Bombay High Court
M/S. Devi Construction Company vs The State Of Maharashtra Through … on 6 April, 2026
Author: Manish Pitale
Bench: Manish Pitale
2026:BHC-AS:16176-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 1397 OF 2017
M/s. Devi Construction LLP ... Petitioner
Versus
The State of Maharashtra & Ors. ... Respondents
WITH
CIVIL APPLICATION NO. 200 OF 2020
IN
WRIT PETITION NO. 1397 OF 2017
******
Mr. Rompal Singh Kohli a/w Ms. Sejal i/by Ms. C. K. Legal for the
Petitioner.
Mrs. Pooja Patil, AGP for Respondent Nos.1 and 5 to 7-State.
Mr. G. H. Keluskar for Respondent Nos.2 to 4.
******
CORAM : MANISH PITALE AND
SHREERAM V. SHIRSAT, JJ.
RESERVED ON : 17th FEBRUARY 2026
PRONOUNCED ON : 6th APRIL 2026
Judgment (Per Manish Pitale, J.) :
. The petitioner has approached this Court seeking a direction
against the respondents for payment of rental compensation as per
the policy of the State, manifested in a number of Government
Resolutions issued from time to time. It is the case of the
petitioner that while the respondents took possession of the
subject land belonging to the petitioner, for establishing an octroi
naka or octroi post, the process of acquisition of land and::: Uploaded on – 06/04/2026 ::: Downloaded on – 06/04/2026 20:51:08 :::
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wp-1397.17.docpayment of compensation was undertaken much later. The amount
of rental compensation is claimed from the point in time the
respondents took possession of the said piece of land, till the
determination and payment of compensation, as per the land
acquisition award.
2. The petitioner owned lands in survey Nos.10 (part), 11
(part) and 160 (part) of Village Wakad, Taluka Mulshi, Dist. Pune.
The said land was included within the limits of the respondent
No.3-Pimpri Chinchwad Municipal Corporation (PCMC). In the
year 1997 and in the year 2000, PCMC published draft
development plan for the city of Pimpri-Chinchwad. In the draft
development plan, the lands of the petitioner were reserved for
octroi post. It is the case of the petitioner that in the year 2003,
PCMC encroached upon the land and started using it for the
purpose of the octroi post, without initiating any process for
acquisition and in the absence of any negotiation with the
petitioner. Apart from the octroi post, PCMC needed land for the
purpose of 12 meter wide road under the development plan.
3. In this backdrop, on 24th February 2006, an agreement/taba
pavati (possession receipt) was executed between the petitioner
and PCMC for handing over 4849.80 sq. mtrs. for the octroi post
and 1379 sq. mtrs. for the 12 meters road. The said agreement
recorded that the petitioner had agreed for the same on the
condition of payment of damages, as advance possession was being
taken.
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4. Thereafter, the petitioner addressed a number of
communications to the respondents, particularly respondent No.3-
PCMC, for taking necessary steps for acquisition of land and for
payment of damages, as advance possession was taken from him.
Certain communications were received from the officers of PCMC
about intended steps to be taken. Eventually, on 16th July 2009, a
declaration under Section 6 of the Land Acquisition Act, 1984
(hereinafter referred to as ‘LA Act‘ for short) was issued and
published in the official gazette. But, further progress was
extremely slow and therefore, the petitioner was constrained to
send communications and representations to the respondents to
take necessary steps in the matter urgently, particularly because the
petitioner stood deprived of enjoyment of its land.
5. In this context, the petitioner was constrained to file Writ
Petition No.2970 of 2013 before this Court. The said writ petition
was disposed of by an order dated 12th June 2013. In the said
order, the Division Bench of this Court took note of the fact that
advance possession of the land of the petitioner was taken and that
apart from seeking acquisition and compensation for the said land,
the petitioner was also pursuing its prayer for rental
compensation. By the said order, the writ petition was disposed of
by directing the respondents to complete acquisition of the said
land under the provisions of the LA Act, within 15 months from
the date of the order. As regards the claim of rental compensation,
the petitioner was permitted to move an application before the
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appropriate Authority, as per the policy of the State and the
concerned Authority was directed to decide the representation
expeditiously and in accordance with law.
6. In this backdrop, the petitioner sent representation to
respondent-PCMC for the payment of rental compensation. This
was followed by a number of letters, but there was no response
from respondent-PCMC. On 22nd January 2015, the land
acquisition award was passed. The prayer for rental compensation
was not entertained, on the ground that possession was handed
over by the petitioner to the PCMC by way of private negotiation,
prior to initiation of acquisition proceeding. It was observed that
the issue of rental compensation would therefore be dealt with by
the respondent-PCMC.
