NARAYANRAO JAGOBAJI GAWANDE PUB.TRUST Vs. STATE OF MAHARASHTRA & ORS.
Supreme Court of India (Division Bench (DB)- Two Judge)
Appeal (Civil), 870 of 2016, Judgment Date: Feb 04, 2016
Non-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.870 OF 2016
(Arising out of SLP(C) No.25972 of 2009)
NARAYANRAO JAGOBAJI
GOWANDE PUBLIC TRUST …APPELLANT
Versus
THE STATE OF MAHARASHTRA AND ORS. …RESPONDENTS
WITH
CIVIL APPEAL NO.871 OF 2016
(Arising out of SLP(C) No.25821 of 2008)
CIVIL APPEAL NO.872 OF 2016
(Arising out of SLP(C) No.25841 of 2008)
CIVIL APPEAL NOS. 876-877 OF 2016
(Arising out of SLP (C) Nos.25923-24 of 2008)
CIVIL APPEAL NO. 873 OF 2016
(Arising out of SLP (C) No.427 of 2009)
CIVIL APPEAL NO. 874 OF 2016
(Arising out of SLP (C) No.1223 of 2009)
And
CIVIL APPEAL NO.875 OF 2016
(Arising out of SLP (C) No. 10246 of 2009)
J U D G M E N T
Delay condoned. Leave granted.
These appeals are directed against the common impugned judgment and order
dated 29.8.2008 passed by the Division Bench of High Court of Judicature at
Bombay, Nagpur Bench, Nagpur in various Writ Petitions including Writ
Petition No.1034 of 1995, wherein the High Court has dismissed all the writ
petitions.
As all the appeals raise the same question of law, for the sake of
convenience and brevity, we would refer to the facts from the appeal
arising out of SLP (C) No. 25972 of 2009. Brief facts are stated hereunder
to appreciate the rival legal contentions urged on behalf of both the
parties:
On 01.01.1937, the Nagpur Improvement Trust Act, 1936
(hereinafter referred to as the “NIT Act”) came into force under which the
Nagpur Improvement Trust (hereinafter referred as “NIT”) was established
and incorporated to provide for improvement and expansion of Nagpur Town.
The State of Maharashtra vide notification dated 29.06.1939 sanctioned a
Civil Station Expansion Scheme of 1939 of the NIT.
On 28.02.1942, one Smt. Laxmibai Gawande, wife of Narayanrao Gawande
purchased a piece of land, measuring 3.59 acres, comprised in Khasra no.
65, Mouza Ajni, Nagpur by a registered deed from Vithoba Fakira Teli. On
27.04.1944, she executed a Release Deed in favour of her husband Narayanrao
Gawande whereby he became the absolute owner of the said land.
It is an undisputed fact that the land in question fell within the Civil
Station Expansion Scheme of 1939 of NIT.
On 11.11.1968, Mr. Narayanrao Gawande applied to respondent no.2-NIT for
the development of his said open space land and gave an undertaking whereby
he agreed to have the layout of the land formed as per the plans,
suggestions and directions of respondent no.2-NIT. In this connection, a
development agreement was executed on the same day between Narayanrao
Gawande and the NIT, whereby NIT permitted him to develop the said land in
a planned way in accordance with the approved scheme and as per the
sanctioned layout plan. In the said layout plan, an area was reserved for
primary school, which was a public utility land.
After the death of Narayanrao Gawande, the appellant-Narayanrao Jagobaji
Gawande Public Trust (hereinafter called the “appellant-trust”) was created
and the said land became the property of this trust. On 21.02.1985, a
development agreement was executed between the appellant-trust and the NIT
for ratifying the earlier development agreement dated 11.11.1968 which
included the sanctioned map/plan showing the land reserved for primary
school/public utility purpose. Under the said agreement, the appellant-
trust was permitted to develop the layout subject to various conditions
including the following one:
“Whereas the said Party No.2 shall agree to transfer the land and or
primary school/open land in the said layout at free of cost for Party No.1
before release of plots and Party No.1 shall be free to dispose of this
land as per its rules and regulations.”
The above Clause contained in the said development agreement (hereinafter
called the “impugned clause”) provides for the transfer of the land
earmarked for the primary school or other public utility purposes, after
its development in favour of respondent no.2-NIT without payment of any
compensation to the land owners.
Respondent no.1- State vide its order dated 05.8.1993 sanctioned the
allotment of land from out of Khasra no. 41/1 and 45 Mouza Somalwada,
Nagpur in favour of respondent no.3-Santaji Mahavidyalaya for the
construction of a senior college. Pursuant to the aforementioned sanction,
respondent no. 2-NIT allotted a piece of land in B.D. Thapar layout to
Respondent no.3-Santaji Mahavidyalaya. On 25.02.1994 respondent no.3
requested respondent no.2-NIT for a change in location of the allotted plot
for the construction of said senior college. The respondent no.2-NIT, by
its resolution allotted a land, measuring 1907.65sq.m, comprised in
Narayanrao Gawande layout to respondent no.3 in exchange of land.
Feeling aggrieved by the action of allotment of land, comprised in
Narayanrao Gawande layout, taken by respondent no.2-NIT, the appellant-
trust approached the High Court by filing Writ Petition No. 1034 of 1995.
Some other writ petitions were also filed by the aggrieved parties. In the
said Writ Petitions, the aforesaid action of respondent no.2-NIT was
challenged on the ground of being without jurisdiction and authority of law
and also being contrary to the provisions of the NIT Act. The High Court
vide its common judgment and order dated 29.08.2008 has dismissed all the
Writ Petitions on the ground that the respondent no.2-NIT is free to allot
the land by following due procedure of law for public utility purpose. It
neither found arbitrariness nor illegality in the aforesaid action of the
respondent no.2-NIT in allotting the said public utility land as reserved
in the sanctioned layout plan. Hence, these appeals have been filed urging
various grounds questioning the correctness of the common impugned judgment
and order passed by the High Court.
Mr. Shekhar Naphade, the learned senior counsel appearing on behalf of the
appellant-trust contended that the impugned clause in the development
agreement dated 21.02.1985, referred to supra, which provides for the
transfer of developed land by the land owners to NIT free of cost and
without payment of any compensation, is void and unenforceable in law in
the light of the provisions of Sections 23 and 25 of the Indian Contract
Act, 1872. He challenged the said clause of the development agreement on
the ground of it being hit by Section 25 of the Indian Contract Act, 1872
as the said agreement is neither registered under the provisions of the
Registration Act nor stamped as per the provisions of the Bombay Stamp Act.
In this regard he placed strong reliance upon the decision of this Court in
the case of Central Inland Water Transport Corpn Ltd & Anr. v. Brojo Nath
Ganguly & Anr[1]. The relevant para 89 cited by the learned senior counsel
reads thus:
“89…...The principle deducible from the above discussions on this part of
the case is in consonance with right and reason, intended to secure social
and economic justice and conforms to the mandate of the great equality
clause in Article 14. This principle is that the courts will not enforce
and will, when called upon to do so, strike down an unfair and unreasonable
contract, or an unfair and unreasonable clause in a contract, entered into
between parties who are not equal in bargaining power….”
