Bombay HC: Section 49 Purchase Notice Cannot Be Rejected for Want of Development Application Where Landowner Invokes Clauses (a) and (e) of MRTP Act

Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 24.09.2026

Bombay HC: Section 49 Purchase Notice Cannot Be Rejected for Want of Development Application Where Landowner Invokes Clauses (a) and (e) of MRTP Act

In an important ruling concerning land reservation and Purchase Notices under the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act), the Bombay High Court has held that a Purchase Notice issued under Sections 49(1)(a) and 49(1)(e) cannot be rejected merely because the landowner had not first submitted a development application to the Planning Authority.

The Division Bench of Justices R.I. Chagla and Firdosh P. Pooniwalla quashed the Director of Town Planning’s order dated 9 September 2024 rejecting the Purchase Notice issued by Devi Construction LLP and directed the authority to decide the notice afresh on merits, without insisting upon an application under Section 49(2).

Dispute Over Land Reserved for Garden

• Devi Construction LLP owns property bearing Bhumapan No. 107/B at Village Vadgaon, measuring approximately 2.10 hectares or 21,000 sq. metres.
• On 28 February 2024, Vadgaon Nagar Panchayat, acting as the Planning Authority under the MRTP Act, published a Draft Development Plan under Section 26. Under the draft plan, 12,290 sq. metres of the petitioner’s property was reserved for a Garden under Reservation No. 40.
• The developer objected to the reservation through a letter dated 12 March 2024. Three days later, on 15 March 2024, it issued a Purchase Notice under Section 49, specifically invoking Sections 49(1)(a) and 49(1)(e).

Director of Town Planning Rejected Purchase Notice

• The Director of Town Planning rejected the Purchase Notice on 9 September 2024.
• The rejection was based on the view that Section 49(2) required the Purchase Notice to be accompanied by a copy of an application made to the Planning Authority along with any order or decision passed on such application.
• Devi Construction challenged this interpretation before the Bombay High Court, contending that Section 49(2) had been incorrectly applied to a Purchase Notice founded upon Sections 49(1)(a) and (e).

What Does Section 49 of the MRTP Act Provide?

Section 49 creates a statutory mechanism enabling a landowner or affected person, in specified circumstances, to require the appropriate authority to purchase an interest in land affected by planning restrictions.

Among the circumstances contemplated by Section 49(1):

• Clause (a) concerns land designated by a plan as subject to compulsory acquisition.
• Clause (e) applies where, because of the designation or allocation of land in a plan, the owner claims that the property cannot be sold except at a price lower than what could reasonably have been obtained had the designation or allocation not existed.
• Section 49(2), meanwhile, states that the Purchase Notice shall be accompanied by a copy of any application made by the applicant to the Planning Authority and any order or decision of that authority or the State Government in respect of which the notice is given.
• The dispute therefore centred on whether Section 49(2) makes such a prior application mandatory in every case under Section 49(1).

Developer: Section 49(1) Contemplates Independent Situations

• Devi Construction argued that the various situations contemplated under Sections 49(1)(a) to (e) are mutually exclusive and independent.
• According to the petitioner, a prior development application becomes relevant where the Purchase Notice arises from a refusal of development permission or permission granted subject to conditions, as contemplated by Section 49(1)(d).
• But where the landowner invokes Section 49(1)(e) because the planning reservation or designation has itself depressed the property’s saleability or value, no separate development application is required.
• The petitioner also invoked Article 300A of the Constitution, arguing that the purpose of Section 49 is to prevent a landowner from being deprived of the enjoyment and value of property merely because of a planning reservation.

State: Prior Application Was Mandatory

• The State authorities defended the rejection.
• They argued that a Purchase Notice under Section 49(1) must be accompanied by the documents referred to in Section 49(2). According to the State, Devi Construction was required to lodge a claim before the Municipal Council concerning its inability to obtain a reasonable price and submit a copy along with the Purchase Notice.
• Since this had not been done, the authorities maintained that the Purchase Notice had been correctly rejected.

Bombay HC: Issue Already Settled by Aone Land Developers

• The High Court rejected the State’s interpretation and held that the issue was no longer res integra.
• The Bench relied substantially upon Aone Land Developers v. State of Maharashtra & Ors., 2019 SCC OnLine Bom 9845.
• In Aone Land Developers, the Bombay High Court had interpreted Section 49(2) to mean that the requirement of accompanying a Purchase Notice with a prior application applies where such an application was actually made and resulted in an order or decision.
• Section 49(2), therefore, cannot be mechanically extended to every independent contingency contained in Section 49(1).

