan for Pune under the MRTP Act and 

 change of utilisation of F.P. No. 110 to a Primary school

10. In the meanwhile, the process of revising the Development Plan of 

Pune city under the provisions of MRTP Act was going on. The PMC as the 

planning authority had passed a resolution on 15.3.1976 declaring its intention to 

prepare a Revised Development Plan under Section 23 (1) read with Section 38 

of the MRTP Act. The State Government appointed the Director of Town Planning 

to be the Special Officer for that purpose under Section 162 (1) of that Act. 

After observing all the legal formalities, the said Director published in the official 

gazette on 18.9.1982 the Revised Draft Development Plan under Section 26 (1) 

of the Act. In that plan F.P. No. 110-112 were initially reserved for children's 

play-ground, but subsequently the reservation was changed to primary school. 

After inviting the objections and suggestions, and after considering them, the 

State Government sanctioned the Revised D.P. Plan on 5.1.1987 (though with a 

few modifications), to be effective from 1.1.1987 (hereafter referred as 1987 

D.P. Plan for short) as also the Development Control Rules (D.C. Rules for short). 

In the sanctioned D.P. Plan of 1987, the purpose of utilization of these three 

plots was, as stated above changed to primary school. 

 11

 The modification with respect to these three plots was as follows:- 

 "Reservation continued. Development allowed as per note 4". 

 Note 4 reads as follows:-

 "Sites designated for Primary Schools from Sector I 
 to VI as may be decided by the Pune Municipal 
 Corporation may be allowed to be developed by 
 recognized public institutions registered under Public 
 Charitable Trust Act, working in that field or the owners of 
 the land."

Thus by virtue of this note, the purpose could also be effectuated either by the 

owner of the land, or by a recognized charitable institution.

11. It is relevant to note at this stage that a school for the handicapped 

children has come up in the adjoining F.P. No. 111. Besides, a primary school 

was set up by Symbiosis International Cultural and Educational Centre 

(`Symbiosis' for short) on F.P. No. 112. It is stated that Symbiosis and another 

educational institution viz. Maharashtra Education Society (MES) had sought 

these plots since they were in need of land for extension of their educational 

activities. The then Chief Minister of Maharashtra had recommended the 

proposal of MES by his letter dated 9.4.1986, and the society had applied to the 

then Commissioner of Pune by its letter dated 29.4.1986. That was, however, 

without any effect.

12. The S.L.A.O. gave one more notice to take possession of F.P. 

No.110 on 1.3.1988. It led to the filing of Regular Civil Suit bearing No. 397 of 

1988 by some of the tenants in the Court of Civil Judge, Senior Division, Pune 

against the State Government and PMC, once again challenging the award of the 

 12

S.L.A.O., and seeking an injunction to protect their possession. The Court 

granted the interim injunction as sought. Thereafter the landowner, who was 

one of the defendants in the suit, applied for transposing himself as a plaintiff, 

which prayer was allowed on 2.4.1988. The Court accepted the contention of 

the tenants that the acquisition had lapsed due to the change of purpose of 

reservation from what it was in 1966 viz. a garden by the time the award was 

made, and, therefore, decreed the suit by its order dated 23.4.1990. 

13. The PMC preferred a first appeal against that decree to the Bombay 

High Court on 7.1.1991, but the Additional Registrar of the High Court returned 

the appeal by his order dated 21.4.1992 for presentation to the District Court on 

the basis of the valuation of the suit, and the provision for jurisdiction as it then 

existed. Accordingly, the PMC filed the appeal before the District Court 

immediately on 29.4.1992, but the District Court in turn, by its order passed two 

years later on 7.4.1994 returned the appeal for re-presenting it to the High 

Court, on the ground that the suit was valued above Rs. 50,000/- and as per the 

rules then existing the appeal would lie to the High Court. PMC once again filed 

the appeal in the High Court being F.A (Stamp) No. 18615 of 1994 on 18.7.1994, 

alongwith an Application for condonation of delay for the reasons as stated 

above. This Appeal remained pending till it was withdrawn on the direction of 

the State Government on 18.8.1998, in the circumstances which will be presently 

pointed out. It is, however, relevant to note that this appeal was withdrawn at a 

point of time when the two public interest petitions were filed on 12.8.1998, and 

were pending in the High Court. The impugned order of the Division Bench on 

 13

these petitions has directed the PMC to move an Application before the High 

Court for reviving the First Appeal (Stamp No.18615 of 1994), and pursuant 

thereto the PMC has already moved the necessary Application on 13.1.2000. Be 

that as it may.

 Steps taken by the landowner after Shri Manohar Joshi 

 took over as the Chief Minister of Maharashtra

14. It is material to note that after the decision of the Reference Court, 

the landowner entered into an agreement of sale of the concerned land with one 

Shri Mukesh Jain on 17.8.1989, though no steps were taken thereafter by either 

of the parties on the basis of that agreement. It so happened that consequent 

upon the elections to the State Assembly, a new Government came in power in 

the State of Maharashtra in March 1995, and Shri Manohar Joshi took over as the 

Chief Minister (hereinafter referred as the then Chief Minister). He retained with 

himself the UDD portfolio. The earlier referred Shri Ravindra Mane became the 

Minister of State for UDD (hereinafter referred to as the then Minister of State). 

On 20.10.1995 the landowner entered into a Development agreement with M/s 

Vyas Constructions by virtue of which the landowner handed over all rights of 

development in the property to them for a consideration of Rs. 1.25 crores, a flat 

of 1500 sq. feet area and an office space of 500 sq. feet in the building to be 

developed on F.P. No. 110. The agreement stated that it was being entered into 

to solve the practical difficulties. Para 7 thereof stated that the developer shall 

follow the procedure or process of de-reservation of the said property. Para 20 

and 21 stated that `after de-reservation of the property, the developer agrees to 

 14

get the clearance under the Urban Land (Ceiling and Regulation) Act 1976 which 

may be necessary,' and for that purpose he was authorised to get any scheme 

sanctioned. M/s Vyas Constructions is stated to have settled the claim of above 

referred Shri Mukesh Jain. On the same day, the landowner executed an 

irrevocable Power of Attorney in favour of Shri Girish Vyas for the development 

of F.P No. 110. (He is referred hereinafter as the developer). The landowner 

simultaneously executed another Power of Attorney in favour of one Shri Shriram 

Karandikar on 26.10.1995, authorising him to take necessary steps concerning 

the development of that land. 

15. Thereafter, on 1.11.1995 the architect of the landowner submitted 

to PMC a building layout for permission for residential use of F.P. No. 110. The 

City Engineer of PMC rejected the proposal by his reply dated 6.11.1995 under 

Section 45 of the MRTP Act read with Section 255 of the Bombay Provincial 

Municipal Corporations Act 1949 (BPMC Act for short) and D.C. Rule No. 6.7.1, 

since the plot had been reserved for a primary school, and hence such a 

permission could not be granted. It was however pointed out in this reply of the 

City Engineer that the development of the land was permissible in the manner 

indicated in the note No.4 published in the gazette which has been referred to 

hereinabove (i.e. putting up a primary school either by the landowner or by a 

charitable trust).

16. At this stage, landowner's Attorney holder, Shri Shriram Karandikar 

wrote to the Minister of State for UDD on 20.11.1995 seeking a direction to the 

Municipal Commissioner to sanction landowner's aforesaid application dated 

 15

1.11.1995 for development of the property for residential houses. He relied on 

the decree of Civil Judge Senior Division in Civil Suit No.399 of 1998 and prayed 

for correcting the Development Plan also. From here onwards starts the role of 

the then Minister of State, the Municipal Commissioner, and the then Chief 

Minister.

 Processing of the application dated 20.11.1995 on behalf of the 

 landowner at the level of the State Government

17. In their petitions to the High Court, the writ petitioners made the 

allegation of mala fides on the part of the then Chief Minister and the Minister of 

State for UDD in entertaining the application made on behalf of the landowner. 

It, therefore, became necessary for the Division Bench of the High Court to call 

for the original record from the State Government as well as from the PMC. The 

application dated 20.11.1995 made by Shri Karandikar on behalf of the landlord 

narrated the developments until the date of that application including the 

judgment and decree of the Civil Court setting aside the acquisition of the 

property. It was, thereafter, submitted that the Municipal Commissioner be 

directed to sanction the development permission as per the application of the 

architect of the landowner. It is relevant to note that as far as this application of 

Shri Karandikar is concerned, it was not addressed to the State Government or to 

the Secretary of the concerned Department, but directly to the Minister of State 

for UDD, which fact is noted by the Division Bench in its judgment. The 

application did not bear any inward stamp of UDD. In the margin of the 

application, there was a noting by the Private Secretary of the Minister of State 

 16

for UDD, recording that the Minister had directed the Deputy Secretary, UDD, to 

call a meeting on 19.1.1996. The record further shows that although the Under 

Secretary of UDD Shri P.V. Ghadge accordingly called the initial meeting, by 

addressing a letter to the Director, Town Planning and the Municipal 

Commissioner, the same was adjourned to 22.1.1996. On that date, the meeting 

was attended by the Director of Town Planning, the Deputy City Engineer of 

PMC, Deputy Director of Town Planning, Pune, as well as by Shri Karandikar and 

his advocate, but what happened in that meeting is not reflected in this file.

 Initial Stand of Urban Development Department and PMC 

18. The Under Secretary (Shri P.V. Ghadge) prepared a preliminary 

note dated 2.2.1996 for the subsequent meeting. At the outset, the note 

mentions in a nutshell the background for the meeting which was sought on 

behalf of the landlord. Thereafter it gives the initial opinion of the U.D. 

Department at the end of the note, which is as follows:- 

 "In this regard it is the advice of the department that, 
 acquisition has been done after taking action on the purchase 
 notice. The compensation amount has been accepted. Even if 
 the reservation of the plot is changed, it does not make any 
 difference. Directions be given to the Pune Municipal Corporation 
 to immediately present this matter in the Bombay High Court. 
 The question of returning the plot to the land owner does not 
 arise."

19. On the background of this departmental note containing its advice, 

a meeting was held on 3.2.1996 presided over by the Minister of State for UDD, 

and the minutes of the meeting are part of the record placed before the High 

Court. Apart from Shri Karandikar and his advocate, high ranking officers such 

 17

as (i) Secretary, UDD, (ii) Director, Town Planning, (iii) Commissioner, PMC, (iv) 

City Engineer, PMC and (v) Under Secretary, UDD were present in the meeting. 

The minutes of the meeting are recorded by the Under Secretary. 

20. These minutes record that in this meeting the advocate of the 

applicant explained the facts leading to his client's application, justifying as to 

why the reservation on the land may be deleted. He referred to the Court 

proceedings, the fact that 25-30 tenants were residing on the property for many 

years, and that on the adjoining property a school was running. He therefore 

submitted that the reservation on the land be deleted. 

21. The note records a preliminary query raised by the Secretary, UDD 

as to whether the advocate was pleading on behalf of the tenants or the 

landowner, to which the Advocate replied that he was pleading for the 

landowner. The Secretary, UDD raised two more queries viz. (i) if the land was 

not useful for reservation because of the tenants, then how will it be available to 

the landowner, and (ii) whether the landowner had ever objected to this 

reservation, to which the advocate replied in the negative.

22. The City Engineer, PMC pointed out during the meeting that 

consequent upon the property owner issuing the purchase notice, the PMC had 

acquired the land, the award was made, the property owner had accepted the 

compensation, and that he never objected to the change in reservation due to 

the revision of the D.P. Plan during the entire period of revision i.e. 1982-87. 

With respect to the proceedings initiated by the tenants, he pointed that PMC 

 18

had filed an Appeal in the Bombay High Court against the judgment of the Civil 

Court, and the matter was sub-judice. He specifically asked whether the hearing 

given to the applicant was on an appeal under Section 47 of the MRTP Act, or 

was it on his application. He pointed out that the property was under 

reservation, and it could not be de-reserved in an appeal under Section 47. It 

required an action in the nature of modification under Section 37 of the MRTP 

Act. If it was an appeal, then it may be rejected, and if it was an application for 

modification then a decision cannot be taken as the matter was sub-judice. On 

these queries it was stated on behalf of the landowner that his application was a 

request and not an appeal.

 Directions by Minister of State and report made by the Municipal 

 Commissioner in pursuance thereof

23. It was thereafter pointed out on behalf of landowner that on the 

adjoining two plots, schools had been developed, and the Corporation may not 

need this land. The note records that in view of this submission, the Minister of 

State, UDD asked the Municipal Commissioner to examine whether the PMC 

really needed the concerned property. He also suggested that it be examined, if 

PMC can keep some portion of the land under reservation, and release the 

remaining to the landowner. If such a compromise is to be arrived at, then the 

property owner will have to accommodate the tenants on a portion of property 

released to him. If PMC did not have any objection to reduce the area under 

reservation, Government will issue the necessary direction to take action under 

Section 37. The note records at that stage, that the Municipal Commissioner 

pointed out that the permission of the Municipal Corporation (meaning the 

 19

general body) was necessary to either delete the reservation, or to reduce the 

area under reservation. 

24. The file shows that accordingly the Under Secretary wrote to the 

Municipal Commissioner on 14.2.1996 requesting him to examine the possibility 

regarding any settlement after a site inspection, and to forward his opinion. He 

was also asked to inform as to when had the PMC filed its appeal in the Bombay 

High Court, and about its status. 

25. The file shows that at this stage, the landowner changed his stand. 

Shri Karandikar wrote another letter dated 23.3.1996 to the Minister of State that 

his application be treated as an appeal under Section 47 of the MRTP Act.

26. The Municipal Commissioner replied Government's letter dated 

14.2.1996 by his letter dated 17.4.1996. He pointed out that the development 

permission for this particular plot had been rejected because the property was 

under reservation. Then he reiterated the position of PMC as stated in the 

meeting of 3.2.1996. Then he added - 

 "On 3.2.1996 we took the same stand which was taken by 
 us in various counts and administrative levels regarding dispute 
 for the development of property, and that if any change is 
 proposed in the use of the said property, permission has to be 
 taken from the Pune Municipal Corporation. The Hon'ble Minister 
 of State for urban development ordered us to survey the subject 
 property and also ordered to explore the options of changing or 
 reducing the area of the reservation." 

27. The Municipal Commissioner then stated that before considering 

the various options as directed by the State Government, it was necessary to 

 20

note the background of the subject property; viz. that as per the 1966 D.P. Plan, 

it was reserved for a garden, and subsequently the reservation was changed to a 

Primary School in the draft D.P. Plan of 1982 confirmed in 1987. He referred to 

the litigation initiated by the tenants, the fact that the PMC had filed an appeal to 

the High Court against the decision in the Civil Suit No. 397/1988, and that the 

High Court sent back the matter to the District Court and it was pending there. 

He placed on record the fact that though full price of the land was paid to the 

owner, procedure of taking actual possession by the PMC was still pending for 

last 13 years, because of which it was not possible to make appropriate use of 

the land. The Minister had asked him to survey the subject property, and to 

explore the possibility of changing or reducing the area of reservation. The 

commissioner pointed out that a survey was carried accordingly. He recorded 

that on inspection following facts were mainly noted:-

 "1. There are about 36 temporary Houses on the land.
 2. Out of the total area nearly half is encumbered.
 3. Two Educational Institutions in the vicinity of the 
 School.
 4. There are 11 Educational Institutions in the vicinity 
 of the School.
 5. Except the temporary Houses on this property the 
 development of the area is planned and corporation 
 has control over it."

The Commissioner however, did not specify as to which area of the city was 

considered by him when he spoke about `vicinity' in item No. 4 above.

28. The land was to be developed either by PMC or the owner or by a 

Charitable Trust as per the D.P. Note 4 referred to above. The Municipal 

Commissioner then gave his opinion that development of a primary school on 

 21

that plot by a charitable institution appeared impossible due to various factors 

such as the order of the Civil Court, litigation concerning this plot, the 

requirement of rehabilitation of the tenants on that plot, and existence of near-

by schools. Besides, the area being a higher middle class area, the response to 

a municipal school was doubtful. He then added as follows - `considering the 

funds available, the PMC is inclined to develop school on some other plot 

reserved for school'. As we have noted earlier two well-known educational 

institutions, viz. MES and Symbiosis had already sought this plot also. The PMC 

had however replied to them that it was not possible for it to give them this plot, 

since it was not in the possession of PMC. The Municipal Commissioner failed to 

bring these very relevant facts to the notice of the Government. Having noticed 

these facts, the Division Bench has observed in para 143 of its judgment that the 

Commissioner's statement in this behalf in his report was "far from truth". 

29. The Commissioner then recorded that in view of the direction of 

the State Government to suggest alternatives for settlement, he had in the 

meanwhile, held discussions with Shri Karandikar, and that Shri Karandikar had 

expressed readiness to give alternate unencumbered land within suburbs of Pune 

admeasuring 5000 to 10000 sq. feet free of cost. Thereafter, in view of the 

direction of the State Government and proposals from Shri Karandikar, the 

Commissioner recorded two suggestions:-

 "1. Presently reserved area is about 3541 sq.mtrs out of 
 which nearly 50% area is occupied by occupants and remaining 
 area is open. The land owner after excluding the area occupied 
 by the existing houses, to transfer the remaining area to the Pune 
 Municipal Corporation for school. However, since the land owner 

 22

 has accepted compensation for the entire area, for the area to be 
 transferred, he should refund the amount to the Pune Municipal 
 Corporation at the rate suggested by the Director of Town 
 Planning.

 2. To get transferred land admeasuring 3000 sq.mtrs 
 elsewhere at a convenient place in Pune City with school 
 admeasuring 500 sq.mtrs constructed thereon free of cost as per 
 specifications of the Pune Municipal Corporation, and for that 
 purpose it is necessary to get executed a proper agreement. But 
 land to be given elsewhere should not be reserved in 
 development plan for school or some other purpose."

 Thereafter his letter stated as follow:-

 "If first proposal is to be accepted for developing school on 
 remaining area question regarding decision of Civil Judge, Senior 
 Division would arise. In this situation it is necessary to have the 
 support of the land owner and tenants for this proposal. For 
 implementing both the aforesaid proposals suggested by us it 
 would be appropriate if the following things are complied with:-

 1. The Pune Municipal Corporation administration to take 
 permission from the Pune Municipal Corporation before releasing 
 rights in respect of the subject property.

 2. For deleting reservation on the property taking action 
 under Section 37 of M.R.T.P.

 3. For acquiring new site as per Proposal No.2 permission of 
 concerned Departments of the Pune Municipal Corporation will 
 have to be taken.

Then the Commissioner added:-

 Prior to this since no such settlement matters have taken place 
 regarding the development plan of Pune Municipal Corporation, 
 the experience of Pune Municipal Corporation in this regard is 
 limited. Till the next order is received from the State Government 
 the Pune Municipal Corporation is continuing the judicial 
 procedure in respect of this land."

30. After the receipt of the letter dated 17.4.1996 from the Municipal 

Commissioner, the file shows the following noting dated 24.4.1996:-

 " Mantralaya, Bombay 400 032

 23

 Date 24/4/1996

 According to the instructions of Shri Chavan, Private Secretary 
 of the Hon'ble Chief Minister, please forward a copy of the report of 
 the Pune Municipal Corporation in the matter of Shri Karandikar for 
 the perusal of the Hon'ble Chief Minister.

 Shri Ghadesaheb Sd/-
 Under Secretary Private Secretary
 N.V. Minister of State for Finance,
 Planning and Urban Development

 Government of Maharashtra"

31. On receiving the above reply dated 17.4.1996 from Municipal 

Commissioner, Shri Ghadge, the Under Secretary once again put up a detailed 

note thereon. In first 8 paragraphs of that note he recorded the previous 

developments, including and upto the letter sent by the Municipal Commissioner. 

Thereafter in paragraph 9, 10 and 11 he put up the proposal of the department:-

 "9. Considering the entire aforesaid circumstances, it is 
 firstly pointed out that applicant Shri Karandikar has approached 
 the Government on behalf of the land owner but the land owner 
 has already taken the price of the said property in the year 1983. 
 Though the physical possession of the said property is not 
 received to the Municipal Corporation still however, legally 
 Municipal Corporation has become owner of the said property. 
 Therefore, the Land Owner does not have any right to demand 
 return of the said property by deleting reservation. Now 
 considering the tenants, they have approached the Court and 
 therefore, it is not necessary to consider that aspect till the 
 matter is decided by the Court. If the said matter is decided 
 against the Municipal Corporation still the said persons shall be 
 tenants and the land owner shall be Municipal Corporation and 
 further that the tenants have requested for allotment of the land 
 for developing it.

 10. Still however considering the fact that no way out 
 will be available if the matter is kept pending as it is, and further 
 considering that there are numerous schools in the vicinity of the 
 said property, there should be no objection to consider and 
 approve on government level the alternative No.1 suggested by 

 24

 the Municipal Commissioner. However, for the said purpose the 
 tenants will have to withdraw their proceedings from the Court 
 and they will have to pay to the Municipal Corporation the cost 
 price of the 50% portion to be released for the said tenants as 
 may be determined by the Director, Town Planning. If the said 
 alternative is acceptable to the land owner, the Pune Municipal 
 Corporation be informed about the orders of the Government to 
 initiate proceedings u/s 37 for the purposes of deletion of 50% 
 property from reservation and to forward the said proposal to the 
 Government.

 11. Second alternative does not deserve any 
 consideration since for shifting the reservation the alternative 
 property should have the same area like that of the original one 
 and that it is necessary that such property should be in the 
 vicinity of approximately 200 mtrs. from the property under 
 reservation. So also the matters like approach road and level of 
 the land are also required to be similar. (MARGINAL REMARK - 
 Rule No.13.5 of Pune Development Control Rules). 

 12. Proposal in paragraph 10 submitted for approval."

 The note was countersigned by Shri Deshpande, Deputy Secretary, 

Town Planning on 4.6.1996, and by the Senior Chief Secretary (NV i.e. Nagar 

Vikas or Urban Development). Thus the Urban Development Department did 

not accept the second proposal of the Municipal Commissioner to remove the 

reservation on the plot in its entirety, but recommended the acceptance of the 

first proposal to reduce the reservation on the plot to 50% of its area. The 

Minister for State however did not sign the note and he ordered a further 

discussion on the subject on 12.6.1996.

32. Thus there was once again a discussion with the Minister of State, 

UDD on 12.6.1996 when Shri Karandikar, Shri Harihar, City Engineer, PMC, Shri 

Deshpande, Deputy Secretary, Town Planning and Shri Ghadge, Under Secretary 

were present. Shri Ghadge made a note of the meeting and signed it on 

 25

13.6.1996, and which note is also signed by Shri Deshpande and the Additional 

Chief Secretary. The note records that on behalf of the applicants it was stated 

that it was not possible for them to accept the alternative no.1, and Municipal 

Corporation should consider the second alternative. The note further records 

that thereupon the City Engineer suggested that if the applicant shows some 

other alternative properties, the Municipal Corporation will inspect all of them 

and then consider as to which of them is possible to be accepted. The note 

thereafter records as follows:-

 "In the event such alternative property is selected by 
 Municipal Corporation, then action to be taken for shifting the 
 reservation from the subject property as per Rule No. 13.5 of 
 Pune Development Control Rules can be considered. However, it 
 was clarified by the Department that for that purpose the 
 condition of 200 mtr. Distance will have to be relaxed and for 
 which the permission of Hon. Chief Minister will have to be 
 obtained".

 The PMC was thereafter asked to submit its response in the light of 

above discussion. Shri Ghadge recorded this suggestion in his letter dated 

20.6.1996 addressed to the Municipal Commissioner.

33. The Municipal Commissioner then wrote back to the Under 

Secretary, UDD by his letter dated 15.7.1996, pointing out that the applicant had 

shown four sites from which one at Lohegaon Survey No.261 H.No.1/2 

admeasuring 3000 sq.meter was suitable for a primary school, but it was in the 

Agricultural zone as per the approved D.P., and if it was to be converted to 

Residential zone, the approval of the State Government will have to be obtained 

for such a modification.

 26

34. On receiving this letter from the Municipal Commissioner, Shri 

Ghadge once again put up a detailed note and at the end of para 8 thereof 

stated as follows:-

 "Considering the above circumstances and especially `A" on 12 T.V. 
 and B on 14 T.V., there could be no objection in granting permission 
 for shifting reservation under Rule 13.5 of the D.C. Rules by relaxing 
 the 200 meter condition and accordingly directions can be given to the 
 PMC for taking the following necessary action:-

 1. The Pune Municipal Corporation should recover the amount of 
 compensation paid earlier, for acquisition of final plot No.110 at 
 Earndwane together with the structures, with simple interest.

 2. The State Government should issue directions to the 
 Pune Municipal Corporation for getting the plot at Lohegaon, Pune 
 Survey No.261 Hissa No.1/2 from Agricultural zone into residential 
 zone by following the procedure under Section 37(1) of the 
 Maharastra Regional and Town Planning Act, 1966 and thereafter 
 submitting the proposal to the State Government for sanction.

 3. The Commissioner Pune Municipal Corporation should 
 take action for shifting the reservation for Primary School on Final Plot 
 No.110 in the Development Plan of Pune City under Rule 13.5 of the 
 Development Control Rules, Pune to Lohegaon, Survey No.261, Hissa 
 No.1/2 and for that purpose the permission of the Corporation is not 
 necessary as intimated earlier by the State Government in another 
 case [Survey No.39/1, Kothrud, Pune].

