The Supreme Court of India has upheld the legality of a government condition that mandates landowners to allocate a portion of their land for public utility purposes in exchange for permission to change the land's designated use. This significant decision by the apex court overturned a Bombay High Court judgment that had challenged this practice.
The Supreme Court cited a prior ruling in the case of "Narayanrao Jagobaji Gowande Public Trust vs. State of Maharashtra and others," emphasizing that when the government allows land development with permission to subdivide it for commercial purposes and requires landowners to provide a part of the land for public utility free of cost, such a clause cannot be deemed illegal.
"We, therefore, allow the appeals and quash and set aside the impugned common judgment and order dated 4th July 2019 passed by the High Court. The writ petition filed by the plot holders also shall stand dismissed," the bench of Justices BR Gavai and SVN Bhatti stated in their order on September 22.
The case heard by the Supreme Court involved a series of appeals challenging the Bombay High Court's judgment. The appellant in both appeals was Shirdi Nagar Panchayat.
In 1992, a Development Plan for the Municipal Council was approved, designating the disputed property as a "Green Zone" or "No Development Zone." Subsequently, a proposal was published in 2000 to convert the land from a "No Development Zone" to a "Residential Zone," inviting objections.
In 2004, the government issued a notification converting some land from a "No Development Zone" to a "Residential Zone," with the condition that the Municipal Council would receive 10% compulsory "open space" and 10% "amenity space" free of charge. Additionally, land was to be allocated for the road.
The landowners sought permission from the Town Planning Authority for plot development, which was granted. They later executed an agreement with the Municipal Council in 2006, assigning and transferring some land as "open space," "amenity space," and "internal road" area to the Municipal Council.
When the Municipal Council sought possession of the property in 2012, the landowners filed a civil suit for an injunction, along with an application for a temporary injunction. Although the trial court rejected the temporary injunction application, the landowners challenged it in the High Court but later withdrew it.
Following the withdrawal of the writ petition before the High Court, the landowners filed a suit challenging the Government Notification dated August 18, 2004.
In its judgment dated July 4, 2019, the High Court held that the writ petition filed by the landowners was not maintainable but partially allowed the writ petition filed by the plot holders. It quashed and set aside some conditions in the Government Notification concerning "open space" and "amenity space."
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