Supreme Court Dismisses Landowners’ Compensation Claim in Ahmedabad Town Planning Case

The Supreme Court of India, in the case of Mrugendra Indravadan Mehta & Others v. Ahmedabad Municipal Corporation, dismissed the appeal of landowners seeking higher compensation for land allotted to them under a town planning scheme in Ahmedabad. The Court upheld the Gujarat High Court’s decision that the appellants had accepted the revised land allotment without protest and had failed to provide evidence supporting their claim for higher compensation.

Background of the Case

The appellants, who were the legal heirs of a landowner, had inherited land that was included in Town Planning Scheme No. 6, Paldi, formulated under the Gujarat Town Planning and Urban Development Act, 1976. The scheme, which came into effect in 1963, required the landowner to contribute 21.40% of his land for public purposes. In return, he was allotted two final plots: Final Plot No. 478 and Final Plot No. 463. While the landowner took possession of Final Plot No. 478, the Ahmedabad Municipal Corporation failed to deliver possession of Final Plot No. 463 as it was occupied by slum dwellers.

Subsequent variations to the town planning scheme resulted in the allotment of a different plot, Final Plot No. 187, instead of Final Plot No. 463. However, this new plot was smaller by 974 sq. meters. The Corporation offered compensation at the rate of Rs. 25 per sq. meter for the deducted land, which the appellants claimed was an “eye wash,” arguing that the land’s actual value in 1991 was at least Rs. 6000 per sq. meter.

Legal Dispute and Trial Court Judgment

In 1998, the appellants filed a suit before the City Civil Court, Ahmedabad, seeking compensation of Rs. 1,63,97,673 with interest or, alternatively, an allotment of equivalent land in any town planning scheme in Ahmedabad’s western zone. The Corporation countered that:

The plaintiffs had already accepted Final Plot No. 187 and the compensation amount.
Their failure to appeal under Section 54 of the Town Planning Act precluded them from challenging the compensation.
Once a town planning scheme is varied, the original scheme ceases to exist.

The Trial Court ruled partially in favor of the appellants, directing the Corporation to allot 974 sq. meters in an alternative scheme while denying monetary compensation. The appellants were also ordered to return the compensation amount they had received.

High Court Appeal and Decision

The Ahmedabad Municipal Corporation appealed the Trial Court’s order, while the landowners filed a cross-objection seeking full compensation. The Gujarat High Court ruled in favor of the Corporation, holding that:

The appellants had accepted Final Plot No. 187 and the compensation amount without protest.
They had failed to produce evidence proving that the land was valued at Rs. 6000 per sq. meter in 1991.
Once a town planning scheme is varied, rights under the previous scheme are extinguished.

Arguments Before the Supreme Court

Arguments by the Appellants (Landowners)

The Gujarat High Court had failed to frame proper points for determination in its judgment.
The compensation awarded was meager, and the town planning scheme should not have resulted in further land deduction.
The Corporation’s failure to provide possession of Final Plot No. 463 caused financial loss.

Arguments by Ahmedabad Municipal Corporation

The appellants had accepted the new plot and the compensation amount without filing objections.
They failed to utilize the legal remedies under the Town Planning Act, such as an appeal under Section 54.
Monetary compensation claims were unsupported by documentary evidence.

Supreme Court’s Observations

A bench comprising Justices A.S. Bopanna and Sanjay Kumar upheld the Gujarat High Court’s ruling, making key observations:

The appellants had voluntarily accepted the new plot and the compensation amount.
There was no evidence to prove that the land was worth Rs. 6000 per sq. meter.
Town planning schemes involve redistribution and reconstitution of land; hence, claimants cannot demand the exact equivalent of the original land allotted.
Once a town planning scheme is varied, previous rights are extinguished under Section 71 of the Town Planning Act.

Final Judgment

The Supreme Court ruled:

The appeals filed by the landowners were dismissed.
The judgment of the Gujarat High Court was upheld.
The appellants had no further claim to alternative land or enhanced compensation.
There were no orders for costs, meaning both parties would bear their own legal expenses.

Implications of the Judgment

The ruling clarifies that landowners who accept compensation without protest cannot later challenge the compensation amount.
It reinforces the principle that town planning schemes are binding, and variations under Section 71 override prior allocations.
The judgment prevents misuse of the legal system to claim additional land or higher compensation retrospectively.
It strengthens urban planning regulations, ensuring that changes in land allotment are legally binding.

Conclusion

The Supreme Court’s ruling in Mrugendra Indravadan Mehta & Others v. Ahmedabad Municipal Corporation upholds the legal sanctity of town planning schemes and restricts landowners from making post-hoc compensation claims. The judgment underscores the importance of using statutory remedies at the appropriate stage and reaffirms that town planning schemes are final and binding once implemented.

Petitioner Name: Mrugendra Indravadan Mehta & Others.
Respondent Name: Ahmedabad Municipal Corporation.
Judgment By: Justice A.S. Bopanna, Justice Sanjay Kumar.
Place Of Incident: Ahmedabad, Gujarat.
Judgment Date: 10-05-2024.

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