He further contended that respondent no.1-State cannot acquire any land by
incorporating a clause like the impugned clause contained in the
development agreement, in the instant case, which has been executed between
itself and the land owners to the effect that the land owners shall
transfer the land developed by them for public utility purpose, free of
cost and without getting any compensation from the NIT. In support of the
aforesaid contention he placed strong reliance upon the decisions of this
Court in Pt. Chet Ram Vashist v. Municipal Corporation of Delhi[2] and
Yogendra Pal & Ors. v. Municipality, Bhatinda & Ors[3].
It was further contended by him that in view of Section 76 of the NIT Act
read with Rule 3 of the NIT Land Disposal Rules, 1983, respondent no.1-
State should not have sanctioned the allotment of land in favour of
respondent no.3. Section 76 of the NIT Act provides for disposal of any
land vested in or acquired by Trust subject to rules, if any, made by the
State Government. However, in the present case, respondent no.2 has
allotted a piece of land comprised in Narayanrao Gawande layout in favour
of respondent no.3 when the said piece of land was neither vested in nor
acquired by respondent no.2-NIT.
It was further contended by the learned Senior counsel that the High Court
has erred in holding that the appellant-trust had received consideration
for transfer of the said land in the form of benefits. He further submitted
that release of the said land reserved in the layout plan from acquisition
and grant of permission to sub-divide the plots cannot be considered to be
a consideration. He further submitted that the ground as noted above was
not taken by respondent no.1 before the High Court and therefore, the same
ought not to have been considered by it.
It was further contended by him that the High Court has failed to
appreciate the scope and scheme of various provisions of NIT Act,
particularly Sections 26, 39, 45, 58, 59 and 68.
While contending further, he drew the attention of this Court towards
various provisions under chapter IV of the NIT Act dealing with Improvement
Schemes. Section 26 of the NIT Act deals with the matters to be provided
for improvement schemes. Further, Section 27 of the NIT Act provides for
various kinds of improvement schemes which include a street scheme under
its clause (d). Section 31 of the NIT Act specifically deals with Street
scheme. Section 31 (2)(a) stipulates that the Trust can even acquire a
land, which in its opinion, is necessary for the execution of a street
scheme. Under Section 44 of the NIT Act, power is given to the State
Government to sanction, reject or return improvement scheme. Once an
improvement scheme is sanctioned by the State Government, a final
notification in that regard is issued by it under Section 45 (1)(a) of the
NIT Act. He further submitted that in item 2 of the Schedule appended to
the NIT Act it is provided that publication of notification under the
provisions of Sections 39 and 45 of the NIT Act shall have the same effect
as a notification under Sections 4(1) and 6 respectively of the Land
Acquisition Act, 1894. He further submitted that it has already come on
record that the notification under Section 45 of the NIT Act in respect of
“Ajni Street Scheme”, was published and the entire land covered under the
said street scheme including the land owned by the appellant-trust was
under acquisition for the execution of the said street scheme.
The learned senior counsel further drew the attention of this Court towards
Section 58 of the NIT Act. The aforesaid Section deals with the acquisition
by agreement and empowers the Trust to enter into an agreement with any
person for the acquisition, by purchase, lease or exchange of any land
within the area comprised in a sanctioned scheme. He further submitted that
Section 58 of NIT Act does not in any manner provides for opting to acquire
a part of the land covered under the scheme and a part of land being left
un-acquired either by agreement or by compulsory acquisition. In the light
of aforesaid, if at all, respondent no.2-NIT intended to acquire the land
of the appellant-trust under the aforesaid Section, it could not have
acquired the said land, by development agreement, without acquiring the
entire land (measuring about 13.45 acres). Further, assuming that NIT can
acquire a part of land by agreement under Section 58 of the NIT Act, then
it ought to have acquired the remaining land by compulsory acquisition and
nothing like this has happened in the instant case.
It was further contended by the learned counsel that Section 68 of the NIT
Act empowers the Trust to abandon the acquisition of the land which is
subsequently discovered to be unnecessary for the execution of the scheme
on the terms and conditions stipulated therein. He further submitted that
from the perusal of both the provisions of Sections 58 and 68 of the NIT
Act, it is clear that the development agreement in question has been
entered into between the parties under Section 68 of the NIT Act as all the
conditions required under the said Section are fulfilled. He fortified his
aforementioned submission by emphasizing upon clause 2(ii)(b) of the
development agreement which reads thus:
“b) If and when any improvement scheme for development of the area in which
the aforesaid Kh. No. 65 of Mouza Ajni is situated is sanctioned by the
State Government, the party no. 2 shall be liable to pay the betterment or
abandonment charges which may be assessed on the plots in accordance with
the provisions of the Nagpur Improvement Trust Act.”
He further contended that once a scheme is declared and notification akin
to Section 6 of the Land Acquisition Act, 1894 is issued in this regard,
the entire land covered under the scheme has to be acquired by NIT and no
provision of the NIT Act permits the release of any land, partly or wholly,
by NIT from acquisition, except in a case where the said land is
subsequently discovered to be unnecessary for the execution of the scheme
as contemplated under Section 68 of the NIT Act which empowers the
abandonment of acquisition. He further submitted that there is no other
provision in the NIT Act which empowers the NIT to release the land on the
terms and conditions contained in the development agreement and
particularly the condition contained in the impugned clause. The fact of
the matter, in the instant case, clearly shows that the land of the
appellant-trust which was included in the approved scheme by the State
Government was subsequently discovered to be unnecessary for the execution
of the said scheme by the NIT.
It was further contended that a bare perusal of the development agreement
reveals that all the terms and conditions of the development agreement,
except the condition contained in the impugned clause, relate to
development of the property. There is no relevance of the condition
contained in the impugned clause with the development purpose as
contemplated under sub-section (1) of Section 68 of NIT Act. Therefore, in
the light of aforesaid, the NIT does not have any power, whatsoever, to
incorporate such condition in the development agreement, which is not only
unilateral but also unconscionable. Thus, the said condition cannot be made
binding upon the appellant-trust and consequently, the same cannot be
enforced against it.
It was further submitted that NIT has no power to acquire, by transfer or
otherwise, land de hors the provisions of the NIT Act in lieu of charging
the betterment contribution from the appellant-trust. He further submitted
that Section 68(4) of the NIT Act provides that when an agreement is
executed in pursuance of sub-section (1) to Section 68 of the NIT Act, the
proceedings for the acquisition of land shall be deemed to be abandoned.