 4. After complying with (1) and (3) above, the Pune 
 Municipal Corporation should enter into an Agreement for transfer of 
 the land at Lohegaon Pune and thereafter give development 
 permission for the plot at Erandwane. However the Completion 
 Certificate for that place should not be issued unless the construction 
 of School at Lohegaon is completed."

 Below that note there are signatures as follows:-

 "Sd/-
 26/7/96
 (P.V. Ghadge)
 Under Secretary

 Sd/- 
 26/7/96 
 (Shri Deshpande)

 27

 Deputy Secretary Town Planning

 Sd/- 
 26/7/96 
 Additional Chief Secretary, (U.D.)

 Sd/- 
 30/7/96 
 Hon'ble Minister of State (U.D.)
 Received
 31/7/96
 All action be taken in accordance with law. No objection.

 Sd/-
 21/8/96
 Hon. Chief Minister"

35. In view of the above decision signed by the Chief Minister on 

21.8.1996, the Deputy Secretary, UDD sent a letter/order dated 3.9.1996 to the 

Commissioner containing exactly the above four conditions. The letter stated 

that he had been ordered by the State Government to inform those four 

directives, and after quoting those four directives the letter further directed the 

Corporation to act as per the above State Government directives and report 

compliance. The letter reads as follows:-

 "ENGLISH TRANSLATION OF STATE GOVERNMENT LETTER DATED 
 03/09/1996

 (MAHARASHTRA STATE)

 No.TPS-1896/102/Matter
 No.7/96/U.D.-93
 Urban Development Department
 Mantralaya, Mumbai 400 032

 Date : 3rd September, 1996

 To,
 The Commissioner
 Pune Municipal Corporation

 28

 Pune

 Sub: Development Permission of T.P. Scheme No.1, Final Ploat 
 No.110.

 Ref: Request Application dated 20/11/95 by Shri Shriram 
 Karandikar to Minister of State for Urban Development for 
 Development in the subject matter.

 Sir,

 I have been ordered by the State Government to communicate to you the 
following directives.

 1. The Pune Municipal Corporation should recover from the 
 land owner according to the land acquisition law the 
 principal amount paid for acquisition of Final Ploat No.110, 
 Erandwane along with construction, with interest thereon 
 at 12%.

 2. S.No.261 Hissa No.1/2 Lohegaon, Pune which is in 
 agricultural zone should be included within residential zone 
 in the Development Plan. For doing this you are directed 
 that Pune Municipal Corporation should complete the entire 
 legal action under Section 37 (1) of the Maharashtra 
 Regional and Town Planning Act, 1966 and send the 
 proposals to the State Government for sanction.

 3. The Commissioner, Pune Municipal Corporation should take 
 steps to shift the reservation of primary school in 
 accordance with Rule 13.5 of the Development Control Rules 
 from Final Plot No.110, Erandwane to Lohegaon S. No.260 
 Hissa No.1/2. For this purpose no sanction is required from 
 the Pune Municipal Corporation as has been earlier 
 communicated to you in another matter (S.No.39/1 
 Kothrud).

 4. After action as stated in (1) and (3) above is completed, 
 appropriate agreement be entered into by Pune Municipal 
 Corporation with land owner about transferring the 
 Lohegaon plot and thereafter Development permission be 
 granted in respect of the Plot at Erandwane, however no 
 completion certificate for that place be granted unless the 
 construction of school at Lohegaon is complete.

 Corporation to act as per the above State Government directive and 
submit report regarding compliance to the Government.

 29

 Yours faithfully,

 Sd/-
 Vidyadhar Deshpande
 Deputy Secretary"

 Notings from the Municipal Files:-

36. Thereafter we have the notings from the Municipal files which show 

that consequently the City Engineer has written to landowner on 27.9.1996 to 

return the amount paid to him for acquisition of final Plot No.110 T.P. Scheme, 

No.1 with interest at the rate of 12%, and secondly to transfer concerned land 

bearing survey No.261 Hissa No.1/2 at Lohegaon free of cost and without any 

encumbrances. The letter further stated that only after compliance of the above 

two conditions he will be given permission for development of F.P. No.110. It 

then stated that building completion certificate will be given only after the 

procedure under Section 37 (1) of the MRTP Act for deleting Survey No.261 

Hissa 2/1 at Lohegaon, Hadapsar from the agricultural zone, and reserving it for 

primary school is completed, and sanctioned by the State Government. 

37. Thereafter there is one more note of the Municipal Commissioner 

dated 21.9.1996 which records the opinion of the Senior Law Officer that the 

permission of the general body of PMC will be required for entering into an 

agreement for deleting the reservation of plot at Erandawana. With respect to 

the same the commissioner has recorded as follows:-

 "However, since the State Government has given clear 
 orders to take action under Rule 13.5 of the Development Control 
 Rules of Pune for complying with the subject matters and since 

 30

 directives have been given for making such change, no 
 permission of the Pune Municipal Corporation is necessary". 

 Subsequent Developments

38. Consequently, the subsequent steps have been taken. The 

landowner has returned the amount as sought, a deed of settlement has been 

entered into between the landowner and the PMC, and Commencement 

Certificates have been issued on 28.11.1996 and 3.5.1997 for the two buildings 

proposed to be constructed. An Occupation Certificate dated 20.12.1997 was 

also given for a part of the building completed thereafter namely, B Wing 

containing 24 flats for the tenants. It is however interesting to note that PMC 

instructed its counsel on 19.11.1996 to withdraw its first appeal in the High 

Court as directed by the Government even before the landowner returning the 

amount of compensation with interest on 22.11.1996.

39. It has so transpired that though the land at Lohegaon was handed 

over to PMC as proposed, subsequently the Municipal Corporation found that 

there was not so much need of a school at Lohegaon, but a school was needed 

at Sinhagad Road, Dattawadi. The procedure for changing the zone of the land 

at Lohegaon as required under Section 37 of the MRTP Act was also taking its 

own time at the municipal level. Once again there was a correspondence 

between the PMC and the Government in this behalf. The Commissioner wrote 

to the Dy. Secretary, UDD on 28.5.1998 for a modification in the conditions in 

the Government letter dated 3.9.1996 to get the school constructed at 

Dattawadi (instead of Lohegaon) in lieu of the school reservation on plot no. 110 

 31

at Prabhat road. At this stage for the first time we have the letter from the 

developer dated 15.7.1998 addressed to the City Engineer of PMC signed by Shri 

Girish Vyas for the Vyas Constructions, stating that he was prepared to offer an 

alternative site admeasuring 3000 sq. meters at Mundhwa within PMC area 

which is in residential zone. This was to avoid the difficulty concerning the 

change of zone. Additionally he was prepared to deposit an amount with PMC 

equivalent to the cost of construction of 500 sq. meters as per PMC's standard 

specifications, and PMC may construct the school whenever and wherever it 

required. He further sought that on his doing so, the final completion certificate 

be issued so that the flat purchasers can occupy their flats in the building on F.P. 

No.110 which was almost ready. 

40. The Government file contains one more note made by the Under 

Secretary Shri Rajan Kop and signed by Shri Deshpande on 22.7.1998. It is 

clearly recorded below the note that it was marked for the Additional Chief 

Secretary to the Chief Minister, and also for the Chief Minister. The note 

mentions that there has been substantial criticism in local newspaper about this 

matter. It is stated that the issue was raised in the general body of PMC, and it 

was represented that an amenity in the area is being destroyed by deleting the 

reservation for a primary school. The Commissioner had defended the decision 

by contending that although 3450 sq. meter area of reservation of F.P. No.110 

was being deleted, reservation on 8219 sq. meters on adjoining two plots was 

being maintained. It was also pointed out by the Commissioner that an 

additional amenity was being created in another area. The note further records 

 32

that in the meanwhile the proposal to shift the reservation on the plot at 

Lohegaon had been filed (i.e. disapproved) by the Standing Committee of PMC. 

Last para of this note states as follows:-

 "Senior Chief Secretary of Hon. Chief Minister has issued 
 instructions to put up a self explanatory note in this entire matter 
 for perusal of Hon. Chief Minister. It is further instructed to 
 include the matters wherein the Government has taken a decision 
 in this matter as also in another matter prior thereto, the 
 information provided and points suggested by Municipal 
 Corporation with respect to the matters of deletion of reservation 
 from Pune City Development Plan, etc., Such note containing the 
 full background, factual and other aspects of the matter would be 
 useful for Hon. Chief Minister if certain questions are raised with 
 respect to the said matter in the current session of Legislative 
 Assembly."

41. On receiving the developer's letter dated 15.7.1998, the 

Commissioner once again wrote to Under Secretary UDD on 23.7.1998 

suggesting acceptance of the two proposals of the developer, but seeking orders 

of the government therefor. It is material to note at this stage that in the 

Government file there is a clear noting of the Principal Secretary UDD dated 

24.7.1998 that the application of Rule 13.5 in the matter under question was not 

legal. As the note states:-

 ".......With due respect to the persons then, doing 
 interpretation of the said decision of the Government and Rule 
 No. 13.5, I feel that application of Rule No. 13.5 in the matter 
 under question is not legal. Upon plain reading of the said rule it 
 is clear that this rule can be applied when the reservation is to be 
 shifted within a distance of 200 mtrs. Government or the 
 Commissioner do not appear to be empowered for such shifting 
 beyond the distance of 200 mtrs. It would have been much 
 appropriate that the action for change as contemplated in Sec. 37 
 of the Maharashtra Regional and Town Planning Act, 1966 would 
 have been taken......"

 33

42. In view of Commissioner's letter dated 23.7.1998 however, once 

again a departmental note was prepared containing following opinion, still 

seeking to resort to Rule 13.5.

 "...... After considering this issue the following opinion is 
 being expressed on the proposal of Pune Municipal Corporation.

 (1) Commissioner, Pune Municipal Corporation to take action to 
 cancel the action earlier taken of shifting reservation at Lohegaon 
 as per Rule No. 13.5 and the action of shifting the said part 
 reservation to Mundhawa be initiated afresh under Rule 13.5.

 (2) Prior to taking action as stated in (1) above, even though it is 
 stated by the Commissioner that the land at Mundhwa admeasuring 
 3000 sq. mtrs., suggested by the Promoter is suitable, still however, 
 it is necessary that the Commissioner , Pune Municipal Corporation 
 should get himself satisfied about the 12 mtr. wide approach being 
 available to the said land. After satisfying itself the legal action for 
 taking the said Mundhwa land in possession of the Pune Municipal 
 Corporation be completed. After completing these actions only, it is 
 necessary to take action as stipulated in (1) above.

 (3) As per the earlier instructions, the Pune Municipal Corporation 
 got executed agreement for construction of 500 sq.mtrs. Since the 
 action with respect to Lohegaon land had remained incomplete, the 
 Municipal Corporation could not grant permission to construct school 
 therein. This construction could have been got done on Mundhwa 
 land. However, from the letter of the Commissioner, Pune Municipal 
 Corporation it is seen that he has not yet decided as to whether the 
 school is to be constructed on the said land or not. On the other hand 
 he has asserted that since the Promoter is ready to pay such amount 
 of construction no loss would be caused to Municipal Corporation by 
 getting deposited such amount. Considering this issue, principally 
 there appears to be no objection on the part of the Commissioner in 
 accepting the proposal of promoter as recommended by him with a 
 view to get available the necessary amenity for the school as per their 
 requirements. However, it would be binding upon the Commissioner 
 to spend the said amount for the construction at such place which 
 may be found necessary and as may be recommended by the 
 Education Committee.

 (4) Since the actions to be taken as stipulated in point No. (3) above, 
 are between the Pune Municipal Corporation Education Committee and 
 Commissioner, Pune Municipal Corporation, there is no reason to 
 suspend the action of granting completion certification to the Promoter 
 therefore. Therefore, the Government shall have no objection if the 
 completion certificate is granted by Municipal Corporation to the 

 34

 Promoter after completing the actions as stipulated in para No. 1 and 
 2 subject to the rules and provisions in that behalf.

 If the aforesaid issues are approved, the proposal of the 
 Commissioner in the present circumstances being FOR superior 
 purpose than these contained in the earlier directives of the 
 Government there should be no reason to object the proposal 
 submitted by the Commissioner and the same ought to be principally 
 approval subject however, to the conditions mentioned in the 
 aforesaid discussion. In accordance hereof the draft or letter to be 
 sent to Pune Municipal Corporation is put up at Page No. _____/PV.
 The above proposal will be issued on the same being approved.

 Submitted for orders.

 Sd/-
 27.7.98
 (Vidyadhar Deshpande)
 Dy. Secretary.
 Sd/-27.7.1998"

43. Below this note however, the Additional Chief Secretary to the 

Chief Minister put up a remark as follows and signed below it:-

 "In this matter the developer and Hon. Chief Minister being 
 related, it is requested that the Hon. Minister of State should take 
 proper decision as per rules".

 Thereafter there is the order of the Minister of State which is as follows:-

 `Proposal of Department approved. Orders be issued':-

 "Sd/- 
 28.7.98
 N.V.V."

44. The Deputy Secretary thereafter sent a reply dated 29.7.1998 to 

the letters of the Municipal Commissioner dated 28.5.1998 and 23.7.1998. In 

para 1 thereof he referred to the Commissioner's letter dated 28.5.1998 seeking 

to shift reservation on F.P. No. 110 under DC Rule 13.5 to Mundhawa instead of 

Lohegaon. Thereafter he stated in para 2 as follows:-

 35

 ".........Now the Developer has shown his readiness to 
 make available land at Mundhawa. Therefore, in your letter you 
 have sought approval to recover the proper amount required for 
 the construction of 500 sq.mtrs, after taking action stated in 
 preceding paragraph. Upon due consideration of your request, I 
 have orders to inform you that after recovering such proper 
 amount from the Developer, the said amount be utilized for 
 construction of primary school at such place as may be required 
 and recommended by the Education Committee of Pune 
 Municipal Corporation. Because of this order request made by 
 you in your letter dt. 28.5.98 automatically becomes redundant.

 In your letter dt. 23rd July 98 you have sought guidance on 
 the issue of grant of occupancy certificate to the Developer. 
 After taking the action as stated in paragraph 1 and 2, there is no 
 reason for the Government to have objection if in furtherance 
 thereof the Pune Municipal Corporation issues the occupancy 
 certificate subject to the other provisions of the Rules in that 
 behalf."

45. In view of the directions dated 3.9.1996 issued by the State 

Government, the PMC issued (i) Commencement Certificate (C.C. for short) in 

the name of the landowner dated 28.11.1996 for constructing a building to 

rehabilitate the tenants, (ii) the second C.C. dated 3.5.1997 for constructing the 

other residential buildings consisting of ground plus ten floors (named as 

Sundew Apartment by the developer), and (iii) the Occupation Certificate (O.C. 

for short) in part dated 20.12.1997 for the tenants' building. Thereafter, the 

developer signed a confirming agreement with the landowner and his family 

members on 16.1.1998 to once again confirm the terms of the earlier referred 

development agreement entered into between the developer and landowner on 

20.10.1995. It is at this stage, that two petitions bearing no. 4433/1998 and 

4434/1998 were filed on 12.8.1998 and 14.8.1998 respectively. A Division Bench 

first issued Rule Nisi without any interim order. In as much as the construction 

 36

had started from March 1997 and was substantially completed, only a direction 

was given in Writ Petition No.4434/1998 not to create any third party interest. 

The PMC was already directed not to grant completion certificate in respect of 

the ten storey building. Subsequently, the petitions were heard finally, and the 

Division Bench consisting of Hon'ble Justice B.N. Srikrishna and Justice S.S 

Parkar, rendered two concurrent judgments on 6th-15th March 1999, and a 

common order which have been challenged in the present group of appeals.

 Justification of the shifting of reservation under D.C. Rule 13.5: 

 Is it in consonance with the statute?

46. As we have noted, the State Government directed the PMC to shift 

the reservation on F.P. No. 110 under DC Rule 13.5. The question therefore 

comes up as to whether the action by the State is in consonance with the 

statutory scheme, and that apart whether such an action is permissible under DC 

Rule 13.5? If we look to the scheme of the Act it gives importance to the 

implementation of the sanctioned plan as it is and it is only in certain 

contingencies that the provision thereunder is permitted to be modified, and that 

too after following the necessary procedure made in that behalf. 

 Signification of the Sanctioned Plan and the provisions for the 

 modification thereof

47. The Planning process under the MRTP Act is quite an elaborate 

process. A number of town planners, architects and officers of the Planning 

Authority, and wherever necessary those of the State Government participate in 

the process. They take into consideration the requirements of the citizens and 

 37

the need for the public amenities. The planners consider the difficulties presently 

faced by the citizens, make rough estimate of the likely growth of the city in near 

future and provide for their solutions. The plan is expected to be implemented 

during the course of the next twenty years. After the draft Development Plan is 

prepared, a notice is published in the official gazette stating that the plan is 

prepared. Under Section 26(1) of the Act the name and place where copy 

thereof will be available for inspection to the public at large is notified. Copies 

and extracts thereof are also made available for sale. Thereafter suggestions 

and objections are invited. The provisions of regional plan are given due 

weightage under Section 27 of the Act and then the plan is finalised after 

following the detailed process under Section 28 of the Act. This being the 

position, Chapter-III of the MRTP Act on Development Plans requires the 

sanctioned plan to be implemented as it is. There are only two methods by 

which modifications of the final Development Plan can be brought about. One is 

where the proposal is such that it will not change the character of the 

Development Plan, which is known as minor modification and for which the 

procedure is laid down under Section 37 of the Act. The other is where the 

modification is of a substantial nature which is defined under Section 22A of the 

Act. In that case the procedure as laid down under Section 29 is required to be 

followed. There is also one more analogous provision though it is slightly 

different i.e. the one provided under Section 50 of the Act, for deletion of the 

reservation where the appropriate authority (other than the planning authority) 

 38

no longer requires the designated land for the particular public purpose, and 

seeks deletion of the reservation thereon.

48. The Government's action to shift the reservation on F.P. No. 110 is 

under DC Rule 13.5 and not under Section 37 of the MRTP Act. We may 

therefore refer to DC Rule 13.5 and Section 37.

 DC Rule 13.5 reads as follows:-

 "13.5 If the land proposed to be laid out is affected by any 
 reservation/s or public purpose/s authority may agree to adjust the 
 location of such reservation/s to suit the development without 
 altering the area of such reservation. Provided however, that no 
 such shifting of the reservation/s shall be permitted.

 (a) beyond 200 m. of the location in the Development 
 Plan.

 (b) beyond the holding of the owner in which such 
 reservation is located, and

 (c) unless the alternative location is at least similar to 
 the location of the Development Plan as regards 
 access, levels etc.

 All such alterations in the reservations/alignment of roads 
 shall be reported by the Planning Authority to Govt. at the time of 
 sanctioning the layout."

49. As can be seen from the D.C. Rule 13.5, shifting of the reservation 

thereunder has to be without altering the size of the area under reservation. 

Besides it is permissible only on three conditions namely, that (1) it cannot be 

beyond 200 metres of the original location in the Development Plan, (2) it has to 

be within the holding of the owner in which the reservation is located, and (3) 

the alternative location ought to have a similar access and land level as the 

original location. Obviously the shifting of the reservation from F.P. No. 110 to a 

far off place could not be justified under D.C. rule 13.5.

 39

 Minor Modifications

50. Section 37 of the MRTP Act, reads as follows:-

 "37. Modification of final Development Plan

 (1) Where a modification of any part of or any proposal 
 made in, a final Development plan is of such a nature that it will 
 not change the character of such Development plan, the Planning 
 Authority may, or when so directed by the State Government 
 [shall, within sixty days from the date of such direction, publish a 
 notice] in the Official Gazette [and in such other manner as may 
 be determined by it] inviting objections and suggestions from any 
 person with respect to the proposed modification not later than 
 One month from the date of such notice; and shall also serve 
 notice on all persons affected by the proposed modification and 
 after giving a hearing to any such persons, submit the proposed 
 modification (with amendments, if any), to the State Government 
 for sanction.

 [(1A) If the Planning Authority fails to issue the notice as 
 directed by the State Government, the State Government shall 
 issue the notice, and thereupon the provisions of sub-section (1) 
 shall apply as they apply in relation to a notice to be published by 
 a Planning Authority.]

 [(1AA) (a) Notwithstanding anything Contained in sub-sections 
 (1), (1A) and (2), where the State Government is satisfied that in 
 the public interest it is necessary to carry out urgently a 
 modification of any part of, or any proposal made in, a final 
 Development Plan of such a nature that it will not change the 
 character of such Development Plan, the State Government may, 
 on its own, publish a notice in the Official Gazette, and in such 
 other manner as may be determined by it, inviting objections and 
 suggestions from any person with respect to the proposed 
 modification not later than one month from the date of such 
 notice and shall also serve notice on all persons affected by the 
 proposed modification and the Planning Authority.

 (b) The State Government shall, after the specified period, 
 forward a copy of all such objections and suggestions to 
 the Planning Authority for its say to the Government within 
 a period of one month from the receipt of the copies of 
 such objections and suggestions from the Government.

 (c) The State Government shall, after giving hearing to the 
 affected persons and the Planning Authority and after 

 40

 making such inquiry as it may consider necessary and 
 consulting the Director of Town Planning, by notification in 
 the Official Gazette, publish the approved modifications 
 with or without changes, and subject to such conditions as 
 it may deem fit, or may decide not to carry out such 
 modification. On the publication of the modification in the 
 Official Gazette, the final Development Plan shall be 
 deemed to have been modified accordingly.]

 [(1-B) Notwithstanding anything contained in sub-section (1), if 
 the Slum Rehabilitation Authority appointed under section 3A of 
 the Maharashtra Slum Areas (Improvement, Clearance and 
 Redevelopment) Act, 1971(Mah. XXV-III of 1971) is satisfied that 
 a modification of any part of, or any proposal made in, a final 
 Development Plan is required to be made for implementation of 
 the Slum Rehabilitation Scheme declared under the said Act, 
 then, it may publish a notice in the Official Gazette, and in such 
 other manner as may be determined by it, inviting objections and 
 suggestions from any person with respect to the proposed 
 modification not later than one month from the date of such 
 notice; and shall also serve notice on all persons affected by the 
 proposed modification, and after giving a hearing to any such 
 persons, submit the proposed modification (with amendments, if 
 any) to the State Government for sanction.]

 (2) The State Government may, [make such inquiry as it may 
 consider necessary] and after consulting the Director of Town 
 Planning by notification in the Official Gazette, sanction the 
 modification * * * with or without such changes, and subject to 
 such conditions as it may deem fit or refuse to accord sanction. If 
 a modification is sanctioned, the final Development Plans shall be 
 deemed to have been modified accordingly."

51. As seen from this Section, the minor modification under Section 37 

(1) has to be such that it will not change the character of the Development Plan. 

The section indicates that for setting the procedure under Section 37 into 

motion, the Planning Authority has to firstly form an opinion that the proposed 

modification will not change the character of the Development Plan. Such an 

opinion has to be formed by the Planning Authority meaning the general body of 

the Municipal Corporation, since this function is not permitted to be delegated to 

 41

anybody else under Section 152 of the Act. Thereafter the Planning Authority 

has to publish a notice in the official gazette inviting the objections and 

suggestions from the public with respect to the proposed modification. It is also 

required to give a notice to all the persons affected by the proposed 

modification. Sub-section (1A) lays down that if the Planning Authority does not 

give the notice, the State Government is required to issue the notice as stated 

above. The notice to the affected persons in our case will mean notice at least 

to the two institutions which had applied for developing a Primary school on this 

very plot of land. Thereafter they have to be heard, and the proposed 

modification with amendments if any, is to be submitted to the State 

Government for sanction. Subsequently, after making appropriate enquiries and 

after consulting the Director of Town Planning the State Government may under 

sub-section (2) sanction the modification with or without appropriate changes, or 

subject to such conditions as it may deem fit or refuse to grant the sanction. 

52. Sub-section (1AA) of Section 37 lays down the power of the State 

Government where it feels the urgency for carrying out any such modification. 

In that case the State Government may publish the notice in the Official Gazette, 

and follow the similar procedure, but subsequently it has to place the proposal 

before the general body of the Planning Authority for its say, and thereafter only 

it may sanction the modification after consulting the Director of Town Planning in 

a similar manner. This shows that in the event of a minor modification the 

general body of the Planning Authority has a say in the matter. The Government 

has to invite the objections and suggestions from the public at large by 

 42

publishing the notification in the Official Gazette, plus it has to issue a specific 

notice to the persons affected by the proposed modification, and last but not the 

least it has to consult the Director of Town Planning before arriving at its 

decision. In the present case nothing of the kind has been done. 

53. In the instant case the officers of the Urban Development 

Department as well as of the PMC took the stand (until it was possible), that the 

procedure under Section 37 will have to be followed. This was because what 

was contemplated was a modification of a proposal made in the Development 

Plan. A reservation for an amenity was sought to be shifted (which will in fact 

mean it was sought to be deleted) from the place where it was provided. If that 

was the official view of UDD and PMC, what was required was a compliance of 

the procedure under Section 37(1) and (2). Ultimately, since the direction was 

given by the State Government, (and if the State Government thought that there 

was an urgency), it was necessary for it to act under Section 37 (1AA), and to 

publish a notice in the Official Gazette to invite objections and suggestions from 

the public at large, and also from the persons affected by the proposed 

modification. Thereafter the State Government was required to send the 

proposal to PMC for its say and then it had to consult the Director of Town 

Planning.

