Bombay HC – Illegal Cancellation of Development Rights Certificates

Judgment dated 16.9.2026 of the High  Court of Bombay in Writ Petition No.3816 of 2004 of Jayant Maniklal Lunawat   Vs.  Pune Municipal Corporation and others

the land in question was acquired by the PMC by an agreement and ultimately on 17th October, 2000, two possession receipts both dated 17 October, 2000, of area admeasuring at about 13,117 sq. mtrs. and 220 sq. mtrs., both aggregating to 13,337 sq. mtrs. were issued. The PMC does not deny issuing such possession receipts.

In lieu of surrender of the said land without compensation, the Development Rights Certificates were issued.

The petitioner  has challenged the order dated 8.7.2005 cancelling elevant Development Rights Certificate of 3,690.01 sq.meters and also sought additional DRCs for deficit area of 220 sq.mts.

The Development Rights Certificates were issued to the petitioner for the compensation of the land surrendered to the Corporation.

Another contention of the Respondent is that the Respondent had constructed a boundary only to the extent of 9,948 sq. mtrs. and the same was in possession and utilization of the Sewage Treatment Plant. The contention of the Respondent was that possession of a lesser area was taken. Although possession receipt was issued in respect of the land admeasuring at about 13,337 sq. mtrs. Factually the possession was of much lesser area. In the entire argument of the learned counsel appearing for PMC, who has also tendered written submission, it is not pointed out as to why the area of 13,337 sq. mtrs. was entered by the Respondent Nos. 1 to 3 in the 7/12 extract of the said property. The Respondent PMC not only issued the possession letter to the extent of 13,337 sq. mtrs., but also issued DRCs on 16/11/2000 in favor of the Petitioner bearing serial number 2667 to 2693 (27 DRCs) aggregating to 13,117 sq. mtrs. Thereafter, we have also perused that there is an internal note of the Respondent no. 1 to 3 dated 16th November, 2000 which clearly stated that the total area under reservation for STP was 21,850 sq. mtrs. and out of this possession of area admeasuring about 13,117 sq. mtrs. had already been taken.

As a matter of fact, the City Survey Officer had carried out measurement of the land in presence of the representatives of the Respondent no. 1 to 3 on 16th September, 2000, wherein it was stated that as per the measurement, the total area of the plot bearing survey number 6A/1 was 13,880 sq. mtrs. The Petitioner, however, is not raising his claim to the extent of 13,880 sq. mtrs., but is limiting his claim only to the extent of the area ad measuring at about 13,337 sq. mtrs.

This being the position, it would be inequitable to deny the rights which the Petitioner has got to utilize the DRCs. The Petitioner had surrendered the property in question. There was admittedly no acquisition under the Land Acquisition Act, and that the acquisition was by agreement. Accordingly, 27 DRCs were issued in favor of the Petitioner and that land admeasuring at about 13,337 sq. mtrs. was acquired by the corporation. In view of the said fact, it was for the corporation, who had validly acquired the land and issued possession receipt on 17th October, 2000, to ensure that the area of the land which was acquired coincides with the possession notice. As a matter of fact, the corporation is estopped today from contending that the possession receipts were bad in law and that they were not in conformity with the actual area which was handed over to the corporation. The act of the corporation, as noted above, coupled with the measurements which were carried out by the officers of the corporation itself, clearly shows that the total area of land which was handed over to the corporation was 1337 sq. mtrs.

we are constrained to observe that once the compensation for the acquisition of the land was in the form of FSI/TDR/DRC in the case, the same was payable to the party as per the regime prevailing on the date on which the said cancellation was made. Once we have expressed our opinion that the cancellation of the DRCs was totally illegal without any basis of law, then the logical consequences must follow. The Petitioner should be allowed to use the DRCs which were cancelled in the year 2005, as per the regime prevailing in the year 2005. There is no reason why the Petitioner who is without any fault should be put to a loss, and directed to use DRCs as per the current regime.