Section 68(5) of the NIT Act provides that the provisions contained in
Sections 70-74 of the NIT Act shall apply mutatis mutandis for the
assessment of betterment charges, its levy and recovery. Further, as per
Section 70 of the said Act, NIT is required to pass a resolution
determining such betterment contribution. Once such a resolution is passed,
the execution of the scheme, by a legal fiction under sub-section (1) to
Section 70 of the NIT Act, is deemed to have been completed and the
betterment contribution is then, calculated as per the procedure prescribed
therein. He further submitted that nothing has been placed on record by NIT
to show that any such resolution has been passed assessing the betterment
contribution under Section 70(1) of NIT Act. He further submitted that the
development agreement in question itself provides for the payment of the
betterment charges, in future, on such conditions, from such persons, as
may be assessed in accordance with the provisions of the NIT Act. For this
purpose, the clause 2(ii)(b) of the development agreement (supra)
stipulates that the appellant-trust shall bind itself to incorporate a
clause in the sale deed of each plot to the effect that the plot is sold
subject to the responsibility of the purchaser to pay betterment charges to
NIT in accordance with the provisions of the NIT Act.
It was further submitted by him that the NIT Act is a self-contained Act
and there is no need to place reliance upon the provisions of Maharashtra
Regional & Town Planning Act, 1966 and Nagpur Corporation Act, 1948. He
contended that the High Court has erred in not holding the impugned clause
in the development agreement as void and unenforceable in law as the same
is opposed to the public policy and contrary to law laid down by this Court
in various cases.
He further submitted that the finding recorded by the High Court that the
terms and conditions of the development agreement were neither
unconscionable nor void and that there was no inequality of bargaining
power between the parties, is completely perverse in the light of the facts
and circumstances of the instant case. He further submitted that respondent
no.2-NIT enjoys a monopoly status as regards the permission to develop the
land under the NIT Act. NIT exerts pressure on such land owners who desire
to develop their land and compels them to incorporate such void and
unconscionable clauses in the development agreement executed between itself
and the land owners, like the impugned clause in the instant case.
Per contra, Mr. V. Giri, the learned senior counsel appearing on behalf of
the respondents sought to justify the impugned judgment and order passed by
the High Court on the ground that the same is well founded both on facts
and law and is not vitiated in law. Therefore, no interference of this
Court with the impugned judgment is required in exercise of its appellate
jurisdiction.
It was contended by Mr. Giri that when the parties entered into development
agreement, they were fully aware of the nature of the transaction,
conditions and respective obligations incorporated therein. On the basis of
the same, the appellant-trust has commercially exploited the said land.
There was no objection raised by it at any point of time while entering
into such agreement and even thereafter, when the appellant-trust and such
other persons who, based upon the development agreements got the benefit
out of the same. He further submitted that the entire development agreement
has to be read as a whole. It is very clear from the provisions of the
Indian Contract Act, 1872 that the consideration of any such agreement is
permissible and valid in law and not to defeat the provisions of any law.
The same is neither fraudulent nor opposed to public policy.
It was further contended by the learned senior counsel that there was no
inequality of bargaining power with the appellant-trust at the time of
getting the development scheme sanctioned. In this regard, he placed strong
reliance upon the decisions of this Court in Premsingh and Others v. Birbal
and others[4] and Yamunabai Anantrao Adhav v. Anantrao Shivrj Adhav[5] to
press upon the point that there is no need of a court decree to set aside
an agreement, like the development agreement in the instant case (as the
impugned clause therein is not void ab initio) especially when the
agreement as well as the clause in question are amply clear and there has
been no ambiguity regarding the same at any point of time. Thus, the terms
and conditions of the said development agreement are binding upon the
parties.
It was further contended by him that since the parties have already acted
upon the terms and conditions of the said development agreement, the entire
agreement is required to be considered in totality. He further submitted
that there is no justification of reading any clause by severing it in
isolation or in part(s) to examine and consider the legal submissions made
on behalf of the appellant-trust. It was further submitted that it is a
well settled principle of law that a party to an agreement cannot be
allowed to approbate and reprobate after availing the benefit from it. In
support of this contention he placed strong reliance upon the decision of
this Court in the case of New Bihar Biri Leaves Co. & Ors v. State of Bihar
& Ors[6]. The relevant paragraph 48 cited by him reads thus:
“48. It is a fundamental principle of general application that if a person
of his own accord, accepts a contract on certain terms and works out the
contract, he cannot be allowed to adhere to and abide by some of the terms
of the contract which proved advantageous to him and repudiate the other
terms of the same contract which might be disadvantageous to him. The maxim
is qui approbat non reprobat (one who approbates cannot reprobate). This
principle, though originally borrowed from Scots Law, is now firmly
embodied in English Common Law. According to it, a party to an instrument
or transaction cannot take advantage of one part of a document or
transaction and reject the rest. That is to say, no party can accept and
reject the same instrument or transaction (Per Scrutton, L.J., Verschures
Creameries Ltd. v. Hull & Netherlands Steamship Co.; see Douglas Menzies v.
Umphelby; see also stroud’s judicial dictionary, Vol. I, p. 169, 3rd Edn.)”
The learned senior counsel drew the attention of this Court towards Section
58 of the NIT Act which reads thus:
“The Trust may enter into an agreement with any person for the acquisition,
by purchase, lease or exchange by the Trust from such person, of any land
within the area comprised in the sanctioned scheme.”
It was submitted by him that if the appellant-trust has entered into an
agreement with the NIT, then, the said public utility land can be said to
have been acquired by an agreement in view of the exchange of not
implementing the scheme as per the sanctioned notification under Section 45
of the NIT Act but agreeing to sanction a private layout with regard to
land comprised within the sanctioned scheme of the NIT. Thus, in light of
aforesaid, it cannot be said that the public utility land, which is being
transferred to the NIT free of cost, is without any compensation.
On the issue of allotment of land in favour of respondent no.3, it was
contended by him that NIT does not have inherent jurisdiction over any
piece of land. The NIT gets ownership of a land through the procedure as
contemplated in the NIT Act. The NIT has been established by the State
Government for the improvement of the city of Nagpur through the
implementation of various improvement schemes. He further submitted that
these schemes are framed by NIT from the matters provided in Section 26 of
the NIT Act. These schemes are framed by the NIT and published by
notification under Section 39 of the NIT Act, which is equivalent to
notification under Section 4 of the Land Acquisition Act, 1894. Thereafter,
going through the provisions of Section 40,41,42,43 and 44 of the NIT Act,
the improvement schemes are sanctioned by the State Government by a
notification issued under Section 45 of the NIT Act, which is equivalent to
Section 6 of the Land Acquisition Act. Section 46 of the NIT Act allows the
alteration of improvement schemes after its sanction. Thus, in the light of
aforesaid, he further submitted that the High Court has rightly concluded
that the NIT has a jurisdiction over the areas, which are part and parcel
of notification issued under Section 6 of the Land Acquisition Act, 1894
equivalent to Section 45 of the NIT Act. He further submitted that the land
in question is definitely a part and parcel of the improvement schemes of
the NIT sanctioned by the State Government under the provision of Section
45 of the NIT Act.
It was further submitted by him that Pt. Chet Ram Vashist and Yogendra Pal
cases, referred to supra, upon which the learned senior counsel on behalf
of the appellant-trust has relied upon are of no relevance to the case in
hand as the facts and the circumstances of the instant case differ from the
facts and circumstances of the aforesaid cases.