 Modifications of a substantial nature

54. Where the modification is of a substantial nature, a different 

procedure is prescribed under Section 22A of the Act. This Section reads as 

follows:-

 43

 " 22A. Modifications of a substantial nature

 In section 29 or 31, the expression "of a substantial nature" 
 used in relation to the modifications made by the Planning 
 Authority or the officer appointed by the State Government 
 under sub-section (4) of section 21 (hereinafter referred to as 
 "the said Officer") or the State Government, as the case may 
 be, in the Draft Development Plan means,--

 (a) reduction of more than fifty per cent., or increase by ten per 
 cent. in area of reservations provided for in clauses (b) to (i) 
 of section 22, in each planning unit or sector of a draft 
 Development Plan, in sites admeasuring more than 0.4 
 hectare in the Municipal Corporation area and 'A' Class 
 Municipal area and 1.00 hectare in 'B' Class and 'C' Class 
 Municipal areas;

 (b) all changes which result in the aggregate to a reduction of 
 any public amenity by more than ten per cent of the area 
 provided in the planning unit or sector in a draft Development 
 Plan prepared and published under section 26 or published 
 with modification under section 29 or 31, as the case may be;

 (c) reduction in an area of an actually existing site reserved for 
 a public amenity except for marginal area upto two hundred 
 square meteres required for essential public amenity or utility 
 services;

 (d) change in the proposal of allocating the use of certain lands 
 from one zone to any other zone provided by clause (a) of 
 section 22 which results in increasing the area in that other 
 zone by ten per cent. in the same planning unit or sector in a 
 draft Development Plan prepared and published under section 
 26 or published with modification under section 29 or 31, as 
 the case may be;

 (e) any new reservation made in a draft Development Plan 
 which is not earlier published under section 26, 29 or 31, as 
 the case may be;

 (f) alternation in the Floor Space Index beyond ten per cent. of 
 the Floor Space Index prescribed in the Development Control 
 Regulations prepared and published under section 26 or 
 published with modification under section 29 or 31, as the 
 case may be.]."

Additional requirement of notice in local newspapers before 

effecting modifications of substantial nature:-

 44

55. The modification under Section 22A requires following of the 

procedure under Section 29 of the MRTP Act. It lays down that apart from a 

notice in the official gazette, a notice will have to be published in the local 

newspapers for the information at the public at large, so that they may make 

their suggestions or file objections thereto if they so deem it fit. Section 29 

reads as follows:-

 "29. Modification made after preparing and 
 publishing notice of draft Development plan.

 Where the modifications made by a Planning Authority or 
 the said Officer in the draft Development plan are [of a 
 substantial nature], the Planning Authority or as the case may be, 
 the said Officer shall publish a notice in the Official Gazette and 
 also in the local newspapers inviting objections and suggestions 
 from any person with respect to the proposed modifications not 
 later than sixty days from the date of such notice; and 
 thereupon, the provisions of section 28 shall apply in relation to 
 such suggestions and objections as they apply to suggestions and 
 objections dealt with under that section."

56. As seen from this Section 22A, it treats modifications of six types as 

substantial modifications. They are as follows:-

(a) if a plot is admeasuring more than 0.4 hectare (i.e. 4000 sq. metres) in 

the Municipal Corporation area or an A class Municipal area a reduction of more 

than 50 per cent would be considered as a substantial modification. In B & C 

class Municipal Areas such a plot has to be of one hectare.

(b) secondly, under sub-section (b) all changes which result in the aggregate 

to a reduction of any public amenity by more than ten per cent of the area 

provided in the planning unit are considered a substantial change.

 45

(c) where there is an actually existing site reserved for a public amenity, 

except for marginal area upto two hundred square metres required for essential 

public amenities or utility services their reduction will be a substantial 

modification.

(d) shifting of the allocation of use of land from zone to zone which results in 

increasing the area in the other zone by ten per cent in the same planning unit 

will be a substantial modification.

(e) any new reservation made in a draft Development Plan which is not earlier 

published will be a substantial modification, and 

(f) alternation in the Floor Space Index beyond ten per cent will be a 

substantial modification.

 Importance given to the spaces reserved for public amenities

57. As we have noted, all such substantial modifications can be 

effected only after following the additional requirement laid down in Section 29 

viz. a notice in the local newspapers inviting objections and suggestions within 

sixty days from the public at large with respect to the proposed modification. 

Sub-section (a) deals with reduction of more than fifty percent in area provided 

in clauses (b) to (i) of Section 22 which sub-sections are concerned with 

proposals for designation of land for public purposes such as schools, colleges, 

markets, and open spaces, playgrounds, transport and communications, water 

supply, drainage and sewerage and other public amenities. It can be seen that 

sub-sections (b) and (c) of section 22A give importance to retention of places 

reserved for public amenities. Sub-section (b) deals with a reduction of any 

 46

public amenity by more than ten per cent of the area reserved in the planning 

unit. Sub-section (c) deals with any reduction in an actually existing site 

reserved for a public amenity (other than marginal area upto 200 sq. metres 

required for essential public amenities or utility services for e.g. road widening). 

Both are treated as substantial modifications. Section 2 (2) of the MRTP Act 

defines what is an "amenity". It is relevant to note that this definition of amenity 

includes primary and secondary schools and colleges and polytechnics. It reads 

as follows:-

 "2 [(2). "amenity" means roads, streets, open spaces, 
 parks recreational grounds, play grounds, sports complex, parade 
 grounds, gardens, markets, parking lots, primary and secondary 
 schools and colleges and polytechnics, clinics, dispensaries and 
 hospitals, water supply, electricity supply, street lighting, 
 sewerage, drainage, public works and includes other utilities, 
 services and conveniences]."

58. In the present case we have a situation where the reservation for a 

Primary school on a plot of an area of 3450 sq. metres is deleted. Would it not 

amount to a substantial modification under sub-section (b) of Section 22A since 

it results into deletion of a public amenity in the entire planning unit? Would it 

not mean that in view thereof it was necessary to follow the procedure required 

under Section 29 of the Act which provides for a public notice in the Official 

Gazettee and also in the local newspapers inviting objections and suggestions? 

Would it not mean that thereafter it was necessary to follow the procedure to 

deal with the suggestions and objections laid down while finalizing the draft 

Development Plan under Section 28 of the Act? Whether the shifting of this 

reservation is covered under Section 37 or Section 22A is a moot point to 

 47

consider. One thing is however very clear, that it could not be justified under 

D.C. Rule 13.5. If the statute provides for doing a particular act in a specified 

manner, it has got to be done in that manner alone, and not in any other 

manner.

 Alleged Conflict between D.P. Plan and the erstwhile T.P. 

 Scheme canvassed for the first time in the High Court - 

 Can a provision in the erstwhile T.P. Scheme be relied upon in 

 the face of a contrary reservation in the subsequent D.P. Plan?

59. In as much as the action of the State Government could not be 

defended under D.C. Rule 13.5, the appellants came up with the submission for 

the first time in the High Court and then in this Court that under the erstwhile 

Town Planning Scheme, this F.P. No. 110 could be developed for residential 

purposes, and that purpose subsisted in spite of the subsequent reservation for a 

public purpose on that plot of land under the D.P. Plan. 

60. It was pointed out that a Town Planning Scheme was framed under 

the then Bombay Town Planning Act of 1915 for Pune City to become effective 

from 1.3.1931. Regulation 14 of the Principal scheme framed under that Act 

provided for the areas included in the scheme which were intended mainly for 

residential purposes wherein this plot was included as original plot No. 230/C. It 

was subsequently allotted F.P. No. 110. There was no reservation on this plot 

for any public purpose. The 1915 Act was repealed and replaced by the Bombay 

Town Planning Act 1957 w.e.f. 1.4.1957 whereunder the concept of a 

Development Plan was introduced. However, by virtue of Section 90 of the 1954 

 48

Act the previous schemes were saved. The erstwhile Town Planning scheme as 

varied, was sanctioned by the State Government w.e.f. 15.8.1979, and 

thereunder the permissible user of F.P. No. 110 continued to be residential. In 

the meanwhile, in exercise of its power under the 1954 Act, the State 

Government sanctioned the Development Plan of Pune City w.e.f. 15.8.1966 

whereunder F.P. No. 110-112 were reserved for a garden. The 1954 Act was 

repealed and replaced by the MRTP Act 1966 w.e.f. 11.1.1967. By virtue of 

Section 165 of the MRTP Act, however, the erstwhile Principal T.P. scheme (as 

varied), as well as the D.P. Plan were both saved. Subsequently, when the D.P. 

Plan of Pune City was revised in 1982 and finalized in 1987 under the provisions 

of the MRTP Act, the reservation on the plot was initially proposed to be changed 

for a play-ground, but ultimately shifted for a primary school in the final 1987 DP 

Plan. 

61. It is contended on behalf of the landowner and the developer that 

the permission for the user of the concerned plot of land for residential purposes 

under the T.P. Scheme effective from 15.8.1979 continued to survive by virtue of 

the saving clause under Section 165(2) of the MRTP Act, and, therefore, the 

order passed by the Government on 3.9.1996 as well as the commencement 

certificates were valid even on that count. It is submitted that until the Town 

Planning scheme is varied under Section 39 read with 92 of MRTP Act, the 

proposals in the Final Development Plan of 1987 cannot have any effect on the 

land covered by the erstwhile Town Planning scheme. The Development Plan 

and Town Planning scheme will both have their independent operation until the 

 49

Town Planning scheme is varied to bring it in accord with the Development Plan. 

As noted earlier that right from 8.5.1979, when the landowner issued purchase 

notice, and led the State Government and PMC to acquire the plot of land, this 

plea was never raised (and the High Court would have been within its rights not 

to entertain this plea on the ground of acquiescing into the change of user under 

the D.P. Plan). The plea having been considered and rejected in the impugned 

judgment, is canvassed once again in this Court. To consider this plea, it 

becomes necessary to examine the relevant provisions of the Act.

 Relevant provisions of the Act in the context of the D.P. Plan as 

 against the erstwhile T.P. Scheme

62. The preamble of the MRTP Act shows that this is an Act to make 

provisions for:

(1) planning the development and use of land in regions established for that 

 purpose and for constitution of regional planning boards therefor,

(2) to make better provisions for the preparation of development plans with a 

 view to ensuring that T.P. Schemes are made in the proper manner and 

 their execution is made effective,

(3) to provide for the creation of new towns by means of development 

 authorities,

(4) to make provisions for the compulsory acquisition of land required for public 

 purposes in respect of the plans, and

 50

(5) for purposes connected with the matters aforesaid.

63. (i) Chapter I of the Act contains the Preliminary provisions. Chapter II 

of the Act is concerning the Regional Plans. Chapter III is about the 

Development Plan, and Chapter IV about Control of Development and Use of 

Land included in Development Plans. Chapter V is about the T.P. Schemes. 

(ii) Section 3 of the Act permits the State Government to establish any 

area in the State to be a Region. A Regional Plan is supposed to be prepared for 

various subjects which are mentioned in Section 14 of the Act. The 

`Development Plan' is defined under Section 2 (9) of the Act as a plan for the 

development or re-development of the area within the jurisdiction of a planning 

authority. Section 2 (19) defines the Planning Authority to mean a local 

authority, and it includes some other specified authorities also. There is no 

dispute that the development plan has to be prepared `in accordance with the 

provisions of a Regional plan' which is what is specifically stated in Section 21 (1) 

of the Act. 

(iii) It is, however, disputed by the developer that the T.P. scheme 

which is normally supposed to be a detailed scheme for a smaller part of a 

Municipal Area has necessarily to be in consonance with the development plan. 

As against this submission we have the mandate of Section 39 of the Act, which 

reads as follows:-

 "39. Variation of town planning scheme by 
 Development Plan. 

 51

 Where a final Development plan contains proposals which 
 are in variation, or modification of those made in a town planning 
 scheme which has been sanctioned by the State Government 
 before the commencement of this Act, the Planning Authority 
 shall vary such scheme suitably under section 92 to the extent 
 necessary by the proposals made in the final Development plan."

 This Section states that the T.P. scheme shall be suitably varied to 

the extent necessary wherever the final development plan contains proposals 

which are in variation or modification of the proposals contained in the T.P. 

Scheme. In the instant case, we are concerned with the final development plan 

of 1987 which contains the reservation for a Primary School on F.P. No.110 as 

against the plot being placed in a residential zone in the final T.P. scheme of 

1979. It is submitted by the appellant that the planning authority may take 

steps to vary the T.P. scheme suitably to bring it in consonance with the D.P 

plan, but until that is done, the provisions in the T.P. scheme will survive. The 

High Court has rejected this submission by holding that the D.P. plan overrides 

the T.P. Scheme. 

64. As noted above, Section 39 lays down that the T.P. Scheme is to be 

varied suitably in accordance with the D.P. Plan under Section 92 of the Act. 

Section 92 appears in Chapter V which is on Town Planning schemes. The first 

section in this chapter V is Section 59. Section 59 reads as follows:-

 "59. Preparation and contents of Town Planning 
 Scheme

 (1) Subject to the provisions of this Act or any other law for 
 the time being in force-
 (a) a Planning Authority may for the purpose of implementing 
 the proposals in the final Development Plan, prepare one or more 
 town planning schemes for the area within its jurisdiction, or any 
 part thereof;

 52

 (b) a town planning scheme may make provision for any of 
 the following matters, that is to say-
 (i) any of the matters specified in section 22;
 (ii) the laying out or re-laying out of land, either 
 vacant or already built upon, including areas of 
 comprehensive development;
 (iii) the suspension, as far as may be necessary for 
 the proper carrying out of the scheme, of any rule, 
 by-law, regulation, notification or order made or 
 issued under any law for the time being in force 
 which the Legislature of the State is competent to 
 make;
 (iv) such other matter not inconsistent with the 
 object of this Act, as may be directed by the State 
 Government.
 (2) In making provisions in a draft town planning scheme for 
 any of the matter referred to in clause (b) of sub-section (1), it shall 
 be lawful for a Planning Authority with the approval of the Director 
 of Town Planning and subject to the provisions of section 68 to 
 provide for suitable amendment of the Development plan."

As can be seen, Section 59 states two things: firstly the opening part of sub-

section 1 of Section 59 states that the T.P. scheme is to be prepared "subject to 

the provisions of this Act". Thereafter, Sub-section 1(a) of this section 

specifically states that the planning authority is to prepare one or more T.P. 

schemes for the area within its jurisdiction "for the purpose of implementing the 

proposals in the final Development Plan". Thus, Section 39 read with Section 59 

do indicate the approach of legislature, namely, superiority of the D.P. plan over 

the T.P. scheme.

65. The learned senior counsel for the developer, Shri Naphade relied 

on the provisions contained in Section 59 (1) (b) (i), and 59 (2) of the Act in 

support of his arguments. Section 59 (1) (b) (i) provides that a town planning 

scheme may make provision amongst others for any of the matters specified in 

 53

Section 22 of the Act. Section 22 lays down as to what ought to be the contents 

of a Development Plan. Section 59 (2) states that in making the draft T.P. 

scheme for any of the matters referred to in sub-section 1 (b), it shall be lawful 

for a planning authority to provide for suitable amendments of the Development 

Plan. It is, therefore, submitted that there is no primacy between the 

Development Plan and the T.P. scheme. It is contended that if the purpose of 

the T.P. Scheme is only to implement the Development Plan, it will militate 

against the plain reading of Section 51 (2) and 59 (1) (b) and that, in such a 

case, Section 59 (1) (b) will become otiose. Shri Naphade, therefore, submitted 

that the D.P. Plan and the T.P. Scheme both are of equal strength. 

66. While examining this submission, we must note that Section 39 

requires the T.P. scheme to be varied to the extent necessary in accordance with 

the final Development Plan. The provision in Section 59 (1) (b) (i) is infact made 

to see to it that there is no conflict between the T.P. scheme and the 

Development Plan. Otherwise, the question will arise as to what meaning will be 

given to Section 59 (1) (a) which specifically states that the T.P. scheme is to be 

prepared for the purpose of implementing the proposals in the final Development 

Plan. Merely because Section 59 (1) (b) provides that the T.P. scheme may make 

provision for any of the matters specified in Section 22, the T.P. scheme cannot 

be placed on the same pedestal as a Development Plan. Section 59 (2) is only 

an enabling provision. It may happen that in a given situation a suitable 

amendment of the Development Plan may as well become necessary while 

seeing to it that the T.P. scheme is in consonance with the Development Plan. 

 54

Section 59 (2) will only mean that the legislature has given an elbow room to the 

planning authority to amend the Development Plan if that is so necessary, so 

that there is no conflict between the T.P. Scheme and the D.P. Plan. In fact 

what is indicated by stating that "it shall be lawful to carry out, such an 

amendment" is that normally such a reverse action is not expected, but in a 

given case if it becomes so necessary, it will not be unlawful. Use of this phrase 

in fact shows the superiority of the D.P. Plan over the T.P. scheme. Besides, the 

phrase put into service in this sub-section is only `to provide for a suitable 

amendment'. This enabling provision for an appropriate amendment in the D.P. 

plan cannot therefore, be raised to the level of the provision contained in Section 

39 which mandates that the planning authority shall vary the T.P. scheme if the 

final D.P. Plan is in variation with the T.P. Scheme sanctioned before the 

commencement of the MRTP Act. It also indicates that subsequent to the 

commencement of the Act, a T.P. Scheme will have to be inconsonance with the 

D.P. Plan. Similarly, Section 59 (1) (b) (i) cannot take away the force of the 

provision contained in Section 59 (1) (a) of the Act. As noted above, Section 39 

specifically directs that the planning authority shall vary the T.P. scheme to the 

extent necessary by the proposal made in the final Development Plan, and 

Section 59 (1) (a) gives the purpose of the T.P. scheme, viz. that it is for 

implementing the proposals contained in the final Development Plan. Under 

Section 31 (6) of the act, a Development plan which has came into operation is 

binding on the planning authority. The Planning Authority cannot act contrary to 

D.P. plan and grant Development permission to defeat the provision of the D.P. 

 55

plan. Besides, it cannot be ignored that a duty is cast on every planning 

authority specifically under Section 42 of the Act to take steps as may be 

necessary to carry out the provisions of the plan referred in Chapter III of the 

Act, namely the Development Plan. Section 46 of the Act also lays down 

specifically that the planning authority in considering an application for 

permission for development shall have "due regard" to the provisions of any 

draft or any final plan or proposal submitted or sanctioned under the Act. It 

indicates that the moment a Draft Plan is proposed, a permission for a contrary 

development can no more be granted, since it will lead to a situation of conflict. 

Section 52 of the Act in fact provides for penalty for unauthorised development 

or for use otherwise then in conformity with the development plan. Thus, when 

it comes to the development in the area of a local authority, a conjoint reading 

of the relevant sections makes the primacy of the Development Plan sufficiently 

clear.

67. Much emphasis was laid on Section 69 (6) which reads as follows:-

 "(6) The provisions of Chapter IV shall, mutatis mutandis, 
 apply in relation to the development and use of land included in a 
 town planning scheme in so far as they are not inconsistent with 
 the provisions of the Chapter."

 It was, therefore, submitted that thus the provisions of Chapter IV 

which are about the Control of Development and use of land included in the 

Development Plan, are mutatis mutandis applicable to the development and the 

use of land included in the T.P. scheme, and therefore the D.P. plan and T.P. 

scheme are on par.

 56

68. Now, it is material to note that sub-sections (1) to (5) of Section 69 

operate when the draft T.P. scheme is under preparation. Sub-section (6) will 

have to be read on that background because this sub-section itself states that 

provisions of Chapter IV will apply in relation to the development of the land 

included in a T.P. scheme "in so far as it is not inconsistent with the provision of 

this Chapter", i.e. Chapter V on Town Planning Schemes wherein Section 69 is 

placed. Chapter IV is on control of Development and use of land included in 

Development Plans. And as noted above, Section 59 (1) (a) which is the first 

section of Chapter V clearly contains the direction that the T.P. scheme is to be 

prepared for the purpose of implementing the proposals in the final Development 

Plan. Therefore, merely because by incorporating the provisions of Chapter IV 

those provisions are made applicable to T.P. schemes, the mandate of Section 59 

(1) (a) cannot be lost sight of.

69. It is then submitted by the appellant that the Development Plan 

and the T.P. scheme operate independent of each other, and, until the State 

Government exercises its power of eminent domain under the Development Plan, 

and acquire the land, the landowner can develop his property as per the user 

permitted under the T.P. scheme. In view of the scheme of the relevant sections 

and particularly Section 46 which we have noted above, this submission cannot 

be accepted. It will mean permitting a development contrary to the provisions of 

the Development Plan, knowing fully well that the user under the T.P. scheme is 

at variance with the Development Plan. Any such interpretation will make 

provisions of Section 39, 42, 46 and 52 meaningless. 

 57

70. There is one more aspect of the matter. Section 43 of the Act lays 

down that after the date on which the declaration of intention to prepare a 

Development Plan is published, no person shall carry out any development on 

land without the permission of the Planning Authority. The principal part of this 

section reads as follows:-

 "43. Restrictions on development of land

 After the date on which the declaration of intention to 
 prepare a Development plan for any area is published in the 
 Official Gazette [or after the date on which a notification 
 specifying any undeveloped area as a notified area, or any area 
 designated as a site for a new town, is published in Official 
 Gazette] no person shall institute or change the use of any land 
 or carry out any development of land without the permission in 
 writing of the Planning Authority."

71. This section will have to be read along with the requirement 

provided in Section 39. Section 39 provides for a T.P. Scheme sanctioned and 

subsisting prior to the Development Plan. The section mandates that such a 

prior scheme shall be varied to the extent necessary by the proposals made in 

the final Development Plan. Section 43 provides that once the declaration of 

intention to prepare a Development Plan is gazetted, no development contrary 

thereto can be permitted. As provided under Section 59 (1) (a), the town 

planning scheme is to be prepared for the purpose of implementing the 

proposals in the final Development Plan. Therefore, even if such a variation as 

directed under Section 39 does not take place, the land cannot be put to use in 

any way in contradiction with the provision in the D.P. Plan. In the instant case, 

we have a provision of the T.P. Scheme effective from 15.8.1979 as against the 

D.P. Plan containing a contrary provision which was notified on 18.9.1982. Shri 

 58

Dholakia, learned senior counsel appearing for the State Government, therefore, 

rightly submitted that in view of Section 165 of the MRTP Act, if the construction 

was completed, partly started or plans were submitted, or any such appropriate 

steps were taken prior to 18.9.1982, the same could have been permitted. Once 

the State Government published the draft Development Plan on 18.9.1982, 

providing for the reservation for a primary school, any construction contrary 

thereto could not be permitted. This can only be the interpretation of the 

provisions contained in Section 39 read with Section 43 and Section 165 of the 

MRTP Act. For convenience, we may refer to Section 165 (1) and (2), which 

read as follows:-

 "165. Repeal and saving.

 (1) The Bombay Town Planning Act, 1954 and sections 
 219 to 226A and clause (xxxvi) of sub-section (2) of 
 section 274 of the Maharashtra Zilla Parishads and 
 Panchayat Samitis Act, 1961, are hereby repealed.

 (2) Notwithstanding the repeal of the provisions 
 aforesaid, anything done or any action taken 
 (including any declaration of intention to make a 
 development plan or town planning scheme, any 
 draft development plan or scheme published by a 
 local authority, any application made to the State 
 Government for the sanction of the draft 
 development plan or scheme, any sanction given by 
 the State Government to the draft development 
 plan or scheme or any part thereof, any restriction 
 imposed on any person against carrying out any 
 development work in any building or in or over any 
 land or upon an owner of land or building against 
 the erection or re-erection of any building or works, 
 any commencement certificate granted, any order 
 or suspension of rule, bye-law, regulation, 
 notification or order made, any purchase notice 

 59

 served on a local authority and the interest of the 
 owner compulsorily acquired or deemed to be 
 acquired by it in pursuance of such purchase notice, 
 any revision of development plan, any appointment 
 made of Town Planning Officer, any proceeding 
 pending before, and decisions of, a Town Planning 
 Officer, any decisions of Board of Appeal, any final 
 scheme forwarded to, or sanctioned, varied or 
 withdrawn by the State Government, any delivery of 
 possession enforced, any eviction summarily made, 
 any notice served, any action taken to enforce a 
 scheme, any costs of scheme calculated and any 
 payments made to local authorities by owners of 
 plots included in a scheme, any recoveries made or 
 to be made or compensation awarded or to be 
 awarded in respect of any plot, any rules or 
 regulations made under the repealed provisions 
 shall be deemed to have been done or taken under 
 the corresponding provisions of this Act, and the 
 provisions of this Act shall have effect in relation 
 thereto."

72. The learned senior counsel Shri Virendra Tulzapurkar appearing for 

the tenants went to the extent of contending that by provisions in the T.P. 

