Section 96 Of The New Land Acquisition Act And Its Application To Land Acquisition Proceedings Under The MRTP Act

Dormaan J. Dalal

11 March 2019 6:50 AM GMT

  • Section 96 Of The New Land Acquisition Act And Its Application To Land Acquisition Proceedings Under The MRTP Act

    Tucked away in the sub-soil of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as "the New Act") is an obscure provision unearthed by crafty Accountants, much to the obliviousness of several learned Counsel and Advocates, that exempts the levy of income tax or stamp duty on awards or agreements made under...

    Tucked away in the sub-soil of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as "the New Act") is an obscure provision unearthed by crafty Accountants, much to the obliviousness of several learned Counsel and Advocates, that exempts the levy of income tax or stamp duty on awards or agreements made under the New Act. This provision, namely Section 96
    [1]finds place in the crevices of the Miscellaneous Chapter of the New Act. The New Act came into force on 1st January 2014, thereby repealing the Land Acquisition Act, 1984. Though the New Act has received considerable attention, not all its provisions have been noticed. Most of the limelight has been hogged by Section 24 of the New Act that deals with the lapsing of acquisition proceedings under the Land Acquisition Act, 1894 in certain cases.[2] Majority of the litigation thus far has revolved around Section 24 and its interpretation, thereby overshadowing the other provisions of the Act such as Section 96.[3] The author, through this Article intends to focus his attention on Section 96 of the New Act (hereinafter referred to as "Section 96") and further examine the extent to which the said section can be applied to acquisition proceedings initiated under the Maharashtra Regional and Town Planning Act, 1966 (hereinafter referred to as the "MRTP Act").

    ORIGIN OF SECTION 96

    The origin of Section 96 can be traced to Clause 90 of the Land Acquisition, Rehabilitation and Resettlement Bill, 2011
    [4] that provided for exemption from stamp duty on any award or agreement made under the Act (except an award or agreement made under clause 42[5]). The said clause also granted further exemption from payment of any fee for obtaining a copy of the award. Save the exception by way of Clause 42, Clause 90 of the Bill was para materia to Section 51[6] of the Land Acquisition Act, 1894 that provided for identical exemptions. Neither clause 90 nor Section 92 provided for exemption from Income Tax.

    • The raison d'être for inserting a further exemption from Income Tax can be found in a recently published book co-authored by Mr. Jairam Ramesh who was the Minister of Rural Development at the time when the Bill was introduced in the Lok Sabha on 7th September 2011.
      [7] It seems that the suggestion to include an exemption from Income Tax was raised in "All Party Meetings" by certain members who were of the opinion that it would be "grossly unfair to levy any taxes" when land was being acquired by the State for "public purpose".[8] Therefore, on March 5, 2013, the government circulated a list of amendments to the Bill, including an amendment to clause 90 that added an exemption from payment of income tax on any award or agreement made under the New Act in addition to exemption from stamp duty and payment for receiving a copy of the award.[9] The exemption would not apply where the land is being taken for private purchase under Section 46 of the New Act.[10] This amendment culminated into the provision in its present form.

      CERTAIN JUDICIAL PRONOUNCEMENTS ON SECTION 96

      One of the issues that came up for consideration before two High Courts namely the Kerala High Court and the erstwhile High Court of Hyderabad for the State of Andra Pradesh and Telangana. (hereinafter referred to as "the Hyderabad High Court" for the purpose of this article), was whether income tax is to be deducted at source under Section 194-LA of the Income Tax Act for acquisitions covered by Section 96. Both the High Courts of Kerala and Hyderabad have given divergent opinions on the issue.

      The Kerala High Court in the matter of Kochi Metro Rail v. Union of India
      [11] had to consider whether the Petitioner (Kochi Metro Rail) was liable to deduct tax at source (TDS) from payments of compensation amounts to the persons from whom land was acquired in connection with the Metro Project in Kochi in light of the specific exemption under Section 96. The argument of the Petitioner in the instant case was that Section 96 would prevail over the then Section 194-LA of the Income Tax Act which was subsequently amended in 2017.[12] Section 194-LA (prior to and post the amendment by the Finance Act, 2017) mandates a deduction of ten percent as income tax from the compensation or enhanced compensation received on account of compulsory acquisition of immovable property (other than agricultural land) "under any law for the time being in force".[13] The Kerala High Court rejected the argument of the Petitioner and held that ten percent deduction would apply to acquisitions under the New Land Acquisition Act and Section 96 would not come to the aid of the Petitioner.[14] However, the Hyderabad High Court in C. Nanda Kumar v. Union of India[15] considered the above mentioned judgment of the Kerala High Court and distinguished the same[16] by holding that Section 96 would prevail over Section 194-LA of the Income Tax Act and that no Income Tax/TDS is to be paid or deducted from the compensation amount.[17]

