The Municipal Corporation of Greater Mumbai & Ors. v. Century Textiles and Industries Limited & Ors., Civil Appeal No. 6667 of 2023

The Supreme Court of India, in The Municipal Corporation of Greater Mumbai vs. Century Textiles and Industries Ltd. [Civil Appeal No. 6667 of 2023, decided January 7, 2025; 2025 INSC 36], delivered a landmark judgment clarifying the rights and obligations arising from a lease granted under the Bombay Improvement Trust Transfer Act, 1925, and related statutes, with significant implications for public interest and urban land use.

Facts and Background
Century Textiles and Industries Limited (Century Textiles) was allotted a plot of land in Lower Parel, Mumbai, under the Poorer Classes Accommodation Scheme (PCAS) in 1918, governed initially by the City of Bombay Improvement Act, 1898. The lease, granted in 1928 under the Bombay Improvement Trust Transfer Act, 1925, was for 28 years at a nominal rent of one rupee per annum, with the condition that the company construct housing for poorer class workers.

The lease expired in 1955, but Century Textiles continued possession without formal conveyance of the title. In 2006, Century Textiles sought execution of a conveyance deed to transfer ownership formally. The Municipal Corporation of Greater Mumbai (MCGM), successor to the Improvement Trust, resisted, contending that the land was meant for public welfare housing and not for private commercial use.

The Bombay High Court ruled in favor of Century Textiles in 2022, directing MCGM to execute the conveyance. The Municipal Corporation appealed to the Supreme Court.

Legal Issues
Whether MCGM was legally bound to convey the leasehold land to Century Textiles after lease expiry under Section 51(2) of the Bombay Improvement Trust Transfer Act, 1925.

Whether the writ petition filed after a delay of over 60 years was barred by laches and delay.

The public interest considerations in interpreting lease terms intended for poorer class housing.

Supreme Court’s Findings
The Supreme Court overturned the Bombay High Court’s decision, holding that MCGM was not obligated to convey the land to Century Textiles. The Court emphasized the social welfare purpose underlying the lease and statutory framework, which aimed to provide affordable housing to the underprivileged.

The Court observed that allowing Century Textiles to claim ownership would defeat the legislative intent and public interest by converting land meant for public benefit into private commercial property. It noted that the company’s prolonged possession without formal conveyance did not confer ownership rights, especially given the nominal rent and specific conditions.

The Court further held that the writ petition was barred by delay and laches, as the cause of action arose in 1955 but the petition was filed only in 2016, undermining the principle of timely justice.

The judgment underscored that statutory provisions and lease conditions must be interpreted in harmony with public interest and social welfare objectives, not merely on technical legal grounds.

Conclusion
The Supreme Court’s ruling:

Denies Century Textiles’ claim for conveyance of leasehold land after expiry of the lease under the Improvement Trust Act.

Affirms that public interest and social welfare considerations prevail in interpreting leases granted under special statutes.

Highlights the importance of timely assertion of legal rights to avoid dismissal on grounds of delay and laches.

Protects the Municipal Corporation’s authority to reclaim land intended for affordable housing and public benefit.

This decision safeguards urban land policies aimed at social equity and prevents misuse of statutory leases for private commercial gain.