Scheme are superior to those in the D.P. Plan. In support to his submission he 

relied upon the judgment of a Division Bench of Gujarat High Court in 

Gordhanbhai Vs. The Anand Municipality & Ors. reported in XVI (1975) 

Gujarat Law Report 558 which was under the Bombay Town Planning Act 

1954 (the 1954 Act for short) as applicable to Gujarat. The petitioner therein 

was aggrieved by the development permission granted by the Anand Municipality 

to the respondents Nos. 4 to 12 to put up a structure on the plot adjoining to his 

plot. One of the objections raised by the petitioner was that the disputed 

construction did not observe the margins prescribed in the regulations framed 

under the Development Plan (comparable to the D.C. regulations in the present 

 60

case). The respondents pointed out that the regulations which were published 

and sanctioned by the State Government as a part of the T.P. scheme specifically 

provided that no margin should be imposed on the particular final plot of the 

respondents Nos. 4 to 12. In view thereof, the Division Bench in para 6 of its 

judgment referred to Section 18 (2) (k) of the 1954 Act which specifically 

provided that the Town Planning scheme may provide for the suspension, so far 

as may be necessary for the proper carrying out of the scheme of any rule, by-

law, regulation, notification or order made or issued under any Act of the State 

Legislature. Since that had been done, the permission for construction in the 

particular case could not be faulted. It was in this context that the Division 

Bench observed that the provisions of the scheme which are contrary to those 

regulations shall prevail over the same. It is material to note that this provision in 

Section 18 (2) (k) of the 1954 Act is pari-materia to Section 59 (1) (b) (iii) of the 

MRTP Act. It is also material to note that like Section 59 (1) (a) of the MRTP 

Act, Section 18 (1) of the 1954 Act provides as follows:-

 "Making and contents of town planning scheme

 18. Subject to the provisions of this Act or any other law 
 for the time being in force:-
 (1) a local authority for the purpose of 
 implementing the proposals in the final 
 development plan may make one or more 
 town planning schemes for the area within 
 its jurisdiction or any part thereof;"

 Section 18 of the 1954 Act as well as Section 59 of the MRTP Act 

provide for suspension of the regulations in a given case by making a specific 

 61

provision in the T.P. scheme, which is basically with the object of implementing 

the proposals in the Final Development Plan. This judgment cannot therefore be 

relied upon to canvass a general proposition that the provisions in the Town 

Planning scheme are superior to the Development Plan. 

 The need for a holistic interpretation 

73. The provision of a statute are required to be read together after 

noting the purpose of the Act, namely that there should be an orderly 

development in the region, local authority as well as in the town area. The 

MRTP Act does not envisage a situation of conflict. Therefore one will have to 

iron out the edges to read those provisions of the Act which are slightly 

incongruous, so that all of them are read in consonance with the object of the 

Act, which is to bring about an orderly and planned development. The provision 

of Section 165 can not be read to mean a right to carry out a development 

contrary to the Development Plan, and in any case without a valid development 

permission particularly when the landowner had not taken any step in pursuance 

to the erstwhile T.P. scheme nor had objected to the changes brought in by the 

authorities by following the due process of law. The submissions of Shri 

Naphade and Tulzapurkar with respect to the alleged conflict between T.P. and 

D.P. can not, therefore, be accepted.

74. The observations of O. Chinnappa Reddy J. in para 33 of the 

Judgment in Reserve Bank of India Vs. Peerless Corpn. reported in [AIR 

1987 SC 1023 = 1987 (1) SCC 424] are instructive in this behalf - 

 62

 "33. Interpretation must depend on the text and 
 the context. They are the bases of interpretation. One may well 
 say if the text is the texture, context is what gives the colour. 
 Neither can be ignored. Both are important. That 
 interpretation is best which makes the textual 
 interpretation match the contextual. A statute is best 
 interpreted when we know why it was enacted. With this 
 knowledge, the statute must be read, first as a whole and then 
 section by section, clause by clause, phrase by phrase and word 
 by word. If a statute is looked at, in the context of its enactment, 
 with the glasses of the statute-maker, provided by such context, 
 its scheme, the sections, clauses, phrases and words may take 
 colour and appear different than when the statute is looked at 
 without the glasses provided by the context. With these glasses 
 we must look at the Act as a whole and discover what each 
 section, each clause, each phrase and each word is meant and 
 designed to say as to fit into the scheme of the entire Act. No 
 part of a statute and no word of a statute can be 
 construed in isolation. Statutes have to be construed so 
 that every word has a place and everything is in its 
 place."......

 (emphasis supplied)

75. The counsel for the landowner criticised the impugned judgment 

for accepting the observations of another Division Bench of Bombay High Court 

in Rusy Kapadia v. State of Maharashtra reported in [1998 (2) ALL MR 

181], In that matter certain private land was reserved in the D.P. plan of Pune 

for a public park. The landowner had no objection to the same, but the land was 

not acquired. The landowner sold the land to some other persons, who moved 

the Government for de-reservation of the land to use it for residential purpose. 

The Government invited objections under Section 37 of the MRTP Act and 

thereafter issued the notification granting de-reservation. At that stage some 

other citizens filed this PIL challenging that notification on the ground that the 

land was ear-marked for environmental purposes and should not be de-reserved. 

It was submitted in that matter on behalf of the purchasers of the land that in 

 63

the T.P. scheme the use for residential purpose was permissible, and since the 

T.P. scheme was sanctioned subsequent to the development plan, it shall prevail. 

Rejecting that argument, the Division Bench observed in para 8 of its judgment 

as follows:-

 "...... We heard and also perused the provisions with the 
 assistance of the Ld. Counsel for the parties. Town Planning 
 Scheme is provided and dealt with by Chapter V of the Act. This 
 Chapter has beginning with Section 59 and opening of the section 
 itself refers that the provisions of this Chapter are subject to the 
 provisions of the Act. The provisions precedent to section 59 are 
 from section 1 to section 58 which include section 31, sub-section 
 (6) which proclaims that the Draft Plan is final and binding on the 
 Planning Authority. As such the binding force would carry even 
 when they anyway deal with the Town Planning Scheme. 
 Besides this section 39 and section 42 of the Act unequivocally 
 indicate that the Development Plan has to definitely prevail over 
 anything and everything including the Town Planning Scheme. In 
 view of this the submission is without any merit."

76. The Division Bench deciding Rusy Kapadia's case (supra) referred 

to para 25 of the Judgment of this Court in Bangalore Medical Trust Vs. B.S. 

Muddapa reported in [1991 (4) SCC 54] to emphasize the importance of 

protecting environment. The High Court quashed the decision of the Government 

granting de-reservation but kept it in abeyance for a period of two years, and 

directed that if during this period the private respondents (i.e. purchasers of the 

land) provided adequate green area as envisaged in the development plan, this 

order will not operate. This order of the High Court in Rusy Kapadia (supra) 

was challenged by those private respondents, the judgment in which Appeal is 

reported in the case of Raju S. Jethmalani Vs. State of Maharashtra 

reported in [2005 (11) SCC 222]. This Court in the case of Raju Jethmalani 

 64

noted that the observations in Bangalore Medical Trust were in the context of 

Section 38 (A) of that Act. The Court also noted that though the development 

plan provided the area for the garden, no proceedings for acquisition of the 

concerned plot had ever been initiated. In that context, the court observed that 

there is no prohibition for preparing the development plan comprising the private 

land, but the plan cannot be implemented unless the said private land was 

acquired. It was for this reason that the court allowed the appeal and set aside 

the order in Rusy Kapadia's case, but this time directed the petitioners of the 

PIL (i.e. Rusy Kapadia & Ors.) to raise funds in six months if they wanted the 

park to be maintained, in order to assist the Government to acquire the land, 

failing which it will be open to the appellants to develop the land. This direction 

was given because the State Government and PMC had expressed inability to 

raise the necessary funds to acquire the concerned plot of land. It is material to 

note that in Raju Jethmalani's case this Court did not deal with the 

controversy concerning the superiority of the Development Plan vis-a-vis the T.P. 

scheme, nor can the Judgment be read as laying down a proposition that 

development contrary to the D.P. plan is permissible. The observations in the 

case of Rusy Kapadia as quoted above are approved in the presently impugned 

judgment, and have been once again reiterated by another Division Bench of the 

Bombay High Court in Indirabai Bhalchandra Bhajekar Vs. The Pune 

Municipal Corporation and Ors., reported in [2009 (111) Bom LR 4251]. 

Having noted the inter-relation amongst the various sections of the statute, in 

 65

our view, it cannot be said that the T.P. scheme is either superior or of equal 

strength as the Development Plan.

77. The counsel for the developer then relied upon the judgment of 

this Court in Laxmi Narayan Bhattad Vs. State of Maharashtra reported in 

[2003 (5) SCC 413] for further supporting the submission in this behalf. The 

appellant in this case was allotted an alternative plot of land and monetary 

compensation under an award when part of his land was acquired to implement 

the T.P. scheme finalized in 1987. The appellant however wanted additionally 

the Transferable Development Rights (TDR) as provided under Development 

Control Regulations framed later in 1991. This Court declined to accept the 

submission of the appellant. It was held that the appellant will be eligible only 

for the benefits under the T.P. scheme, since the acquisition of his land was to 

implement the same. The D.C. Regulations of 1991 had come subsequently. 

There was no provision for TDR under the T.P. scheme and therefore, the 

appellant could not get T.D.R which are provided subsequently in the D.C. 

Regulations of 1991. This judgment also cannot be read as laying down that the 

T.P. scheme will prevail over or is of equal strength as the D.P. plan.

78. Thus from the analysis of the relevant provisions and the 

judgments it is clear that the right claimed under the erstwhile T.P. scheme could 

not be sustained in the teeth of the reservation for a Primary school under the 

1987 D.P. plan. The submission in this behalf cannot be accepted.

 66

 Additional submissions in this Court in defence of the 

 Government Order:-

79. The appellants came up with some more submissions in this Court. 

They submitted that the shifting was protected under Rule 6.6.2.2, and the 

reference to Rule 13.5 in the Government's order dated 3.9.1996 was erroneous. 

Now, this Rule 6.6.2.2 reads as follows:-

 "6.6.2.2 In specific cases where a clearly demonstrable 
 hardship is caused the Commissioner may by special written 
 permission
 (i) Permit any of the dimensions/provisions prescribed by 
 these rules to be modified provided the relaxation sought does 
 not violate the health safety, fire safety, structural safety and 
 public safety of the inhabitants, the buildings and the 
 neighborhood. However, no relaxation from the set back 
 required from the road boundary or FSI shall be granted under 
 any circumstances.
 While granting permissions under (i) conditions may be 
 imposed on size, cost or duration of the structure abrogation of 
 claim of compensation payment of deposit and its forfeiture for 
 non-compliance and payment of premium."

 As can be seen from this Rule it provides for variations with respect 

to dimensions and structural requirements. This rule 6.6.2.2 is a part of Rule 6 

which contains the `Procedure for obtaining building permission/ commencement 

certificates'. It does not deal with shifting of a particular reservation from one 

plot to another which is covered under Rule 13.5 (with certain restrictions) to 

which we have already referred. Thus Rule 6.6.2.2 has no application at all.

80. The request of the landowner was to shift the reservation of a 

primary school from F.P. No. 110, and to grant him the permission for 

development under Section 45 of the Act. It is also material to note that though 

subsequent to the Government orders, Commencement Certificates were issued, 

 67

there was no order specifically setting aside the earlier order of the City Engineer 

of PMC passed under Section 45 of the MRTP Act rejecting the building 

permission by his letter/order dated 6.11.1995. We are, therefore, required to 

infer from the Commencement Certificate which refers to Section 44 and 45 

(alongwith other sections) that the appeal against the order of the City Engineer 

is impliedly allowed under Section 47 of the Act. This is because there is no such 

specific mention of reversal of the order dated 6.11.1995 even in the aforesaid 

order of the State Government dated 3.9.1996.

81. It was therefore contended on behalf of the developer that the 

order passed by the Government made a reference to a wrong provision of law. 

It was submitted that Section 47 was erroneously relied upon, and the order was 

in fact an order passed under Section 50 of the Act. 

 Section 50 reads as follows:-

 "50. Deletion of reservation of designated land for 

 interim draft of final Development Plan.

 (1) The Appropriate Authority (other than the Planning 
 Authority), if it is satisfied that the land is not or no longer required 
 for the public purpose for which it is designated or reserved or 
 allocated in the interim or the draft Development plan or plan for 
 the area of Comprehensive development or the final Development 
 plan, may request--
 (a) the Planning Authority to sanction the deletion 
 of such designation or reservation or allocation from the 
 interim or the draft Development plan or plan for the area of 
 Comprehensive development, or

 (b) the State Government to sanction the deletion 
 of such designation or reservation or allocation from the final 
 Development plan.

 (2) On receipt of such request from the Appropriate 
 Authority, the Planning Authority, or as the case may be, the 
 State Government may make an order sanctioning the deletion of 

 68

 such designation or reservation or allocation from the relevant 
 plan:

 Provided that, the Planning Authority, or as the case may 
 be, the State Government may, before making any order, make 
 such enquiry as it may consider necessary and satisfy itself that 
 such reservation or designation or allocation is no longer 
 necessary in the public interest.

 (3) Upon an order under sub-section (2) being made, 
 the land shall be deemed to be released from such designation, 
 reservation, or, as the case may be, allocation 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."

 As can be seen, Section 50 provides for deletion of a reservation at 

the instance of an Appropriate authority (other than the planning authority) for 

whose benefit the reservation is made. Such is not the present case. Under 

sub-section (1) of Section 50, the appropriate authority has to be satisfied that 

the land is not required for the public purpose for which it is reserved. 

"Appropriate authority" is defined under Section 2 (3) of the Act to mean a public 

authority on whose behalf the land is designed for a public purpose in any plan 

or scheme and which it is authorised to acquire. In the instant case, the 

acquiring body is PMC, and it will mean the general body of PMC. Assuming that 

the section applies in the instance case, the general body has to be satisfied that 

the land is no longer required for the public purpose for which it is designed or 

reserved. In the instant case, it is on the direction of the Minister of State that 

the Municipal Commissioner has given a report which has been used by the State 

Government to pass an order of shifting the reservation from F.P. No.110. The 

officers of the Planning Authority as well as of the concerned Government 

 69

department were not in favour of deleting the reservation. The Commissioner's 

opinion could not have been treated as the opinion of PMC. Under certain 

circumstances the Municipal Commissioner can act on behalf of the Municipal 

Corporation, and those sections are specifically mentioned in Section 152 of the 

MRTP Act. Section 50 is not one of those sections and, therefore, the State 

Government could not have made any such order sanctioning the deletion of 

reservation on the basis of the report of the Municipal Commissioner. Section 50 

is, therefore, of no help to the appellants.

82. One of the sections which was pressed into service to defend the 

directions of the State Government dated 3.9.1996 and 29.7.1998 and the 

actions of the Municipal Commission was Section 154 (1) of the MRTP Act. This 

section reads as follows:-

 "154. Control by State Government

 (1) Every Regional Board, Planning Authority and 
 Development Authority shall carry out such directions or 
 instructions as may be issued from time to time by the State 
 Government for the efficient administration of this Act.
 (2) If in, or in connection with, the exercise of its powers 
 and discharge of it functions by any Regional Board, 
 Planning Authority or Development Authority under this Act, 
 any dispute arises between the Regional Board, Planning 
 Authority or Development Authority, and the State 
 Government, the decision of the State Government on such 
 dispute shall be final."

 It was submitted that the State Government was thus entrusted with the 

over-all control in the interest of efficient administration, and its directions had to 

be followed by the Planning Authority, and such directions could not be faulted 

on any count. In a similar situation in Bangalore Medical Trust (supra), a 

 70

reservation for a public park was sought to be shifted for the benefit of a private 

nursing home. Amongst others Section 65 of the Bangalore Development Act, 

1976 was sought to be pressed into service which authorised the Government to 

issue directions to carry out the purposes of the act. This Court observed in para 

52 of that judgment that the section authorises the Government to issue 

directions to ensure that provisions of law are obeyed and not to empower itself 

to proceed contrary to law. In the present matter, it is to be seen that the 

section provides for directions or instructions to be given by the State 

Government for the efficient administration of the Act. This implies directions for 

that purpose which are normally general in character, and not for the benefit of 

any particular party as in the present case. The provisions of law cannot be 

disregarded and ignored merely because what was done, was being done at the 

instance of the State Government. Consequently, Section 154 cannot save the 

directions issued by the State Government or the actions of the Municipal 

Commissioner in pursuance thereof. 

83. Thus, the reliance on these provisions is of no use to the 

appellants. It was submitted that while passing the order the Government has 

referred to a wrong provision of law and reference to a wrong provision of law 

does not vitiate the order if the order can be traced to a legitimate source of 

power. Reliance was placed on the judgment of this Court in PR Naidu v. 

Government of Andhra Pradesh (reported in AIR 1977 SC 854) = [1977 

(3) SCC 160] and VL and Co. v. Bennett Coloman and Co. [AIR 1977 SCC 

1884] = [1977 (1) SCC 561]. In the instant case, however, the order of the 

 71

Government dated 3.9.1996 cannot be traced to any legitimate source of power, 

and therefore, the situation cannot be remedied by reference to other sources of 

power. The Division Bench has therefore, rightly commented on this submission 

in paragraph 180 of its judgment that `the rub is that the action taken by the 

Planning authority was otherwise not legal and justified'. It could not therefore 

be justified by reference to other provisions of law because basically the decision 

itself was illegal. 

84. Thus the submission canvassed on behalf of the appellants is that 

although the landowner never objected to the reservation either for a garden or 

a primary school during the process of the revision of the D.P. Plan during 1982 

to 1987, and although he had received the compensation for its acquisition, he 

retained the right to develop the property for residential purposes merely 

because under the erstwhile Town Planning scheme residential use was 

permissible, and it is supposed to be saved under Section 165 (2) of the MRTP 

Act. However, as seen from the conjoint reading of Section 39, 42 and 46, and 

the scheme of the Act, such a submission cannot be accepted. That apart, 

ultimately it was contended on his behalf the deletion of the reservation of a 

primary school on this plot u/s 37 of the MRTP Act is not necessary, and the 

order passed by the State Government in his favour can be explained u/s 50 of 

the MRTP Act read with D.C. Rule 6.6.2.2. As we have seen Section 50 as well 

as D.C. Rule 6.6.2.2. have no application to the present case, nor can the power 

of the State Government under Section 154 of the Act help the appellants. 

Besides, independent of one's right either under the D.P. Plan or the T.P. 

 72

Scheme, one ought to have a permission for development granted by the 

planning authority traceable to an appropriate provision of law. In the present 

case there is none. The appellants are essentially raising all these submissions 

to justify a construction which is without a valid and legal development 

permission. The appellants have gone on improving and tried to change their 

stand from time to time with a view to justify Government's order in their favour. 

However, "Orders are not like old wine becoming better as they grow older" as 

aptly stated by Krishna Iyer J. in para 8 of Mohinder Singh Gill Vs. Chief 

Election Commissioner, New Delhi reported in 1978 (1) SCC 405. The 

submissions of the appellants in defence of the decision of the State Government 

are devoid of any merit and deserve to be rejected. 

 Legality of the acquisition of the land:

 Whether the acquisition lapses on account of change of purpose 

 of acquisition

85. As seen earlier, the letter of the landowner had led to the 

subsequent steps for acquisition. The landowner was interested in good return 

for his land. The tenants were interested only in the rehabilitation on the same 

plot of land. That was their stand until the award dated 12.5.1983. The Civil 

Court has held the acquisition for the changed purpose under the D.P Plan as 

bad in law on the ground that the initially designated public purpose for 

acquisition was changed. Was the civil suit maintainable? Was the view taken 

by the Civil Court a correct view? We are required to go into that question also, 

 73

since the order of the Civil Court is sought to be defended by the landowner as 

well as by the developer.

86. The Learned Civil Judge Senior Division set aside the award by his 

judgment and decree dated 23.4.1990 on the ground that though the land was 

initially proposed to be acquired for a garden, it was ultimately to be used for 

another public purpose i.e. setting up a primary school. It was contended on 

behalf of the developer that in the instant case the declaration under Section 6 

of the L.A. Act was issued when the land was reserved for a garden, and the 

purpose of acquisition must subsist as initially designated until the possession of 

the land is taken. The Court accepted the contention that the acquisition had 

lapsed due the change of purpose of reservation by the time the award was 

made. In the instant case, the award was made on 12.5.1983, but pursuant to 

the award the possession of the plot was not taken in the circumstances 

mentioned earlier. According to the appellant the acquisition was not complete, 

and the jurisdiction to further continue with the acquisition was no longer 

available.

87. Two judgments of Bombay High Court were relied upon on behalf 

of the appellants i.e. Industrial Development & Investment Company Pvt. 

Ltd. Vs. State of Maharashtra reported in 1988 Mh.LJ 1027 (which was 

relied upon by the Learned Civil Judge Senior Division also), and Santu Kisan 

Khandwe Vs. Special Land Acquisition Officer No. 2 Nasik & Ors reported 

in 1995 (1) Mh.LJ 363, in support of the proposition that the purpose of 

acquisition must subsists till vesting. As far as the first judgment of the High 

 74

Court in the case of Industrial Development Company is concerned, the same is 

about the provisions of MRTP Act, and it has been specifically overruled by this 

Court in Municipal Corporation of Greater Bombay Vs. Industrial 

Development Investment Co. Pvt. Ltd. & Ors. reported in 1996 (11) SCC 

501. It was a case where the concerned parcel of land situated in Dharavi, 

Mumbai was acquired by the Municipal Corporation under the MRTP Act initially 

for the setting up of a Sewage Purification Plant, but subsequently the land was 

sought to be used for the residential and commercial purposes of its employees, 

since this Sewage Treatment Plant was shifted to another parcel of land. This 

utilisation was held to be completely valid and permissible by K. Ramaswamy, J. 

88. The appellants before us contended that Majmudar, J., the other 

Learned Judge deciding the I.D.I Co's. case had taken a different view on the 

issue of change of user, and therefore, the issue remained undecided, and that 

the view taken by the Bombay High Court in the above referred two judgments 

deserved acceptance. The appellants submitted that Majmudar, J. agreed with 

K. Ramaswamy, J. only to the extent that the petition filed by the respondents 

in the High Court deserved to be dismissed on the ground of delay and laches. 

As far as the ground of change of purpose is concerned, Majmudar J., expressed 

his different opinion in the following few sentences:-

 "33. Even though the proposal under Section 126(1) is for 
 acquisition of land for a specified public purpose, if the planning 
 authority wants to acquire the land subsequently for any other 
 public purpose earmarked in the modified scheme as has 
 happened in the present case that is if the appellant-Corporation 
 which had initially proposed to acquire the land for extension of 
 sewerage treatment plant wanted subsequently to acquire the 

 75

 same land for its staff quarters then such a purpose must be 
 specifically indicated in the plan meaning thereby that the land 
 must be shown to be reserved for the staff quarters of the 
 Corporation and then the Special Planning Authority which had 
 become the appropriate planning authority, i.e., BMRDA would be 
 required to issue a fresh proposal under Section 126(1) read with 
 Section 40(3)(e) and Section 116 of the MRTP Act and follow the 
 gamut thereafter. So long as that was not done the earlier 
 proposal under Section 126(1) and the consequential notification 
 by the State Government under Section 126(2) which had lost 
 their efficacy could not be revitalised.........."

89. The appellants relied upon the judgment of this Court in Special 

Land Acquisition Bombay Vs. M/s Godrej & Boyce reported in AIR 1987 

SC 2421, in support of their contention, that the purpose for acquisition must 

continue until possession is taken. In that matter this Court held that the title to 

the land vests in the Government only when the possession is taken. It is 

however, material to note that this judgment is concerning Section 16 of the L.A. 

Act. As far as this submission is concerned, as held by K. Ramaswamy J., in 

I.D.A Co's case (supra), one must note that the scheme of MRTP Act is different 

from that under the L.A. Act. In para 11 and 12 of his judgment in I.D.I Co's. 

case (supra) he has specifically held that Section 126 (1) of the MRTP Act is a 

substitute for the notification under Section 4 of the L.A. Act. A declaration 

under Section 126 (2) is equivalent to a declaration under Section 6 of the L.A. 

Act. The objections of the persons concerned are considered before such land 

gets earmarked for public purpose in the plan. Therefore, there is no need of 

any enquiry as under Section 5A of the L.A. Act. Section 126 (1) (c) specifically 

states that when an application is made to the State Government for acquiring 

the land under the L.A. Act, the land vests absolutely with the Planning 

 76

Authority. Therefore, it was held that in the scheme of the MRTP Act, it is not 

necessary that the original public purpose should continue to exist till the award 

was made and possession taken.

90. The observations of K. Ramaswamy, J. in paragraph 11 of the 

judgment in I.D.A. Co's case (supra) are relevant in this behalf. This para reads 

as follows:-

 "11. If we turn to Chapter III of the MRTP Act, we find 
 that the entire machinery is provided for preparation, submission 
 and sanction of development plan proceeding from Section 21 
 and ending with Section 31. These provisions, in short, provide 
 for preparation of draft development plant by the planning 
 authority inviting objections of persons concerned against such 
 proposals, hearing of objections filed by the objectors as per 
 Section 28 sub-section (3) by the Planning committee and then 
 submitting its report to the planning authority which ultimately 
 gets the proposals approved by the State Government under 
 Section 30. All these provisions do indicate that requirement, 
 designation, reservation or earmarking of any land for acquisition 
 for any specified public purpose as indicated in the plan has 
 already undergone the process of hearing after the objections of 
 the persons concerned were considered and then such land gets 
 earmarked for public purpose in the plan. It is after that stage, 
 therefore, when need to acquire such earmarked, designated or 
 reserved land for public purpose under the plan arises, that 
 Section 126(1) proposal gets issued by the planning authority 
 concerned and which itself becomes a substitute for Section 4(1) 
 notification under the Act. It would thus, appear that the 
 scheme of acquisition of earmarked land under the plan 
 for a specified public purpose thereunder, is a complete 
 scheme or code under the MRTP Act. It is a distinct and 
 independent scheme as compared to general scheme of 
 acquisition under the Land Acquisition Act."
 (emphasis supplied)

91. In this connection, we must note Section 126(1) of the MRTP Act 

provides for three modes of acquisition of land for public purposes specified in 

the plan. The third mode is by making an application to the State Government 

 77

for acquiring such land under the L.A. Act, and thereafter the land so acquired 

vests absolutely in the Planning Authority. Sections 126(1) and (2) are extracted 

herein below for ready reference.