      Pursuant to the above mentioned decisions, the Union Government amended Section 194-LA of the Income Tax Act by inserting a proviso to the said section with effect from 1st April 2017 which stated that no deduction shall be made under Section 194-LA of the Income Tax Act with respect to any award or agreement exempted from the levy of income tax under Section 96.
      [18] Though the Statement of Objects and Reasons as well as the Notes of Clauses[19] of the Finance Bill 2017 does not indicate the reason behind the amendment, it seems quite likely that the Union Government took note of the judgments of the Kerala and Hyderabad High Courts and suitably amended the section to avoid any confusion.

      APPLICATION OF THE NEW LAND ACQUISITION ACT TO ACQUISITIONS UNDER CHAPTER VII OF THE MRTP ACT

      Before analysing whether Section 96 applies to acquisitions under the MRTP Act, it is imperative to first examine whether the MRTP Act and its subsequent amendments apply to the New Act.

      The MRTP Act was enacted by the State of Maharashtra in order to make provisions for planning, development and the use of land in regions established for that purpose under the said Act and to control unregulated and haphazard development of land in regional or peripheral areas outside the municipal limits in Maharashtra. 
      [20] The Act makes provisions for compulsory acquisition of land required for public purposes in respect of planned development or regional plans by the concerned authority.[21] Chapter VII (Sections 125 to 129) of the MRTP Act deals with land acquisition needed for various purposes including public purposes.[22] Prior to its amendment, the provisions of the Old Land Acquisition Act had been "incorporated" into the MRTP Act. The Constitutional Bench of the Honourable Supreme Court in Girnar Traders (3) v. State of Maharashtra[23] (hereinafter referred to as "Girnar (3)") had on a detailed analysis of the MRTP Act specifically held that the MRTP Act is a self-contained code and the provisions of the Land Acquisition Act 1894 (hereinafter referred to as "the Old Act") could be read into Chapter VII of the MRTP Act "to the limited extent of acquisition of land, payment of compensation and recourse to legal remedies provided under the said act". [24]

      With effect from 29th August 2015, the State of Maharashtra amended the MRTP Act
      [25]; as a result of which the provisions of the Old Act that had been "incorporated" into the MRTP Act were replaced by the relevant provisions of the New Act. Therefore, on and from 29th August 2015, the New Act applies to a "limited extent" to acquisitions under the MRTP Act. The question as to whether the 2015 Amendment overrides the "dicta" in Girnar (3) has been considered by the Full Bench of the Bombay High Court in Mehtab Laiq Ahmed Shaikh v. State of Maharashtra[26](hereinafter referred to as "the Full Bench"). Referring to the Statement of Objects of the 2015 Amendment, the Full Bench was of the opinion that the provisions of the Old Act have been replaced by the New Act and the amendment, being clarificatory in nature, neither attempted to "dilute the decision of Girnar (3)" nor did the legislature intend to "override" the law laid down in Girnar (3).[27] The challenge to the decision of the Full Bench is pending before the Supreme Court.[28]

      In the meanwhile, in 2018, the State of Maharashtra vide an amendment to the New Act specifically excluding the MRTP Act from the purview of the New Act.
      [29] The effect of this amendment had recently been considered by the Division Bench of the Bombay High Court in Chandrakant Mahadev Patil v. State of Maharashtra.[30] The Division Bench after relying on the judgment of the Full Bench and Girnar (3) held that the provisions of the New Act have been "incorporated" into the MRTP Act and therefore "a modification, repeal or re-enactment" of the New Act "will have no impact on the applicability" of the New Act "to acquisition under the MRTP Act to the extent permitted by Sections 125 and 126 of the MRTP Act."[31]

      APPLICABILITY OF SECTION 96 TO ACQUISITIONS INITIATED BY THE PLANNING AUTHORITY UNDER CHAPTER VII OF THE MRTP ACT

      A close examination of Section 96 would show that the said section specifically states that the exemption from Income Tax and Stamp Duty would apply to (a) awards or (b) agreements made under "this act" namely the New Act. Therefore, can this exemption also extend to land acquisition proceedings initiated under MRTP Act by the Planning Authority, Development Authority or Appropriate Authority?