We have carefully heard both the parties at length and have also given our
conscious thought to the materials on record and the relevant provisions of
law. We are of the view that the High Court in its judgment and order has
rightly held that respondent no.1-State and respondent no.2-NIT are bound
to stick to the development plan and scheme. It has placed reliance upon
the decision of this Court in Chairman, Indore Vikas Pradhikaran v. Pure
Industrial Coke & Chemicals Ltd. & Ors[7], wherein this Court, while
dealing with the aspect of town planning and Articles 300-A and 14 of the
Constitution of India, has observed as under:
“………The courts must make an endeavour to strike a balance between the
public interest on the one hand and protection of a constitutional right to
hold property, on the other. For the aforementioned purpose, an endeavour
should be made to find out as to whether the statute takes care of public
interest in the matter vis-à-vis the private interest, on the one hand, and
the effect of lapse and/or positive inaction on the part of the State and
other planning authorities, on the other.”
Further, the High Court has rightly held thus:
“NIT or such other local authority needs to consider the purpose, Scheme,
development plan and the circular issued from time to time by striking a
balance of public and private interest. The petitioners are bound by the
agreement and undertaking as given. In fact, both the parties are bound by
the agreements. In totality the permissible action of respondent NIT is
within the frame of law and the record. There is no substance in these
petitions.”
The High Court has, further, rightly held that the impugned clause
contained in the said development agreement is neither void nor illegal for
want of consideration. It has also been rightly held by it that after
consideration of whole scheme of the NIT Act, particularly, provisions
under Sections 29 to 70 and 121 of the said Act read with the terms and
conditions of the said development agreement entered into between the
parties, it is clear that the said development agreement creates reciprocal
rights and obligations between the parties with some objects. The aforesaid
objects as cited by the High Court in its judgment and order read thus:
“(a)Abandonment of the land from acquisition of NIT.
(b)Permission to develop the said land and sanction of a scheme of a layout
therein,
(c)Entrustment of the job of supervision of such development on NIT,
(d)Transfer of the public utility land, reserved in the said layout to the
NIT.
(e)Immediate and reciprocal permission to develop the land by making a
layout in the said land and permission to sell plots therein, i.e.
permission for commercial exploitation of the land.”
Thus, seeking abandonment of acquisition of the land as provided under
Section 68 of the NIT Act is a huge benefit which the appellant-trust has
gained from the agreement. Further, it is not open for the appellant-trust
to avail only the beneficial part of the said development agreement to form
a layout plan and allow the sites to be allotted in favour of allottees,
when it itself is not willing to discharge the obligation of transferring
the reserved land for public utility purpose, as agreed upon in the
development agreement.
Further the High Court has rightly observed that another benefit derived by
the appellant-trust from the said development agreement is immediate and
reciprocal sanction for the development of the said land with permission
for the commercial usage of the same, presuming that there would be no
acquisition.
This Court is of the view that the High Court has rightly held that the
impugned clause in the development agreement is neither void nor opposed to
the public policy. The High Court has held thus:
“42.When the parties entered into agreement, they were fully aware of the
nature of transaction, conditions and respective obligations. There was no
objection raised at any point of time while entering into such agreement
and even thereafter when petitioners and such other persons who based upon
the said agreement got the benefit out of the same. We cannot read the
clauses in isolation. We have to read the whole agreement in question. It
is very clear even from the provisions of the Contract Act that the
consideration of any such agreement was permissible and not unlawful and/or
not prohibited by law and was not to defeat the provisions of any law or is
fraudulent and/or is immoral or opposed to public policy.
43.The submissions, that such contract and especially the clause is void,
in view of provisions contained under Section 23/25 of the Indian Contract
Act being opposed to public policy; violative of fundamental rights of the
petitioner; violative of the right of property of petitioner/society;
because of unequal bargain power; being forbidden by law and further in
view of Section 25 of the Contract Act, as the agreement to transfer is
without consideration and the same was not registered, have no force.”
In view of the findings and reasons recorded by the High Court in the
Central Inland Water Transport Corpn Ltd & Anr case (supra) upon which the
reliance was placed by the learned senior counsel for the appellant-trust
is of no relevance to the fact situation.
Further, it has been rightly held by the High Court that the appellant-
trust has accepted and acted upon the said development agreement like other
beneficiaries who are either the societies or other similar persons who are
benefited by the approved scheme of the NIT. It is noteworthy that the
appellant-trust has accepted all the terms and conditions of the
development agreement without any objection while executing the same. The
impugned clause of the said development agreement provides for the transfer
of land in favour of NIT which is earmarked in the layout for the public
utility purpose. The same is in terms of the approved development plan by
Maharashtra Government and as per the provisions of the Maharashtra
Regional & Town Planning Act, 1966 contained in its Chapter-V i.e.,
Sections 59-112 and Nagpur Corporation Act, 1948.
The findings recorded on the relevant contentious issues by the High Court
in the impugned judgment with cogent and valid reasons are legal and
justifiable. Therefore, we do not find any valid reason, whatsoever, to
interfere with the said impugned judgment and order as the same, in our
opinion, is a well-considered and reasoned decision. The same does not
suffer from erroneous reasoning or error in law which requires interference
by this Court.
For the reasons stated supra, the civil appeals are dismissed. The order
dated 01.10.2009 granting status quo shall stands vacated.
…………………………………………………………J.
[V. GOPALA GOWDA]
……………………………………………………….J.
[AMITAVA ROY]
New Delhi,
February 4, 2016
ITEM NO.1B-For Judgment COURT NO.9 SECTION IX
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal 870/2016 @ SLP (C) No(s). 25972/2009
NARAYANRAO JAGOBAJI GAWANDE PUB.TRUST Appellant(s)
VERSUS
STATE OF MAHARASHTRA & ORS. Respondent(s)
WITH
C.A. No. 871/2016 @ SLP (C) No(s). 25821/2008
C.A. No. 872/2016 @ SLP (C) No(s). 25841/2009
C.A. No. 876-877/2016 @ SLP (C) No(s).25923-25924/2008
C.A. No. 873/2016 @ SLP (C) No(s). 427/2009
C.A. No. 874/2016 @ SLP (C) No(s). 1223/2009
C.A. No. 875/2016 @ SLP (C) No(s). 10246/2009
Date : 04/02/2016 These appeals were called on for pronouncement of
JUDGMENT today.
For Appellant(s)
Mr. Rameshwar Prasad Goyal,Adv.
Mr. Manish Pitale, Adv.
Ms. Deeplaxmi S. Matwankar, Adv.
Mr. Chander Shekhar Ashri,Adv.
Mr. Shivaji M. Jadhav,Adv.
Non-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.870 OF 2016
(Arising out of SLP(C) No.25972 of 2009)
NARAYANRAO JAGOBAJI
GOWANDE PUBLIC TRUST …APPELLANT
Versus
THE STATE OF MAHARASHTRA AND ORS. …RESPONDENTS
WITH
CIVIL APPEAL NO.871 OF 2016
(Arising out of SLP(C) No.25821 of 2008)
CIVIL APPEAL NO.872 OF 2016
(Arising out of SLP(C) No.25841 of 2008)
CIVIL APPEAL NOS. 876-877 OF 2016
(Arising out of SLP (C) Nos.25923-24 of 2008)
CIVIL APPEAL NO. 873 OF 2016
(Arising out of SLP (C) No.427 of 2009)
CIVIL APPEAL NO. 874 OF 2016
(Arising out of SLP (C) No.1223 of 2009)
And
CIVIL APPEAL NO.875 OF 2016
(Arising out of SLP (C) No. 10246 of 2009)
J U D G M E N T
Delay condoned. Leave granted.