 "126 - Acquisition of land required for public purposes 
 specified in plans

 (1) Where 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, expect as otherwise provided 
 in section 113A] [acquire the land,--

 (a) by agreement by paying an amount agreed to, or

 (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 Land Acquisition Act, 
 1894(I of 1894), 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 behalf provide, or

 (c) by making an application to the State Government for 
 acquiring such land under the Land Acquisition Act, 1894(I of 
 1894),and the land (together with the amenity, if any so 
 developed or constructed) so acquired by agreement or by grant 
 of Floor Space Index or additional Floor Space Index or 
 Transferable Development Rights under this section or under the 
 Land Acquisition Act, 1894(I of 1890), as the case may be, shall 
 vest absolutely free from all encumbrances in the Planning 
 Authority, Development Authority, or as the case may be, any 
 Appropriate Authority.]

 (2) On receipt of such application, if the State Government is 
 satisfied that the land specified in the application is needed for 

 78

 the public purpose therein specified, or [if the State Government 
 (except in cases falling under section 49 [and except as provided 
 in section 113A)] itself is of opinion] that any land included in any 
 such plan is needed for any public purpose, it may make a 
 declaration to that effect in the Official Gazette, in the manner 
 provided in section 6 of the Land Acquisition Act, 1894(I of 
 1894), in respect of the said land. The declaration so published 
 shall, notwithstanding anything contained in the said Act, be 
 deemed to be a declaration duly made under the said section:

 [Provided that, subject to the provisions of sub-section (4), no 
 such declaration shall be made after the expiry of one year from 
 the date of publication of the draft Regional Plan, Development 
 Plan or any other Plan, or Scheme, as the case may be.]

 (3) ........

 (4) ........"

92. Section 128 of the MRTP Act strengthens the view that we are 

taking. Section 128 deals with a situation where the land is sought to be 

acquired for a purpose other than the one which is designated in the plan or the 

scheme. In that case provisions of the L.A. Act apply with full force. This 

Section reads as follows:-

 "128. Power of State Government to acquire lands 

 for purpose other than the one for which it is designated 

 in draft plan or scheme.

 (1) Where any land is included in [any plan or scheme] as 
 being reserved, allotted or designated for any purpose therein 
 specified or for the purpose of Planning Authority or Development 
 Authority or Appropriate Authority and the State Government is 
 satisfied that the same land is needed for a public purpose 
 different from any such public purpose or purpose of the Planning 
 Authority, Development Authority or Appropriate Authority, the 
 State Government may, notwithstanding anything contained in 
 this Act, acquire such land under the provisions of the Land 
 Acquisition Act, 1894(I of 1894).

 [(1A) Save as otherwise provided in this Act or any other 
 law for the time being in force where any land included in any 

 79

 plan or scheme as being reserved, allotted or designated for any 
 purpose therein specified or for the purposes of a Planning 
 Authority or Development Authority or Appropriate Authority, is 
 being acquired by the State Government under the provisions of 
 the Maharashtra Industrial Development Act, 1961(Mah. III of 
 1962), for the Maharashtra Industrial Development Corporation 
 (being the Special Planning Authority deemed to have been 
 appointed as such under sub-section (1A) of section 40), the 
 provisions of sub-sections (2) and (3) of this section shall mutatis 
 mutandis, apply to such acquisition proceedings.]

 (2) In the proceedings under the Land Acquisition Act, 
 1894(I of 1894), the Planning Authority, or Development 
 Authority or Appropriate Authority, as the case may be, shall be 
 deemed to be a person interested in the land acquired; and in 
 determining the amount of compensation to be awarded, the 
 market value of the land shall be assessed as if the land had 
 been released from the reservation, allotment or designation 
 made in the [any plan or scheme] or new town, as the case may 
 be, and the Collector or the Court shall take into consideration 
 the damage, if any, that Planning Authority or Development 
 Authority or Appropriate Authority, as the case may be, may 
 sustain by reason of acquisition of such land under the Land 
 Acquisition Act, 1894(I of 1894), or otherwise, and the 
 proportionate cost of the Development plan or town planning 
 scheme or new town, if any, incurred by such Authority and 
 rendered abortive by reason of such acquisition.

 (3) On the land vesting, in the State Government under 
 sections 16 or 17 of the Land Acquisition Act, 1894(I of 1894), as 
 the case may be, the [relevant plan or scheme] shall be deemed 
 to be suitably varied by reason of acquisition of the said land."

 Sub-section (1) of this Section states that in such situations the 

provision of L.A. Act will apply notwithstanding anything contained in the MRTP 

Act, and sub-section (3) specifically states that in such an event the vesting will 

take place under Section 16 and 17 of the L.A. Act as the case may be. That is 

not the case with respect to the acquisition under Section 126 of the MRTP Act, 

where the vesting takes place in the three circumstances mentioned thereunder. 

In the present case also the acquisition is resorted to by issuing a notification 

 80

under Section 126 read with Section 6 of the L.A. Act. The vesting therefore 

takes place at that stage. 

93. After the declaration is made under Section 126 (2) of the MRTP 

Act, the proceedings to determine the compensation follow the procedure as laid 

down under the L.A. Act until Section 11 thereof. A notice is given to the 

interested persons as required under Section 9 of the L.A. Act to lodge their 

claims to compensation for all the interests in such land. Thereafter, they are 

heard in the inquiry made by the Collector or the S.L.A.O., and after following 

the requirements as laid down in Section 11, the compensation is arrived at. The 

change of purpose of utilisation of the land acquired under Section 126 of the 

Act does not make any difference in this behalf. There is no prejudice caused to 

the landowners since the award is made only after affording them full hearing 

concerning their claims for compensation.

94. (i) When it comes to urgency also, there is a separate provision in the 

MRTP Act, distinct from the one in the L.A. Act. Section 129 of the MRTP Act 

contains provisions different from Section 17 of the L.A. Act. Under sub-Section 

(2) of Section 129 there is the requirement of paying to the owner of the land 

concerned, an interest @ 4% per annum on the amount of compensation, from 

the date of taking possession of the land until the date of payment.

(ii) Thus the MRTP Act contains a separate scheme in Chapter VII of 

the Act distinct from the one in L.A. Act. This is because MRTP Act is a special 

 81

act enacted for the purpose of planned development and the provisions 

concerning land acquisition are made therein in that context. 

95. We may mention at this stage that recently a Constitution Bench of 

this Court has also held in the context of Section 11A of the L.A. Act (providing 

for two years period to make the award) in Girnar Traders (3) Vs. State of 

Maharashtra & Ors. reported in 2011 (3) SCC 1, that only the provisions with 

respect to the acquisition of land, payment of compensation and recourse of 

legal remedies under the L.A. Act can be read into Chapter VII of the MRTP Act 

concerning Land Acquisition, and Section 11A of the L.A. Act will not apply 

thereto. It held that in the scheme of the MRTP Act, the provisions of Land 

Acquisition Act would apply only until the making of the award under Section 11 

of the Act. The Court held that MRTP Act is a self contained code and Sections 

126 to 129 thereof clearly enunciate the intention of the framers that substantive 

provisions of L.A. Act are not applicable to MRTP Act. In para 129 of the 

judgment the Constitution Bench has specifically held:-

 "129. ...... Vesting, unlike Section 16 of the Land 
 Acquisition Act which operates only after the award is made and 
 compensation is given, whereas under the MRTP Act it may 
 operate even at the initial stages before making of an award, for 
 example, under Sections 126(1)(c) and 83."

96. The appellants herein have contended, and so had the respondents 

in I.D.A. Co's case (supra) contended that the original public purpose should 

continue till the award was made and possession taken. While dealing with this 

proposition, K. Ramaswamy, J. took an overview of the leading judgments in this 

behalf. The Learned Judge in arriving at his conclusions referred to the law laid 

 82

down by this Court in Ghulam Mustafa Vs. State of Maharashtra reported in 

1976 (1) SCC 800, Mangal Oram Vs. State of Orissa reported in 1977 (2) 

SCC 46 , State of Maharashtra Vs. Mahadeo Deoman Rai reported in 

1990 (3) SCC 579 , Collector of 24 Parganas Vs. Lalit Mohan Mullick 

reported in 1986 (2) SCC 138, and Ram Lal Sethi Vs. State of Haryana 

reported in 1990 Supp. SCC 11.

97. It is relevant to refer to these judgments. Ghulam Mustafa 

(supra) & Mangal Oram (Supra) were both cases concerning the acquisition 

under the Land Acquisition Act. In the case of Ghulam Mustafa, V.R. Krishna 

Iyer J., observed as follows:-

 ".....once the original acquisition is valid and title has 
 vested in the municipality how it uses the excess land is no 
 concern of the original owner and cannot be the basis for 
 invalidating the acquisition. There is no principle of law by which 
 a valid compulsory acquisition stands voided because long later 
 the requiring authority diverts it to a public purpose other than 
 the one stated in the Section 6(3) declaration."

 In Mangal Oram (supra) a bench of three Judges specifically held 

that use of land after a valid acquisition for a different public purpose will not 

invalidate the acquisition. In Collector of 24 Parganas (supra) the notification 

under Section 4 of the West Bengal Land Development and Planning Act was 

issued for settlement and rehabilitation of displaced persons. Subsequently the 

land was utilised for establishment of a Hospital for crippled children, which was 

held to be not vitiated. In Union of India Vs. Jaswant Rai Kochhar reported 

in 1996 (3) SCC 491 land acquired for housing scheme was utilised for 

commercial purpose i.e. a District Centre. This Court held in that matter that it is 

 83

will settled law that land sought to be acquired for one public purpose may be 

used for another public purpose. In State of Maharashtra Vs. Mahadeo 

Deoman Rai reported in 1990 (3) SCC 579 yet another Bench of three Judges 

had held that requirement of public purpose may change from time to time but 

the change will not vitiate the acquisition proceeding. The opinion rendered by 

K. Ramaswamy J. is in conformity with this line of judgments. Following this law, 

K. Ramaswamy, J. held in para 22 as follows:-

 "22. It is thus well-settled legal position that the land 
 acquired for a public purpose may be used for another public 
 purpose on account of change or surplus thereof. The acquisition 
 validly made does not become invalid by change of the user or 
 change of the user in the Scheme as per the approved 
 plan........... It would not, therefore, be necessary that the original 
 public purpose should continue to exist till the award was made 
 and possession taken."

 This being the position, there is no difficultly in stating that the two 

judgments of the Bombay High Court which are relied upon by the appellants 

(viz. in the cases of I.D.I. Co. (supra) and Santu Kisan Khandwe (supra) do 

not lay down the correct position of law. We are in respectful agreement with 

the opinion rendered by K.Ramaswamy J. in I.D.I. Co's Case. The acquisition of 

the land in the present case cannot said to be invalid on account of change of 

purpose during acquisition.

98. That apart, there is also the question as to whether the Civil Court 

had the jurisdiction to entertain a suit to challenge the acquisition after the 

award was rendered. This is because when it comes to acquisition, the L.A. Act 

provides for the entire mechanism as to how acquisition is to be effected, and 

 84

the remedies to the aggrieved parties. In State of Bihar Vs. Dhirendra 

Kumar & Ors. reported in 1995 (4) SCC 229 this Court in terms held that 

since the Act is a complete code, by necessary implication the power of the Civil 

Court to take cognizance of a case under Section 9 of the CPC stands excluded, 

and Civil Court had no jurisdiction to go into the question of the validity or 

legality of the notification under Section 4 and declaration under Section 6, which 

could be done only by the High Court in a proceeding under Article 226 of the 

Constitution. In view of this dictum the civil suit itself was not maintainable in 

the present case. 

 Conduct of the Landowner/Developer 

99. The facts as narrated earlier can be placed into proper prospective 

if we note the conduct of the landowner and the developer appointed by him as 

it emerges from stage to stage which is as follows:-

(a) The landowner never raised any objection when the F.P. No. 110 was 

sought to be reserved for a public purpose, viz. either for a garden/playground 

or subsequently for a primary school.

(b) On his issuing the purchase notice to the Government to purchase the 

land and to commence the proceedings for acquisition, the State Government 

responded by confirming the purchase notice under Section 49 (4) of the Act by 

its letter dated 5.12.1979.

(c) When SLAO started the acquisitions proceedings, and when the notice 

under Section 9 of the L.A. Act was issued, the landowner replied the same but 

 85

did not challenge the acquisition as such. He merely demanded compensation at 

a rate of Rs. 480 per sq.m, and demanded that the material removed after 

demolition of the temporary structures (of the tenants) on the property be 

handed over to him.

(d) After the SLAO rejected the objections of the landowner as well as the 

tenants, and gave his award dated 12.5.1983, the landowner accepted the 

compensation on 15.3.1985, though under protest.

(e) After the Reference Court enhanced the solatium and the special 

component by its order dated 15.4.1988, the landowner accepted the enhanced 

amount, once again under protest. However, he did not file the statutory appeal 

available to him under Section 54 of the L.A. Act.

(f) When the notice to take possession was given, it is the tenants alone who 

filed a suit to challenge the acquisition.

(g) After the injunction in that suit No. 966 of 1983 was vacated, the tenants 

represented to the Minister of State for UDD, pointing out their difficulties. The 

landowner did not challenge the acquisition in any manner whatsoever.

(h) After the Development Plan under the MRTP Act was sanctioned, though 

the reservation was continued, the purpose of utilization of the land was 

changed in the 1987 D.P. plan from garden to primary school. Thereafter, when 

the SLAO gave one more notice to take possession on 1.3.1988, some of the 

tenants filed another Civil Suit bearing No. 397 of 1988 in the Court of Civil 

 86

Judge, Senior Division Pune. It was at that stage that the landowner who was a 

defendant in that suit, applied for transposing himself as a plaintiff which 

application was allowed on 2.4.1988. The Civil Court having held that the 

acquisition had lapsed due to the change of purpose of acquisition (from what it 

originally was in 1966), the PMC filed an Appeal which is pending thereafter.

(i) After Shri Manohar Joshi took over as the Chief Minister on 14.3.1995, the 

landowner entered into a Development agreement with M/s Vyas Constructions 

on 20.10.1995. Besides, he executed two powers of attorney, one in favour of 

its proprietor Shri Girish Vyas on 20.10.1995 for carrying out development on 

F.P. No. 110, and another in favour of Shri Shriram Karandikar on 26.10.1995 to 

take necessary steps concerning this development. Thereafter the follow-up 

steps were taken by Shri Karandikar, until the last stage when Shri Girish Vyas 

stepped in.

(j) After the City Engineer, Pune rejected the proposal of the Architect of the 

landowner for building permission by his reply dated 6.11.1995, the above 

referred Shri Karandikar straightaway wrote to the Minister of State for UDD on 

20.11.1995, and sought a direction to the Municipal Commissioner to consider 

landowner's application for development of the property. This application was 

not addressed to the State Government or to the Secretary concerned, but 

straightaway to the Minister of State for UDD, and did not bear any inward 

stamp of the department. The noting of the Private Secretary of the Minister of 

State in UDD in the margin of the application showed that it was directly 

received at the Minister's level. Thereafter as directed by the Minister of State, 

 87

the Under Secretary of UDD immediately called a meeting of high ranking 

officers such as Secretary UDD, Director Town Planning, Commissioner of PMC, 

City Engineer of PMC, and Under Secretary UDD, which meeting would not have 

been possible unless one had a clout with the Ministry.

(k) The initial stand of the administration was clearly reflected in the notings, 

and in the record of the meeting held on 3.2.1996. The preliminary note dated 

2.2.1996 from the department clearly stated that the land had been acquired 

after taking the necessary action on the purchase notice, and the compensation 

had been accepted. The question of returning of the plot to the landowner 

therefore did not arise.

(l) During the meeting held on 3.2.1996 the City Engineer of PMC also 

pointed out that landowner had never objected to the reservation on the plot, or 

the change in the purpose of its utilization from 1982 to 1987, i.e. during the 

entire process of revising the development plan. If the proceeding before the 

Minister of State was in the nature of an appeal under Section 47 of the MRTP 

Act (against the rejection of the proposal of development) under Section 45, the 

same could not be entertained, and the appeal had to be rejected. If it was an 

application for de-reservation then it had to be considered under Section 37 of 

the MRTP Act and not otherwise.

(m) The landowner initially took the stand that it was not an appeal, but 

subsequently wrote a letter on 23.3.1996 through Shri Karandikar that it was an 

 88

appeal under Section 47 of the MRTP Act. The landowner and the developer 

have been changing their stand from time to time.

 The conduct of the Minister of State for UDD, the then Chief 

 Minister, and the Municipal Commissioner

100. We may now refer to the conduct of the then Minister of State for 

UDD, the then Chief Minister and the then Municipal Commissioner. 

(a) As stated above the application of the landowner was received directly at 

the level of the Minister of State and immediately a meeting of high ranking 

officers was called, which is normally not done.

(b) In spite of a clear initial stand taken by the City Engineer PMC, as well as 

by the senior officers of UDD such as its Secretary, in view of the landowner 

submitting that on the adjoining plots schools had been developed, the Minister 

of State for UDD asked the Municipal Commissioner to survey the property and 

make a report, whether the PMC really needed the concerned property. The 

note of the meeting dated 3.2.1996 shows that initially the Minister of State for 

UDD was also of the view that if necessary a direction may be issued under 

Section 37 of the Act, and only a part of F.P. 110 could be released if PMC did 

not have any objection to reduce the area under reservation. 

(c) In view of the direction of the Minister of State, the Municipal 

Commissioner who is the Chief Executive of PMC and an I.A.S. officer of a high 

rank was asked to make a report after personally making a site inspection. A 

 89

direction to a high ranking officer to make a site inspection is not expected in 

such a case, and is quite unusual and disturbing to say the least. 

(d) In his letter dated 17.4.1996 the Municipal Commissioner reiterated the 

earlier stated stand of PMC to begin with, and then gave the report about the 

schools in the vicinity. However, he volunteered to add thereafter that private 

institutions may not come to this plot to set up a primary school, and PMC may 

as well spend its funds elsewhere. This was not correct since the applications of 

two reputed educational institutions for this very plot were pending with the 

PMC, and this fact was not stated by the Commissioner in his report. 

(e) In view of the direction of the State Government, the Commissioner held 

discussions with Shri Karandikar, who offered to give an alternate unencumbered 

plot of land of about 5000 to 10,000 sq. feet free of cost. Thereafter the 

Commissioner recorded in his letter the two proposals given by Shri Karandikar, 

and observed that if the school was to be shifted from F.P. No. 110, an action 

under Section 37 of the MRTP Act as well as the permission from PMC will be 

required.

(f) On 24.4.1996 there is a noting (which is subsequent to the letter of the 

Municipal Commissioner dated 17.4.1996) that the file was called by the then 

Chief Minister for his perusal. Thus the Chief Minister had kept himself fully 

abreast with the developments in this matter.

(g) The UDD department did not accept the proposal of shifting the school 

from F.P. No. 110 to a place far away, as seen from the note prepared by the 

 90

department (signed by the Deputy Secretary on 4.6.1996) recording that if the 

school was to be shifted from F.P. No. 110, it had to come up in the vicinity of 

approximately 200 metres as per rule 13.5 of Pune D.C. Rules. The note 

suggested acceptance of the proposal of reduction of 50% of the area under 

reservation by resorting to the procedure under Section 37 of MRTP Act. 

(h) The Minister of State did not approve this note dated 4.6.1996, and in 

view of Shri Karandikar insisting on shifting the school from F.P. No. 110, the 

subsequent note dated 13.6.1996 recorded that if the condition of 200 metres is 

to be relaxed, orders will have to be obtained from the Chief Minister (which 

power is disputed by the Principal Secretary, UDD in his subsequent note dated 

24.7.1998). 

(i) Thereafter, the developer offered another parcel of land at Lohegaon 

(which is a far off place), on which proposal the department prepared a note to 

give four directions to PMC which have been referred earlier. Under that 

proposal, Lohegaon land was to be exchanged for the concerned F.P. No. 110 

which was to be released by invoking DC Rule 13.5, and the landowner was to 

return to PMC the amount of compensation received. This note was approved by 

the Chief Minister on 21.8.1996 and accordingly a direction was given to the 

Municipal Commissioner on 3.9.1996 to accept the proposal of the developer and 

issue the development permission for F.P. No. 110.

(j) The Senior Law Officer of the PMC recorded an objection that such 

permission will require the approval of the general body of the Municipal 

 91

Corporation, but the Municipal Commissioner overruled him on 21.9.1996, in 

view of the direction of the government to act under DC Rule 13.5 as stated 

above, and ignored the mandatory provision of Section 37 of MRTP Act. 

(k) Thereafter the commencement certificates have been issued on 

28.11.1996, and an occupation certificate for the tenants' building was also given 

on 20.12.1997. 

(l) At this stage, the land developer Shri Girish Vyas had written on 

15.7.1998 to PMC on learning that according to PMC the Lohegaon land was not 

suitable for a school. He offered to handover another parcel of land in a 

residential zone at Mundhwa (which is also a far off place), and to deposit 

whatever amount that was required for the construction of a school of 500 sq. 

feet area at Mundhwa or elsewhere, but the Completion Certificate for the 

building for the other occupants of F.P. No. 110 (named as Sun-Dew Apartment) 

be issued. 

(m) There is a clear office note dated 22.7.1998 on record which shows that 

there was already a criticism of this matter in the newspapers and in the General 

Body of PMC, that one educational amenity in that area was being destroyed. 

The note recorded that Sr. Chief Secretary of Chief Minister had issued 

instructions, to put up a self-explanatory note for the perusal of the Chief 

Minister, to enable him to answer the probable questions in the assembly. This 

note dated 22.7.1998 was specifically marked for the Chief Minister. 

 92

(n) The Principal Secretary UDD had opined on 24.7.1998 that resort to DC 

Rule 13.5 will not be legal, and an action be taken under Section 37 of MRTP 

Act. Yet, in view of the favourable indication of the Municipal Commissioner in 

his letter dated 17.4.1996, a note was prepared on 27.7.1998 to continue to 

maintain the decision under DC Rule 13.5. 

(o) When Shri Girish Vyas had entered into the picture through his above 

referred letter, the Additional Chief Secretary made a note that since the 

developer is related to the Chief Minister, the Minister of State may take proper 

decision as per the rules. It is only because of this note that the Minister of 

State had signed the papers approving the proposal of the department, and 

directing that the necessary orders be issued to the PMC. Accordingly, the 

Deputy Secretary of UDD issued the consequent letter dated 29.7.1998 to the 

Municipal Commissioner, permitting him to accept the land at Mundhwa or 

elsewhere, as well as the amount to construct a school building of 500 sq. feet, 

and to issue the occupancy certificate for the Sundew Apartments. 

(p) Thus it has got to be inferred that not only the then Chief Minister was 

fully aware about this matter right from April 1996, until the last direction of UDD 

dated 29.7.1998, but was associated with the decision making process and the 

directions issued all throughout.

101. The events in this matter disclose that although the officers of UDD 

and the PMC initially took the clear stand opposing the proposal on behalf of the 

landowner to put up a residential building in place of a Primary School, the 

 93

Minister of State for Urban Development asked the Municipal Commissioner to 

personally carry out a survey of the property, on the ground that two schools 

had come up in the near vicinity, ignoring the fact that they had so come up as 

per the provision in the D.P. Plan itself. Thereafter when it was pointed out that 

the permission of the general body of the Municipal Corporation will be required 

for the modification, that submission was by-passed. The provision of DC Rule 

13.5 requiring alternate land to be provided for the same purpose within 200 

meters was also given a go-bye, and this rule was utilized to accept the proposal 

to shift the school to a very far off place. The mandatory provision for 

modification under Section 37 of the MRTP Act was totally ignored. Ultimately 

only an amount for constructing a school building elsewhere and the land 

therefor was offered to the Municipal Corporation, for getting a reserved plot of 

land in a prime area of the city released from a public amenity. Last but not the 

least, the Municipal Corporation was instructed to withdraw the First Appeal 

which it had filed to challenge the decision of the District Court in favour of the 

landowner in the matter of acquisition.

102. It is material to note that after the Municipal Commissioner sent his 

report dated 17.4.1996, the Private Secretary to the then Chief Minister Shri 

Manohar Joshi had called for the file for his perusal. After all necessary 

directions were decided, the Chief Minister placed on record his approval on 

21.8.1996 with an apparently innocent remark `All actions be taken in 

accordance with law', though he did not forget to record "No objection". Thus, 

the decision of the Government dated 3.9.1996 to shift the reservation of a 

 94

primary school from F.P. 110 under D.C. Rule 13.5 was under his order dated 

21.8.1996. Subsequently, when his son-in-law Shri Girish Vyas wrote the letter 

dated 15.7.1998 that money be received for constructing a school somewhere 

else, it became obvious on the record that the son-in-law of the then Chief 

Minister was behind the project. At that stage also the Chief Minister had to be 

pointed out by the Addl. Chief Secretary that the developer is related to him, and 

therefore, the necessary decision may not be taken by him, but by the Minister of 

State. Therefore, the file went to the Minister of State for UDD on whose 

direction the last necessary letter has been sent to PMC by the Deputy Secretary 

UDD on 29.7.1998. However this subsequent decision is in continuation to the 

initial decision of the Chief Minister dated 21.8.1996, and therefore the 

responsibility for the clearance of this disputed construction squarely lies on his 

shoulders.