      Section 126 (1)
      [32] of the MRTP Act lays down three modes by which the Planning Authority, Development Authority or the Appropriate Authority (hereinafter referred to as "the Authority" interchangeably for any of the Authorities) can acquire land.[33] They are as follows:

      • By agreement between the Authority and the land owner by paying an amount agreed to, [Section 126 (1) (a)] or

      • By granting FSI or TDR to the "land-owner" or "lessee"
        [34] in lieu of the an amount agreed to, [Section 126 (1) (b) ] or

      • By the Authority making an application to the State Government for acquiring land "under" the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. [Section 126 (1)(c)].

      (a) Acquisition by Agreement [Section 126 (1) (a)]

      The expression "agreement" under Section 126(1)(a) would mean an agreement between the Authority and the owner of the land. Such an agreement cannot be interpreted to mean "an agreement" for the purposes of Section 96 of the New Act. This is because in case of an acquisition initiated under MRTP Act, the procedure specified in Sections 4 to 15 of the New Act is completely excluded
      [35]. Further, the land is acquired by the Authority and not the Government and the said land once acquired would "vest absolutely free from all encumbrances" in the Authority. Whereas an acquisition under the New Act is carried out by the "appropriate Government" (namely the Central or State Government or the Collector)[36] by firstly carrying out a "Social Impact Assessment study" as per the procedure set out in Chapter II (Sections 4 to 10) of the New Act, followed by publication of a preliminary notification by the appropriate Government under Section 11 and then by publishing a declaration under Section 19 of the New Act, after which the appropriate Government may acquire the land in the manner specified in the New Act. Therefore, Section 96 cannot be applied to agreements under Section 126(1)(a) of the MRTP Act.

      (b) Granting FSI or TDR [Section 126 (1) (b) ]

      It is clear from a bare reading of Section 126 (1) (b) of the MRTP Act that granting FSI or TDR by the Authority can only be done under the MRTP Act and not under the New Act. FSI and TDR are concepts that have been incorporated into the MRTP Act by the State Legislature and such concepts do not feature in the Old or New Act. Therefore, when FSI or TDR is granted, the power of the Authority to grant FSI or TDR and the extent to which it is to be granted is sourced from the MRTP Act and the concerned Development Control Regulations. Moreover, FSI or TDR is given "in lieu of" an amount and therefore, granting FSI or TDR cannot be interpreted to mean an "award" under the New Act.

      (c) Acquisition by the Authority by making an application to the State Government [Section 126 (1) (c) ]

      Under this sub-section, the Authority has to make an application to the State Government to acquire land "under" the New Act. Once the application under Section 126(1)(c) is made to the State Government by the Authority, Section 126(2) and (3) will come into play.
      [37] As per Section 126 (2), a declaration for acquisition of land is made to that effect in the Official Gazette in the manner provided under Section 19 of the New Act. Under Section 126 (3), on publication of this declaration under Section 19, the Collector shall proceed "to take order for the acquisition of the land under the said Act" (meaning the New Act). Section 126 (3) also goes on to clearly state that "the provisions of that Act (meaning the New Act) shall apply to the acquisition of the said land," with certain modifications in the market value of the land that is to be calculated from the specific dates mentioned in Section 126(3) (i), (ii) and (iii).[38]

      From a reading of Section 126 (2) and (3), it is clear that the provisions of the New Act apply to acquisitions under Section 126(1)(c) subject to determination of the market value of the land as per Section 126(3).