These appeals are directed against the common impugned judgment and order
dated 29.8.2008 passed by the Division Bench of High Court of Judicature at
Bombay, Nagpur Bench, Nagpur in various Writ Petitions including Writ
Petition No.1034 of 1995, wherein the High Court has dismissed all the writ
petitions.
As all the appeals raise the same question of law, for the sake of
convenience and brevity, we would refer to the facts from the appeal
arising out of SLP (C) No. 25972 of 2009. Brief facts are stated hereunder
to appreciate the rival legal contentions urged on behalf of both the
parties:
On 01.01.1937, the Nagpur Improvement Trust Act, 1936
(hereinafter referred to as the “NIT Act”) came into force under which the
Nagpur Improvement Trust (hereinafter referred as “NIT”) was established
and incorporated to provide for improvement and expansion of Nagpur Town.
The State of Maharashtra vide notification dated 29.06.1939 sanctioned a
Civil Station Expansion Scheme of 1939 of the NIT.
On 28.02.1942, one Smt. Laxmibai Gawande, wife of Narayanrao Gawande
purchased a piece of land, measuring 3.59 acres, comprised in Khasra no.
65, Mouza Ajni, Nagpur by a registered deed from Vithoba Fakira Teli. On
27.04.1944, she executed a Release Deed in favour of her husband Narayanrao
Gawande whereby he became the absolute owner of the said land.
It is an undisputed fact that the land in question fell within the Civil
Station Expansion Scheme of 1939 of NIT.
On 11.11.1968, Mr. Narayanrao Gawande applied to respondent no.2-NIT for
the development of his said open space land and gave an undertaking whereby
he agreed to have the layout of the land formed as per the plans,
suggestions and directions of respondent no.2-NIT. In this connection, a
development agreement was executed on the same day between Narayanrao
Gawande and the NIT, whereby NIT permitted him to develop the said land in
a planned way in accordance with the approved scheme and as per the
sanctioned layout plan. In the said layout plan, an area was reserved for
primary school, which was a public utility land.
After the death of Narayanrao Gawande, the appellant-Narayanrao Jagobaji
Gawande Public Trust (hereinafter called the “appellant-trust”) was created
and the said land became the property of this trust. On 21.02.1985, a
development agreement was executed between the appellant-trust and the NIT
for ratifying the earlier development agreement dated 11.11.1968 which
included the sanctioned map/plan showing the land reserved for primary
school/public utility purpose. Under the said agreement, the appellant-
trust was permitted to develop the layout subject to various conditions
including the following one:
“Whereas the said Party No.2 shall agree to transfer the land and or
primary school/open land in the said layout at free of cost for Party No.1
before release of plots and Party No.1 shall be free to dispose of this
land as per its rules and regulations.”
The above Clause contained in the said development agreement (hereinafter
called the “impugned clause”) provides for the transfer of the land
earmarked for the primary school or other public utility purposes, after
its development in favour of respondent no.2-NIT without payment of any
compensation to the land owners.
Respondent no.1- State vide its order dated 05.8.1993 sanctioned the
allotment of land from out of Khasra no. 41/1 and 45 Mouza Somalwada,
Nagpur in favour of respondent no.3-Santaji Mahavidyalaya for the
construction of a senior college. Pursuant to the aforementioned sanction,
respondent no. 2-NIT allotted a piece of land in B.D. Thapar layout to
Respondent no.3-Santaji Mahavidyalaya. On 25.02.1994 respondent no.3
requested respondent no.2-NIT for a change in location of the allotted plot
for the construction of said senior college. The respondent no.2-NIT, by
its resolution allotted a land, measuring 1907.65sq.m, comprised in
Narayanrao Gawande layout to respondent no.3 in exchange of land.
Feeling aggrieved by the action of allotment of land, comprised in
Narayanrao Gawande layout, taken by respondent no.2-NIT, the appellant-
trust approached the High Court by filing Writ Petition No. 1034 of 1995.
Some other writ petitions were also filed by the aggrieved parties. In the
said Writ Petitions, the aforesaid action of respondent no.2-NIT was
challenged on the ground of being without jurisdiction and authority of law
and also being contrary to the provisions of the NIT Act. The High Court
vide its common judgment and order dated 29.08.2008 has dismissed all the
Writ Petitions on the ground that the respondent no.2-NIT is free to allot
the land by following due procedure of law for public utility purpose. It
neither found arbitrariness nor illegality in the aforesaid action of the
respondent no.2-NIT in allotting the said public utility land as reserved
in the sanctioned layout plan. Hence, these appeals have been filed urging
various grounds questioning the correctness of the common impugned judgment
and order passed by the High Court.
Mr. Shekhar Naphade, the learned senior counsel appearing on behalf of the
appellant-trust contended that the impugned clause in the development
agreement dated 21.02.1985, referred to supra, which provides for the
transfer of developed land by the land owners to NIT free of cost and
without payment of any compensation, is void and unenforceable in law in
the light of the provisions of Sections 23 and 25 of the Indian Contract
Act, 1872. He challenged the said clause of the development agreement on
the ground of it being hit by Section 25 of the Indian Contract Act, 1872
as the said agreement is neither registered under the provisions of the
Registration Act nor stamped as per the provisions of the Bombay Stamp Act.
In this regard he placed strong reliance upon the decision of this Court in
the case of Central Inland Water Transport Corpn Ltd & Anr. v. Brojo Nath
Ganguly & Anr[1]. The relevant para 89 cited by the learned senior counsel
reads thus:
“89…...The principle deducible from the above discussions on this part of
the case is in consonance with right and reason, intended to secure social
and economic justice and conforms to the mandate of the great equality
clause in Article 14. This principle is that the courts will not enforce
and will, when called upon to do so, strike down an unfair and unreasonable
contract, or an unfair and unreasonable clause in a contract, entered into
between parties who are not equal in bargaining power….”
He further contended that respondent no.1-State cannot acquire any land by
incorporating a clause like the impugned clause contained in the
development agreement, in the instant case, which has been executed between
itself and the land owners to the effect that the land owners shall
transfer the land developed by them for public utility purpose, free of
cost and without getting any compensation from the NIT. In support of the
aforesaid contention he placed strong reliance upon the decisions of this
Court in Pt. Chet Ram Vashist v. Municipal Corporation of Delhi[2] and
Yogendra Pal & Ors. v. Municipality, Bhatinda & Ors[3].
