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)

-----------------------
[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

 

  

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