 A brief summary

103. This is not a case where the landowner or his developer have 

approached the appropriate authority on the basis of their allegedly subsisting 

rights under the erstwhile T.P. scheme contending that setting up of a primary 

school on that plot contrary thereto would be affecting their right to develop the 

property and is therefore illegal. It is also not a case where they have 

approached the appropriate authority pointing out that there are sufficient 

number of schools in the near vicinity with supporting information and, 

therefore, sought deletion of reservation on the concerned plot. This is a case 

where the landowner never raised either of the two pleas to begin with. He was 

 95

conscious of the fact that the land was reserved for a public garden in the 1966 

D.P. Plan and, therefore, gave a purchase notice in May, 1979 which was 

confirmed by the State Government in December, 1979. When the D.P. Plan 

was revised during 1982-1987, he never raised any of the above two 

submissions. He did not even challenge the subsequent reservation for a 

primary school finalized in 1987. Only in 1995 when Shri Manohar Joshi became 

the Chief Minister, he appointed his son-in-law as a developer and another power 

of attorney Shri Karandikar to approach the Ministers directly. He pointed out 

that two schools had come up on the adjoining plots (which was in fact as per 

the D.P. Plan itself), and the Minister used this information to get a report from 

the Municipal Commissioner who suppressed the fact that applications for this 

very plot from two educational institutions were pending with PMC. Then also 

the order of deletion was not passed either under Section 37 (leave aside Section 

22A), or Section 50 of the Act which was invoked for the first time in this Court 

(and which otherwise also could not be applied). The order of deletion was 

passed under D.C. Rule 13.5 which had no application.

104. The effect of what has been done is this: that a landowner accepts 

compensation for his land when acquisition proceedings are initiated at his 

instance. The landowner does not challenge either the acquisition proceedings 

or the amount of compensation, but in fact collects the amount. When the 

tenants challenge the acquisition, the land owner joins the same subsequently. 

When the award is set aside by the civil court, and the Municipal Corporation 

files the appeal, the landowner approaches a close relative of the Chief Minister, 

 96

who happens to be a property developer. The development permission is 

granted by-passing the objections of the concerned department of the 

Government and the Municipal Corporation, and flouting all relevant provisions of 

law. The Municipal Corporation is asked to withdraw the appeal against the 

judgment holding that acquisition has lapsed. When the actions are challenged in 

a public interest litigation, the landowner contends that he had a subsisting right 

under the erstwhile T.P. Scheme, in spite of a subsequent reservation for a 

public amenity in the D.P. Plan holding the field, and that the construction is 

permissible though its legality cannot be traced to any provision of law.

105. Present case is not one where permission was sought for the 

construction under erstwhile T.P. scheme, or under Section 50 of the MRTP Act. 

This is a case where the personal relationship of the developer with the Chief 

Minister was apparently used to obtain permission for construction without 

following any due process of law. This is a case of rules and procedures being 

circumvented to benefit a close relative of the Chief Minister. It is a clear case of 

mala fide exercise of the powers and, therefore, the High Court was perfectly 

justified in canceling the development permission which was granted by the 

State Government. The development permission could not be defended either 

under Rule 6.6.2.2 or under Section 50. The MRTP Act requires a valid 

development permission under chapter IV of the act, and in the instant case 

there is none. Consequently, the construction put up on the basis of such 

permission had to be held to be illegal. In the circumstances, we uphold the 

 97

judgment of the Division Bench as fully justified in law and in the facts of the 

case.

 Impugned Order passed by the Division Bench

106. (i) As seen above, the Division Bench in the impugned judgment came 

to the conclusion that the disputed construction by the developer was totally 

illegal, and also concluded that there was nothing wrong with the acquisition of 

F.P. No.110. Having held so, it passed the impugned order which can be split 

into two parts. The first part of the order is arising out of the determination 

concerning the legality of the construction, and it can be seen in sub-paragraphs 

(a) to (d) of para 227 of the judgment. The order pertaining to costs is 

connected with this part and it is in sub-paragraph (f). The second part of the 

order is regarding appropriate criminal investigation which is in sub-paragraph 

(e). 

(ii) In the first part of its order the Division Bench directed:-

 (a) the cancellation of the commencement certificate dated 20.8.1996, 

 3.5.1997 and 3.7.1998, and occupation certificate dated 

 20.12.1997,

 (b) the PMC and its Commissioner to call upon the landowner and the 

 developer to restore F.P. No.110 to the position prior to the date of 

 the earliest of the commencement certificates, failing which these 

 authorities will take action to demolish the disputed construction, 

 and collect the cost of such action from the landowner and the 

 developer,

 98

 (c) the PMC to move an application for restoration of First Appeal 

 (stamp no.18615 of 1994), 

 and

 (d) rejected the prayer to revive first appeal without the demolition of 

 the structure.

 (f) the Division Bench directed payment of cost of Rs. 10,000/- each 

 by the State of Maharashtra, the PMC, the then Chief Minister, the 

 then Minister of State, the developer and the Municipal 

 Commissioner to the petitioners.

107. In view of the gross illegality in the order of the State Government 

and PMC in granting the development permission, the direction (a) for 

cancellation of Commencement Certificates and Occupation Certificate had to be 

issued and the same can not be faulted. As far as the direction (c) is concerned, 

it was noted by the High Court that the PMC had been forced by the State 

Government to apply for withdrawal of its First Appeal so that the judgment of 

the Civil Court remains undisturbed. Since the High Court came to the 

conclusion that there were nothing illegal about the acquisition, the First Appeal 

had to be restored. The direction is therefore fully justified. We may note that 

PMC has already filed an application for restoration of the First Appeal. 

 Direction to demolish the disputed building, and rejection of the 

 objection based on alleged delay and laches

108. The direction (b) in the impugned order was issued basically on 

two grounds. Firstly, the development permission had no legal validity 

 99

whatsoever, and secondly it was clearly a case of showing favouritism by going 

out of the way and circumventing the law. Besides, since the challenge to 

acquisition was being rejected, it would not have been proper to postpone the 

demolition of the disputed construction on the ground of pendency of the First 

Appeal, since the construction was absolutely illegal. Hence, the High Court 

issued direction (d) as above. 

109. The demolition was objected to by the appellants amongst others 

on the ground that there was delay and laches in moving the petitions to the 

High Court. It was submitted that if the petitioners were vigilant, they could 

have seen the building coming up from November 1996 onwards, but the 

petitions have been filed only in August 1998. According to them by the time the 

petitions were filed, the tenants' wing was complete, and even the other wing of 

Sundew Apartments was nearing completion The Division Bench has rejected this 

submission in paragraph 220 of its judgment by observing that merely because a 

construction is coming up, a citizen cannot assume that it is illegal or that the 

developer had obtained the construction permission in a manner contrary to law. 

Besides, when the petitioner in Writ Petition No. 4434 of 1998 (who is a 

Corporator) sought the information about the construction, he was informed by 

PMC that the same could not be made available under the relevant rules, though 

no such rules were shown to the Division Bench. The High Court has on the 

other hand noted that as a matter of fact even the construction of the building 

meant for the tenants was actually said to have commenced in March 1997 only. 

Hence, in the facts of the present case it could not be said that the writ petitions 

 10

suffered on account of delay or laches, and therefore the High Court was right in 

rejecting that contention.

110. With respect to the direction for demolition, we may note that 

similar direction was given way back in the case of Pratibha Cooperative 

Housing Society Vs. State of Maharashtra reported in 1991 (3) SCC 341. 

The appellant society situated in a prime area in Mumbai had added eight upper 

floors in excess of the F.S.I. permissible, and the Municipal Corporation directed 

removal of those floors. The petitioner society challenged the order of the 

Municipal Corporation. A Division Bench of the Bombay High Court dismissed the 

Writ Petition, but permitted the society to give proposals to reduce the area of 

construction upto the permissible limit. During the pendency of the appeal from 

the judgment of the High Court, the proposal of the society was examined by the 

Municipal Corporation and was found unacceptable. While dismissing the appeal, 

this Court noted in the aforesaid judgment that `the tendency of raising unlawful 

construction by the builders in violation of the rules and regulations of the 

Corporation was rampant' in the city of Mumbai. Thereafter it observed in para 6 

of the judgment:-

 "We are also of the view that the tendency of raising 
 unlawful construction and unauthorised encroachments is 
 increasing in the entire country and such activities are required to 
 be dealt with by firm hands.

 Having noted so it upheld the demolition of the upper eight floors 

and further observed in the last para of the judgment `

 "Before parting with the case we would like to observe 
 that this case should be a pointer to all the builders that making 

 10

 of unauthorised constructions never pays and is against the 
 interest of the society."

111. The observations of the Court however, have had no effect. In M.I 

Builders Pvt. Ltd. Vs. Radhey Shyam Sahu & Ors. reported in 1999 (6) 

SCC 464, the issue was with respect to the retention of a public amenity viz. a 

park in a congested area of city of Lucknow. The park was of historical 

importance and also an environmental necessity. The Lucknow Mahapalika had 

permitted the appellant builder to put up a shopping complex and a parking 

facility thereon. The appellant was permitted to do so without calling any bids 

and for hardly any monetary gain to the Municipal Corporation. This was also a 

case where the construction was on the basis of an agreement with the builder 

which agreement amounted to a fraud on the powers of the Mahapalika, and a 

clear case of favouritism, as in the present case. This Court dismissed the appeal 

and directed the demolition of the disputed construction and observed as follows 

in para 73 of its judgment:-

 "73. ....... This Court in numerous decisions has held 
 that no consideration should be shown to the builder or 
 any other person where construction is unauthorised. 
 This dicta is now almost bordering the rule of law. Stress 
 was laid by the appellant and the prospective allottees of the 
 shops to exercise judicial discretion in moulding the relief. Such 
 a discretion cannot be exercised which encourages illegality or 
 perpetuates an illegality. Unauthorised construction, if it is 
 illegal and cannot be compounded, has to be demolished. 
 There is no way out. Judicial discretion cannot be guided by 
 expediency. Courts are not free from statutory fetters. Justice is 
 to be rendered in accordance with law......"
 (emphasis supplied)

 10

112. In the present case, one would have thought of retaining the 

building and utilising it for a school. The PMC had shown its willingness to 

consider such a proposal. But the developer wanted to retain half of the flats of 

this ten storey building which would have been contrary to the provision in the 

Development Plan, and hence the proposal fell through. That apart, such a 

compounding would have been contrary to the above dicta in M.I Builders case 

(supra). There is no redeeming feature whatsoever in the present case. It is 

clearly a case of misuse of one's position for the benefit of a relative leading to 

an action which is nothing short of fraud on one's power and also on the statute. 

There is no reason for us to interfere in the order passed by the High Court 

directing the demolition of the disputed buildings. 

113. The building constructed for the tenants is meant for 

accommodating them, and it has been stated on behalf of the developer that he 

is not interested in dis-housing them. The learned senior counsel for PMC Shri 

R.P. Bhat has also stated on instructions, that PMC has no objection to the 

retention of the building constructed for the erstwhile occupants of the plot, 

however these occupants will now have to continue in that building as tenants of 

PMC. As far as these occupants are concerned, their status at the highest was 

that of tenants of the landowner. They claim to have been residing on this plot 

for over fifty years, and appear to be belonging to economically weaker section 

of the society. Their only request during the acquisition proceedings was that 

they should be accommodated on this very plot of land. It is another matter that 

in the High Court and in this Court they supported the landowner and the 

 10

developer, in view of the promise given to them that in the event the landowner 

and the developer succeed, the tenants will get ownership rights. Now that the 

plea of the landowner and the developer is rejected, the best that can happen to 

these occupants is to get the tenancy rights on this very plot of land. That apart, 

in view of their long stay on this plot, they had to be rehabilitated. The offer of 

PMC to accommodate them on the very plot of land is more than fair, and 

deserves acceptance. Since, the tenants were already in possession of a part of 

the plot for residential purpose, they are being continued to remain on that plot 

for that very purpose. In that event, the tenants may not be entitled to receive 

any monetary compensation since this offer is as per their original demand and it 

very much compensates them. However, since the amount of compensation 

awarded to them was too meagre, if they have collected it, they need not return 

the same to PMC. This being the position, in our view, the main operative order 

passed by the High Court needs to be modified appropriately. In the 

circumstances, we modify and restrict the operative order of demolition only to 

the extent it directs the removal / demolition of the building meant for the 

persons other than these tenants (i.e. the ten storey building named as Sundew 

Apartments). 

114. We may as well mention at this stage that as far as this building 

viz. Sundew Apartments is concerned, no one, except a bank had come forward 

to claim any third party rights, or prejudice on account of the order of demolition 

passed by the High Court in spite of the well publicised litigation of this matter. 

The concerned bank had advanced a loan to the developer against the security 

 10

of two flats in that building, and it intervened only at the last stage of passing of 

the order. The Division Bench has rightly rejected the claim of the bank in 

paragraphs 224 to 226 of its judgment by observing that the court could not 

accept the contention of the bank that it was not aware of the illegality on the 

part of the developer. The court did not accept the bank's plea of innocently 

advancing the money, since the mortgage was executed on 13.8.1998, whereas 

the allegations concerning the illegality of this transaction had appeared in the 

newspapers right from March 1998. The bank should have considered the 

matter in depth before advancing the loan. In any case the demolition will only 

extinguish its security though its claim against the developer may remain.

 Adverse remarks, and the direction for criminal investigation

115. The second part of the operative order in the impugned judgment 

was based on the adverse inferences drawn by the Division Bench against the 

then Chief Minister, the Minister of State and the Municipal Commissioner. The 

petitioners had infact sought a prosecution against all of them. However, after 

considering the facts and circumstances of the case the court was not inclined to 

grant that relief, without appropriate prior investigation. Therefore, with respect 

to this prayer the Court passed an order which is contained in paragraph 227 (e) 

in two parts as follows: 

(i) to direct the State of Maharashtra to make appropriate investigation 

against the then Chief Minister, the Minister of State and the Municipal 

Commissioner by an impartial agency, and 

 10

(ii) if satisfied that any criminal offences have been committed by the 

aforesaid respondents in the discharge of their duties, to take such action as is 

warranted in law. 

These three appellants have therefore made two fold prayers viz. expunging the 

adverse observations, and setting aside the direction for appropriate 

investigation to be followed by such action as is warranted in law.

 Adverse remarks by the Division Bench against the Municipal 

 Commissioner, Minister of State and the then Chief Minister:-

 Adverse remarks against the Municipal Commissioner

116. Apart from other allegations, it has been specifically alleged in Writ 

Petition 4434 of 1998 that the then Municipal Commissioner "wilted under the 

pressure of the Chief Minister.....", "acted in flagrant disregard to the provisions 

of the law", and "with a view to favour his son-in-law Shri Girish Vyas acted 

illegally and mala fide". As we have seen from the notings on the file, initially he 

did take a stand which could be said to be as per the record, and in consonance 

with law. In his affidavit before the High Court, he took the stand that he 

acted under the directions of the Minister, and hence, he should not be blamed 

for the ultimate decision. Shri Narshima, learned senior counsel appearing for 

him drew our attention to the Maharashtra Government Rules of Business 

framed under Article 166 of the Constitution in this behalf. He also tried to 

defend the Commissioner's action by invoking Section 154 of the MRTP Act which 

lays down amongst others that the Planning Authority has to carry out the 

directions and instructions of the State Government for the efficient 

 10

administration of the act. The Division Bench declined to accept this explanation. 

We have already dealt with this submission and recorded our reasons as to why 

we also cannot accept this reliance on Section 154.

117. (i) It was submitted on behalf of the Commissioner that he 

brought the correct legal position to the notice of the Minister of State to begin 

with, but ultimately had to give up due to the instructions from the Minister of 

State, meaning thereby that he cannot be blamed since he was acting under the 

directions of his superiors. Reliance was placed in this behalf on the proposition 

in paragraph 16 of Tarlochan Das Vs. State of Punjab & Ors reported in 

2001 (6) SCC 260 to the following effect:-

 "No government servant shall in the performance of his 
 official duties, or in the exercise of power conferred on him, act 
 otherwise than in his best judgment except when he is acting 
 under the direction of his official superior."

(ii) This defence cannot help him much if we see his actions atleast on two 

occasions. Firstly, when he made his report dated 17.4.1996 to the Minister of 

State, he overlooked the fact that the reservation on this plot was for a primary 

school, and not merely for a municipal primary school. As has been noted by the 

Division Bench, two private schools had already come up on the adjoining plots 

as per the D.P. provision itself. Besides, two renowned educational institutions 

had applied way back for this plot of land for running of schools thereon. The 

Commissioner did not place this very vital information before the Minister of 

State in his report. On the other hand he stated that Prabhat Road being a 

higher middle class area, a municipal school may not get adequate students. The 

Division Bench has therefore, observed in paragraph 143 of its judgment, that 

 10

his report was "far from truth". Secondly, he bypassed the general body of the 

Municipal Corporation in the matter of deleting the reservation on F.P. No. 110 

inspite of being aware of the correct legal position, and his attention having been 

specifically drawn thereto by the senior law officer of PMC.

118. Both these acts on the part of the Municipal Commissioner clearly 

amounted to failure on his part to discharge his duty correctly for which he 

cannot blame anybody else. This is the least that is got to be stated about his 

conduct by this Court. The Division Bench has commented that he acted "as a 

loyal soldier perhaps more loyal to the king than king himself", which was "with a 

view to please his bosses". It is true that in the first meeting called by the 

Minister of State for UDD, it was pointed out on behalf of PMC that the land had 

been acquired. The Commissioner had also pointed out that if the reservation 

was to be reduced or to be deleted, the permission of the Municipal Corporation 

will have to be obtained. His report of 17.4.1996, cannot however be said to be 

fully satisfactory and he failed in his duty when he permitted the by-passing of 

the Municipal Corporation in the matter of deletion of reservation on F.P. No.110, 

which he claims to have done in view of the direction from the Chief Minister 

under the D.C. Rules. We can say that a high ranking IAS Officer was expected 

to show his mettle, and he failed to come up to the expectations, but noticing 

that he had no personal interest in the matter, and he was acting under the 

directions of his superior, the Division Bench could have avoided making the 

particular remarks against him. 

 The conduct of the Minister of State

 10

119. In paragraph 3 of Writ Petition 4434 of 1998, there is a specific 

allegation against the then Minister of State as well as the then Chief Minister of 

"the blatant misuse of executive powers", "with a sole objective of ensuring a 

substantial monetary benefit for M/s Vyas Constructions. The defence of the 

Minister of State was that he tried to find out a workable solution, and acted on 

the advice of the officers of his department. As we have seen from the notings 

and as observed by the Division Bench that initially the Minister of State was also 

of the view that Section 37 of the MRTP Act should be followed. In this 

connection, it is relevant to note that after receiving the letter dated 17.4.1996 

from the Municipal Commissioner, the UDD department prepared its note in 

which it specifically recommended that only half the area of the concerned plot 

be released to the landowner, and that he should accommodate the tenants in 

his development of the property on that portion of land, and an action under 

Section 37 be taken for that purpose. Thus, the departmental note was in fact 

as per the initial stand taken by the Minister of State, yet strangely enough, he 

declined to approve the note. He contended in his affidavit before the High 

Court that he was persuaded to accept the suggestion to act under the D.C. Rule 

13.5 under which a similar action had been taken in Kothrud, Pune. No 

particulars of that Kothrud precedent were however, placed before the Court. 

120. The Minister of State also tried to contend that until the last he had 

no knowledge of Shri Murudkar's connection with the son-in-law of Chief 

Minister. In view of the facts which have emerged on the record, it was just not 

possible to accept this contention. The Division Bench has given its reasons for 

 10

the same and has commented on his conduct as follows at the end of paragraph 

140:-

 ".......It is difficult to account for the anxiety of the Minister 
 of State, UDD, to find out some solution to either reduce the area 
 of reservation or shift it to a new place. Only tenable explanation 
 is that it was a design to ensure that the representation made by 
 Murudkar on November 20, 1995 was allowed. It is not being 
 suggested by any one that respondent No.6 was personally 
 interested in the proposal or that he had any particular interest in 
 seeing that this proposal was sanctioned. We, therefore, have to 
 fall back on the inference that respondent No.6 was under 
 pressure from respondent No.5."

121. In this behalf it is relevant to note the conduct of the Minister of 

State from stage to stage. 

(i) Firstly, he entertained the application of Shri Karandikar directly at his 

own level, and thereafter immediately called a meeting of high ranking officers to 

take a decision thereon. Would such other applications receive such a direct and 

expeditious attention? 

(ii) Secondly, he directed the Municipal Commissioner, a very high ranking 

officer, to carry out a personal inspection and to make a report. Would he issue 

such directions in the case of other similar applications? 

(iii) Thirdly, after the Commissioner's report, the UDD department supported 

the initial view of the Minister of State that only a part of F.P.No. 110 be 

released, and that too under Section 37. Why did he not approve that note?

(iv) He acted as if he was waiting for the Commissioner to state that two 

schools had come up in the adjoining plots, so that he can release F.P. No. 110 

from the reservation for a Primary school. Did he not realise that those schools 

had come up as per the Development plan itself?

 11

(v) He relied upon an alleged precedent of release of the land at Kothrud 

under D.C. Rule 13.5 without having the particulars thereof on record. 

(vi) He tried to put the blame on the Municipal Commissioner and the 

Municipal Officers for the decision arrived at. It is true that the Commissioner 

failed in his duties to place full facts on record. At the same time the fact that 

the Minister of State ignored the initial notes of his own department and of PMC, 

which were in accordance with law, and went on acting and instructing as per 

the suggestions of Shri Karandikar, which led to the convenient reports cannot 

be lost sight of. He acted clearly against the provisions of law though he was 

fully informed about the same. Would he have acted in such a manner on any 

other similar application? 

(vii) Would he not be aware that the file was called by the Chief Minister after 

receiving the report from the Municipal Commissioner, and for what purpose? 

The natural inference which flows from all this conduct is that right from the 

beginning, the Minister of State was aware about Shri Murudkar's connection 

with the son-in-law of Chief Minister, and therefore he acted for the benefit of 

the developer, obviously at the instance of the then Chief Minister as inferred by 

the Division Bench. We have no reason to disagree.

 Observations against the Chief Minister

122. (i) The two Writ Petitions contain serious allegations against the then 

Chief Minister at various places. Thus in paragraph 2 of the Writ Petition 4433 of 

1998, it is alleged that the then Chief Minister misused his executive powers and 

 11

authority for the purpose of securing benefits for his near relatives, and in 

paragraph 3 it is specifically stated that this was for ensuring a substantial 

monetary benefit for M/s Vyas Constructions. A specific averment in paragraph 2 

in this behalf is as follows:-

 "It is the claim of the petitioner that on account of this 
 close relationship, the executive powers vested in the State of 
 Maharashtra have either been misused and/or actions which 
 cannot be taken in exercise of the executive powers under the 
 Act are presumably take in purported exercise of such executive 
 powers with a full knowledge that the actions are illegal and ultra 
 vires the provisions of the Act."

(ii) As we have noted earlier, on 24.4.1996 the initial report made by the 

Municipal Commissioner dated 17.4.1996 was called for the perusal of the then 

Chief Minister. The basic order dated 21.8.1996 granting no objection, thereby 

approval to the release of the reservation on F.P. No. 110 was that of the then 

Chief Minister. The disputed permission dated 3.9.1996 was issued in pursuance 

thereto. There is a note dated 22.7.1998 on record which was meant for the 

perusal of the then Chief Minister to enable him to answer the probable 

questions concerning this matter in the assembly. The last order proposed at the 

Government level was also brought to his notice, and he was going to sign it, but 

for the advice of the Additional Chief Secretary that since his son-in-law had 

written a letter by that time to the Commissioner, the papers be sent for the 

signature of the Minister of State. Thus it is quite clear that he was aware about 

the developments in the matter, and the orders therein were issued with his 

approval and knowledge. He cannot therefore, escape the responsibility for all 

the illegal actions in this matter.

 11

(iii) The learned senior counsel for the then Chief Minister Shri Shyam Diwan 

objected to the language used in paragraphs 111 and 131 of the judgment which 

accused him of "pettifogging or obfuscation of facts". It is stated in the 

judgment that the then Chief Minister "furtively" sought a copy of the report 

dated 17.4.1996 on the basis of the file note dated 24.4.1996 prepared by his 

private secretary to the Minister of State for Urban Development calling for the 

file for the then Chief Minister's perusal. It was submitted that there was no need 

for the then Chief Minister to act secretively. In our view, there is no use in 

taking umbrage behind the language used by the Court. The question is 

whether the inference that the Chief Minister had called for the file for his 

perusal can be disputed. A private secretary will not make such a note unless the 

file is required by the Chief Minister. In our view the inference was fully justified. 

It was also sought to be contended that the petitions were politically motivated 

and one of the petitioners did not have clean antecedents. We are concerned in 

the present case with respect to serious allegations against the then Chief 

Minister misusing his office for the benefit of his son-in-law and in that process 

destroying a public amenity in the nature of a primary school. Such submissions 

cannot take away the seriousness of the charge, and the Chief Minister must 

squarely explain and justify his actions. 

123. (i) With respect to the Chief Minister calling the file for his perusal, the 

Division Bench has posed a question as to whether it was an idle curiosity. "Why 

were the Chief Minister and the Minister of State interested in one particular 

case? What momentous public policy decision was sought to be taken in this 

 11

matter?" Shri Murudkar was not someone for whom the administration could 

have moved so fast. It was very clear that the Chief Minister was very much 

interested in knowing the progress of the case all throughout. The obvious 

inference was that the then Chief Minister and the Minister of State took keen 

interest in the matter only because Shri Murudkar had appointed the son-in-law 

of the Chief Minister as his developer.

