ORDER
Kumar Rajaratnam, C.J.
1. The appellants being aggrieved by the order of the learned Single Judge dated 8-9-1998, in Writ Petition No. 1453/95 (Gautam Nagar Housing Society v. State of M.P. and Ors.), have preferred this Letters Patent Appeal.
2. The short question that arose before the learned Single Judge was whether the Town & Country Planning Authority has got the power to require the Developer to surrender the land to the extent of 15% of the area, for which development was sought tor by a Developer for informal sector. The learned Single Judge held that the condition of surrender of 15% of the land for the purpose of informal sector is contrary to law without payment of just compensation.
3. The facts briefly are that the respondent is a Housing Society. It has 187 members belonging to service class and weaker section of the society. The respondent-Housing Society applied for exemption under Section 20 of the Urban Land (Ceiling & Regulations) Act, 1976, which was granted to him subject to certain conditions therein.
4. The respondent-Housing Society purchased 2.50 acres of land and applied for diversion and mutation under the relevant provisions of the M.P. Land Revenue Code, 1959. The respondent submitted lay out plan to the Town & Country Planning Department. An application was also made for grant of licence under Section 24 of the M.P. Vinirdisth Bhrast Acharan Nivaran Adhiniyam, 1982, and the Society wanted to divide the land into plots.
5. When the respondent-Housing Society approached the Town & Country Planning Authority, the Authority directed demarcation of 15% of the land for informal sector. It was further stated by the Authority that the land shall be placed at the disposal of the M.P. Gandi Basti Unmulan Mandal.
6. The State justified in ear-marking 15% of the land before the licence being granted for development of the sites under Section 73 of the M.P. Nagar Tatha Gram Nivcsh Adhiniyam, 1973 (for short ‘Act of 1973’) and claimed that it has power to set aside 15% of the land for informal sector.
7. Anncxure (P-10) is the requirement of the Housing-Society to leave a site of 15% of the land meant for development. Annexure P-10, which has been translated in English, reads as under :–
” Translated copy of Annexure P-10
Government of Madhya Pradesh
Department of Housing and Environment
ORDER
Bhopal, dated 26th August, 87.
(1) In accordance with the declared Housing Policy of the State Government, vide No. F 3-39/32/05, which had been declared vide resolution No. 3380/1652/32-1/81, dated 30th October, 1981, there was provision for securing plots of land for the domestic servants/informal sector (class) in various colonies. In exercise of powers conferred by Section 73 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, in the Housing Year the State Government has now decided that all plots of 1 acre or more than 1 acre in which colonies, housing groups are proposed to be developed, at least 15% undeveloped land shall be kept secured for such classes.
(2) This secured land shall be given to the Slum Clearance Board or an organisation referred to by the Government, which shall pay a sum equal to the actual cost of purchase of the land to the owner organisation of the land.
(3) All the lay outs in the State shall be accepted only after the above mentioned provision is made.
Sd/
(R.C. Jain)
Chief Secretary, Government
of Madhya Pradesh,
Department of Housing
and Environment.”
Section 73 of the Act reads as under:–
“Section 73. Power of State Government to give directions.–
(1) In the discharge of their duties, the officers appointed under Section 3 and the authorities constituted under this Act shall be bound by such directions on matters of policy as may be given to them by the State Government.
(2) If any dispute arises between the State Government and any authority, as to whether a question is or is not a question of policy, the decision of the State Government shall be final.”
8. The definition of ‘informal sector’ is not clear.
9. However, according to Shri R.S. Jha, learned Additional Advocate General, it was submitted that 15% of the area is sought to be used for quarters for domestic servants or for weaker sections of Society.
10. The question is, can this be done, without acquiring the land and paying just and reasonable compensation.
11. In our view, what the State has tried to do is to take over 15% of the land for the informal sector without paying just compensation. However, laudable object may be such an acquisition of large extent of 15% of total land of the sanctioned plan being reserved for informal sector, can not be done without payment of just compensation.
12. It is apparent that the land will vests with the State and the State is free to construct the houses on the land for informal sector. In other words, there is a change of ownership to the extent of 15% of land from the Society to the State Government on the basis of the circular issued under Section 73 of the Act.
13. It would have been another matter for sanctioning of the plan, if the Authority had set aside certain land for roads and parks. But, in this case, the land that is sought to be taken away permanently from the owner to the extent of 15%, and is a transfer of ownership from the original owner to the State Government without payment of compensation.
14. The law is well settled by the Supreme Court in Pt. Chetram Vashist v. Municipal Corporation of Delhi, reported in (1995) 1 SCC 47. The Supreme Court makes a distinction between the ownership and the management. The Authority may have the right to manage, but the ownership shall always vest with the legal owner.
15. However, it is always open to the Authority to acquire the land after paying market price.
16. The Supreme Court in the case of Pt. Chetram Vashist (supra), in Para 6 held :–
“Reserving any site for any street, open space, park, school etc. in a layout plan is normally a public purpose as it is inherent in such reservation that it shall be used by the public in general. The effect of such reservation is that the owner ceases to be a legal owner of the land in dispute and he holds the land for the benefit of the society or the public in general. It may result in creating an obligation in nature of trust and may preclude the owner from transferring or selling his interest in it. It may be true as held by the High Court that the interest which is left in the owner is a residuary interest which may be nothing more than a right to hold this land in trust for the specific purpose specified by the coloniser in the sanctioned layout plan. But the question is, does it entitle the Corporation to claim that the land so specified should be transferred to the authority free of cost. That is no made out from any provision in the Act or any principle of law. The Corporation by virtue of the land specified as open space may get a right as a custodian of public interest to manage it in the interest of the society in general. But the right to manage as a local body is not the same thing as to claim transfer of the property to itself. The effect of transfer of the property is that the transferor ceases to be owner of it and the ownership stands transferred to the person whose favour it is transferred. The resolution of the Committee to transfer land in the colony for park and school was an order for transfer without there being any sanction for the same in law.”
17. We have extracted Section 73 of the Act. We have strong reservation whether under Section 73, the State Government has power to issue such a direction as has been contained in Annexure P-10. Annexure P-10 is the order which sought to compulsorily acquire 15% of the land by the State Government without payment of market price. Section 73 of the Act can only be exercised by the State Government in the matter of administration and supervision of the Corporation. Section 73 of the Act does not empower the State to direct the Corporation to compulsorily acquire the land. Such direction as has been contained in Annexure P-10. can not be given by virtue of power under Section 73 of the Act. The judgment of the Supreme Court in ft. Chetram Vashist (supra) fully covers the subject.
18. Accordingly, there is no merit in this appeal and the same stands dismissed.