Authorities cannot keep private land under reservation indefinitely without acquiring it or taking the relevant steps within the prescribed timeframe, the court said

Published on: Aug 17, 2026, 08:22:20 IST

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MUMBAI: The Bombay High Court has freed 36,662.43 square metres (sqm) of land in Thane from reservation under the Development Plan (DP) for a park, police station and mass transit system, saying authorities cannot keep private land under reservation indefinitely without acquiring it or taking the relevant steps within the prescribed timeframe.

“The property rights of owners cannot be kept in abeyance indefinitely by labelling the land as reserved land. Depriving landowners to use property or enjoy the financial benefits arising out of the use and development of the property cannot be indefinitely postponed under the garb of acquisition or reservation of land,” a division bench of justices MS Karnik and Ranjitsinha Raja Bhonsale said in the order dated August 10.

The court was hearing a petition filed by M/s Eastern Machinery & Trading Company and M/s Tolani Brothers. The two firms had, in 1962, purchased 55,812.67 sqm land in Manpada in Thane West. But in the 1999 DP, 48,963.43 sqm of this land was placed under reservation – 29,525.13 sqm for a park, 2,528 sqm for a police station, 4,608 sqm for High Capacity Mass Transit Route (HCMTR) and 12,274 sqm for roads, the petition filed by the firms said.

According to the petition, the portion of land reserved for roads was subsequently acquired by the Thane Municipal Corporation (TMC) and the owners were compensated via transfer of development rights (TDR). In 2007, the petitioners issued a purchase notice under the Maharashtra Regional and Town Planning (MRTP) Act, 1966, seeking acquisition of the remaining reserved land and monetary compensation of around ₹481 crore in lieu of TDR in accordance with the prevailing policy.

Although the state accepted the purchase notice and directed the authorities to complete the acquisition within one year, the land was not acquired, the petitioners told the court.

The TMC, however, placed on record the audited financial statements for the previous five financial years, indicating its financial inability to pay the approximately ₹481 crore compensation sought by the petitioners. The civic body said it was willing to compensate the land owners via TDR/FSI.

The bench, however, rejected the contention and said that the process of acquisition had to be completed within the stipulated timeline.

“The reservation cannot go on for an indefinite period of time, without completing the reservation process and compensating the land owner. The property rights of a citizen cannot be altered and adversely affected in such a manner,” the court said.

While reservation and acquisition of land for public purposes gets precedence over the rights of individual property owners, the same has to be within the four corners of the law. “It cannot be that landowners are deprived of their properties for an indefinite period without being paid any compensation,” the bench remarked.

The court clarified that the government cannot, after restricting the use of land, keep it reserved for an indefinite period or compel the owners to accept TDR as compensation. It directed removal of the DP reservation on 36,662.43 sqm of the land and ordered the state government to notify lapsing of the reservation.

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