      In this author's opinion, Section 96 of the New Act will apply to an acquisition under Section 126(1)(c) for the following reasons:

        • Though the acquisition is initiated under the MRTP Act, the Collector proceedings "to take order for the acquisition" under the New Act and passes an award under the New Act and not under the MRTP Act. Therefore, the benefit of exemption from Income Tax and Stamp Duty will certainly be applicable to the award passed for acquisitions under Section 126(1)(c).
        • The Honourable Supreme Court Girnar (3) has specifically held that so far as acquisitions under Chapter VII of the MRTP Act, the Old Act will apply "to the limited extent of acquisition of land, payment of compensation and recourse to legal remedies provided under the said Act".
          [39] As stated earlier, the ratio laid down in Girnar (3) continues to apply to the MRTP Act even after the amendments to the said Act as well as the State Amendment to the New Act.[40] Hence, to the "limited extent" of "Payment of Compensation," the New Act will apply to acquisitions under Section 126(1)(c). Ideally "Payment of Compensation" would mean payment of "Net Compensation" or compensation actually received in hand after statutory deductions. However, after the New Act, being a beneficial legislation, has come into force, the benefit/exemption of Income Tax provided for under Section 96 would squarely apply to awards.
        • It may be argued that since the market value is determined under Section 126 (1)(c) of the MRTP Act and not under the Section 26 of the New Act, the compensation is paid actually as per or under the MRTP Act and not as per the New Act. However, it is submitted that the determination of market value under the MRTP Act would only mean fixing the "amount of compensation" to be paid. This determination would have nothing to do with the actual "payment of compensation" as per the award. Therefore, once the "amount of compensation" is determined in the award, at the time of payment of compensation, the exemption under Section 96 would apply.

      CONCLUDING COMMENTS

      While the policy of the erstwhile Union Government was to bring in a "rights-based" law empowering the people against the State,
      [41] it appears that a change in Government at the Union level and in several states like Maharashtra has resulted in a change in policy. The Maharashtra amendments to the MRTP Act and the New Law are a clear indication of the same. As far as the interpretation of Section 96 and its applicability to acquisitions under the MRTP Act, it would be interesting to see how the courts deal with such cases if they arise.[42] Whether the Courts give effect to Government policy or remain unphased by it would be anyone's guess.

      The Author is an independent practitioner in the Bombay High Court. He can be contacted on dormaandalal@gmail.com

      [1] Section 96. Exemption from income-tax, stamp duty and fees.–No income tax or stamp duty shall be levied on any award or agreement made under this Act, except under section 46 and no person claiming under any such award or agreement shall be liable to pay any fee for a copy of the same.

      [2] Section 24. Land acquisition process under Act No. 1 of 1894 shall be deemed to have lapsed in certain cases.–(1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894,— (a) where no award under section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply; or (b) where an award under said section 11 has been made, then such proceedings shall continue under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed.

      (2) Notwithstanding anything contained in sub-section (1), in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (1 of 1894), where an award under the said section 11 has been made five years or more prior to the commencement of this Act but the physical possession of the land has not been taken or the compensation has not been paid the said proceedings shall be deemed to have lapsed and the appropriate Government, if it so chooses, shall initiate the proceedings of such land acquisition afresh in accordance with the provisions of this Act:

      Provided that where an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act.

      [3] The interpretation of Section 24 and the correctness of law laid down in Pune Municipal Corporation v Harakchand Misirimal Solanki (2014) 3 SCC 183 will now be decided by a Constitutional Bench. As per media reports, the Constitutional Bench will soon be constituted to decide the issue. https://www.livelaw.in/top-stories/conflicting-judgments-on-s24-of-land-acquisition-act-cji-agrees-to-consider-to-set-up-constitution-bench-soon-142512 (last visited on 13th February 2019 at 2:55 p.m.)

      [4] Clause 90. Exemption from stamp duty and fees. No award or agreement made under this Act shall be chargeable with stamp duty, except under section 42, and no person claiming under any such award or agreement shall be liable to pay any fee for a copy of the same.

      The entire bill can be found on the website of PRS Legislative Research, the link for which is as under: https://www.prsindia.org/uploads/media/Land Acquisition/bill167_20080311167_The_Land_Acquisition_Act__1894.pdf (last visited on 14th February 2019 at 11:00 AM)

      [5] Acquisition of land through private negotiations

      [6] Section 51. Exemption from stamp duty and fees. - No award or agreement made under this Act shall be chargeable with stamp duty, and no person claiming under any such award or agreement shall be liable to pay any fee for a copy of the same.