7. In this backdrop, the petitioner was constrained to
repeatedly approach respondent-PCMC by making representations
in the year 2015-16. Since there was no response from the said
respondent, in September 2016, the petitioner was constrained to
file Writ Petition No. 12305 of 2016 before this Court, seeking a
direction to the said respondent-PCMC to comply with the order
dated 12th June 2013 passed by this Court in Writ Petition No.
2970 of 2013. During the pendency of the said writ petition, on
25th October 2016, the PCMC sent a letter to the petitioner,
forwarding a demand draft of Rs.3,22,308/- towards the demand
of rental compensation. Since the petitioner was totally unaware
about the basis on which the amount was calculated, it sent letters
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to the respondent No.3-PCMC, seeking details thereof. Eventually,
on 4th November 2016, the respondent No.3-PCMC sent a letter,
furnishing a copy of its order dated 10th October 2016. In the said
order, it was recorded that the aforesaid amount was calculated
for the period between August 2003 and 24 th February 2006 on
the basis of per square foot per annum rent of the area.
8. The petitioner immediately sent a letter dated 11th
November 2016 to respondent No.3-PCMC, stating that the said
order dated 10th October 2016 was not in terms of the policy of
the State, for payment of rental compensation. Thereafter, the
petitioner filed the instant writ petition in this Court. The
petitioner prayed for quashing and setting aside of the said
impugned order dated 10th October 2016 issued by the respondent
No.3-PCMC; a further direction to the respondent No.6 i.e. the
Special Land Acquisition Officer (SLAO) to decide the claim of the
petitioner for rental compensation in terms of the Government
Resolutions dated 1st December 1972 and 2nd April 1979 and 24th
March 1988; a direction for working out rental compensation and
for payment of the same along with interest at the rate of 6% per
annum, in terms of Government Resolution dated 24 th March
1988 and in the meanwhile, the petitioner prayed for interim
directions.
9. The respondent No.6-SLAO filed affidavit in reply in the
writ petition, stating that the land acquisition award dated 22nd
January 2015 had correctly made remarks on the aspect of rental
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compensation claimed by the petitioner and that on the said
aspect, the appropriate Authority was the respondent No.3-
PCMC. The respondent No.1 i.e. the State of Maharashtra
through the Principal Secretary of Urban Development
Department, also took a similar stand in its reply affidavit.
Respondent Nos.2 to 4 filed an additional affidavit, simply placing
on record subsequent Government Resolutions dated 17th April
2003, 17th October 2003 and 26th December 2003, claiming that
the entire scheme of payment of rental compensation as per earlier
Government Resolutions dated 1st December 1972 and 2nd April
1979, was cancelled and therefore, the petitioner was not entitled
to the relief claimed in the writ petition.
10. The petitioner filed rejoinder affidavit and a further
affidavit, refuting the claims made by the respondents and insisted
upon the relief of rental compensation, as per the policy of the
State. It was submitted that the last Government Resolution dated
26th December 2003 inured to the benefit of the petitioner. In this
backdrop, the petition was taken up for hearing.
11. Mr. Rompal Singh Kohli, learned counsel appearing for the
petitioner, submitted that the policy of the State was manifested in
the aforementioned Government Resolutions dated 1st December
1972, 2nd April 1979, 17th April 2003, 17th October 2003 and 26th
December 2003. It was submitted that a proper reading of the said
Government Resolutions demonstrated that the petitioner was
entitled for payment of rental compensation at the rate of 8% per
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annum on the quantum of the compensation determined in the
land acquisition award from the point in time that possession of
the land was taken, till the full amount in the final award was
paid. It was submitted that all the respondents, including
respondent No.3-PCMC, are bound by the said policy and since
the respondents have granted such rental compensation to other
land owners and in some cases, upon directions issued by this
Court, the present writ petition deserves to be allowed. It was
submitted that the impugned order dated 10th October 2016 is
wholly unsustainable, as it does not take into account the
aforementioned policy of the State and in any case, it illegally
restricts the payment of rental compensation from August 2003 to
24th February 2006.
12. It was submitted that although, formal agreement/taba pavati
(possession receipt) about advance possession of the subject land
was executed on 24th February 2006, the possession of the land
was actually taken by the respondent No.3-PCMC much earlier
i.e. in August 2003. As a matter of fact, the petitioner specifically
pleaded in the writ petition that the respondent No.3-PCMC
encroached upon the lands of the petitioner in the year 2003, in
the light of the reservation of the said lands for establishment of
octroi post. On this basis, it was submitted that the period for
which the petitioner is entitled for rental compensation begins
from August 2003. It was submitted that although the respondents
were now claiming that advance possession was taken on 24 th
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February 2006, the impugned order which calculates payment of
compensation from August 2003 belies the aforesaid stand taken
by the respondents.
