Acquiring Authority cannot deny compensation for land reserved as service roads or open spaces in layouts.

The Petitioners’ land (26R) in Osmanabad was acquired for widening National Highway No. 211 under the National Highways Act, 1956

An initial award was passed on November 3, 2014, for ₹64,09,201, followed by a subsequent award on June 14, 2018, under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013

Respondent No. 5 (Deputy Collector) refused to pay compensation for 2,168 sq. meters of the acquired land on the grounds that this portion was designated for a "service road" or "public purpose" and thus, according to Town Planning norms and building bye-laws, was not compensable

The Petitioners sought a direction for payment of the full compensation amount deposited by the acquiring body with the Land Acquisition Officer

The power to regulate land use in a layout (reserving sites for streets or parks) does not equate to a right for the State to claim ownership without compensation.

The precedent set by the Hon’ble Supreme Court in Pt. Chet Ram Vashist v. Municipal Corporation of Delhi, which held that while a corporation may act as a custodian of public interest for reserved spaces, it cannot compel a transfer of property to itself free of cost without specific statutory sanction

Landowners are entitled to compensation for amenity and open spaces acquired under the National Highways Act and Town Planning Act as per Shirdi Nagar Panchayat v. Kishor Sharad Borawake and Ors. and Union of India v. Tarsem Singh.

The Court rejected the Respondents' contention that land designated for service roads or public purposes in a sanctioned layout should be exempted from compensation based on building bye-laws or Government notifications from 1974.

The legal issue is "no more res-integra," as established by the Supreme Court.

Even if a landowner holds land in "trust" for the public benefit due to a layout reservation, the State cannot seize legal ownership via acquisition without paying the fair market value determined under the law.

Since the acquiring body (NHAI) had already deposited the full amount with Respondent No. 5, the Court found the Deputy Collector’s refusal to disburse the portion relating to the service road to be arbitrary and contrary to established judicial precedents.

The Writ Petition was allowed, and the Court directed Respondent No. 5 to pay the determined compensation with consequential benefits within two months.

The Court further imposed a cost of ₹50,000 on Respondent No. 5 if payment is delayed beyond the stipulated two-month period.