      [7] Jairam Ramesh and Muhammad Ali Khan "Legislating for Justice, The Making of the 2013 Land Acquisition Law" Oxford University Press 2015 page 113

      [8] Ibid

      [9] A comparison of the original Bill and the official amendments can be found on PRS Legislative Research. https://www.prsindia.org/sites/default/files/bill_files/Comparison_of_Bill_and_amendments.pdf (last visited on 14th February 2019 at 4:05 PM)

      [10] This section deals with purchase of land through private negotiations for an area equal to or more than such limits as may be notified by the appropriate Government

      [11] WP C. No. 21478 of 2015 decided on 9th September 2015. As referred to from Indian Kanoon https://indiankanoon.org/doc/195568821/ (last visited on 15th February 2019 at 1:45 PM)

      [12] Ibid para 1

      [13] [194LA. Payment of compensation on acquisition of certain immovable property.—Any person responsible for paying to a resident any sum, being in the nature of compensation or the enhanced compensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land), shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax thereon:

      Provided that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year does not exceed 1 [two lakh and fifty thousand rupees]:

      Provided further that no deduction shall be made under this section where such payment is made in respect of any award or agreement which has been exempted from levy of income-tax under section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013). [Inserted by the Finance Act, 2017 namely Act 7 of 2017, s. 67 (w.e.f. 1-4-2017)]

      Explanation.—For the purposes of this section,—

      i) ―agricultural land means agricultural land in India including land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2;

      ii) ―immovable property means any land (other than agricultural land) or any building or part of a building.

      [14] Supra Note 11 para 3

      [15] MANU/AP/0247/2017

      [16] Ibid (Page 4 para 15)

      [17] Ibid (page 9, 10 para 37 and 38)

      [18] Supra note 13

      [19] See notes on clauses of Clause 66. Section 67 was originally Clause 66 in the Finance Bill 2017. The Notes on clauses are available on the website of PRS Legislative Research. https://www.prsindia.org/sites/default/files/bill_files/Finance Bill 2017.pdf at Page 77. (Last visited on 15th February 2019 at 3:32 PM)

      [20] Girnar Traders (3) v. State of Maharashtra and others (2011) 3 SCC 1 (page 31 para 22). Also see the Statement of Objects and Reasons of the MRTP Act.

      [21] Dormaan J. Dalal, "Applicability of Section 24(2) of the New Land Acquisition Act and its Application to Land Acquisition Proceedings under the M.R.T.P. Act" AIR 2017 Vol. 104 Part 1244 page 135. See also the preamble and long title of the MRTP Act.

      [22] Ibid

      [23] Supra Note 20

      [24] Ibid para 191

      [25] Maharashtra Act No. 42 of 2015

      [26] (2017) 6 Mh. L.J. 408, 438 para 69.

      [27] Ibid

      [28] SLP (C) No. 460 of 2018. Filed on 6th January 2018. There is no stay to the impugned judgment of the Full Bench.

      [29] Maharashtra Act No. XXXVII of 2018 . The amending Act after having received the assent of the President of India has come into force on 26th April 2018. Section 10 of the amendment Act has added Section 105-A which reads thus:

      Provisions of this Act not to apply to certain Maharashtra Acts or to apply with certain modifications

      "105-A. (1) Subject to sub-section (2), the provisions of this Act shall not apply to acquisition of land under the enactments specified in the Fifth Schedule.

      (2) The State Government may, by notification, within one year from the date of commencement of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Maharashtra Amendment) Act, 2018, direct that any of the provisions of this Act, relating to the determination of compensation in accordance with the First Schedule and rehabilitation and resettlement specified in the Second and Third Schedules, being beneficial to the affected families, shall apply to the cases of land acquisition under the enactments specified in the Fifth Schedule or shall apply with such exceptions or modifications that do not reduce the compensation or dilute the provisions of this Act relating to the compensation, rehabilitation and resettlement as may be specified in the notification, as the case may be : Provided that, no such notification shall be issued except on a resolution passed by both Houses of the State Legislature.".