13. The learned counsel for the petitioner referred to the
contents of the aforementioned Government Resolutions. He
submitted that initially as per Government Resolution dated 1 st
December 1972, it was provided that whenever land was taken
over by private negotiation and possession was taken in advance,
rental compensation was payable at the rate of 6½% per annum
from the date on which possession of land was taken over, till the
date on which full amount was paid as per the final award. By
subsequent Government Resolution dated 2nd April 1979, the rate
was increased to 8% per annum for calculating the amount of
rental compensation. Thereafter, circular dated 24th March 1988
was issued, directing that whenever possession was taken by
negotiation with the land owner, expeditious steps were required
to be taken for acquisition, so that the State Exchequer was not
unnecessarily overburdened. It was submitted that thereafter,
Government Resolution dated 17th April 2003 was issued, which
cancelled the earlier Government Resolutions dated 1st December
1972 and 2nd April 1979, in the light of the financial implications
on the State. It was submitted that the said Government
Resolution itself clarified that it would be implemented from the
date of issuance of the same and that those cases wherein
possession of lands was taken by private negotiation prior to
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issuance of the said Government Resolution, further action would
be taken in the light of the cancelled Government Resolutions
dated 1st December 1972 and 2nd April 1979. Thereafter, reference
was made to Government Resolutions dated 17 th October 2003
and 26th December 2003, to submit that only the basis of
calculation of rental compensation was changed, but the
entitlement of land owners like the petitioner was not adversely
affected.
14. The learned counsel for the petitioner placed heavy reliance
on judgment of Division Bench of this Court in the case of
Bhagwat s/o. Nathu Patil vs. State of Maharashtra & Ors., 2009
(3) Mh.L.J. 413, wherein the aforementioned Government
Resolutions were taken into consideration and it was eventually
concluded that the land owner was entitled to rental compensation
at the rate of 8% per annum specified in the aforementioned
Government Resolutions and that the said amount would be paid
along with interest at the rate of 6%. It was submitted that in the
said judgment, this Court took into consideration various
judgments of the Supreme Court that recognized the concept of
rental compensation, since the land owners were deprived of
enjoyment of their lands, even before the acquisition proceeding
was undertaken. Attention of this Court was also invited to
judgments in the cases of Jagdish s/o. Kashiprasad Tiwari vs. The
Special Land Acquisition Officer & Ors. (judgment and order
dated 16th November 2017 passed in Writ Petition No. 1092 of
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2013) and Uttam Ganpat Ubale & Ors. vs. State of Maharashtra
& Ors., 2012 SCC OnLine Bom 692, wherein this Court granted
relief of rental compensation to similarly situated land owners.
15. As regards reliance placed on behalf of respondent No.3-
PCMC on the judgment of this Court in the case of Ashok s/o.
Masu Bansode & Anr. vs. State of Maharashtra & Ors., 2023 (4)
Mh.L.J. 119, it was submitted that the said case was concerned
with a different set of facts, giving rise to completely distinct
issues. This Court in the said judgment took into consideration the
fact that under the Right to Fair Compensation and Transparency
in Land Acquisition, Rehabilitation and Resettlement Act, 2013
(hereinafter referred to as ‘Act of 2013’ for short), upon
acquisition of land through private negotiation an additional
compensation of 25% was payable.
16. The learned counsel for the petitioner further submitted that
there is no substance in the contention raised on behalf of the
respondent No.3-PCMC that the Government Resolutions pertain
only to irrigation projects, simply for the reason that the policy of
the State cannot be restricted to acquisitions for the purpose of
irrigation projects and that in any case, the Supreme Court had
also recognized the concept of rental compensation and relief had
been granted to land owners. On this basis, it was submitted that
the said judgment is clearly distinguishable and the present writ
petition ought to be allowed.
17. On the other hand, Mrs. Pooja Patil, learned AGP, appearing
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on behalf of respondent No.1 and 5 to 7 i.e. the State Authorities,
submitted that the policy of the State was evident from the
aforesaid Government Resolutions. In terms of Government
Resolution dated 17th April 2003, the earlier Government
Resolutions dated 1st December 1972 and 2nd April 1979 had been
cancelled. It was further submitted that this Court may take into
consideration the subsequent policy of the State, as per
Government Resolutions dated 17th April 2003, 17th October 2003
and 26th December 2003. It was emphasized that the change in
policy was brought about due to heavy financial burden on the
public exchequer in respect of payment of rental compensation.
18. Mr. Keluskar, learned counsel appearing for respondent
Nos. 2 to 4, including respondent No.3-PCMC, submitted that in
the first place, the aforementioned Government Resolutions dated
1st December 1972 and 2nd April 1979 and even the subsequent
Government Resolutions, all apply only to land acquisition
concerning irrigation projects. Since the present petition concerns
utilization of land for establishment of octroi post, the
Government Resolutions are not applicable at all. It was submitted
that on this basis itself, the writ petition deserves to be dismissed.