(ii) The Division Bench has dealt with the affidavit of the then Chief Minister, 

some of the relevant events in this behalf and then held that the conduct of the 

then Chief Minister definitely leads to the conclusion that he was very much 

interested in knowing the progress of the case pertaining to F.P. No.110, and he 

wanted to apprise himself of report dated 17.4.1996 made by the Commissioner 

of PMC. Therefore, the Division Bench held at the end of para 131 as follows:-

 "We are afraid, unless the Court is naove and its 
 credulousness is stretched to the extreme, the inference has to 
 be that, not only was there an attempt on the part of respondent 
 No.5 to `concern' himself with the file even prior to August 1996, 
 but also that respondent No.5 had taken an active interest in the 
 case."

124. (i) Then we come to the merits of the disputed permission dated 

3.9.1996 which was in pursuance to the order of the Chief Minister dated 

21.8.1996 viz. "All actions be taken in accordance with law. No objection". It 

was sought to be contended on his behalf that he had clearly stated that all 

actions be taken in accordance with law. But we cannot ignore that he had 

simultaneously stated in his remarks of approval, "no objection" to the note 

containing the proposal which had been put up before him, and which was not in 

 11

accordance with law. The note clearly stated that the reservation on the land at 

Lohegaon be shifted from agricultural zone to residential zone by following the 

procedure under Section 37 of the MRTP Act. But as far as shifting of 

reservation from F.P. No. 110 was concerned, a different yardstick, namely that 

of D.C. Rule 13.5 was applied for which there was no explanation whatsoever. 

Thus he gave no objection to an illegal proposal as proposed in the note, and 

directed that all actions be taken in accordance with law which will only mean 

that the proposal be somehow fitted in four corners of law. 

(ii) The letter dated 17.4.1996 from the Municipal Commissioner had already 

been forwarded for his perusal. This report had clearly stated to begin with that 

the departmental permission had been rejected because the property was under 

reservation. The report of the Municipal Commissioner also stated that in case 

the change was proposed in the use of the property, permission had to be taken 

from the Pune Municipal Corporation. Could not the Chief Minister understand 

that D.C. Rule 13.5 could not be applied to F.P. No.110 in the manner in which it 

was suggested? Could he not understand that the permission of Municipal 

Corporation was required as per the law? In the teeth of these legal provisions 

he gave no objection to the proposal to shift the reservation of F.P. No. 110 

under D.C. Rule 13.5, and to shift the reservation of the plot at Lohegaon under 

D.C. Rule 37. In between there is a noting of 22.7.1998 which recorded that the 

Chief Minister had to be briefed about this matter appropriately for him to 

answer the questions in the legislative assembly. The note has also recorded 

that there was a criticism about this matter in the local newspaper. 

 11

Subsequently, thereafter when the land at Mundhwa or elsewhere was sought to 

be exchanged in place of Lohegaon, the letter of Shri Girish Vyas was already on 

the file of the PMC and the Government. Still he was going to sign note of 

approval but for the advice of the Additional Chief Secretary. This shows the 

keen interest of the then Chief Minister in the matter and it can certainly be 

inferred that he was so acting for the benefit of his son-in-law. 

125. According to Shri Naphade, the learned counsel appearing for the 

developer, the inference of mala fides is misconceived, as it is contrary to the 

material on record. He submitted that the Municipal Commissioner's report 

dated 17.4.1996 was not found to be untrue or false by any authority. He 

emphasized that as per the report (i) There are about 36 structures on the land 

which are occupied by tenants; (ii) Half the area of the plot is encumbered; (iii) 

There are two educational institutions in the vicinity of the plot and 11 

educational institutions in the area; (iv) The acquisition of the plot has been 

declared illegal by the Court; (v) The locality in question is inhabited by higher 

middle class people and there may not be an appropriate response to a Primary 

School; (vi) Considering the funds available the Pune Municipal Corporation is 

inclined to develop school on some other plot reserved for school. He defended 

the decision of the then State Government and the actions taken in pursuance 

thereof by submitting that (i) There is no detriment to Public Interest, as no 

Municipal Primary School was required in the locality. (ii) The Appellant made 

alternative plot available at his own cost in the locality where a Municipal Primary 

School was required. (iii) The developer paid a sum of Rs. 25 lakhs to the PMC 

 11

for construction of Municipal Primary School wherever it wanted to put it up. (iv) 

Tenants occupying dilapidated structures were rehabilitated on the very plot and 

were to get the ownership right free of cost.

126. These arguments are based on an erroneous premise that the plot 

was reserved for a Municipal Primary school. It was reserved for a Primary 

school and not merely a Municipal Primary school. It is on this false premise that 

the Commissioner had opined that this being a higher middle class area, a 

Municipal Primary school may not get an appropriate response. The two 

adjoining plots were also reserved for Primary schools as per the D.P. plan, and 

thereon two private schools had already come up. That cannot be a ground to 

say that this plot be released from reservation. The Municipal Commissioner had 

failed to place on record a very material information that one renowned 

educational institution had sought this very plot for educational activities way 

back in 1986. The Municipal Commissioner had not specified as to what he 

meant by the particular area when he stated that eleven educational institutions 

had come up therein. The plot had been reserved for a Primary school after an 

elaborate planning process wherein the requirements of the particular area are 

appropriately considered. This is not the first case where there would be three 

adjoining plots reserved for Primary schools. There are many such schools and 

educational complexes which always require adjoining plots and are developed 

accordingly. The submission that the acquisition had been declared illegal by the 

Court was also a very convenient submission ignoring that the Municipal Appeal 

therefrom was pending in the High Court. There was no reason for the 

 11

Corporation to be deterred by the encumbrances on the plot, since the 

compensation therefor had already been arrived at as per the law, and it did not 

cast much burden on the Corporation. The report of the Municipal Commissioner 

was clearly made "to please the bosses" as observed by the Division Bench, and 

could not be accepted as the basis for a valid legal action. The acceptance of 

the offer of the developer would mean that whenever anybody wants to delete a 

reservation of a public amenity in a prime area, he can throw the money to the 

Municipal Corporation and say that let the amenity come up elsewhere, but the 

reservation be deleted. Such an approach will mean destruction of the entire 

planning process and deserves to be rejected. None of these arguments can 

whitewash the material on the record which clearly leads to the inference, that 

the impugned actions were motivated to benefit the son-in-law of then Chief 

Minister. 

127. (i) The learned counsel for the then Chief Minister objected to the 

inference drawn by the Division Bench that the then Chief Minister had 

pressurized the officers into taking an illegal action. It was submitted that the 

notings on the file indicated that there were deliberations on issues involved in 

the matter at the government level on a number of occasions. The course of 

action suggested in the PMC note dated 26.7.1996 was approved at several 

levels of authority before the same coming to the then Chief Minister. The 

Deputy Secretary in the UDD Shri Vidyadhar Despande has also stated in his 

affidavit that there was no pressure from the office of the Chief Minister or for 

himself. That apart there were cogent factors explaining why there was no need 

 11

for yet another primary school in the locality and generally the thinking was that 

public interest would gain from the proposed course of action. 

(ii) As far as this latter submission about there being no need of one more 

primary school, one may immediately note the scant respect that the then Chief 

Minister had for the cause of education and the method of planning. One fails to 

see as to what public interest was going to be achieved by preventing a primary 

school from coming up on a designated plot. There is no use stating that instead 

a primary school will come up in another area. It will of course come up in that 

area if it is so required. But there is no need to tinker with a school in another 

area, provided by a proper planning process. 

(iii) We have already noted the manner in which the matter had been 

handled. The application of the developer was entertained directly at the level of 

the Minister of State. Immediately a meeting of high ranking officers was called. 

Inspite of a clear stand taken by the offices of UDD as well as by PMC, the 

Minister of State asked the Commissioner, a high ranking officer to make a 

personal site inspection and then a report, only because the developer submitted 

that two schools had come up on the adjoining plots. Was it not clear to the 

Minister of State that those two schools had come up as per the provisions of the 

D.P. plan? The Municipal Commissioner in his report, and thereafter the officers 

of the UDD, initially submitted that if deletion of reservation was to be resorted, 

the action will have to be initiated under Section 37 of the Act. It is only 

because of the insistence of the developer that the resort to D.C. Rule 13.5 was 

adopted. During the course of all these developments the file had been called by 

 11

the Secretary to the Chief Minister. Were these not clear signals to the officers as 

to what was the interest of the then Chief Minister? There will never be any 

direct evidence of the officers being pressurized, nor will they say that they were 

so pressurized. Ultimately one has to draw the inference from the course of 

events, the manner in which the officers have acted and changed their stand to 

suit the developer and the fact that the son-in-law of the then Chief Minister was 

the developer of the project. As we have noted earlier the affidavit of the 

Commissioner clearly indicated that he tried to place the correct legal position 

initially but ultimately had to give in from the pressure from the superiors. 

Unless one is naove one will have to agree with the conclusion which the Division 

Bench had drawn in para 136 of its judgment to the following effect:- 

 "We are left with only one conclusion which we have to 
 draw from the facts on record and, to quote the words of the 
 petitioners, "the conduct of respondent No.5 itself indicates that 
 he had `pressurized' the officials into taking an illegal action" and 
 this, in our view, is certainly misuse of executive powers." 

128. The learned senior counsel who had appeared for the then Chief 

Minister in the High Court had relied upon amongst others on the judgment of 

this Court in E.P. Royappa vs. State of Tamil Nadu [AIR 1974 SC 555] . 

Krishna Iyer J. had observed in paragraph 92 of his judgment in that matter that 

"we must not also overlook that the burden of establishing mala fides is very 

heavy on the person who alleges it. The allegations of mala fides are often more 

easily made than proved, and the very seriousness of such allegations demands 

proof of a high order of credibility." Shri Royappa, while challenging his transfer 

had made allegations of mala fides against the then Chief Minister of Tamil 

Nadu, and this Court had refused to accept those allegations. The Division Bench 

 12

noted in the presently impunged judgment that Shri Royappa was a Chief 

Secretary, and hardly any Chief Secretary of a State Government was known 

who would be in any way hamstrung, or stopped from getting information or 

documents on the basis of which he makes out the case of mala fides against 

the officer holding a public office. The Division Bench rightly observed at the 

end of para 129 as follows:-

 "We do agree with Mr. Salve that a finding of mala fides 
 against public authority, that too of the rank of Chief Minister of 
 the State, should not be lightly drawn. It is quite a serious 
 matter. But, if the Court is required to draw such an inference 
 after examining the record, we feel that the Court cannot flinch 
 from its duty."

129. In one earlier case i.e Shivajirao Nilangekar Patil v. Dr. 

Mahesh Madhav Gosavi [1987 (1) SCC 227], a single Judge of the Bombay 

High Court had held that in the facts of that case it could be reasonably held that 

the marksheet of the M.D. Examination was tampered to benefit the daughter of 

Shri Shivajirao, the then Chief Minister of Maharashtra. The Division Bench of 

the Bombay High Court took the view that the circumstances relied on clearly 

formed a reasonable and cogent basis for the adverse comments on the conduct 

of Shri Shivaji Rao. The Division Bench had noted that the single Judge had 

followed the tests led down by this Court earlier in State of U.P. Vs. 

Mohammad Naim [AIR 1964 SC 703] which were as follows:-

 "10. ......(a) whether the party whose conduct is in 
 question is before the court or has an opportunity of explaining 
 or defending himself; (b) whether there is evidence on record 
 bearing on that conduct justifying the remarks; and (c) whether it 
 is necessary for the decision of the case, an in integral part 
 thereof, to animadvert on that conduct. It has also been 

 12

 recognized that judicial pronouncements must be judicial in 
 nature, and should not normally depart from sobriety, moderation 
 and reserve."

Having approved the approach of the High Court this Court held in the facts of 

Shri Shivajirao's Case as follows:-

 "50. There is no question in this case of giving any clear 
 chit to the appellant in the first appeal before us. It leaves a 
 great deal of suspicion that tampering was done to please Shri 
 Patil or at his behest. It is true that there is no direct evidence. 
 It is also true that there is no evidence to link him up with 
 tampering. Tampering is established. The relationship is 
 established. The reluctance to face a public enquiry is also 
 apparent. Apparently Shri Patil, though holding a public office 
 does not believe that "Ceaser's wife must be above suspicion....."

130. The facts of the present case are stronger than those in the case of 

Shri Shivajirao Nilangekar (supra). Here also a relationship is established. 

The basic order dated 21.8.1996 in this matter granting no objection to an illegal 

action is signed by the then Chief Minister himself. That was after personally 

calling for the file containing the report dated 17.4.1996 sent by the Municipal 

Commissioner much earlier. The entire narration shows that the then Chief 

Minister had clear knowledge about this particular file all throughout, and the 

orders were issued only because the developer was his son-in-law, and he 

wanted to favour him. Ultimately, one has to draw the inference on the basis of 

probabilities. The test is not one of being proved guilty beyond reasonable 

doubt, but one of preponderance of probabilities.

 Appropriate actions taken in a Public Interest Litigation

 12

131. It was contended before the High Court that the rule as to the 

construction of pleadings should be strictly applied in the present case and that 

the material as contained in the petitions did not justify any further probe. The 

High Court rightly rejected that argument. There was a sufficient foundation in 

the petition for the further steps to be taken by the High Court. The petitions 

before the High Court were in the nature of public interest litigation. The 

purpose in such matters is to draw the attention of the High Court to a particular 

state of facts, and if the Government action is found to be contrary to law or 

affecting the rights of the citizen, the court is required to intervene. There was a 

specific plea in paragraph 10 of Writ Petition No. 4433 of 1998 to the effect that 

"the fundamental and legal right of the citizens of Pune of submitting objections 

and suggestions to any modification in the Final Development Plan u/s 37 of the 

act has been infringed", and that was solely on account of the developer being a 

close relation of the then Chief Minister who was also the Minister for Urban 

Development which controls the appointments of a Municipal Commissioner to a 

Corporation established under the B.P.M.C Act 1949. A prima facie case had 

been made up in the petitions which got supported when the High Court in 

exercise of its Writ Jurisdiction rightly called for the relevant files from the State 

Government and the PMC to explain and defend their decisions.

132. Public Interest Litigation is not in the nature of adversarial 

litigation, but it is a challenge and an opportunity to the government and its 

officers to make basic human rights meaningful as observed by this Court in 

paragraph 9 of Bandhua Mukti Morcha Vs. Union of India [AIR 1984 SC 

 12

802]. By its very nature the PIL is inquisitorial in character. Access to justice 

being a Fundamental Right and citizen's participatory role in the democratic 

process itself being a constitutional value, accessing the Court will not be readily 

discouraged. Consequently, when the cause or issue, relates to matters of good 

governance in the Constitutional sense, and there are no particular individuals or 

class of persons who can be said to be injured persons, groups of persons who 

may be drawn from different walks of life, may be granted standing for 

canvassing the PIL. A Civil Court acts only when the dispute is of a civil nature, 

and the action is adversarial. The Civil Court is bound by its rules of procedure. 

As against that the position of a Writ Court when called upon to act in protection 

of the rights of the citizens can be stated to be distinct. 

133. It was submitted on behalf of the appellants that inference should 

not be drawn merely on the basis of the notings in the file, and the remarks 

made by the Division Bench ought to be expunged. In this connection we may 

profitably refer to the observations of this Court in P.K. Dave Vs. Peoples' 

Union of Civil Liberties (Delhi) & Ors. reported in 1996 (4) SCC 262. A 

Writ Petition by way of a PIL was filed before the Delhi High Court alleging 

commission of gross financial irregularities by the Director of Govt. Hospitals in 

Delhi. Notings in the office file produced by the Government showed that 

despite suggestions made by the Health Secretary and Chief Secretary to the 

Delhi Administration, Lt. Governor of the Administration had refused to take any 

action against the Director. The High Court had passed strictures against the Lt. 

Governor. The learned senior counsel Shri Venugopal appearing on behalf of the 

 12

appellant Lt. Governor had submitted that the strictures based on the basis of 

the notings should be expunged. Rejecting the submission this Court observed 

in paragraph 8 as follows:-

 "8. ..... Where the relevant departmental files were 
 produced before the court by the Government and the court on 
 scrutiny of the same came to the conclusion that the decision has 
 not been taken fairly, then the court would be entitled to 
 comment on the role of such person who took the decision..... In 
 such circumstances if the contention of Mr. Venugopal is 
 accepted then no administrative authority and his conduct would 
 come under the judicial scrutiny of the court. That an 
 administrative order is subjected to judicial review is by now the 
 settled position and no longer remains res integra. This being 
 the position we fail to appreciate the contentions of Mr. 
 Venugopal that the notings in the file or the orders passed by the 
 Secretary and Chief Secretary as well as the Governor should not 
 have formed the basis of the strictures passed against the 
 appellant." 

134. Reliance was placed on the judgment of this Court in Jasbir Singh 

Chhabra Vs. State of Punjab reported in 2010 (4) SCC 192 to submit that 

the issues and policy matters which are required to be decided by the 

Government are dealt with by several functionaries, some of whom may record 

notings on the files, and such notings recorded in the files cannot be made basis 

for a finding of mala fides. There can be no dispute with the preposition when 

policy matters are involved as in that case where the question was whether the 

State Government's refusal to sanction change of land use from industrial to 

residential was vitiated due to mala fides claimed to be arising out of such 

notings. In the present case we are concerned with the notings not concerning 

with any policy matter, but with respect to the application on behalf of an 

individual landowner to delete the reservation of a primary school on his land, 

 12

where the developer is the son-in-law of the Chief Minister. The notings in the 

present case are quite clear and the inference of mala fides therefrom is 

inescapable.

135. We have noted the observations and the conclusions arrived at by 

the High Court with respect to the conduct of the then Municipal Commissioner, 

the Minister of State and the then Chief Minister. The High Court has drawn its 

inferences and made the remarks after following the dicta in State of U.P. Vs. 

Mohd. Naim (supra). Having seen the totality of facts and guidelines laid down 

by this Court in P.K. Dave's case (supra), we do not see that we can draw any 

other inference then the one which was drawn by the Division Bench. We will be 

failing in our duty if we do not draw the inference which clearly arises from the 

notings on the file, the affidavits filed by the persons concerned and the law with 

respect to drawing such inference. In the circumstances, we refuse to expunge 

any of these remarks rendered by the Division Bench.

 Orders for Criminal Investigation

136. Having drawn the above inferences, and having made the adverse 

remarks about the conduct of the then Chief Minister, Minister of State and 

Municipal Commissioner the impugned judgment has directed the State of 

Maharashtra to initiate appropriate investigation against them through an 

impartial agency, and if satisfied that any criminal offence has been committed 

to take such action as warranted in law.

137. Now, as far as this direction is concerned, we have to note that as 

far as the Municipal Commissioner is concerned, though the Division Bench did 

 12

not approve his conduct and squarely criticized him for being more loyal to the 

king then the king himself, yet in terms it observed in paragraph 144 of the 

judgment, that it did not attributive any motive to him for his actions. This para 

reads as follows:- 

 "144. While we may not attribute any motive to 
 respondent No.10 for his actions, we cannot approve of the 
 actions taken by him. We have already pointed out that the 
 action of withdrawing the appeal was wrong. In our view, 
 respondent No.10 would have served the interests of the PMC 
 better if he had placed his dilemma before the PMC and sought a 
 resolution thereof, particularly when he believed that the 
 Government was issuing him instructions contrary to law, which 
 he believed to exist. But, perhaps, this might not have been 
 clear to him at the time when he acted to please his masters. 
 While holding that the actions taken by the tenth respondent 
 were contrary to the provisions of the BPMC Act, MRTP Act and 
 Development Control Rule No.13.5, we find it difficult to accept 
 the suggestion in the writ petitions that he was a willing party to 
 the process of abuse of executive powers." 

That apart, Shri Narsimha, learned senior counsel appearing for the Municipal 

Commissioner drew our attention to Section 147 of the MRTP Act which provides 

that no suit, prosecution or other legal proceedings shall lie against any person 

for anything which is in good faith done or entitled to be done under this Act or 

any rules or regulations made therein. Reliance was also placed on Section 486 

of the B.P.M.C. Act 1949 which is also to the similar effect. The Division Bench 

has also clearly stated that it did not accept the suggestion in the writ petitions 

that the Commissioner was willingly a party to the process of abuse of executive 

powers. This being the position, in our view it would not be correct to direct any 

criminal investigation against the then Municipal Commissioner, and in our view 

to that extent the order of the Division Bench requires to be corrected.

 12

138. As far as the Minister of State is concerned also, the Division Bench 

commented adversely on his conduct in paragraph 140 of its judgment. Yet it 

also observed in paragraph 142 that there was nothing on record as suggested 

that he had any personal motive in the matter. The relevant observation at the 

end of paragraph 142 reads as follows:- 

 ".......All that we can say is that there is nothing on record 
 to suggest that he had any other personal motive in the matter. 
 We, therefore, infer that respondent No.6 must have done it to 
 oblige his senior colleague i.e. the then Chief Minister, 
 respondent No.5." 

The Division Bench has thus specifically inferred that whatever he has done, was 

done to oblige his senior Minister i.e. the then Chief Minister and he had no 

personal motive in the matter. In the circumstances, he is entitled to a benefit 

of doubt and, therefore, the direction for criminal investigation against him also 

can not be sustained. 

139. As far as the Chief Minister is concerned, however, it is very clear 

that he was fully aware about the application made by Shri Karandikar who was 

a camouflage for his son-in-law. He had called for the file after the Municipal 

Commissioner sent his report in April, 1996. But for his personal interest, the 

Government and the Municipal officers would not have taken the stand and put 

up the notes that he wanted to be on record. The shifting of the reservation 

from F.P. No.110 was clearly untenable under D.C. Rule 13.5. The by-passing of 

the Municipal Corporation and ignoring the mandate of Section 37 was also not 

expected, yet he gave "no objection" to a contrary and totally unjustified order. 

The earlier part of his order viz. "all action be taken in accordance with law" 

 12

therefore becomes meaningless, and is nothing but a camouflage. The conduct 

on the part of the then Chief Minister prima-facie amounts to a misfeasance and 

Shri Wasudev, learned senior counsel appearing for the original petitioners 

submits that such a conduct ought to be sternly dealt with. 

140. The learned counsel for the Chief Minister on the other hand 

pointed out that there were no prayers for prosecution in the Writ Petitions, and 

the direction contained in paragraph 227 (e) was beyond the prayers. The 

question therefore, is whether the operative order passed by the High Court in 

this behalf is legally tenable. The direction given by the High Court in paragraph 

227 (e) is as follows:-

 "(e) As far as prayer for directing prosecution against 
 Respondent Nos. 5, 6 and 10 is concerned, after considering the 
 facts and circumstances of the case we are not inclined to grant 
 this relief. ...... Nonetheless, we direct the first respondent to 
 make appropriate investigations through an impartial agency and, 
 if satisfied that any criminal offences have been committed by the 
 aforesaid respondents in the discharge of their duties, to take 
 action as is warranted in law."

Respondent Nos. 5, 6 and 10 were the then Chief Minister, the then Minister of 

State and the then Municipal Commissioner. 

141. In this context we have to take note of the judgment of a bench 

of three Judges of this Court in this behalf on a review petition in the case of 

Common Cause, A Registered Society Vs. Union of India & Ors. reported 

in 1999 (6) SCC 667. The Minister concerned in that matter had committed the 

misfeasance of allotment of retail outlets of petroleum products out of the 

discretionary quota in an arbitrary and mala fide manner. Such allotments had 

been set aside by a bench of two Judges by its judgment between the same 

 12

parties reported in 1996 (6) SCC 530. The Court had thereafter passed an 

order that the Minister concerned shall show cause within two weeks why a 

direction be not issued to the appropriate police authority to register a case and 

initiate prosecution against him for criminal breach of trust of any other offence 

under law. This Court held in paragraph 174 of its judgment on the review 

petition as follows:-

 "174. The other direction, namely, the direction to CBI to 
 investigate "any other offence" is wholly erroneous and cannot be 
 sustained. Obviously, direction for investigation can be given 
 only if any offence is, prima facie, found to have been committed 
 or a person's involvement is prima facie established, but a 
 direction to CBI to investigate whether any person has committed 
 an offence or not cannot be legally given. Such a direction would 
 be contrary to the concept and philosophy of "LIFE" and 
 "LIBERTY" guaranteed to a person under Article 21 of the 
 Constitution. This direction is in complete negation of various 
 decisions of this Court in which the concept of "LIFE" has been 
 explained in a manner which has infused "LIFE" into the letters of 
 Article 21."

142. It could be perhaps argued that the misfeasance on the part of the 

then Chief Minister and the Minister of State amounts to a criminal misconduct 

also under Section 13 (1) (d) of the Prevention of Corruption Act, 1988. In the 

present case however, there is neither any such reference to this section nor any 

prima facie finding in the impugned judgment rendered way back in March 1999. 

In the circumstances in view of the proposition of law enunciated by a larger 

bench in the above case it is difficult to sustain the direction to make appropriate 

investigations through an impartial agency, and if satisfied that any criminal 

offence has been committed by the aforesaid respondents in the discharge of 

their duties, to take action as is warranted in law.

