Hi Amit,
In answer to your questions:
1) Not that I’m aware of, although possibly they could hand it back to the Crown as the beneficial owner.
2) I refer you to Sec 570 LGA. The key word is “may”……….
3) Under Sec 570 it becomes the Councils land so the Council is free to deal with it as they desire.
Not sure if that will help you.
JT