It was further submitted that the Government Resolution dated
17th April 2003 cancelled the earlier Government Resolutions
dated 1st December 1972 and 2nd April 1979, thereby
demonstrating a departure from the earlier policy of the State. No
rental compensation is payable in the light of the cancellation of
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the earlier Government Resolutions. It was submitted that the
petitioner was duly compensated for acquisition of its land as per
the award dated 22nd January 2015. The petitioner had initiated
reference proceeding for enhancement of the quantum of
compensation and therefore, it cannot be permitted to claim
further relief of rental compensation.
19. It was submitted that there is no statutory basis for grant of
rental compensation and since such relief is purely based on
executive instructions in the form of Government Resolutions and
since the said Government Resolutions providing for rental
compensation have been cancelled, there is no question of
payment of rental compensation to the petitioner. It was submitted
that the petitioner cannot rely upon judgments passed by this
Court in the cases of Bhagwat s/o. Nathu Patil vs. State of
Maharashtra & Ors. (supra), Jagdish s/o. Kashiprasad Tiwari vs.
The Special Land Acquisition Officer & Ors. (supra) and Uttam
Ganpat Ubale & Ors. vs. State of Maharashtra & Ors. (supra).
The learned counsel for the said respondents placed heavy reliance
on judgment of this Court in the case of Ashok s/o. Masu Bansode
& Anr. vs. State of Maharashtra & Ors. (supra), wherein it was
categorically held that rental compensation is not payable in the
context of the Act of 2013. Since the LA Act has been repealed
and it is no longer available, the petitioner cannot be granted
rental compensation.
20. Having heard the learned counsel for the rival parties, this
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Court is of the opinion that the claim of the petitioner for
payment of rental compensation will have to be decided upon the
policy of the State manifested in the said Government Resolutions
dated 1st December 1972, 2nd April 1979, 17th April 2003, 17th
October 2003 and 26th December 2003. It is to be noted that the
concept of rental compensation is not found in the provisions of
the LA Act and it is payable as per the policy of the State. This
pertains to cases where possession of the subject land was taken
even before initiation of the land acquisition proceedings. The said
concept of rental compensation in the context of the respondent-
State of Maharashtra, came up for consideration before the
Supreme Court in the case of State of Maharashtra & Ors. v/s.
Maimuma Banu & Ors., (2003) 7 SCC 448. In the said judgment,
it was observed as follows :
“7. It is to be noted that the resolutions adopted by the
Government were intended to benefit the landowners whose
lands were acquired. To avoid unnecessary delays in payment
urgency for follow-up action was indicated in the resolutions.
To that extent, learned counsel for the landowners are on
terra firma. But legally the landowners are not entitled to any
interest. There is no provision either in the resolutions or in
the statutes concerned which entitles the landowners to
payment of interest. Whatever is statutorily payable has been
clearly indicated in the Act itself. Section 23(1-A) of the Act
was introduced by the Amendment Act of 1984. There is no
dispute, and in our opinion rightly, that rental compensation
is not relatable to the Act. The entitlement of the claimants is
on the basis of the government resolutions i.e. on the basis of
executive orders.
8. It is crystal clear from a bare reading of the provisions
of the Act that it does not provide for payment of any rental
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wp-1397.17.docstand to the extent that the liability for rental compensation
does not have its source under the Act. Therefore, the logic of
Sections 17(3-A), 23(1-A) and 28 of the Act and Section 34
has no application in law to rental compensation. That being
the position, the High Court was not justified in relying on
Sections 17(3-A), 23(1-A) or Section 28 of the Act to grant
interest.
9. But the problem does not end there. Admittedly, the
possession of land was taken long years back. Thereafter, the
landowner does not practically possess any right over the land
in question except to the compensation as statutorily provided
for. But it would be illogical and improper to turn a Nelson’s
eye to the factual position as highlighted by the respondents.
It is not in dispute that in most of the cases the rental
compensation has not been paid. If that factual position
continues, it clearly is a case where the amount to which a
person is entitled is withheld without any legitimate excuse.
The learned counsel for the appellants strenuously urged that
in most of the cases the proceedings have not yet attained
finality and are pending either before the Reference Court or
in appeal. That does not provide a legitimate excuse to the
appellants to withhold payment of the rental compensation.
The amount calculated on the basis of award by the Land
Acquisition Officer cannot be below than the amount to be
ultimately fixed. If in appeal or the reference proceeding,
there is any variation, the same can be duly taken note of as
provided in law. There is no difficulty and we find none as to
why the compensation on the basis of value determined by the
Land Acquisition Officer cannot be paid. If there is upward
revision of the amount, the consequences will follow and if
necessary, redetermination of the rental compensation can be
made and after adjustment of the amount paid, if any, balance
can be paid. If, however, the Land Acquisition Officer’s award
is maintained then nothing further may be required to be
done. In either event, payment of the rental compensation
expeditiously would be an appropriate step. Looking at the
problem from another perspective, one thing is clear that
authorities have clearly ignored the sense of urgency
highlighted in the various resolutions.”
