The Bombay High Court has unequivocally held that compensation for land acquisition under the Mumbai Metropolitan Region Development Authority Act, 1974 must be monetary in form, and cannot be unilaterally substituted by Transferrable Development Rights (TDR). This ruling reinforces the constitutional guarantee of property rights under Article 300A and mandates strict adherence to statutory procedures for expropriation.
Background & Facts
The Dispute
The petitioners, legal heirs of landowners, challenged the unilateral determination of compensation by the competent authority under the MMRDA Act, 1974. The land bearing CTS Nos. 57 to 57/10 in Kurla, Mumbai, measuring 629.37 sq.mtrs., was acquired for the Santacruz-Chembur Link Road project. While possession was taken in May 2011 and the final notification issued in March 2011, the competent authority issued an award in December 2012 offering TDR as compensation, bypassing the statutory mechanism for monetary determination.
Procedural History
- 19 May 2011: Possession of land taken by MMRDA under Section 32(3) of the MMRDA Act
- 15 December 2012: Competent Authority issued award determining compensation solely in the form of TDR
- 2012 - 2024: Petitioners repeatedly approached MMRDA seeking monetary compensation; no substantive response
- 1 April 2024: MMRDA formally rejected monetary compensation claim, citing impugned award as final
- 2024: Writ petition filed before Bombay High Court challenging the award and communication
Relief Sought
The petitioners sought quashing of the impugned award dated 15.12.2012 and the communication dated 01.04.2024, and directed the respondents to determine monetary compensation in accordance with Section 35 of the MMRDA Act.
The Legal Issue
The central question was whether Section 35 of the Mumbai Metropolitan Region Development Authority Act, 1974 permits the competent authority to unilaterally substitute monetary compensation with Transferrable Development Rights (TDR), or whether compensation must strictly be determined as an 'amount' in accordance with the prescribed statutory procedure.
Arguments Presented
For the Petitioner
The petitioners argued that Section 35 is a self-contained code mandating monetary compensation only. They emphasized that the statute repeatedly uses the term 'amount' and prescribes a step-wise process: first, negotiation under Section 35(2); then, calculation of net average monthly income under Section 35(3)-(4); followed by notice and opportunity to object under Section 35(5); and finally, an appeal to the tribunal under Section 35(6). The unilateral imposition of TDR, they contended, violated this statutory hierarchy and deprived them of their right to challenge the compensation amount. Reliance was placed on the Full Bench judgment in Shree Vinayak Builders and Developers v. State of Maharashtra (2022), which held that TDR cannot be imposed without consensus. They further invoked Sukh Dutt Ratra v. State of Himachal Pradesh (2022) and Kolkata Municipal Corporation v. Bimal Kumar Shah (2024) to assert that Article 300A protects against arbitrary deprivation of property, and that delay cannot bar constitutional remedies.
For the Respondent
The respondents argued that the petition was barred by delay and laches, as the award was passed in 2012 and possession taken in 2011. They contended that the petitioners had acquiesced to TDR by seeking its monetized value and that Section 35(6) provided an efficacious alternative remedy before the tribunal. They further claimed that Section 34, which entitles landowners to an 'amount', could be interpreted to include non-monetary compensation, and that the petitioners’ failure to appeal within 30 days under Section 35(6) rendered the award final.
The Court's Analysis
The Court undertook a rigorous textual analysis of Section 35 of the MMRDA Act, concluding that the statutory language leaves no room for non-monetary compensation. The term 'amount' appears repeatedly in subsections (1) through (7), and the entire procedure is structured around calculating a monetary value based on net average monthly income. The Court observed:
"There is nothing in the language of the aforesaid provision that the compensation can be in any form other than monetary compensation."
The Court distinguished Shree Vinayak Builders, which dealt with the MRTP Act where TDR was statutorily contemplated, from the present case where the MMRDA Act contains no such provision. It held that even if Section 35(2) allows agreement for TDR, such agreement must be consensual - not unilateral. The competent authority’s reliance on Section 34 was rejected, as Section 34 itself refers to compensation 'as provided in Chapter VIII', which is exclusively governed by Section 35’s monetary framework.
The Court further held that the tribunal under Section 35(6) has no jurisdiction to examine the legality of substituting TDR for monetary compensation, as its mandate is limited to reviewing the quantum of the 'amount' determined. Thus, the alternative remedy argument failed. On the issue of delay, the Court invoked Kolkata Municipal Corporation and Sukh Dutt Ratra to affirm that Article 300A constitutes a continuing cause of action, and that the State cannot invoke laches to evade its constitutional obligation to provide fair compensation. The Court emphasized:
"Deprivation or extinguishment of that right is permissible only upon restitution, be it in the form of monetary compensation, rehabilitation or other similar means. Compensation has always been considered to be an integral part of the process of acquisition."
The Court also dismissed the respondents’ claim of acquiescence, noting that communications from the petitioners pertained to unacquired land (1031.9 sq.mtrs.), not the 629.37 sq.mtrs. acquired under Chapter VIII.
The Verdict
The petitioners won. The Court held that Section 35 of the MMRDA Act mandates monetary compensation only, and that unilateral imposition of TDR violates statutory procedure and Article 300A of the Constitution. The impugned award and communication were quashed, and the respondents were directed to determine just and fair monetary compensation in accordance with the step-wise procedure under Section 35(2) to (5) within six months.
What This Means For Similar Cases
Monetary Compensation Is Non-Negotiable Under Statutory Acquisition
- Practitioners must challenge any acquisition award that substitutes monetary compensation with TDR, FSI, or other non-monetary benefits where the statute prescribes an 'amount'
- The burden shifts to the State to prove that the compensation mechanism followed is strictly within the statutory framework
- Any deviation from Section 35’s procedure renders the acquisition illegal, regardless of the perceived 'fairness' of the alternative
Delay Cannot Shield State from Constitutional Obligations
- Writ petitions challenging unlawful acquisition under Article 300A are not barred by delay, even after a decade
- Continuous violation of property rights constitutes a continuing cause of action
- State agencies cannot rely on laches to avoid compliance with statutory and constitutional duties
Tribunal Remedies Are Limited to Quantum, Not Validity
- Appeals under Section 35(6) cannot be used to challenge the legality of the compensation form
- If the State bypasses the statutory procedure entirely, the writ jurisdiction of the High Court remains open
- Practitioners should file writ petitions immediately upon receipt of non-monetary compensation offers under statutes that mandate 'amount'