It was further contended by him that in view of Section 76 of the NIT Act
read with Rule 3 of the NIT Land Disposal Rules, 1983, respondent no.1-
State should not have sanctioned the allotment of land in favour of
respondent no.3. Section 76 of the NIT Act provides for disposal of any
land vested in or acquired by Trust subject to rules, if any, made by the
State Government. However, in the present case, respondent no.2 has
allotted a piece of land comprised in Narayanrao Gawande layout in favour
of respondent no.3 when the said piece of land was neither vested in nor
acquired by respondent no.2-NIT.
It was further contended by the learned Senior counsel that the High Court
has erred in holding that the appellant-trust had received consideration
for transfer of the said land in the form of benefits. He further submitted
that release of the said land reserved in the layout plan from acquisition
and grant of permission to sub-divide the plots cannot be considered to be
a consideration. He further submitted that the ground as noted above was
not taken by respondent no.1 before the High Court and therefore, the same
ought not to have been considered by it.
It was further contended by him that the High Court has failed to
appreciate the scope and scheme of various provisions of NIT Act,
particularly Sections 26, 39, 45, 58, 59 and 68.
While contending further, he drew the attention of this Court towards
various provisions under chapter IV of the NIT Act dealing with Improvement
Schemes. Section 26 of the NIT Act deals with the matters to be provided
for improvement schemes. Further, Section 27 of the NIT Act provides for
various kinds of improvement schemes which include a street scheme under
its clause (d). Section 31 of the NIT Act specifically deals with Street
scheme. Section 31 (2)(a) stipulates that the Trust can even acquire a
land, which in its opinion, is necessary for the execution of a street
scheme. Under Section 44 of the NIT Act, power is given to the State
Government to sanction, reject or return improvement scheme. Once an
improvement scheme is sanctioned by the State Government, a final
notification in that regard is issued by it under Section 45 (1)(a) of the
NIT Act. He further submitted that in item 2 of the Schedule appended to
the NIT Act it is provided that publication of notification under the
provisions of Sections 39 and 45 of the NIT Act shall have the same effect
as a notification under Sections 4(1) and 6 respectively of the Land
Acquisition Act, 1894. He further submitted that it has already come on
record that the notification under Section 45 of the NIT Act in respect of
“Ajni Street Scheme”, was published and the entire land covered under the
said street scheme including the land owned by the appellant-trust was
under acquisition for the execution of the said street scheme.
The learned senior counsel further drew the attention of this Court towards
Section 58 of the NIT Act. The aforesaid Section deals with the acquisition
by agreement and empowers the Trust to enter into an agreement with any
person for the acquisition, by purchase, lease or exchange of any land
within the area comprised in a sanctioned scheme. He further submitted that
Section 58 of NIT Act does not in any manner provides for opting to acquire
a part of the land covered under the scheme and a part of land being left
un-acquired either by agreement or by compulsory acquisition. In the light
of aforesaid, if at all, respondent no.2-NIT intended to acquire the land
of the appellant-trust under the aforesaid Section, it could not have
acquired the said land, by development agreement, without acquiring the
entire land (measuring about 13.45 acres). Further, assuming that NIT can
acquire a part of land by agreement under Section 58 of the NIT Act, then
it ought to have acquired the remaining land by compulsory acquisition and
nothing like this has happened in the instant case.
It was further contended by the learned counsel that Section 68 of the NIT
Act empowers the Trust to abandon the acquisition of the land which is
subsequently discovered to be unnecessary for the execution of the scheme
on the terms and conditions stipulated therein. He further submitted that
from the perusal of both the provisions of Sections 58 and 68 of the NIT
Act, it is clear that the development agreement in question has been
entered into between the parties under Section 68 of the NIT Act as all the
conditions required under the said Section are fulfilled. He fortified his
aforementioned submission by emphasizing upon clause 2(ii)(b) of the
development agreement which reads thus:
“b) If and when any improvement scheme for development of the area in which
the aforesaid Kh. No. 65 of Mouza Ajni is situated is sanctioned by the
State Government, the party no. 2 shall be liable to pay the betterment or
abandonment charges which may be assessed on the plots in accordance with
the provisions of the Nagpur Improvement Trust Act.”
He further contended that once a scheme is declared and notification akin
to Section 6 of the Land Acquisition Act, 1894 is issued in this regard,
the entire land covered under the scheme has to be acquired by NIT and no
provision of the NIT Act permits the release of any land, partly or wholly,
by NIT from acquisition, except in a case where the said land is
subsequently discovered to be unnecessary for the execution of the scheme
as contemplated under Section 68 of the NIT Act which empowers the
abandonment of acquisition. He further submitted that there is no other
provision in the NIT Act which empowers the NIT to release the land on the
terms and conditions contained in the development agreement and
particularly the condition contained in the impugned clause. The fact of
the matter, in the instant case, clearly shows that the land of the
appellant-trust which was included in the approved scheme by the State
Government was subsequently discovered to be unnecessary for the execution
of the said scheme by the NIT.
It was further contended that a bare perusal of the development agreement
reveals that all the terms and conditions of the development agreement,
except the condition contained in the impugned clause, relate to
development of the property. There is no relevance of the condition
contained in the impugned clause with the development purpose as
contemplated under sub-section (1) of Section 68 of NIT Act. Therefore, in
the light of aforesaid, the NIT does not have any power, whatsoever, to
incorporate such condition in the development agreement, which is not only
unilateral but also unconscionable. Thus, the said condition cannot be made
binding upon the appellant-trust and consequently, the same cannot be
enforced against it.
It was further submitted that NIT has no power to acquire, by transfer or
otherwise, land de hors the provisions of the NIT Act in lieu of charging
the betterment contribution from the appellant-trust. He further submitted
that Section 68(4) of the NIT Act provides that when an agreement is
executed in pursuance of sub-section (1) to Section 68 of the NIT Act, the
proceedings for the acquisition of land shall be deemed to be abandoned.
Section 68(5) of the NIT Act provides that the provisions contained in
Sections 70-74 of the NIT Act shall apply mutatis mutandis for the
assessment of betterment charges, its levy and recovery. Further, as per
Section 70 of the said Act, NIT is required to pass a resolution
determining such betterment contribution. Once such a resolution is passed,
the execution of the scheme, by a legal fiction under sub-section (1) to
Section 70 of the NIT Act, is deemed to have been completed and the
betterment contribution is then, calculated as per the procedure prescribed
therein. He further submitted that nothing has been placed on record by NIT
to show that any such resolution has been passed assessing the betterment
contribution under Section 70(1) of NIT Act. He further submitted that the
development agreement in question itself provides for the payment of the
betterment charges, in future, on such conditions, from such persons, as
may be assessed in accordance with the provisions of the NIT Act. For this
purpose, the clause 2(ii)(b) of the development agreement (supra)
stipulates that the appellant-trust shall bind itself to incorporate a
clause in the sale deed of each plot to the effect that the plot is sold
subject to the responsibility of the purchaser to pay betterment charges to
NIT in accordance with the provisions of the NIT Act.
It was further submitted by him that the NIT Act is a self-contained Act
and there is no need to place reliance upon the provisions of Maharashtra
Regional & Town Planning Act, 1966 and Nagpur Corporation Act, 1948. He
contended that the High Court has erred in not holding the impugned clause
in the development agreement as void and unenforceable in law as the same
is opposed to the public policy and contrary to law laid down by this Court
in various cases.
