HC dismisses civic body’s plea over compensation for land acquired in 1951

Upholding the arbitral award, the court said, “...on the aspect of propriety and justifiability as well, no fault can be found with the interim award”

Mumbai: The Bombay High Court last week upheld an interim arbitral award granted to the heirs of the owner of a plot of land in Thane which was acquired in 1951 for building a protective wall along the Tansa pipeline. The court dismissed the Brihanmumbai Municipal Corporation’s (BMC) petition challenging the arbitral award of ₹14.15 crore granted by the sole arbitrator appointed in the case, saying, “The court cannot be oblivious to the hard facts that the collector passed the award almost 75 years ago, and the land owners are yet to be paid compensation.”

HC dismisses civic body’s plea over compensation for land acquired in 1951

The BMC had challenged the interim arbitral award passed in favor of the respondents Kekobad Dossabhoy Doongriwalla and Khorshed Navzar Wadia, the legal heirs of the original landowner late Dinshaw Cawasji Doongriwalla. The sole arbitrator appointed in the matter had granted the award in favour of the respondents on February 15, 2023, against which the BMC had filed the petition before the High Court.

On November 16, 1951, the collector had passed an award for the BMC to acquire 14 annas of Doongriwalla’s 11 gunthas and 2 annas (1113.2 square metre) land in Majiwada, Thane. The corporation wanted to acquire the land to build a protective wall along the Tansa pipeline and other buildings. Proceedings ensued between Doongriwalla and the BMC and in 2014, they were referred to arbitration for determination of the market value and compensation of the acquired land.

In the fresh round of arbitration, the arbitrator, on February 15, 2023, granted an interim award of ₹14.15 crore to the respondents, calculated based on the statement of defence of the BMC, at ₹ 28,500 per square metre. The corporation then challenged this interim award in the High Court. It argued that the sole arbitrator had passed the interim award suo motu, when the arbitral proceeding was fixed for final arguments. The arbitrator had misconstrued the BMC’s statement of defence, the civic body said.

The counsel for Doongriwalla and Wadia, however, said that the BMC was well aware of its statement of defence and was given the opportunity to explain its position.

Justice NJ Jamadar said that the compensation was calculated construing it to be the least that must be determined under the LARR Act. The court said that the BMC not only denied that the ready reckoner rate for the land, as claimed by the land owners, was ₹ 35,500 per square metre, but positively asserted that it was ₹28,500 per square metre and even furnished a calculation sheet based on the ready reckoner rate applicable to the property.

The corporation cannot be allowed to “wriggle out of the situation”, Justice Jamadar said. The LARR Act, 2013, which replaced the “fragmented framework” of the Land Acquisition Act, 1894, had introduced an element of certainty and scientificity in determination of the market value of a property, the court stated.

Upholding the arbitral award, the court said, “...on the aspect of propriety and justifiability as well, no fault can be found with the interim award”. While the corporation had sought a stay on the execution of the arbitrator’s award, the judge said that since almost 75 years had elapsed since the acquisition of land, the prayer for stay “does not merit acceptance”.