      "THE FIFTH SCHEDULE" namely "LIST OF MAHARASHTRA ENACTMENTS REGULATING LAND ACQUISITION IN THE STATE OF MAHARASHTRA" has excluded The Maharashtra Highways Act (LV of 1955), The Maharashtra Industrial Development Act, 1961 (Mah. III of 1962), the Maharashtra Regional and Town Planning Act, 1966 (Mah. XXXVII of 1966) and The Maharashtra Housing and Area Development Act, 1976 (Mah. XXVIII of 1977)

      [30] Writ Petition No. 4790 of 2018 decided on 6th August 2018. To the best of the author's knowledge, the said judgment has not been challenged in the Supreme Court.

      [31] Ibid page 16 para 17 (The page number is as per PDF version of the judgment downloaded from the website of the Bombay High Court.)

      [32] 126. (1) Where 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 113Abacquire the land,—

      (a) by agreement by paying an amount agreed to, or

      (b) in lieu of any such amount, by granting the land-owner or the lessee, subject, however, to the lessee paying the lessor or depositing with the Planning Authority, Development Authority or Appropriate Authority, as the case may be, for payment to the lessor, an amount equivalent to the value of the lessor's interest to be determined by any of the said Authorities concerned on the basis of the principles laid down in the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, Floor Space Index (FSI) or Transferable Development Rights (TDR) against the area of land surrendered free of cost and free from all encumbrances, and also further additional Floor Space Index or Transferable Development Rights against the development or construction of the amenity on the surrendered land at his cost, as the Final Development Control Regulations prepared in this behalf provide, or

      (c) by making an application to the State Government for acquiring such land under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and the land (together with the amenity, if any so developed or constructed) so acquired by agreement or by grant of Floor Space Index or additional Floor Space Index or Transferable Development Rights under this section or under the Land Acquisition Act, 1894, as the case may be, shall vest absolutely free from all encumbrances in the Planning Authority, Development Authority, or as the case may be, any Appropriate Authority.

      [33] The Planning Authority under Section 2(19) of the MRTP Act would include a Local Authority like a Municipal Corporation, Municipal Council or a Nagar Panchayat and would also mean a Special Planning Authority constituted under Section 40 of the MRTP Act. A Development Authority under Section 2(8) of the MRTP Act means a New Town Development Authority constituted or declared under Section 113 of the MRTP Act. The Appropriate Authority under Section 2(3) would mean any public authority on whose behalf land is designated for a public purpose in any plan or scheme and which it is authorized to acquire.

      [34] In case of leased lands, the lessee has to pay to the lessor or deposit with the Authority an amount equivalent to the value of the lessor's interest to be determined by the Authority on the basis of the principles laid down in the New Act.

      [35] See the proviso to Section 125 of the MRTP Act

      [36] See the detailed definition in Section 3(e) of the New Act.

      [37] (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 19 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, 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, subject to the provisions of sub-section (4), no such declaration shall be made after the expiry of one year from the date of publication of the draft Regional Plan, Development Plan or any other Plan, or Scheme, as the case may be.

      (3) On publication of a declaration under the said section 19,the Collector shall proceed to take order for the acquisition of the land under the said Act ; and the provisions of that Act shall apply to the acquisition of the said land with the modification that the market value of the land shall be,—

      (i) where the land is to be acquired for the purposes of a new town, the market value prevailing on the date of publication of the notification constituting or declaring the Development Authority for such town ;

      (ii) where the land is acquired for the purposes of a Special Planning Authority, the market value prevailing on the date of publication of the notification of the area as undeveloped area ; and

      (iii) in any other case, the market value on the date of publication of the interim development plan, the draft development plan or the plan for the area or areas for comprehensive development, whichever is earlier, or as the case may be, the date of publication of the draft Town Planning Scheme :

      Provided that, nothing in this sub-section shall affect the date for the purpose of determining the market value of land in respect of which proceedings for acquisition commenced before the commencement of the Maharashtra Regional and Town Planning (Second Amendment) Act, 1972 :

      Provided further that, for the purpose of clause (ii) of this sub-section, the market value in respect of land included in any undeveloped area notified under sub-section (1) of section 40 prior to the commencement of the Maharashtra Regional and Town Planning (Second Amendment) Act, 1972, shall be the market value prevailing on the date of such commencement.

      [38] Ibid

      [39] Supra Note 24

      [40] Supra Note 30

      [41] Supra note 7 page 3 and 4

      [42] The Author has not come across any decision of the Bombay High Court or the Supreme Court on this issue.

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