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2026 High Court January 2026 Latest Legal Real Estate

Bombay HC Upholds Binding Surrender of Housing Society Land to Pune Municipal Corporation

January 9, 2026 legaldeli

The plaintiff housing society filed the civil suit for declaration of its right as owner to develop the plot and construct commercial building.

On 26.12.1967, the society purchased the land of 1.20 hectares at Kothurd, Pune. The open space of 10% of net area of the land in the lay out was for the benefit of the members. However, the Corporation insisted for retaining 10% of the gross total area as open space.

By the letter dated 9.9.1968, the Corporation asked the society to hand over physical possession of 10% of the layout area land.

HELD that the society in lieu of surrendering the area reserved for the shopping centre free of cost, the condition of keep 10% of the net plot area as open space was waived and construction was permitted. Accordingly the society surrendered area free of cost. Accordingly, construction was permitted without retaining 10% of the net area as open space. The society did not challenge this condition for surrender of the area free of cost. It was only after 28 years that the suit was filed challenging the surrender of the land free of cost.

Section 126(1)(a) and (b) of the MRTP Act mere approval of the request of the land owner to grant of monetary compensation or grant of TDR/FSI in lieu of compensation by itself will not always result in a concluded contract, and the question would have to be determined in the facts and circumstances of each case.

In the present case, there is no dispute that the society took advantage of obtaining construction permission in lieu of the waiver of the condition requiring the retention of 10% of the area open. Thus, it was an agreement with concluded terms between the society and the corporation that the society shall surrender the area equivalent to 10% of the compulsory open space free of cost for utilisation of the reservation of the commercial building, and in lieu of the surrender, the corporation shall sanction the layout and permit construction enabling the society to accommodate all its members.

Judgment dated 6.1.2026 of the High Court of Bombay in Second Appeal No.1400 of 2005 of Milan Cooperative Housing Society Kothrud Pune Vs. Pune Municipal Corporation and another

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