Supreme Court restores enhanced land-acquisition award but denies long‑standing rental claim; grants mesne‑profits from date of sale

A bench of Chief Justice B. R. Gavai and Justice Augustine George Masih heard an appeal arising from a dispute over 3,700 sq. metres of land in Survey No. 8/1, Deolali, Nashik, which the Municipal Corporation had used as roads after an incomplete 1978 acquisition. The appeal challenged a High Court order that set aside a Reference Authority award enhancing compensation for the owner and denied rental compensation for alleged unauthorised occupation.

The Court restored the Reference Authority’s enhanced award and clarified the proper application of the 2013 Land Acquisition Act’s valuation and equitable provisions, while rejecting the claim for long‑period rental compensation for occupation predating the purchaser’s title. The Court observed that valuation must follow the statutory selection rule and that the residuary equity head could support relief in appropriate cases. The Court, in its reasoning, observed: The Court also noted that “the Appellant is entitled to compensatory mesne‑profits/interest on that payment for the period of the State’s occupation up to the date of actual payment of compensation.”

Background The dispute dated to a 1972 municipal reservation for school, playground and road purposes over land in Deolali; possession of 37 ares (3,700 sq. metres) was taken without formal acquisition. A 1978 notification acquired 1.01 hectares but left the 3,700 sq. metres unacquired. The original owner repeatedly sought development permission and litigated in the High Court; the High Court in 1998 held the reservation had lapsed and directed fresh consideration, but the Corporation continued to assert possession and, in appeals and proceedings, the State directed compensation or TDR. The present appellant purchased the 3,700 sq. metres in 2011 for ₹1.17 crore. After prolonged litigation and a contempt direction to the State to complete acquisition, a Section 11 notification issued on 9.1.2017 and the Special Land Acquisition Officer awarded compensation of ₹8.69 crore on 29.4.2017. The appellant challenged valuation by reference and obtained enhancement from the Resettlement Authority to ₹20.20 crore (including enhanced component of ₹11.50 crore) and additional awards treating unauthorized occupation as rental compensation under Section 26/28 and related principles. The Corporation’s first appeal before the High Court set aside the Reference award and restored the SLAO award; the appellant challenged that ruling before the Supreme Court.

The Supreme Court considered two core issues: (i) correct assessment of market value under Section 26 of the 2013 Act and (ii) entitlement to rental compensation/other equitable relief for alleged unauthorised occupation. Relying on the statutory method in Section 26 and the admissible sale deeds, the Court held the Reference Authority correctly computed the market rate (₹26,814 per sq. metre after adjustments). The Court rejected a blanket award of rental compensation for the period from 1972, holding that rental relief under precedents was confined to cases of unlawful and exclusive occupation by the acquiring authority prior to acquisition. The Court found documentary records (eviction order of 22.6.2000, SARFAESI proceedings and sale deed of 29.7.2011) showed the original owner had exercised possession and the appellant had been placed in possession on purchase; consequently the claim for rental compensation prior to the date of purchase was untenable. However, applying the equitable limb of Section 28 and established practice, the Court awarded mesne‑profits/interest at 8% per annum on the purchase price of ₹1.17 crore from 29.7.2011 to 8.5.2017. The Court restored the Reference Authority’s enhanced compensation award of ₹20,20,11,533 with interest as directed, denied rental for the long period from 1972, expunged adverse personal observations made by the High Court against the appellant and waived the imposed costs.

Case Details: Case No.: 2025 INSC 1236 (Civil Appeal arising out of SLP (C) No.18305 of 2023)
Case Title: Pradyumna Mukund Kokil v. Nashik Municipal Corporation and Others
Appearances:
For the Petitioner(s): Not indicated in the judgment
For the Respondent(s): Not indicated in the judgment