He further submitted that the finding recorded by the High Court that the
terms and conditions of the development agreement were neither
unconscionable nor void and that there was no inequality of bargaining
power between the parties, is completely perverse in the light of the facts
and circumstances of the instant case. He further submitted that respondent
no.2-NIT enjoys a monopoly status as regards the permission to develop the
land under the NIT Act. NIT exerts pressure on such land owners who desire
to develop their land and compels them to incorporate such void and
unconscionable clauses in the development agreement executed between itself
and the land owners, like the impugned clause in the instant case.
Per contra, Mr. V. Giri, the learned senior counsel appearing on behalf of
the respondents sought to justify the impugned judgment and order passed by
the High Court on the ground that the same is well founded both on facts
and law and is not vitiated in law. Therefore, no interference of this
Court with the impugned judgment is required in exercise of its appellate
jurisdiction.
It was contended by Mr. Giri that when the parties entered into development
agreement, they were fully aware of the nature of the transaction,
conditions and respective obligations incorporated therein. On the basis of
the same, the appellant-trust has commercially exploited the said land.
There was no objection raised by it at any point of time while entering
into such agreement and even thereafter, when the appellant-trust and such
other persons who, based upon the development agreements got the benefit
out of the same. He further submitted that the entire development agreement
has to be read as a whole. It is very clear from the provisions of the
Indian Contract Act, 1872 that the consideration of any such agreement is
permissible and valid in law and not to defeat the provisions of any law.
The same is neither fraudulent nor opposed to public policy.
It was further contended by the learned senior counsel that there was no
inequality of bargaining power with the appellant-trust at the time of
getting the development scheme sanctioned. In this regard, he placed strong
reliance upon the decisions of this Court in Premsingh and Others v. Birbal
and others[4] and Yamunabai Anantrao Adhav v. Anantrao Shivrj Adhav[5] to
press upon the point that there is no need of a court decree to set aside
an agreement, like the development agreement in the instant case (as the
impugned clause therein is not void ab initio) especially when the
agreement as well as the clause in question are amply clear and there has
been no ambiguity regarding the same at any point of time. Thus, the terms
and conditions of the said development agreement are binding upon the
parties.
It was further contended by him that since the parties have already acted
upon the terms and conditions of the said development agreement, the entire
agreement is required to be considered in totality. He further submitted
that there is no justification of reading any clause by severing it in
isolation or in part(s) to examine and consider the legal submissions made
on behalf of the appellant-trust. It was further submitted that it is a
well settled principle of law that a party to an agreement cannot be
allowed to approbate and reprobate after availing the benefit from it. In
support of this contention he placed strong reliance upon the decision of
this Court in the case of New Bihar Biri Leaves Co. & Ors v. State of Bihar
& Ors[6]. The relevant paragraph 48 cited by him reads thus:
“48. It is a fundamental principle of general application that if a person
of his own accord, accepts a contract on certain terms and works out the
contract, he cannot be allowed to adhere to and abide by some of the terms
of the contract which proved advantageous to him and repudiate the other
terms of the same contract which might be disadvantageous to him. The maxim
is qui approbat non reprobat (one who approbates cannot reprobate). This
principle, though originally borrowed from Scots Law, is now firmly
embodied in English Common Law. According to it, a party to an instrument
or transaction cannot take advantage of one part of a document or
transaction and reject the rest. That is to say, no party can accept and
reject the same instrument or transaction (Per Scrutton, L.J., Verschures
Creameries Ltd. v. Hull & Netherlands Steamship Co.; see Douglas Menzies v.
Umphelby; see also stroud’s judicial dictionary, Vol. I, p. 169, 3rd Edn.)”
The learned senior counsel drew the attention of this Court towards Section
58 of the NIT Act which reads thus:
“The Trust may enter into an agreement with any person for the acquisition,
by purchase, lease or exchange by the Trust from such person, of any land
within the area comprised in the sanctioned scheme.”
It was submitted by him that if the appellant-trust has entered into an
agreement with the NIT, then, the said public utility land can be said to
have been acquired by an agreement in view of the exchange of not
implementing the scheme as per the sanctioned notification under Section 45
of the NIT Act but agreeing to sanction a private layout with regard to
land comprised within the sanctioned scheme of the NIT. Thus, in light of
aforesaid, it cannot be said that the public utility land, which is being
transferred to the NIT free of cost, is without any compensation.
On the issue of allotment of land in favour of respondent no.3, it was
contended by him that NIT does not have inherent jurisdiction over any
piece of land. The NIT gets ownership of a land through the procedure as
contemplated in the NIT Act. The NIT has been established by the State
Government for the improvement of the city of Nagpur through the
implementation of various improvement schemes. He further submitted that
these schemes are framed by NIT from the matters provided in Section 26 of
the NIT Act. These schemes are framed by the NIT and published by
notification under Section 39 of the NIT Act, which is equivalent to
notification under Section 4 of the Land Acquisition Act, 1894. Thereafter,
going through the provisions of Section 40,41,42,43 and 44 of the NIT Act,
the improvement schemes are sanctioned by the State Government by a
notification issued under Section 45 of the NIT Act, which is equivalent to
Section 6 of the Land Acquisition Act. Section 46 of the NIT Act allows the
alteration of improvement schemes after its sanction. Thus, in the light of
aforesaid, he further submitted that the High Court has rightly concluded
that the NIT has a jurisdiction over the areas, which are part and parcel
of notification issued under Section 6 of the Land Acquisition Act, 1894
equivalent to Section 45 of the NIT Act. He further submitted that the land
in question is definitely a part and parcel of the improvement schemes of
the NIT sanctioned by the State Government under the provision of Section
45 of the NIT Act.
It was further submitted by him that Pt. Chet Ram Vashist and Yogendra Pal
cases, referred to supra, upon which the learned senior counsel on behalf
of the appellant-trust has relied upon are of no relevance to the case in
hand as the facts and the circumstances of the instant case differ from the
facts and circumstances of the aforesaid cases.
We have carefully heard both the parties at length and have also given our
conscious thought to the materials on record and the relevant provisions of
law. We are of the view that the High Court in its judgment and order has
rightly held that respondent no.1-State and respondent no.2-NIT are bound
to stick to the development plan and scheme. It has placed reliance upon
the decision of this Court in Chairman, Indore Vikas Pradhikaran v. Pure
Industrial Coke & Chemicals Ltd. & Ors[7], wherein this Court, while
dealing with the aspect of town planning and Articles 300-A and 14 of the
Constitution of India, has observed as under:
“………The courts must make an endeavour to strike a balance between the
public interest on the one hand and protection of a constitutional right to
hold property, on the other. For the aforementioned purpose, an endeavour
should be made to find out as to whether the statute takes care of public
interest in the matter vis-à-vis the private interest, on the one hand, and
the effect of lapse and/or positive inaction on the part of the State and
other planning authorities, on the other.”