 13

 Epilogue

 Approach Towards the Planning Process

143. The significance of planning in a developing country cannot be 

understated. After years of foreign rule when we became independent, leaders 

of free India realized that for advancement of our society and for an orderly 

progress, we had to make a planned effort. Infact, even prior to independence 

the leaders of the freedom struggle had applied their mind to this aspect. The 

leaders of Indian Freedom Movement and particularly Pandit Jawaharlal Nehru, 

our first Prime Minister always emphasised democratic planning as a method of 

nation building and economic and social upliftment of Indian society. In March, 

1931, the Indian National Congress at its Karachi Session passed a resolution to 

the effect that the State shall take steps to secure that ownership and control of 

the material resources of the community are so distributed as best to subserve 

the common good. Pandit Nehru drafted this resolution in consultation with 

Gandhiji and described it as a very short step in a socialist direction. In 1938, 

the National Planning Committee of the Congress was set up under the 

Chairmanship of Pandit Nehru who has been aptly described as "the Architect 

of democratic planning in India". The Economic Programme Committee of 

the Congress under his Chairmanship made a recommendation of setting up a 

permanent Planning Commission in 1947-48. 

144. Shri H.K. Paranjape, (1924-1993) an eminent Economist and a 

former Member of Monopolies and Restrictive Trade Practices Commission and 

 13

former Chairman of Railway Tariff Committee, in his monograph "Jawaharlal 

Nehru and the Planning Commission" (published by Indian Institute of 

Public Administration in September, 1964) notes that Nehru linked up the work 

of Planning Commission directly to the Fundamental Rights and the Directive 

Principles enunciated in the Constitution. Nehru always wanted to make sure 

that the objectives of the Planning Commission were well defined and well 

understood. In this article, the author further records as follows:-

 "When the National Development Council was discussing 
 the Draft Outline of the Third Plan in September, 1960, he 
 emphasized the importance of remembering "what our objectives 
 were and not to lose ourselves in the forest of details that a Plan 
 had to deal with. Because, always when one considered the 
 detail, one must look back on the main thing, how far it fitted in 
 with the main issue; otherwise, it was out of place". 

Nehru believed in participation of different sections of society in framing of the 

Plan. The emphasis has always been amongst others to put land to the best use 

from the point of the requirements of our society, since land is a scarce resource 

and it has to be used for the optimum benefit of the society

145. As stated above, we adopted the model of democratic planning 

which involves the participation of the citizens, planners, administrators, 

Municipal bodies and the Government as is also seen throughout the MRTP Act. 

Thus when it comes to the Development Plan for a city, at the initial stage itself 

there is the consideration of the present and future requirements of the city. 

Suggestions and objections of the citizens are invited with respect to the 

proposed plan, and then the planners apply their mind to arrive at the plan 

which is prepared after a scientific study, and which will be implemented during 

 13

the next 10 to 20 years as laid down under Section 38 of the MRTP Act. The 

plan is prepared after going through the entire gamut under Sections 21 to 30 of 

the Act, and then only the sanction is obtained thereto from the State 

Government. That is why the powers to modify the provisions of the plan are 

restricted as noted earlier. If the plan is to be tinkered for the benefit of the 

interested persons, or for those who can approach the persons in authority, then 

there is no use in having a planned development. Therefore, Section 37 which 

permits the minor modifications provides that even that should not result into 

changing the character of the development plan, prior whereto also a notice in 

the gazette is required to be issued to invite suggestions and objections. Where 

the modification is of a substantial nature, then the procedure under Section 29 

of the Act requiring a notice in the local newspapers inviting objections and 

suggestions from the citizens is to be resorted to. Even the deletion of 

reservation under Section 50 is at the instance of the appropriate authority only 

when it does not want the land for the designated purpose. 

146. The idea is that once the plan is formulated, one has to implement 

it as it is, and it is only in the rarest of the rare cases that you can depart 

therefrom. There is no exclusive power given to the State Government, or to the 

planning authority, or to the Chief Minister to bring about any modification, 

deletion or de-reservation, and certainly not by a resort to any of the D.C. Rules. 

All these constituents of the planning process have to follow the mandate under 

Section 37 or 22A as the case may be if any modification becomes necessary. 

That is why this Court observed in paragraph 45 of Chairman, Indore Vikas 

 13

Prodhikaran Vs. Pure Industrial Coke & Chemicals Ltd. & Ors. reported in 

2007 (8) SCC 705 as follows:-

 "45. Town and country planning involving land 
 development of the cities which are sought to be achieved 
 through the process of land use, zoning plan and regulating 
 building activities must receive due attention of all concerned. 
 We are furthermore not oblivious of the fact that such planning 
 involving highly complex cities depends upon scientific 
 research, study and experience and, thus, deserves due 
 reverence.

 (emphasis supplied)

 Role of Municipalities

147. The municipalities which are the planning authorities for the 

purpose of bringing about the orderly development in the municipal areas, are 

given a place of pride in this entire process. They are expected to render wide 

ranging functions which are now enumerated in the constitution. They are now 

given a status under Part IX A of the Constitution introduced by the 74th 

Amendment w.e.f. 1.6.1993. Article 243W lays down the powers of the 

Municipalities to perform the functions which are listed in the Twelfth Schedule. 

For performing these functions, planning becomes very important. This Twelfth 

Schedule contains the following items:- 

 "TWELFTH SCHEDULE

 [Article 243W]

 1. Urban planning including town planning.
 2. Regulation of land-use and construction of buildings.
 3. Planning for economic and social development.
 4. Roads and bridges.
 5. Water supply for domestic, industrial and, commercial purposes.
 6. Public health, sanitation conservancy and solid waste management.
 7. Fire services.

 13

 8. Urban forestry, protection of the environment and promotion of 
 ecological aspects.
 9. Safeguarding the interests of weaker sections of society, including 
 the handicapped and mentally retarded.
 10. Slum improvement and upgradation.
 11. Urban poverty alleviation.
 12. Provision of urban amenities and facilities such as parks, gardens, 
 playgrounds.
 13. Promotion of cultural, educational and aesthetic aspects.
 14. Burials and burial grounds; cremations, cremation grounds and 
 electric crematoriums.
 15. Cattle ponds; prevention of cruelty to animals.
 16. Vital statistics including registration of births and deaths.
 17. Public amenities including street lighting, parking lots, bus stops 
 and public conveniences.
 18. Regulation of slaughter houses and tanneries."

The primary powers of the Municipal Corporations in Maharashtra such as PMC 

(excluding some Municipal Corporations which have their separate enactments) 

and of the Standing Committees of the Corporations are enumerated in the 

BPMC Act. Coupled with those powers, the Municipal Corporations have their 

powers under MRTP Act. These are the statutory powers, and they cannot be 

bypassed. 

 The Responsibility of the Municipal Commissioner and the Senior 

 Government Officers

148. The Municipal Commissioner is the Chief Executive of the Municipal 

Corporation. It is his responsibility to act in accordance with these laws and to 

protect the interest of the Corporation. The Commissioner is expected to place 

the complete and correct facts before the Government when any such occasion 

arises, and stand by the correct legal position. That is what is expected of the 

senior administrative officers like him. That is why they are given appropriate 

 13

protection under the law. In this behalf, it is worthwhile to refer to the speech of 

Sardar Vallabhbhai Patel, the first Home Minister of independent India, made 

during the Constituent Assembly Debates, where he spoke about the need of the 

senior secretaries giving their honest opinions which may not be to the liking of 

the Minister. While speaking about the safeguards for the Members of Indian 

Civil Service (now Indian Administrative Service), he said- 

 "...To-day, my Secretary can write a note opposed to my 
 views. I have given that freedom to all my Secretaries. I have 
 told them `if you do not give your honest opinion for fear that it 
 will displease your Minister, please then you had better go. I will 
 bring another Secretary.' I will never be displeased over a frank 
 expression of opinion. That is what the Britishers were doing with 
 the Britishers. We are now sharing the responsibility. You have 
 agreed to share responsibility. Many of them with whom I have 
 worked, I have no hesitation in saying that they are patriotic, as 
 loyal and as sincere as myself."

(Ref: Constituent Assembly Debates. Vol.10 p. 50)

Now unfortunately, we have a situation where the senior officers are changing 

their position looking to the way the wind is blowing.

 Expectations from the Political Executive

149. Same are the expectations from the political executive viz. that it 

must be above board, and must act in accordance with the law and not in 

furtherance of the interest of a relative. However, as the time has passed, these 

expectations are belied. That is why in the case of Shri Shivajirao Nilangekar 

(supra) this Court had to lament in paragraph 51 of the judgment as follows:-

 "51. This Court cannot be oblivious that there has been a 
 steady decline of public standards or public morals and public 
 morale. It is necessary to cleanse public life in this country along 
 with or even before cleaning the physical atmosphere. The 

 13

 pollution in our values and standards in (sic is) an equally grave 
 menace as the pollution of the environment. Where such 
 situations cry out, the courts should not and cannot remain mute 
 and dumb." 

150. People of a state look up to the Chief Minister and those who 

occupy the high positions in the Government and the Administration for redressal 

of their grievances. Citizens are facing so many problems and it is expected of 

those in such positions to resolve them. Children are particularly facing serious 

problems concerning facilities for their education and sports, quality of teaching, 

their health and nutrition. It is the duty of those in high positions to ensure that 

their conduct should not let down the people of the country, and particularly the 

younger generation. The ministers, corporators and the administrators must 

zealously guard the spaces reserved for public amenities from the preying hands 

of the builders. What will happen, if the protectors themselves become 

poachers? Their decisions and conduct must be above board. Institutional trust 

is of utmost importance. In the case of Bangalore Medical Trust (supra) this 

court observed in paragraph 45 of its judgment that "the directions of the Chief 

Minister, the apex public functionary of the State, was in breach of public trust, 

more like a person dealing with his private property than discharging his 

obligation as head of the State administration in accordance with law and rules". 

Same is the case in the present matter where Shri Manohar Joshi, the then Chief 

Minister and Shri Ravindra Mane, the Minister of State have failed in this test, 

and in discharge of their duties. Nay, they have let down the people of the city 

and the state, and the children. 

 Importance of the spaces for public amenities

 13

151. As we have seen, the MRTP Act gives a place of prominence to the 

spaces meant for public amenities. An appropriately planned city requires good 

roads, parks, playgrounds, markets, primary and secondary schools, clinics, 

dispensaries and hospitals and sewerage facilities amongst other public amenities 

which are essential for a good civic life. If all the spaces in the cities are covered 

only by the construction for residential houses, the cities will become concrete 

jungles which is what they have started becoming. That is how there is need to 

protect the spaces meant for public amenities which cannot be sacrificed for the 

greed of a few landowners and builders to make more money on the ground of 

creating large number of houses. The MRTP Act does give importance to the 

spaces reserved for public amenities, and makes the deletion thereof difficult 

after the planning process is gone through, and the plan is finalized. Similar are 

the provisions in different State Acts. Yet, as we have seen from the earlier 

judgments concerning the public amenities in Bangalore (Bangalore Medical 

Trust (supra) and Lucknow (M.I Builders Pvt. Ltd. (supra), and now as is 

seen in this case in Pune, the spaces for the public amenities are under a 

systematic attack and are shrinking all over the cities in India, only for the 

benefit of the landowners and the builders. Time has therefore come to take a 

serious stock of the situation. Undoubtedly, the competing interest of the 

landowner is also to be taken into account, but that is already done when the 

plan is finalized, and the landowner is compensated as per the law. Ultimately 

when the land is reserved for a public purpose after following the due process of 

law, the interest of the individual must yield to the public interest. 

 13

152. As far as the MRTP Act is concerned, as we have noted earlier, 

there is a complete mechanism for the protection of the spaces meant for public 

amenities. We have seen the definition of substantial modification, and when the 

reservation for a public amenity on a plot of land is sought to be deleted 

completely, it would surely be a case of substantial modification, and not a minor 

modification. In that case what is required is to follow the procedure under 

Section 29 of the Act, to publish a notice in local newspapers also, inviting 

objections and suggestions within sixty days. The Government and the Municipal 

Corporations are trustees of the citizens for the purposes of retention of the plots 

meant for public amenities. As the Act has indicated, the citizens are vitally 

concerned with the retention of the public amenities, and, therefore deletion or 

modification should be resorted to only in the rarest of rare case, and after fully 

examining as to why the concerned plot was originally reserved for a public 

amenity, and as to how its deletion is necessary. Otherwise it will mean that we 

are paying no respect to the efforts put in by the original planners who have 

drafted the plan, as per the requirements of the city, and which plan has been 

finalized after following the detailed procedures as laid down by the law. 

 Suggested safeguards for the future

153. Having noted as to what has happened in the present matter, in 

our view it is necessary that we should lay down the necessary safeguards for 

the future so that such kind of gross deletions do not occur in the future, and the 

provisions of the Act are strictly implemented in tune with the spirit behind. 

 13

(i) Therefore, when the gazette notification is published, and the public 

notice in the local newspapers is published under Section 29 (or under Section 

37) it must briefly set out the reasons as to why the particular modification is 

being proposed. Since Section 29 provides for publishing a notice in the `local 

newspapers', we adopt the methodology of Section 6 (2) of the L.A. Act, and 

expect that the notice shall be published atleast in two daily newspapers 

circulating in the locality, out of which atleast one shall be in the regional 

language. We expect the notice to be published in the newspapers with wide 

circulation and at prominent place therein.

(ii) Section 29 lays down that after receiving the suggestions and objections, 

the procedure as prescribed in Section 28 is to be followed. Sub-section (3) of 

Section 28 provides for holding an inquiry thereafter wherein the opportunity of 

being heard is to be afforded by the Planning Committee (of the Planning 

Authority) to such persons who have filed their objections and made 

suggestions. The Planning Committee, therefore, shall hold a public inquiry for 

all such persons to get an opportunity of making their submission, and then only 

the Planning Committee should make its report to the Planning Authority.

(iii) One of the reasons which is often given for modification/deletion of 

reservation is paucity of funds, which was also sought to be raised in the present 

matter by the Municipal Commissioner for unjustified reasons, in as much as the 

compensation amount had already been paid. However, if there is any such 

difficulty, the planning authority must call upon the citizens to contribute for the 

project, in the public notice contemplated under Section 29, in as much as these 

 14

public amenities are meant for them, and there will be many philanthropist or 

corporate bodies or individuals who may come forward and support the public 

project financially. That was also the approach indicated by this Court in Raju 

S. Jethmalani Vs. State of Maharashtra reported in [2005 (11) SCC 222]. 

 Primary Education

154. Primary education is one of the important responsibilities to be 

discharged by Municipalities under the Bombay Primary Education Act 1947. 

Again, to state the reality, even after sixty years after the promulgation of the 

Constitution, we have not been able to attain full literacy. Of all the different 

areas of education, primary education is suffering the most. When the 

Constitution was promulgated, a Directive Principle was laid down in Article 45 

which states that the State shall endeavour to provide, within the period of ten 

years from the commencement of the Constitution, for free and compulsory 

education for all children until they complete the age of fourteen years. This has 

not been achieved yet. The 86th Amendment to the Constitution effected in the 

year 2002 deleted this Article 45, and substituted it with new Article 45 which 

lays down that the State shall endeavour to provide early childhood care and 

education for all children until they complete the age of six years. The 

amendment has made Right to Education a Fundamental Right under Article 21A. 

This Article lays down that the State shall provide free and compulsory education 

to all children of the age of six to fourteen years in such manner as the State 

may, by law, determine. In the year 2009 we passed the Right of Children to 

 14

Free and Compulsory Education Act 2009. All these laws have however not been 

implemented with the spirit with which they ought to have been. We have 

several national initiatives in operation such as the Sarva Shiksha Abhiyan, 

District Primary Education Programme, and the Universal Elementary Education 

Programme to name a few. However, the statistical data shows that we are still 

far away from achieving the goal of full literacy. 

155. Nobel laureate Shri Amartya Sen commented on our tardy progress 

in the field of basic education in his Article `The Urgency of Basic Education' in 

the seminar "Right to Education-Actions Now" held at New Delhi on 19.12.2007 

as follows:-

 "India has been especially disadvantaged in basic 
 education, and this is one of our major challenges today. When 
 the British left their Indian empire, only 12 per cent of the India 
 population was literate. That was terrible enough, but our 
 progress since independence has also been quite slow. This 
 contrasts with our rapid political development into the first 
 developing country in the world to have a functioning 
 democracy."

The story for Pune city is not quite different. Since the impugned development 

permission given by the Municipal Corporation was on the basis of no objection 

of the Chief Minister dated 21.8.1996, we may refer to the Educational Statistics 

of Pune city, at that time. As per the Census of India 1991, the population of 

Pune city was 24,85,014, out of which 17,14,273 were the literate persons which 

comes to just above 2/3 of the population. The percentage of literacy has gone 

up thereafter, but still we are far away from achieving full literacy and from the 

goal of providing quality education and facilities at the primary level. 

 14

156. There is a serious problem of children dropping out from the 

primary schools. There are wide ranging factors which affect the education of 

the children at a tender age, such as absence of trained teachers having the 

proper understanding of child psychology, ill-health, and mal-nutrition. The 

infrastructural facilities are often very inadequate. Large number of children are 

cramped into small classrooms and there is absence of any playground attached 

with the school. This requires adequate spaces for the primary schools. Even in 

the so called higher middle class areas in large cities like Pune, there are hardly 

any open spaces within the housing societies and, therefore, adequate space for 

the playgrounds of the primary schools is of utmost importance. Having noted 

this scenario and the necessity of spaces for primary schools in urban areas, it is 

rather unfortunate that the then Chief Minister who claims to be an educationist 

took interest in releasing a plot duly reserved and acquired for a primary school 

only for the benefit of his son-in-law. It also gives a dismal picture of his deputy, 

the Minister of State acting to please his superior, and so also of the Municipal 

Commissioner ignoring his statutory responsibilities. 

 Operative order with respect to the disputed buildings 

157. We have held the direction given by the State Government for the 

deletion of reservation on Final Plot No.110, and the commencement and 

occupation certificates issued by the Pune Municipal Corporation in favour of the 

developer were in complete subversion of the statutory requirements of the 

MRTP Act. The development permission was wholly illegal and unjustified. As 

far as the building meant for the tenants is concerned, the developer as well as 

 14

PMC have indicated that they have no objection to the building being retained. 

As far as the ten storied building meant for the private sale is concerned, the 

developer had offered to hand over half the number of floors to PMC, provided 

it permits the remaining floors to be retained by the developer. PMC has 

rejected that offer since the plot was reserved for a primary school. The building 

must therefore be either demolished or put to a permissible use. The illegal 

development carried out by the developer has resulted into a legitimate primary 

school not coming up on the disputed plot of land. Thousands of children would 

have attended the school on this plot during last 15 years. The loss suffered by 

the children and the cause of education is difficult to assess in terms of money, 

and in a way could be considered to be far more than the cost of construction of 

this building. Removal of this building is however not going to be very easy. It 

will cause serious nuisance to the occupants of the adjoining buildings due to 

noise and air pollution. The citizens may as well initiate actions against the PMC 

for appropriate reliefs. It is also possible that the developer may not be able to 

remove the disputed building within a specified time, in which case the PMC will 

have to incur the expenditure on removal. It will, therefore, be open to the 

developer to redeem himself by offering the entire building to PMC for being 

used as a primary school or for the earmarked purpose, free of cost. If he is so 

inclined, he may inform PMC that he is giving up his claim on this building also in 

favour of PMC. 

158. The High Court has not specified the time for taking the necessary 

steps in this behalf. Hence, for the sake of clarity, we direct the developer to 

 14

inform the PMC within two weeks from today whether he is giving up the claim 

on the ten storied building named `Sundew Apartments' apart from the tenants' 

building in favour of PMC, failing which PMC will issue a notice to the developer 

within two weeks thereafter, calling upon him to furnish particulars to PMC within 

two weeks from the receipt of the notice, as to in what manner and time frame 

he proposes to demolish this ten storied building. In the event the developer 

declines or fails to do so, or does not respond within the specified period, or if 

PMC forms an impression after receiving his reply that the developer is incapable 

of removing the building in reasonably short time, the PMC will go ahead and 

demolish the same. In either case the decision of the City Engineer of PMC with 

respect to the manner of removal of the building and disposal of the debris shall 

be final.

159. As far as the ownership of the plot is concerned, the same will 

abide by the decision of the High Court in First Appeal Stamp No. 18615 of 1994 

which will be decided in accordance with law. The old tenants will continue to 

occupy the building meant for the tenants.

 160. The PMC and the State Government have fairly changed/reviewed 

their legal position in this Court, and defended their original stand about the 

illegality of the construction. We therefore, absolve both of them from paying 

costs to the original petitioners. The order with respect to payment of cost of Rs. 

10,000/- against the then Chief Minister and the Minister of State to each of the 

original petitioners however remains. Over and above we add Rs. 15,000/- for 

each of them to pay to the two petitioners separately towards the cost of these 

 14

appeals in this Court. Thus, the then Chief Minister and the Minister of State 

shall each pay Rs. 25,000/- to the two petitioners separately.

161. The spaces for public amenities such as roads, playgrounds, 

markets, water supply and sewerage facilities, hospitals and particularly 

educational institutions are essential for a decent urban life. The planning 

process therefore assumes significance in this behalf. The parcels of land 

reserved for public amenities under the urban plans cannot be permitted to be 

tinkered with. The greed for making more money is leading to all sorts of 

construction for housing in prime city areas usurping the lands meant for public 

amenities wherever possible and in utter disregard for the quality of life. Large 

number of areas in big cities have already become concrete jungles bereft of 

adequate public amenities. It is therefore, that we have laid down the guidelines 

in this behalf which flow from the scheme of the MRTP Act itself so that this 

menace of grabbing public spaces for private ends stops completely. We are 

also clear that any unauthorised construction particularly on the lands meant for 

public amenities must be removed forthwith. We expect the guidelines laid 

down in this behalf to be followed scrupulously.

 The conclusions in nutshell and the consequent order

162. In the circumstances we conclude and pass the following order -

(i) We hold that the direction given by the Government of Maharashtra for 

the deletion of reservation on Final Plot No. 110, at Prabhat Road, Pune, and the 

consequent Commencement and Occupation certificates issued by the Pune 

Municipal Corporation (PMC) in favour of the developer were in complete 

 14

subversion of the statutory requirements of the MRTP Act. The development 

permission was wholly illegal and unjustified.

(ii) The direction of the High Court in the impugned judgment dated 

6/15.3.1999 in Writ Petition Nos. 4433 and 4434/1998 for demolition of the 

concerned building was fully legal and justified.

(iii) The contention of the landowner that his right of development for 

residential purposes on the concerned plot under the erstwhile Town Planning 

scheme subsisted in spite of coming into force of Development Plan reserving 

the plot for a primary school, is liable to be rejected. 

(iv) The acquisition of the concerned plot of land was complete with the 

declaration under Section 126 of the MRTP Act read with Section 6 of Land 

Acquisition Act and the same is valid and legal. 

(v) The order passed by the High Court directing the Municipal Corporation to 

move for the revival of the First Appeal Stamp No. 18615 of 1994 was therefore 

necessary. The High Court is expected to decide the revived First Appeal at the 

earliest and preferably within four months hereafter in the light of the law and 

the directions given in this judgment.

(vi) The developer shall inform the PMC whether he is giving up the claim over 

the construction of the ten storied building (named `Sundew Apartments') apart 

from the tenants' building in favour of PMC, failing which either the developer or 

the PMC shall take steps for demolition of the disputed building (Sundew 

Apartments) as per the time frame laid down in this judgment.

 14

(vii) The former occupants of F.P No. 110 will continue to reside in the building 

constructed for the tenants on the terms stated in the judgment.

(viii) The corporation will not be required to pay any amount to the developer 

for the tenants' building constructed by him, nor for the ten storied building in 

the event he gives up his claim over it in favour of PMC. 

(ix) The strictures passed by the High Court against the then Chief Minister of 

Maharashtra Shri Manohar Joshi and the then Minister of State Shri Ravindra 

Mane are maintained. The prayer to expunge these remarks is rejected. The 

remarks against the Municipal Commissioner are however deleted.

(x) The order directing criminal investigation and thereafter further action as 

warranted in law, is however deleted in view of the judgment of this Court in the 

case of Common Cause A Registered Society Vs. Union of India reported 

in 1999 (6) SCC 667

(xi) The then Chief Minister and the then Minister of State shall each pay cost 

of Rs. 15,000/- to each of the two petitioners in the High Court towards these 

ten appeals, over and above the cost of Rs. 10,000/- awarded by the High Court 

in the writ petitions payable by each of them to the two writ petitioners. 

 (xii) The State Government and the Planning authorities under the MRTP Act 

shall hereafter scrupulously follow the directions and the suggested safeguards 

with respect to the spaces meant for public amenities. 

 All the appeals stand disposed of as above.

 ...............................J.

 ( R.V. Raveendran )

 14

 ................................J. 

 ( H.L. Gokhale )

New Delhi

Dated: October 12, 2011.

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Discussion

One thought on “What is the nature and significance of the planning process for a large Municipal town area? In that process, what is the role of the Municipal Corporation, which is the statutory planning authority? Can the State Government interfere in its decisions in that behalf and if so, to what extent? Does the State Government have the power to issue instructions to the Municipal Corporation to act in a particular manner contrary to the Development Plan sanctioned by the State Government, and that too a number of years after the Municipal Corporation having taken the necessary steps in consonance with the plan? Can the State Government instruct a Municipal Corporation to shift the reservation for a public amenity such as a primary school on a plot of land, and also instruct it to grant a development permission for residential purposes thereon without modifying the Development Plan?

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