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21. Thereafter, in the said judgment, the Supreme Court
proceeded to grant interest at the rate of 6% from 1st April 2000
on the amount of rental compensation payable to the land owner.
Thus, despite recognizing that there was no statutory obligation, it
was held that the State was liable to pay rental compensation for
the period that the land owner was deprived of enjoyment of its
land, even before initiation of land acquisition proceeding.
22. In a subsequent judgment in the case of R. L. Jain (D) by
LRS. vs. DDA & Ors., (2004) 4 SCC 79, the Supreme Court took
into consideration situations where the land owners stood
dispossessed prior to issuance of preliminary notification under
Section 4(1) of the LA Act. It was found that only possession was
taken over in such situations, while the title continued to vest in
the land owner. In this context, in the said judgment, the Supreme
Court observed as follows :
“18. In a case where the landowner is dispossessed prior to
the issuance of preliminary notification under Section 4(1) of
the Act the Government merely takes possession of the land
but the title thereof continues to vest with the landowner. It is
fully open for the landowner to recover the possession of his
land by taking appropriate legal proceedings. He is therefore
only entitled to get rent or damages for use and occupation
for the period the Government retains possession of the
property. Where possession is taken prior to the issuance of
the preliminary notification, in our opinion, it will be just and
equitable that the Collector may also determine the rent or
damages for use of the property to which the landowner is
entitled while determining the compensation amount payable
to the landowner for the acquisition of the property. The
provisions of Section 48 of the Act lend support to such a
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wp-1397.17.docappropriate interest at prevailing bank rate may be awarded.”
23. Thus, the Supreme Court recognized the fact that as per
State policy, the land owners in such cases would be entitled to
rental compensation and that in any case, the land owner would
be entitled to rent or damages for use of the property, as it would
be just and equitable to grant such relief.
24. A Division Bench of this Court in the aforesaid case Bhagwat
s/o. Nathu Patil vs. State of Maharashtra & Ors. (supra)
considered the aforementioned Government Resolutions in detail
and thereupon, found that the rental compensation would be
payable to such land owners whose lands were taken over even
prior to initiation of land acquisition proceeding. It was found that
where possession was taken over prior to 17th April 2003, the
Government Resolutions dated 1st December 1972 and 2nd April
1979 would apply and that in any case, even if possession was
taken subsequent to 17th April 2003, rental compensation would
be payable in terms of the Government Resolutions dated 17 th
October 2003 and 26th December 2003. It was held that as per
Government Resolution dated 26th December 2003, the basis of
calculating the rental compensation would change and it would be
different from the basis as specified in Government Resolutions
dated 1st December 1972 and 2nd April 1979. The relevant
observations in the said judgment are as follows :
“8. In answer to the Petition, which claims rental
compensation, a reply has been filed on behalf of respondent
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wp-1397.17.docOfficer, Jayakwadi Project No. 2, Aurangabad. It is admitted
that possession of the petitioner’s land was taken by
respondent No. 3 by private negotiations on 17-4-2002 and
award was passed on 9-5-2007. It is, however, pointed out
that by Government Resolution dated 17-4-2003, the State of
Maharashtra has cancelled the Government Resolution dated
1-12-1972. It is then set out that consequent upon the
Government Resolution dated 26-12-2003 there is no
question of granting rental compensation for acquired land
which was acquired by private negotiations. The affiant then,
sets out that, however, it is made clear that in pending cases
lands which are acquired by private negotiations prior to 26-
12-2003 the Government has decided to pay the rental
compensation on the amount of open land awarded by the
Land Acquisition Officer and not on the amount of trees,
structure etc. i.e. total amount of award value. It is reiterated
that rental compensation payable, has to be calculated based
on Government Resolution dated 26-12-2003.
9. There is, therefore, no dispute that rental compensation
in respect of lands where possession was taken prior to 17-4-
2003, the rental compensation is still payable and also in
respect of those lands where possession was taken after that
date, which are covered by Government Resolution dated 17-
10-2003. The question that we are called upcin to answer is,
whether the rental compensation should be paid based on the
Government Resolution dated 1-12-1972 read with
Government Resolution dated 2-4-1979 or based on the
Government Resolution dated 26-12-2003. Reason for
payment of rental compensation is that the State takes
possession of the land even before proceedings are initiated
under the provisions of the Land Acquisition Act. The loss by
way of income to the landowner on account of such dis-
possession is not provided for under the provisions of the
Land Acquisition Act.
10. Is it therefore, open to the State Government, by a
subsequent Resolution dated 26-12-2003, to provide for
determination of rental compensation on a different yardstick
than that provided by Resolution dated 1-12-1972 and 2-4-
1979? Insofar as Resolutions dated 1-12-1972 and 2-4-1979,
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wp-1397.17.doclanguage of the said Resolution that, rental compensation is
based on “the award value.” The award value in terms of
section 23 of the Act would be what is payable under section
23 to the exclusion of additional compensation payable under
section 23 (1-A). This, as pointed out earlier, was in issue in
the Judgment before this Court in State of Maharashtra v.