Further, the High Court has rightly held thus:
“NIT or such other local authority needs to consider the purpose, Scheme,
development plan and the circular issued from time to time by striking a
balance of public and private interest. The petitioners are bound by the
agreement and undertaking as given. In fact, both the parties are bound by
the agreements. In totality the permissible action of respondent NIT is
within the frame of law and the record. There is no substance in these
petitions.”
The High Court has, further, rightly held that the impugned clause
contained in the said development agreement is neither void nor illegal for
want of consideration. It has also been rightly held by it that after
consideration of whole scheme of the NIT Act, particularly, provisions
under Sections 29 to 70 and 121 of the said Act read with the terms and
conditions of the said development agreement entered into between the
parties, it is clear that the said development agreement creates reciprocal
rights and obligations between the parties with some objects. The aforesaid
objects as cited by the High Court in its judgment and order read thus:
“(a)Abandonment of the land from acquisition of NIT.
(b)Permission to develop the said land and sanction of a scheme of a layout
therein,
(c)Entrustment of the job of supervision of such development on NIT,
(d)Transfer of the public utility land, reserved in the said layout to the
NIT.
(e)Immediate and reciprocal permission to develop the land by making a
layout in the said land and permission to sell plots therein, i.e.
permission for commercial exploitation of the land.”
Thus, seeking abandonment of acquisition of the land as provided under
Section 68 of the NIT Act is a huge benefit which the appellant-trust has
gained from the agreement. Further, it is not open for the appellant-trust
to avail only the beneficial part of the said development agreement to form
a layout plan and allow the sites to be allotted in favour of allottees,
when it itself is not willing to discharge the obligation of transferring
the reserved land for public utility purpose, as agreed upon in the
development agreement.
Further the High Court has rightly observed that another benefit derived by
the appellant-trust from the said development agreement is immediate and
reciprocal sanction for the development of the said land with permission
for the commercial usage of the same, presuming that there would be no
acquisition.
This Court is of the view that the High Court has rightly held that the
impugned clause in the development agreement is neither void nor opposed to
the public policy. The High Court has held thus:
“42.When the parties entered into agreement, they were fully aware of the
nature of transaction, conditions and respective obligations. There was no
objection raised at any point of time while entering into such agreement
and even thereafter when petitioners and such other persons who based upon
the said agreement got the benefit out of the same. We cannot read the
clauses in isolation. We have to read the whole agreement in question. It
is very clear even from the provisions of the Contract Act that the
consideration of any such agreement was permissible and not unlawful and/or
not prohibited by law and was not to defeat the provisions of any law or is
fraudulent and/or is immoral or opposed to public policy.
43.The submissions, that such contract and especially the clause is void,
in view of provisions contained under Section 23/25 of the Indian Contract
Act being opposed to public policy; violative of fundamental rights of the
petitioner; violative of the right of property of petitioner/society;
because of unequal bargain power; being forbidden by law and further in
view of Section 25 of the Contract Act, as the agreement to transfer is
without consideration and the same was not registered, have no force.”
In view of the findings and reasons recorded by the High Court in the
Central Inland Water Transport Corpn Ltd & Anr case (supra) upon which the
reliance was placed by the learned senior counsel for the appellant-trust
is of no relevance to the fact situation.
Further, it has been rightly held by the High Court that the appellant-
trust has accepted and acted upon the said development agreement like other
beneficiaries who are either the societies or other similar persons who are
benefited by the approved scheme of the NIT. It is noteworthy that the
appellant-trust has accepted all the terms and conditions of the
development agreement without any objection while executing the same. The
impugned clause of the said development agreement provides for the transfer
of land in favour of NIT which is earmarked in the layout for the public
utility purpose. The same is in terms of the approved development plan by
Maharashtra Government and as per the provisions of the Maharashtra
Regional & Town Planning Act, 1966 contained in its Chapter-V i.e.,
Sections 59-112 and Nagpur Corporation Act, 1948.
The findings recorded on the relevant contentious issues by the High Court
in the impugned judgment with cogent and valid reasons are legal and
justifiable. Therefore, we do not find any valid reason, whatsoever, to
interfere with the said impugned judgment and order as the same, in our
opinion, is a well-considered and reasoned decision. The same does not
suffer from erroneous reasoning or error in law which requires interference
by this Court.
For the reasons stated supra, the civil appeals are dismissed. The order
dated 01.10.2009 granting status quo shall stands vacated.
…………………………………………………………J.
[V. GOPALA GOWDA]
……………………………………………………….J.
[AMITAVA ROY]
New Delhi,
February 4, 2016
ITEM NO.1B-For Judgment COURT NO.9 SECTION IX
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal 870/2016 @ SLP (C) No(s). 25972/2009
NARAYANRAO JAGOBAJI GAWANDE PUB.TRUST Appellant(s)
VERSUS
STATE OF MAHARASHTRA & ORS. Respondent(s)
WITH
C.A. No. 871/2016 @ SLP (C) No(s). 25821/2008
C.A. No. 872/2016 @ SLP (C) No(s). 25841/2009
C.A. No. 876-877/2016 @ SLP (C) No(s).25923-25924/2008
C.A. No. 873/2016 @ SLP (C) No(s). 427/2009
C.A. No. 874/2016 @ SLP (C) No(s). 1223/2009
C.A. No. 875/2016 @ SLP (C) No(s). 10246/2009
Date : 04/02/2016 These appeals were called on for pronouncement of
JUDGMENT today.
For Appellant(s)
Mr. Rameshwar Prasad Goyal,Adv.
Mr. Manish Pitale, Adv.
Ms. Deeplaxmi S. Matwankar, Adv.
Mr. Chander Shekhar Ashri,Adv.
Mr. Shivaji M. Jadhav,Adv.
For Respondent(s) Mr. Satyajit A. Desai, Adv.
Ms. Anagha S. Desai,Adv.
Mr. Vimal Chandra S. Dave,Adv.
Mr. A. Venayagam Balan,Adv.
Mr. Kunal A. Cheema, Addl. Govt. Adv.
Mr. Nishant Katneshwarkar, Govt. Adv.
Mr. Yogesh Ahirrao, Adv.
Mr. Siddhesh Kotwal, Adv.
Ms. Shreya Bhatnagar, Adv.
Mr. Raghunatha S., Adv.
Mr. Nirnimesh Dubey, Adv.
Hon'ble Mr. Justice V.Gopala Gowda pronounced the judgment of the
Bench comprising His Lordship and Hon'ble Mr. Justice Amitava Roy.
Delay condoned.
Leave granted.
The appeals are dismissed in terms of the signed Non-Reportable
Judgment.
The order dated 01.10.2009 granting status quo shall stands vacated.
|(VINOD KUMAR) | |(CHANDER BALA) |
|COURT MASTER | |COURT MASTER |
(Signed Non-Reportable judgment is placed on the file)
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[1] [2] (1986) 3 SCC 156
[3] [4] (1995) 1 SCC 47
[5] [6] (1994) 5 SCC 709
[7] [8] (2006) 5 SCC 353
[9] [10] (1988) 1 SCC 530
[11] [12] (1981) 1 SCC 537
[13] [14] (2007) 8 SCC 705