The Bombay High Court has held that the determination of compensation for land acquired under Chapter VIII of the Mumbai Metropolitan Region Development Authority Act, 1974, must be in monetary terms as per the specific step-wise procedure prescribed in Section 35 of the Act. The acquiring authority cannot unilaterally impose compensation in the form of Transferrable Development Rights (TDR), which is not provided for in the statute and violates the prescribed legal procedure.
Such an action, being without the authority of law, constitutes a violation of the landowner’s constitutional right to property under Article 300-A of the Constitution of India, which gives rise to a continuing cause of action, thereby preventing the State from taking the defence of delay and laches, emphasised the Court.
The Court, therefore, quashed the impugned award and the impugned communication, and directed the respondents to determine and pay just, fair, and reasonable monetary compensation to the petitioners for the acquisition of their land. This determination must be made by following the step-wise procedure contemplated under Section 35(2) to 35(5) of the Act.
The Division Bench comprising Justice Manish Pitale and Justice Shreeram V. Shirsat observed that Section 35 of the 1974 Act provides a self-contained code for determining the compensation “amount” for acquired land. The language of the provision consistently refers to monetary compensation, starting with an attempt to reach an agreement on the amount, and failing that, determining the amount based on a statutory formula (100 times the net average monthly income).
The Bench noted that there is nothing in the language of Section 35 that suggests compensation can be in any form other than monetary. Offering TDR was found to be beyond the four corners of the basis for determination of compensation specified under Section 35. The Bench further observed that even if compensation by TDR could be contemplated by agreement under Section 35(2), it could never be unilaterally foisted upon a landowner.
Referencing the Full Bench judgment in Shree Vinayak Builders and Developers, Nagpur vs. State of Maharashtra [2022 (4) Mh.L.J. 739], the Bench noted that even under the MRTP Act, which explicitly provides for TDR, consensus between the parties is required. Thus, the petitioners’ case was deemed to be on a better footing since the MMRDA Act does not even contain an option for TDR in lieu of monetary compensation.
Regarding the respondents’ objections, the Bench found that the alternative remedy of an appeal to the tribunal under Section 35(6) was not applicable, as the tribunal’s jurisdiction is limited to disputes over the quantum of monetary compensation, not the form of it. On the issue of delay and laches, the Bench held that the State cannot evade its responsibility in cases of violation of the constitutional right to property under Article 300-A.
Lastly, the Bench concluded that the failure to pay fair compensation for acquired land was considered a continuing cause of action, and depriving a person of property without due process of law was held to be a violation of both a constitutional and a human right.
Briefly, the petitioners are the legal heirs of the joint owners of land in Mumbai, which was required by the Mumbai Metropolitan Region Development Authority (MMRDA) for the Santacruz-Chembur Link Road widening project. Following a proposal by MMRDA on 12.05.2010, notifications were issued under Section 32 of the Mumbai Metropolitan Region Development Authority Act, 1974, and possession of the land was taken by MMRDA.
The competent authority, instead of determining monetary compensation as prescribed under the Act, passed an award unilaterally granting Transferrable Development Rights (TDR) as compensation. The petitioners contended that this action was contrary to the step-wise procedure in Section 35 of the Act and deprived them of their right to appeal the determination of compensation. After repeatedly raising their grievance to no avail, the petitioners received a final communication from MMRDA, rejecting their demand for monetary compensation.
Appearances:
Senior Advocate Neeta Karnik and Advocate Sagar Kursija, for the Petitioner
Senior Advocate G. S. Hegde, along with Advocates Pinky M. Bhansali, Jyoti Chavan, and Gaurangi Patil, for the Respondent
