Acquisition of land occupied by buildings must proceed via Section 296, not Section 299 of the MMC Act.

The Petitioners in WP 1173/2016 (lessees) and WP 414/2023 (owners) challenged a compensation order dated June 11, 2018, passed by the Deputy Municipal Commissioner of the MCGM

The MCGM demolished buildings and structures on the Petitioners' land for the construction of a flyover and road in Goregaon, Mumbai

The MCGM calculated compensation using Sections 298–301 of the Mumbai Municipal Corporation Act (MMC Act), which significantly reduced the payout by applying ready reckoner rates and various deductions

The Petitioners contended that since the land was occupied by permanent authorized buildings, the MCGM was required to acquire the property under Section 296 read with Section 91 of the MMC Act, entitling them to market-value compensation under the 2013 Act

1. Whether the MCGM was justified in determining compensation under Sections 298 to 301 of the MMC Act instead of acquiring the land and buildings under Section 296 read with the Act of 2013

2. Whether the impugned order violated the principles of natural justice by failing to hear the landowners (Petitioners in WP 414/2023) during the determination and apportionment of compensation

The court applied Section 299 of the MMC Act, which permits summary possession of land within a "regular line" of a street only if it is "not occupied by a building," or if the structure is merely external (e.g., a porch/verandah)

Section 301 provides the compensation mechanism specifically for Sections 298 and 299

The court relied on the Supreme Court precedent in Indian City Properties Ltd. v. Municipal Commissioner of Greater Bombay, which clarified that "building" in Section 299 refers to independent permanent structures, and Section 299 cannot be invoked if such buildings exist

Section 296 read with Section 91 of the MMC Act mandates formal acquisition under prevailing land acquisition laws (The Act of 2013) for any land/building not covered by the exceptions in Sections 298–299

The court found that the subject lands were occupied by authorized, permanent R.C.C. structures existing prior to the 1962 datum line

Under Section 299, the MCGM can only use the summary "regular line" procedure if the land is open or the structures are minor external appendages; it cannot be used to bypass formal acquisition when independent buildings are present

The court noted that the contingencies under Section 298 (buildings falling down or being rebuilt) did not apply here, as the MCGM forcibly demolished the structures for a project

Consequently, the "self-contained code" of Sections 297–301 was inapplicable

The court also held that determining compensation without hearing the registered owners of the land constituted a gross violation of natural justice

The Court directed the Respondents to initiate fresh acquisition proceedings under Section 296 of the MMC Act read with the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, passing a fresh award within one year provide market-value compensation, solatium, and rental compensation, while adjusting the amounts already withdrawn