An acquisition award does not bar TDR where DCR conditions are satisfied and compensation remains unpaid.

The Petitioner, a co-operative housing society, owned land at Bibvewadi, Pune, bearing Survey No. 47/1/1B/2. The land was acquired for a public purpose under the Land Acquisition Act, 1894, and an award dated 5 November 1984 determined compensation of ₹64,800. Although the compensation was deposited with the State Government, the Petitioner did not receive it.

The land was shown as reserved for the weaker section in Pune’s Development Plan. Under DCR Regulation N-2.4.17, persons whose lands had been acquired and whose possession had been delivered without receiving compensation could claim Transferable Development Rights (“TDR”). The Petitioner applied for TDR on 31 July 2003 and submitted the prescribed application and undertakings. It handed over possession of the land to the Pune Municipal Corporation (“PMC”) on 18 October 2005 and maintained that it had not received the award compensation.

On 3 February 2007, the State Government issued directions under Section 154 of the Maharashtra Regional and Town Planning Act, 1966 (“MRTP Act”), stating that TDR would not be available where an award had been declared or possession had been delivered to the Municipal Corporation. A further clarification dated 16 August 2007 restricted TDR in cases where possession had been taken and compensation had been tendered, deposited, or accepted. Relying on these directions, PMC rejected the Petitioner’s application on 5 October 2007, and the State Government rejected it on 9 April 2008.

The Petitioner challenged the directions and the consequential rejection orders. During the pendency of the petition, the Division Bench in Kausarbag Co-operative Housing Society Ltd. v. State of Maharashtra, 2009 SCC OnLine Bom 1435, declared the 3 February 2007 notification and the consequential notification dated 22 March 2007 ultra vires the applicable Development Control Regulations. The Supreme Court subsequently upheld that decision in Pune Municipal Corporation v. Kausarbag Co-operative Housing Society Ltd., (2014) 15 SCC 753.

Whether the Petitioner was entitled to TDR under the applicable Development Control Regulation despite the fact that an award had been passed and possession had subsequently been delivered to PMC, when the Petitioner had not received the compensation.

Whether the State Government’s directions dated 3 February 2007 and clarification dated 16 August 2007, issued under Section 154 of the MRTP Act, could restrict or override the statutory Development Control Regulations governing TDR.

Whether PMC’s order dated 5 October 2007 and the State Government’s order dated 9 April 2008, rejecting the Petitioner’s TDR claim solely on the basis of those directions, were liable to be quashed.

The Court applied the TDR scheme under DCR Regulation N-2.4.17, subsequently referred to in the operative direction as Regulation N-2.7.14, under which TDR was available where possession of acquired land had been delivered without receipt of part or full compensation and the relevant event occurred within twelve years before 30 September 1993.

Section 154 of the MRTP Act permits Government directions concerning the implementation of the Act but does not authorise administrative instructions that override the parent statute or statutory regulations; this principle was affirmed in Laxminarayan R. Bhattad v. State of Maharashtra, (2003) 5 SCC 413.

Relying on Kausarbag Co-operative Housing Society Ltd. v. State of Maharashtra, 2009 SCC OnLine Bom 1435, and its affirmance in Pune Municipal Corporation v. Kausarbag Co-operative Housing Society Ltd., (2014) 15 SCC 753, the Court held that the 3 February 2007 notification unlawfully modified and restricted the applicable TDR Regulation without following the statutory procedure under Section 37 of the MRTP Act.

The Court also treated the principles relied upon from Indore Development Authority v. Manoharlal, (2020) 8 SCC 129, as inapplicable to defeat the Petitioner’s specific entitlement under the TDR Regulation.

The Court found that the Petitioner’s case was materially identical to Kausarbag. The land had been acquired, possession had been delivered to PMC, and the Petitioner had not received the compensation determined under the award.

The Court held that the applicable Regulation required consideration of possession and non-receipt of compensation, and did not exclude a claim merely because an award had been passed. The Petitioner had also made its TDR application after 30 September 1993 and had satisfied the relevant conditions by handing over possession and undertaking not to pursue compensation claims.

The Government’s directions purported to introduce a new substantive restriction—that TDR would be unavailable once an award had been declared or possession had been taken. Since this restriction altered the operation of the statutory Development Control Regulations, it could not be introduced through administrative directions under Section 154.

The Supreme Court’s decision in Kausarbag had already invalidated the principal notification; consequently, the clarification dated 16 August 2007 and the rejection orders founded upon those instruments could not survive.

The PMC order dated 5 October 2007 and the State Government order dated 9 April 2008 were quashed and set aside because they rejected the Petitioner’s claim solely on the basis of those invalid directions.

The Court directed PMC to grant the TDR/FSI to which the Petitioner was entitled under the applicable Regulation and to issue the necessary Development Rights Certificate within twelve weeks from the date of judgment.