K. Ramaswamy, J. - (1.) This appeal by special leave arises from the judgment and order dated July 14, 1988 in Appeal No. 120 of 1988 of the Bombay High Court reversing the judgment and order of the learned single Judge and quashing the award passed under Section 11 of the Land Acquisition Act, 1894, (For short, the Act) and the notification dated 6th September 1972 issued under Section 6 of the Act read with Section 126 (2) of the Maharashtra Regional and Town Planning Act (For short, the MRTP Act) as inoperative. It was also held that the land in question could not be acquired under the Act, It was also further declared that all steps taken for taking possession and vesting of plot of land bearing CS No. 503, Dharavi Division, Bombay, in pursuance of the said award were illegal.
(2.) A few relevant facts leading to these proceedings deserve to be noted at the outset. On 6th January 1967 a draft development plan for G Ward of the Bombay Municipal Corporation was sanctioned by the State of Maha-rashtra in exercise of its powers under Section 31 sub-section (1) of the MRTP Act, The said draft development plan was earlier prepared by the then planning authority, namely, the Municipal Corporation of Bombay as per the provisions found in Chapter III of the MRTP Act dealing with the preparation, submission and sanction to development plan. It is not in dispute between the parties that necessary gamut enjoined by Sections 21 to 30 of the MRTP Act was gone through by the then planning authority functioning under the Act and that ultimately culminated into the sanctioned draft development plan by the State Government under Section 31 (1) of the MRTP Act as aforesaid. This sanctioned draft development plan for G Ward of the Municipal Corporation of Bombay came into force on 7th February, 1967. It is also not in dispute between the parties that city survey No. 503 Dharavi with which we are concerned in the present proceedings formed part of the said Ward G and, therefore, was naturally covered by the aforesaid sanctioned development plan. The said city survey plot No. 503 Dharavi is a large piece of land owned by the 6th respondent, the Provident Investment Co. Ltd. which belongs to the Government of Madhya Pradesh. Some portion of the said land, to be precise an area admeasuring 20,397 sq. yds. was leased out by the 5th respondent to 1st respondent herein. It was using the same for the business of manufacture of art silk and rayon textiles and processing of textiles. The appellant, Municipal Corporation of Greater Bombay which was original 3rd respondent in the writ petition has a Sewage Purification Plant at Dharavi. With the increase in the population and the area under control of the appellant-Corporation it became necessary to extend the Dharavi Sewage Purification Works. In the year 1963, it was decided at a meeting of the Standing Committee of the appellant-Corporation to acquire City Survey No. 503. The said requisite proposal was taken note of in the aforesaid Development plan prepared under the MRTP Act, In the said plan, City Survey No. 503 was designated and shown as reserved for extension of the Dharavi Sewage Purification Works. As noted above, the said plan came into force w.e.f. February 7, 1967. On the basis of the aforesaid reservation of this land in the said plan for the extension of Dharavi Sewage Purification Works belonging to the appellant-Corporation, the appellant-Corporation, being the then planning authority sought to acquire the said land for the purpose of extension of Dharavi Sewage Purification Plant as per Section 126 (1) of the MRTP Act and the State Government of Maharashtra being satisfied that the land specified in the application was needed for the public purpose therein specified, issued the requisite notification dated July 6, 1972 under Section 126 (2) of the MRTP Act read with Section 6 of the Act, The said provisions of Section 126 read as under: "126. (1) When after the publication of a draft Regional plan, a Development or any other plan or town planning scheme, any land is required or reserved for any of the public purposes specified in any plan or scheme under this Act at any time the Planning Authority, Development Authority, or as the case may be, (any Appropriate Authority may, except as otherwise provided in Section 113A, acquire the land) either by agreement or make an application to the State Government for acquiring such land under the Land Acquisition Act, 1894. (2) On receipt of such application, if the State Government is satisfied that the land specified in the application is needed for the public purpose therein specified, or (if the State Government (except in cases falling under section 49 (and except as provided in section 113A) itself is of opinion) that any land included in any such plan is needed for any public purpose it may make a declaration to that effect in the Official Gazette, in the manner provided in section 6 of the Land Acquisition Act, 1894, in respect of the said land. The declaration so published shall, notwithstanding anything contained in the said Act, be deemed to be a declaration duly made under the said section: Provided that, no such declaration shall be made after the expiry of three years from the date of publication of the draft Regional plan. Development plan or any other plan."
(3.) Pursuant to the said notification notices under Section 9 of the Act were issued on March 14, 1973 to the concerned interested parties inviting claims for compensation. As the respondents 1 and 2 were in possession of the land as tenants, they naturally put foward their claims for compensation. It is in evidence that in 1979, respondents 1 and 2 were also heard in support of their claim petition seeking appropriate compensation for acquisition of their rights over the land sought to be acquired.;