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2026 Supreme(Bom) 136

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
MANISH PITALE, SHREERAM V. SHIRSAT, JJ.
M/s. Devi Construction LLP - Petitioner 
Versus 
The State of Maharashtra & Ors. – Respondents
Writ Petition No. 1397 of 2017 With Civil Application No. 200 of 2020
Decided On : 06-04-2026

Advocates Appeared:
For the Petitioner: Mr. Rompal Singh Kohli a/w Ms. Sejal i/by Ms. C. K. Legal.
For the Respondents: Mrs. Pooja Patil, AGP, Mr. G. H. Keluskar.

Possession prior to acquisition entitles landowner to 8% rental compensation on open land value per state policy Government Resolutions, plus 6% interest, irrespective of purpose or post-cancellation modifications.

Headnote:(A) Land Acquisition Act, 1894 - Sections 4(1), 6 - Government Resolutions on rental compensation - Possession taken prior to acquisition proceedings by private negotiation - Earlier resolutions providing 8% p.a. rental compensation on award value cancelled from 2003, but subsequent resolutions modify basis to open land value without denying entitlement - Landowner deprived of enjoyment entitled to rental compensation at 8% p.a. on open land value from possession date till award payment date, plus 6% interest on delayed payment - Policy applies irrespective of public purpose to avoid Article 14 discrimination - Concept recognized by Supreme Court as equitable rent/damages for pre-notification dispossession. (Paras 20-40)

(B) Promissory Estoppel - State bound by policy representations acted upon to detriment of landowner - Subsequent policy changes cannot retrospectively deny vested entitlement where possession taken post-cancellation but per modified scheme. (Paras 24, 34)

Facts of the case:
Land reserved for octroi post and road under development plan. Possession taken in August 2003, formal possession receipt executed February 2006 conditioned on damages. Acquisition declaration 2009, prior writ directed completion within 15 months; award passed January 2015 excluding rental claim. Authority paid nominal amount for short period August 2003-February 2006 per impugned order; challenged for non-conformity with policy.

Findings of Court:
Impugned order quashed; direct calculation of rental compensation from August 2003 till award compensation payment at 8% p.a. on open land value per relevant Government Resolution, payable with 6% interest within four months, adjusting prior payment.

Issues: Applicability of rental compensation policy post-cancellation of earlier resolutions; restriction to irrigation projects; possession date determination; calculation basis and interest entitlement.

Ratio Decidendi: Government Resolutions read together sustain entitlement with modified open land value basis post-2003; authority's document fixes possession at August 2003; uniform application prevents discrimination; equity mandates payment as landowner dispossessed pre-acquisition without statutory interest.

Result: Writ petition allowed.

Table of Content
1. advance possession in 2003 before delayed acquisition award triggers rental claim (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10)
2. 8% rental compensation under grs 1972/1979 for pre-acquisition possession (Para 11 , 12 , 13 , 14 , 15 , 16)
3. grs cancelled post-2003; inapplicable to non-irrigation octroi post (Para 17 , 18 , 19)
4. sc recognizes rental compensation sans statutory basis for dispossession (Para 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27)
5. post-april 2003 possession governed by subsequent grs maintaining entitlement (Para 28 , 29 , 30 , 31 , 32)
6. rental policy universal; 8% on open land value plus 6% interest (Para 33 , 34 , 35 , 36)
7. distinguishable from 2013 act private negotiation acquisitions (Para 37 , 38 , 39)
8. direct pcmc to pay rental compensation per 2003 gr with interest (Para 40 , 41)

JUDGMENT :

Manish Pitale, J.

1. The petitioner has approached this Court seeking a direction against the respondents for payment of rental compensation as per the policy of the State, manifested in a number of Government Resolutions issued from time to time. It is the case of the petitioner that while the respondents took possession of the subject land belonging to the petitioner, for establishing an octroi naka or octroi post, the process of acquisition of land and payment of compensation was undertaken much later. The amount of rental compensation is claimed from the point in time the respondents took possession of the said piece of land, till the determination and payment of compensation, as per the land acquisition award.

2. The petitioner owned lands in survey Nos.10 (part), 11 (part) and 160 (part) of Village Wakad, Taluka Mulshi, Dist. Pune. The said land was included within the limits of the respondent No.3-Pimpri Chinchwad Municipal Corporation (PCMC). In the year 1997 and in the year 2000, PCMC published draft development plan for the city of Pimpri-Chinchwad. In the draft development plan, the lands of the petitioner were reserved for octroi post. It is the case of the petitioner that in the year 2003, PCMC encroached upon the land and started using it for the purpose of the octroi post, without initiating any process for acquisition and in the absence of any negotiation with the petitioner. Apart from the octroi post, PCMC needed land for the purpose of 12 meter wide road under the development plan.

3. In this backdrop, on 24th February 2006, an agreement/taba pavati (possession receipt) was executed between the petitioner and PCMC for handing over 4849.80 sq. mtrs. for the octroi post and 1379 sq. mtrs. for the 12 meters road. The said agreement recorded that the petitioner had agreed for the same on the condition of payment of damages, as advance possession was being taken.

4. Thereafter, the petitioner addressed a number of communications to the respondents, particularly respondent No.3- PCMC, for taking necessary steps for acquisition of land and for payment of damages, as advance possession was taken from him. Certain communications were received from the officers of PCMC about intended steps to be taken. Eventually, on 16th July 2009, a declaration under Section 6 of the Land Acquisition Act, 1984 (hereinafter referred to as ‘LA Act’ for short) was issued and published in the official gazette. But, further progress was extremely slow and therefore, the petitioner was constrained to send communications and representations to the respondents to take necessary steps in the matter urgently, particularly because the petitioner stood deprived of enjoyment of its land.

5. In this context, the petitioner was constrained to file Writ Petition No.2970 of 2013 before this Court. The said writ petition was disposed of by an order dated 12th June 2013. In the said order, the Division Bench of this Court took note of the fact that advance possession of the land of the petitioner was taken and that apart from seeking acquisition and compensation for the said land, the petitioner was also pursuing its prayer f

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