Maimuna Banu (supra). The Supreme Court in Appeal
accepted the principle, that the landowner is entitled for
rental compensation in terms of the Government Resolution
and that in the event in a reference or otherwise the market
value is enhanced, the rental compensation will have to be re-
determined. Under the Government Resolution of 1-12-1972,
the rental compensation was 6 and ½% of the award value.
By Resolution of 2-4-1979 it has been made 8%. Therefore,
from 2-4-1979, the rental compensation payable would be at
the rate of 8% of the market value.
13. Even if it is to be read that there is a departure in
Government Resolution of 26-10-2003. If possession is taken
after 26-12-2003, the rental compensation would be payable
in terms of Government Resolution dated 26-12-2003. If a
party has acted on a promise by the State to his detriment, the
State would be bound to be held by its promise. The doctrine
of promissory estoppel and the principle thereto has evolved
over a period of time in this Country. The Supreme Court in
M.P. Mathur v. D.T.C., (2006) 13 SCC 706 : AIR 2007 SC
414 has observed that promissory estoppel is based on equity
or obligations. It is not based on vested right. In equity the
Court has to strike a balance between individual rights on one
hand and the larger public interest on the other hand. The
principle of promissory estoppel was invoked by the Supreme
Court in the Case of Union of India v. Anglo Afghan Agencies,
AIR 1968 SC 718, wherein it was laid down that even though
the case would not fall within the terms of section 115 of the
Indian Evidence Act, which indicates the rule of estoppel, it
would be still open to a party who has acted on the
representation made by the Government to claim that the
Government should be bound to carry out the promise made
by it even though the promise was not recorded in the form
of formal contract as required by Article 299 of the
Constitution. The principle has been evolved by equity to
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25. On the question of payment of interest on such delayed
payment of rental compensation, after referring to the judgment of
the Supreme Court in the case of State of Maharashtra & Ors. v/s.
Maimuma Banu & Ors. (supra), the Division Bench of this Court
in the aforesaid case of Bhagwat s/o. Nathu Patil vs. State of
Maharashtra & Ors. (supra), held as follows :
“15. We then come to the issue of cases where a party
though entitled to be paid rental compensation on yearly basis
after possession is taken, has not been paid rental
compensation. In State of Maharashtra v. Maimuma Banu
(supra) the Supreme Court while interfering with the interest
awarded by this Court, held as under:
“It would therefore be appropriate if appellants pay
interest @ 6% from 1-4-2000 till amounts payable as
rental compensation are paid to the concerned
landowners. This direction shall not apply to those
cases where the payments have already been made prior
to 1-4-2000.”
It is thus, clear that interest on delayed rental
compensation is also payable, but the same is fixed at the rate
of 6% and from 1-4-2000. The Supreme Court took the
approach as many landowners approached the Court after
considerable lapse of time. In our opinion, therefore, the
interest on unpaid rental compensation, would be payable at
the rate of 6% and that would be from 1-4- 2000. It is true
that we have not fixed any cut off period for payment of
interest in the Judgment of Dinkar Sandipan Gholve (supra),
the same is fixed now, considering the Judgment of the
Supreme Court in State of Maharashtra v. Maimuma Banu.”
26. This Court finds that in the subsequent judgments in the
cases of Jagdish s/o. Kashiprasad Tiwari vs. The Special Land
Acquisition Officer & Ors. (supra) and Uttam Ganpat Ubale &
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Ors. vs. State of Maharashtra & Ors. (supra), this Court followed
the said position and granted relief of rental compensation to the
land owners.
27. The said position of law will have to be applied to the
present case, on the basis of documents available on record.
28. The respondents have placed much emphasis on the fact that
the petitioner itself relied upon the agreement/taba pavati
(possession receipt) dated 24th February 2006 executed between
the respondent No.3-PCMC and the petitioner, to contend that
possession by way of private negotiation was taken on the said
date i.e. 24th February 2006. On this basis, it was submitted that
since Government Resolution dated 17th April 2003 cancelled the
earlier Government Resolutions dated 1st December 1972 and 2nd
April 1979, there was no question of applicability of the concept
of rental compensation as manifested in the said two Government
Resolutions. It was submitted that in any case, possession having
been taken beyond 17th April 2003, the petitioner was not entitled
to any relief in this petition. On the other hand, the petitioner
claims that possession of the subject land was taken in the year
2003. In the writ petition, the petitioner has not specified the date
on which the possession was taken in the year 2003, although, it is
claimed that possession was taken in the year 2003 and the land
acquisition award was passed at a belated stage on 22nd January
2015.