Each Contingency Under Section 49(1) Is Independent

• The Court reiterated that Section 49(1) contains several independent circumstances capable of triggering the statutory right to issue a Purchase Notice.
• The use of the word “or” between the different clauses supports a disjunctive reading of the provision.
• In particular, Section 49(1)(e) creates an independent situation where the landowner claims that, because of designation or allocation under a plan, the land cannot be sold except at a lower price.
• That situation does not depend upon the landowner first applying for development permission and having that permission refused or conditionally granted.

Section 49(2) Does Not Create a Universal Prior-Application Requirement

• The Court emphasized that Section 49(2) is not to be interpreted as imposing an independent requirement that every landowner must first make a development application before invoking Section 49.
• The earlier Aone Land Developers judgment had specifically held that Section 49(2) applies to a situation where an application was made to the Planning Authority and an order or decision arose from that application.
• It cannot be read as imposing the same requirement upon every contingency enumerated under Section 49(1).

Court Also Relies on Gopal Kashinath Lad

• The Division Bench also relied upon Gopal Kashinath Lad v. State of Maharashtra & Ors., in which the Aurangabad Bench of the Bombay High Court had followed Aone Land Developers.
• That decision similarly held that where a Purchase Notice is based solely upon Section 49(1)(e), insisting upon a prior development application under Section 49(2) is unnecessary.
• If no such application was made and consequently no decision exists, there is simply no question of annexing a non-existent application or decision to the Purchase Notice.
• The Court quoted the earlier ruling to reiterate that the contingencies under Section 49(1)(e) and the documentary requirement under Section 49(2) operate independently in such circumstances.

Purchase Notice Under Sections 49(1)(a) and (e) Was Maintainable Without Prior Application

• Applying those principles to Devi Construction, the Bombay High Court noted that the Purchase Notice had specifically been issued under both Sections 49(1)(a) and 49(1)(e).
• Section 49(1)(a) applies where land is designated by a plan as subject to compulsory acquisition, while Section 49(1)(e) addresses the situation where designation or allocation causes the owner to be unable to sell the property except at a lower price.
• The Court held that neither situation required Devi Construction to first submit an application to the Planning Authority or obtain an order or decision on such application.
• Accordingly, the Purchase Notice dated 15 March 2024 was not required to be accompanied by an application under Section 49(2).

Director’s Rejection Held Incorrect

• Since the Director of Town Planning had rejected the Purchase Notice specifically because it was not accompanied by an application contemplated under Section 49(2), the High Court held that the reason for rejection was legally incorrect.
• The order dated 9 September 2024 was therefore quashed and set aside.

Important: Court Did Not Itself Confirm the Purchase Notice

• An important distinction in the judgment is that although Devi Construction succeeded in challenging the rejection order, the High Court did not itself finally confirm the Purchase Notice.
• Instead, it directed the Director of Town Planning to reconsider and decide the Purchase Notice on its own merits under Sections 49(1)(a) and (e), without insisting upon a Section 49(2) application.
• The authority has been directed to complete this exercise within six weeks from the date of uploading of the High Court’s order.
• Thus, the judgment represents a clear procedural and statutory-interpretation victory for Devi Construction, while the substantive merits of its Purchase Notice remain for determination by the competent authority.

What Happens After Confirmation of a Purchase Notice?

• Section 49 itself contains an important consequence where a Purchase Notice is confirmed.
• Under Section 49(7), if the appropriate authority fails within one year from confirmation of the Purchase Notice to make the required application to acquire the land under Section 126, the relevant reservation, designation, allotment, indication or restriction on development is deemed to lapse.
• The land is then deemed released and becomes available to the owner for development otherwise permissible for adjacent land under the relevant plan.
• That statutory consequence was part of the Section 49 framework considered by the Court; however, the present judgment does not hold that the Garden Reservation over Devi Construction’s property has already lapsed.

Key Takeaway

The Bombay High Court’s ruling clarifies that Section 49(2) of the MRTP Act does not impose a blanket requirement that every Purchase Notice must be preceded by a development application to the Planning Authority.

Where a landowner invokes the independent contingencies under Sections 49(1)(a) and 49(1)(e), the Purchase Notice cannot be rejected merely because no such application or consequent order has been annexed. For landowners whose properties are affected by reservations or designations in development plans, the judgment is significant because it prevents authorities from imposing a procedural precondition that the Court found is not required by the statutory scheme.

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Source: Bombay High Court

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