Bombay High Court orders equal compensation for landlord and tenant in Siddhivinayak land acquisition

The Bombay High Court on Tuesday ordered an equal 50:50 split of ₹10.94 crore land acquisition compensation between the landowners and their long-term tenant, Sadanand Garage, for a Prabhadevi property acquired for Mumbai’s Shree Siddhivinayak Ganapati Temple Trust [Special Land Acquisition Officer v. Kapu A Shetty & Anr]

Justice Amit Borkar determined the market value of the 642.98 square-metre plot at ₹1,70,200 per square metre as of September 19, 2002. The State had acquired the land to construct a waiting hall and Bhakti Niwas for visiting devotees.

The court rejected the Special Land Acquisition Officer’s reliance on ready reckoner rates. It reiterated that such rates lack statutory foundation for determining open-market value under Section 23 of the Land Acquisition Act, 1894. 

The judge instead evaluated genuine registered transactions of comparable properties in the immediate vicinity. The final compensation was fixed at ₹10.94 crores for the land, alongside ₹3.85 lakh awarded exclusively to the owners for existing structures and trees.

A dispute arose regarding the division of this sum. 

The landowners demanded the entire award, whereas Sadanand Garage claimed a 75 percent share citing continuous occupation since 1971. 

The Court found that while the garage proved a valid tenancy and business occupation, it failed to demonstrate exclusive title or perpetual lease over the entire open plot.

Justice Borkar observed that valuation must reflect the actual encumbrance.

“The owner cannot claim the value of the property as though the land was vacant and was available in his own possession when a tenant was occupying it,” the judge held. 

He concluded that equal apportionment of the amount was fair given the facts of the case.

“The owners had substantial ownership rights, though those rights were subject to the established tenancy and occupation rights of the Garage,” the judge held.

The Court also rejected a compensation claim by Century Developers and apportionment pleas by prospective flat purchasers. 

The parties were directed towards independent contractual remedies. 

The competent authority was directed to disburse the amounts within eight weeks.

Advocate General Milind Sathe with government pleaders Anjali Helekar, Jyoti Chavan and Prashant Kamble appeared for the State.

Senior advocate Prasad Dhakephalkar with advocates Vivek Walavalkar and Sameer Bhalekar appeared for developers

Senior advocate Pravin Samadani with advocates Shashikant Surana and Madhur Surana appeared for Siddhivinayak Trust. 

[Read Judgment]