HC orders BMC to pay ₹1,062 crore more for Oshiwara land acquisition

While the civic body had sought to reduce the compensation, the developer had argued that it was entitled to a higher amount

MUMBAI: The Bombay High Court on Thursday ordered the Brihanmumbai Municipal Corporation (BMC) to pay additional compensation of ₹1,062 crore to SN Desai Hospitalities and Developers LLP for acquiring 48,897 square metres of land in Oshiwara and Ambivali for public amenities, including gardens, a recreation ground and a road.

A division bench of justices Manish Pitale and Shreeram Shirsath passed the order after both parties challenged the compensation proceedings.

A division bench of justices Manish Pitale and Shreeram Shirsath passed the order after both parties challenged the compensation proceedings. While the civic body had sought to reduce the compensation, the developer had argued that it was entitled to a higher amount.

The dispute dates back to July 2011, when the developer asked the BMC to acquire its land in Oshiwara and Ambivali in Andheri West, as the plots had been reserved for a garden, recreation ground and a 27.45-metre road under Mumbai’s 1991 development regulations. The Maharashtra government subsequently issued a notification for their acquisition in June 2012.

On May 3, 2017, the land acquisition officer, a deputy collector, fixed the compensation amount at ₹511.48 crore. Dissatisfied with the amount, the developer approached the high court seeking higher compensation. The case was later transferred to the Land Acquisition, Rehabilitation and Resettlement (LARR) Authority, established under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

The BMC sought restoration of the original award of ₹511.48 crore, arguing that referring the case to the LARR Authority was legally impermissible. The civic body also raised several other technical grounds to reduce the claim.

The developer, meanwhile, claimed that it was entitled to more compensation than the amount awarded by the authority. It contended that the land’s size, location and potential for development should have been considered while determining its market value.

The high court rejected the BMC’s objections, but held that the LARR Authority had wrongly calculated the land’s value. The court said that the authority had applied the same ready reckoner rate of ₹90,600 per sq m for both parcels of lands. It held that this rate was applicable only to the smaller plot in Oshiwara, measuring 1,895.62 sq m, while the rate for the larger 47,002 sq m plot in Ambivali should be ₹72,100 per sq m.

After recalculating the land valuation, the court held that the developer was entitled to total compensation of ₹1,572 crore. Since the developer had already received around ₹511 crore, the court ordered the civic body to pay the balance of around ₹1,062 crore in 12 weeks.

The BMC then expressed its wish to challenge the ruling in the Supreme Court.