M/S. DEVI CONSTRUCTION COMPANY v. THE STATE OF MAHARASHTRA THROUGH PRINCIPAL SECRETARY, URBAN DEVELOPMENT DEPT. AND ORS.
Right to Rental Compensation for Land Dispossession Prior to Acquisition Award - Non-Discrimination Based on Project Purpose and Applicability of State Government Resolutions.
Court: Bombay High Court
Citation: 2026:BHC-AS:16176-DB
Decision Date: 06-04-2026
List of Laws
The Constitution of India, Article 14 and Article 226; Land Acquisition Act, 1894; Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013; Maharashtra State Government Resolutions (dated 01.12.1972, 02.04.1979, 17.04.2003, 17.10.2003, and 26.12.2003); Doctrine of Promissory Estoppel; Administrative Law - Executive Instructions and Policy
- Facts: The petitioner, M/s. Devi Construction LLP, owned lands in Village Wakad, Pune, which were reserved for an octroi post and a road in the draft development plan of the Pimpri-Chinchwad Municipal Corporation (PCMC). In August 2003, PCMC took advance possession of the land through private negotiation before initiating formal acquisition proceedings. A formal possession receipt (taba pavati) was later executed in February 2006. The formal land acquisition award was passed much later, on 22nd January 2015. While PCMC paid a small sum of Rs. 3,22,308 as rental compensation for the period between August 2003 and February 2006, it refused to pay compensation for the subsequent period until the final award, claiming that the state policy for rental compensation had been cancelled or was limited to irrigation projects.
- Procedural Posture: The petitioner filed the present writ petition under Article 226 of the Constitution of India challenging the PCMC order dated 10th October 2016. The petitioner sought the quashing of the limited compensation order and a direction for full payment of rental compensation with interest as per State Government Resolutions (GRs).
- Issue: Whether a landowner is entitled to rental compensation for the period they are deprived of their land following advance possession by the State but before the final acquisition award is paid, and whether such entitlement is affected by the purpose of the acquisition or changes in executive policy.
- Holding: Yes, the petitioner is entitled to rental compensation. The court held that the State cannot discriminate between landowners based on the purpose of acquisition (e.g., irrigation vs. municipal octroi post) and must pay compensation for the entire period of dispossession.
- Reasoning: The Court reasoned that "rental compensation" is an equitable relief based on executive policy (Government Resolutions) to compensate for the deprivation of enjoyment of land prior to formal acquisition, a principle recognized by the Supreme Court in "Maimuma Banu" and "R.L. Jain". Although the GR dated 17th April 2003 cancelled earlier schemes, subsequent GRs in October and December 2003 clarified that compensation remains payable but changed the yardstick for calculation to the value of "open land". The Court rejected the respondent's argument that these policies applied only to irrigation projects, stating that under Article 14, the only relevant factor is the deprivation of the owner's property, regardless of its ultimate use. Consequently, the Court directed PCMC to calculate compensation from August 2003 until the date of payment of the final award at 8% p.a. on the value of open land, plus 6% p.a. interest on the delayed rental amount.
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