29. We find that the document at Exhibit ‘A’, which is the
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impugned order dated 10th October 2016, whereby the respondent
No.3-PCMC has determined the amount of rent payable to the
petitioner, itself records such amount payable from August 2003
to 24th February 2006. Thus, the said document issued by the
respondent No.3-PCMC itself shows that possession of the
aforesaid land of the petitioner was taken in August 2003 for
establishing the octroi post.
30. Even if that be so, we find that taking over possession of the
aforesaid land of the petitioner was after 17th April 2003.
Therefore, the position as regards applicability of Government
Resolutions for payment of rental compensation would be the one
obtaining as per Government Resolution dated 17th April 2003. A
perusal of the said Government Resolution shows that the earlier
Government Resolutions dated 1st December 1972 and 2nd April
1979 were cancelled. This was in the backdrop of the financial
liability on the State Exchequer, due to payment of such sums
towards rental compensation and the need for completing land
acquisition proceeding for public purpose, at the earliest. The said
Government Resolution indeed specified that it came into effect
from 17th April 2003 and that those cases where possession was
taken prior to the said date, rental compensation would continue
to be payable under Government Resolutions dated 1st December
1972 and 2nd April 1979.
31. But, it is crucial to note that subsequent Government
Resolution issued within a few months on 17th October 2003,
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specified that in cases where possession was required to be taken
urgently before initiation of land acquisition proceeding as per
four categories identified therein, the Government Resolution
dated 1st December 1972 would continue to apply and for other
projects, the Government Resolution dated 17th April 2003 would
be applicable.
32. Thereafter, Government Resolution dated 26th December
2003 was issued, which clarified that in the light of the financial
burden on the State Exchequer, rental compensation as per the
aforesaid Government Resolutions of the years 1972 and 1979
would be payable on the value of open land. The said Government
Resolutions dated 1st December 1972, 2nd April 1979, 17th April
2003, 17th October 2003 and 26th December 2003, will all have to
be read together for determining the policy of the State as regards
the entitlement of land owners like the petitioner, towards
payment of rental compensation.
33. A submission was made on behalf of respondent No.3-
PCMC that the policy of rental compensation was applicable only
for irrigation projects and since the present case concerned
utilization of the land for octroi post, the said Government
Resolutions could not be made applicable. We are of the opinion
that the said contention cannot be accepted, for the reason that
there cannot be any discrimination between land owners on the
basis of the purpose for which possession of their lands is taken
over, even prior to initiation of land acquisition proceedings. In
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the case of Union of India & Anr. vs. Tarsem Singh & Ors., (2019)
9 SCC 304, the Supreme Court relied upon its own earlier
judgments in the cases of P. Vajravelu Mudaliar vs. Special Deputy
Collector for Land Acquisition, AIR 1965 SC 1017 and Nagpur
Improvement Trust vs. Vithal Rao, (1973) 1 SCC 500, to hold that
for the land owner the only relevant aspect is deprivation of
enjoyment of its own land and that the public purpose for which
the land is ultimately utilized is hardly of any relevance. It was
found that if held otherwise it would amount to discriminatory
treatment to similarly situated land owners, thereby violating
Article 14 of the Constitution of India. Thus, we find that the
respondents cannot escape liability of suitably compensating the
petitioner, only on the basis of the purpose for which the land has
been ultimately utilized. Hence, we hold that the payment of
rental compensation to the petitioner is governed by the aforesaid
executive instructions in the form of Government Resolutions.
34. This Court in the case of Bhagwat s/o. Nathu Patil vs. State
of Maharashtra & Ors. (supra), after analyzing the effect of
subsequent Government Resolutions dated 17th April 2003, 17th
October 2003 and 26th December 2003, in the above quoted
portion of the said judgment, held that if possession is taken after
26th December 2003, the rental compensation would be payable in
terms of the said Government Resolution i.e. on the basis of price/
value of open land, instead of the price fixed under the award for
“land” as defined under the LA Act. Hence, we find that the
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respondents cannot escape their liability of payment of rental
compensation to the petitioner on the basis that possession of the
subject land was taken for establishing octroi post after 17th April
2003. On a proper reading of Government Resolutions dated 17th
October 2003 and 26th December 2003, we hold that only the
basis of calculation of the rental compensation changed from the
one specified in Government Resolution dated 1st December 1972
read with Government Resolution dated 2nd April 1979 to the one
specified in Government Resolution dated 26th December 2003.
We also find that restricting the effect of Government Resolution
dated 17th October 2003 to only certain irrigation projects is also
not sustainable, again in the light of the said position of law
reiterated by the Supreme Court in the case of Union of India &
Anr. vs. Tarsem Singh & Ors. (supra) that the use to which the
land is put cannot be the basis for determining the relief to which
the land owner would be entitled, as the fact that the land owner
has been deprived of enjoyment of its own land in all such cases,
can never be disputed.
