SC Slashes High Court Ruling, Reinstates 20 Crore Land Payout in Nashik Case

In the case of Pradyumna Mukund Kokil Vs. Nashik Municipal Corporation & Others, the Supreme Court addressed a dispute over land with an area of 1 hectare and 38 ares (13,800 sq. meters) located at Survey No.8/1, Village Deolali, District Nashik, that had been dragging on for quite a long time. The Nashik Road–Deolali Municipal Council, through a resolution dated 03.05.1972, reserved the entire land for public purposes under the Maharashtra Regional and Town Planning Act, 1966. On 22.06.1972, the Council took possession of 37 ares (3,700 sq. meters) without formal acquisition under the Land Acquisition Act, 1894. A subsequent notification dated 02.03.1978 under Section 126(2) of the MRTP Act, read with Section 6 of the 1894 Act, acquired only 1 hectare and 1 are (10,100 sq. meters), leaving 37 ares unacquired but under use by the Corporation. In 1995, the original owner sought development permission under Section 127 of the MRTP Act, claiming a lapse of the reservation, which was upheld by the High Court in 1998. The Corporation, however, took the position that it owned the property and therefore rejected the development proposals made thereafter. This led to several writ petitions and appeals, culminating in the Supreme Court ordering the State to take over the remaining 3,700 sq. meters. The appellant bought that area on July 29, 2011, for Rs.1,17,00,000/-.

After the contempt proceeding in 2017, the acquisition was made under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and the Special Land Acquisition Officer (SLAO) granted Rs.8,69,46,650/- on 29.04.2017. The appellant accepted the award under protest and filed a reference for enhancement. The Resettlement Authority, Nagpur, enhanced the compensation to Rs.20,20,11,533/- by applying Section 26 of the 2013 Act and adopting comparable sale instances reflecting a rate of Rs.26,814/- per sq. meter. It also granted rental compensation from 1972 to 2017, totaling Rs.238.87 crore. On appeal, the High Court set aside the enhanced award and restored the SLAO’s determination, prompting the present appeal before the Supreme Court.

Issue Raised: Whether the Reference Authority’s enhancement of compensation under Section 26 of the 2013 Act was justified, and whether the appellant was entitled to rental compensation or mesne profits for the period of alleged unauthorized occupation before acquisition.

Supreme Court’s Ruling: The Supreme Court ruled that the Reference Authority had applied the correct statutory method in compliance with Section 26(1)(b) along with Explanations 1 and 2 of the 2013 Act. The Authority did well to depend on true, timely sale deeds from the neighborhood, which indicated the actual market rate. The Court reinstated the increased award of Rs.20,20,11,533/- and ordered that the appellant be paid interest at the rate of 9% per annum from 09.01.2017 (the date of the notification) for one year, and thereafter at the rate of 15% per annum till payment, after deducting the compensation already disbursed.

In respect of the rental compensation, the Court determined that the Corporation did not solely occupy the land before the appellant’s purchase in 2011. The documentary evidence, which included mortgage records and SARFAESI proceedings, indicated that the original owner retained his or her possession and had been deriving benefits from the land. Thus, the claim for rental compensation from 1972 was rejected. Notwithstanding, the Court, under Section 28 (seventhly) invoking equity, awarded mesne-profit interest at 8% per annum on Rs.1,17,00,000/- from 29.07.2011 to 08.05.2017, acknowledging the appellant’s suffering during that period.The Supreme Court annulled the adverse comments about the appellant made by the High Court and the cost of Rs.10,00,000/- that had been imposed was also cancelled. Thus, the appeal was allowed in part.

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