35. In this context, the above quoted observations made by the
Supreme Court in the case of R. L. Jain (D) by LRS. vs. DDA &
Ors. (supra) assume great significance, for the reason that the
Supreme Court, without any reference to executive instructions
like the Government Resolutions issued by the respondent-State of
Maharashtra, observed that a land owner who is deprived of
possession of its land, even before initiation of land acquisition
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proceeding is entitled to get rent or damages for use and
occupation for the period that the State authority has retained
possession of the property even prior to acquisition. Therefore, we
are inclined to read the aforementioned Government Resolutions
to hold that the petitioner is entitled to payment of rental
compensation from the point in time that possession of the subject
land was taken, till the time compensation for acquisition of the
land was actually paid to it under the land acquisition award. As
per Government Resolution dated 26th December 2003, the
calculation of rental compensation would be on the price/value of
open land, instead of value determined under the land acquisition
award for “land” as defined under the LA Act.
36. We also find that as per the law laid down by the Supreme
Court in the case of State of Maharashtra & Ors. v/s. Maimuma
Banu & Ors. (supra) followed by this Court in various judgments,
including the judgment of Division Bench of this Court in the case
of Bhagwat s/o. Nathu Patil vs. State of Maharashtra & Ors.
(supra), the petitioner is also entitled to payment of interest at the
rate of 6% on the amount of rental compensation that shall be
determined in the light of the observations made hereinabove.
37. As regards reliance placed on behalf of respondent No.3-
PCMC on the judgment of this Court in the case of Ashok s/o.
Masu Bansode & Anr. vs. State of Maharashtra & Ors. (supra),
suffice it to say that the said judgment is distinguishable on facts.
In the said case, the acquisition was under the provisions of the
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Act of 2013 by way of private negotiations and in terms of the
provisions of the said Act, the land owner was already paid 25%
additional compensation. It was in this context that certain
observations were made with regard to entitlement of rental
compensation under the LA Act and Government Resolutions. In
the present case, the respondent No.3-PCMC simply walked into
the property of the petitioner in August 2003 for establishing
octroi post. Subsequently, it executed the aforesaid document
dated 24th February 2006 titled as agreement/taba pavati
(possession receipt).
38. The petitioner had to knock the doors of this Court in writ
jurisdiction, as the land acquisition proceeding initiated by
issuance of declaration under Section 6 of the LA Act in the year
2009, was not followed up by the respondents-Authorities. It was
only after this Court issued specific directions in its order dated
12th June 2013 passed in Writ Petition No. 2970 of 2013 filed by
the petitioner that further steps were taken in the matter and the
land acquisition award was eventually rendered on 22nd January
2015. In the said order itself, this Court had granted liberty to the
petitioner to make an application to the appropriate Authority for
grant of rental compensation, as per the policy of the State. In that
regard, the respondent No.3-PCMC determined the amount
payable towards rental compensation only for the period between
August 2003 to 24th February 2006, as per the impugned order
dated 10th October 2016. The said order was not in terms of the
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policy of the State as manifested in the aforementioned
Government Resolutions, culminating in the Government
Resolution dated 26th December 2003.
39. Hence, we find substance in the contentions raised on behalf
of the petitioner and further, that the respondents are not justified
in contending that rental compensation is not payable to the
petitioner, despite the admitted position that respondent No.3-
PCMC took possession of the subject land in August 2003 and the
compensation payable under the land acquisition award was
eventually determined as per the award passed after about 12
years on 22nd January 2015.
40. In view of the above, the writ petition is allowed in the
following terms :
(a) The impugned order dated 10th October 2016 is quashed
and set aside.
(b) The respondent No.3-PCMC is directed to calculate the
amount of rental compensation payable to the petitioner
from August 2003 till the date on which amount of
compensation under the said award dated 22nd January 2015
was paid to the petitioner. The amount shall be calculated as
per Government Resolution dated 26th December 2003 i.e.
on the basis of the price/value of open land and rental
compensation shall be at the rate of 8% p.a. of the said
price/value, instead of the price/value determined under the
said award, as per the definition of “land” under the LA Act.
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(c) The respondent No.3-PCMC shall pay the aforesaid amount
of rental compensation along with interest at the rate of 6%
p.a. in terms of the judgment of the Supreme Court in the
cases of State of Maharashtra & Ors. v/s. Maimuma Banu &
Ors. (supra) and Bhagwat s/o. Nathu Patil vs. State of
Maharashtra & Ors. (supra).
(d) The said exercise of determining the amount payable in
terms of the directions issued hereinabove, shall be
completed, and the amounts shall be paid to the petitioner,
within a period of four months from today.
(e) The amount of Rs.3,22,308/- already paid to the petitioner
as per the impugned order dated 10th October 2016 shall be
adjusted, while making payment of the amount as per the
directions given hereinabove.
41. Pending applications also stand disposed of.
(SHREERAM V. SHIRSAT, J.) (MANISH PITALE, J.)
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