LARR Authority can hear compensation references in pre-2013 MRTP acquisitions, Bombay HC rules; MCGM’s total compensation fixed at ₹1,572 crore

The acquisition concerned 48,897.60 sq. m. of land in Oshiwara and Ambivali, Mumbai, reserved for a garden, recreation ground and Development Plan road.

A notification under Section 126(2) and (4) of the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act), deemed to be a declaration under Section 6 of the Land Acquisition Act, 1894 (LA Act), was issued on 19 June 2012.

The LA Act was in force when acquisition commenced, but the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (2013 Act) came into force before the Collector made the award on 3 May 2017.

The Collector awarded approximately ₹511.49 crore. The claimant sought enhanced compensation; its reference was transferred to the Land Acquisition, Rehabilitation and Resettlement Authority (LARR Authority), which enhanced compensation. Both the claimant and the Municipal Corporation of Greater Mumbai (MCGM), the acquiring body, appealed against that award.

1. Whether the reference was maintainable before the LARR Authority under Section 64 of the 2013 Act, or whether it could be pursued only under Section 18 of the LA Act, given that acquisition began under the MRTP Act read with the LA Act

2. Whether market value should be determined under Section 26(1)(a) of the 2013 Act (ready reckoner method) or Section 26(1)(b) (sale-instances method), and whether the residual land value technique could be used

3. Whether the LARR Authority’s enhancement and its adjustments for the land’s characteristics, TDR, fungible FSI, deductions and other heads were justified, and what compensation was payable

Section 24(1)(a) of the 2013 Act requires compensation to be determined under that Act where acquisition proceedings were initiated under the LA Act but no award had been made when the 2013 Act commenced; Sections 26–30 prescribe the compensation framework, while Sections 64 and 69 provide for a reference to the LARR Authority and its determination of compensation.

The Maharashtra Rules, 2014, Rule 19(3), provides that proceedings for land reserved under the MRTP Act, where a Section 6 declaration preceded 31 December 2013 but no award had been made by that date, continue under Sections 26–30 of the 2013 Act.

Under Section 26, the prescribed valuation criteria include the ready reckoner value and the average sale price for similar land; the statutory explanations govern the sale-instances method, and the applicable market value is the higher one.

Section 6 of the General Clauses Act, 1897 preserves accrued rights and remedies after repeal, but does not confer a vested right to a particular forum. The Full Bench in Pune Municipal Corporation v. Rajeev L. Sangtani, 2019 SCC OnLine Bom 1492, held that a reference concerning compensation governed by the 2013 Act lies before the LARR Authority; Girnar Traders (3) v. State of Maharashtra, (2011) 3 SCC 1, addressed incorporation of the LA Act into the MRTP Act before the 2013 Act came into force.

Madhya Pradesh Road Development Corporation v. Vincent Daniel, (2025) 7 SCC 798, explains the operation of Section 26’s sale-price explanations and the reasoned discretion to adjust values.

The Court also applied Sahebrao Bhausaheb Kalate v. State of Maharashtra, 2019 SCC OnLine Bom 1504, on the relevant valuation date, and the Supreme Court’s decision in Municipal Corporation of Greater Mumbai v. B. J. Development Corporation Pvt. Ltd., Civil Appeal No. 2336 of 2021, on the effect of reservation when determining market value.

The Court held that the compensation determination was governed by the 2013 Act and that Sections 64 and 69 made the LARR Authority the appropriate forum to examine whether the Collector had applied Sections 26–30. Rule 19(3) and the subsequent amendment of the MRTP Act supported that conclusion; a Section 18 reference under the repealed LA Act would not permit the required review under the 2013 Act.

On valuation, the Court found no qualifying comparable open-land sales under Section 26(1)(b). The claimant’s residual land value evidence relied on flat sales from only one scheme and did not provide sufficient comparable transactions to apply the statutory explanations; the ready reckoner method therefore applied.

The Court fixed the Ambivali rate at ₹72,100 per sq. m. and the Oshiwara rate at ₹90,600 per sq. m., then applied a weighted average of ₹72,817 per sq. m. to the whole property.

It rejected the argument that reservation depressed market value, allowed 40% for TDR and 25.2% for fungible FSI, applied deductions of 15% under DCR 35(1) and 5% for amenity space, and allowed a 25% addition for the advantageous size of the plot.

It also retained the supported compound-wall and storm-water-drain expenses, while rejecting further additions for road frontage and plot shape and a deduction for unevenness.

It modified the LARR Authority’s award and determined total compensation at ₹1,572,00,48,407.23, including the applicable solatium and 12% component; after crediting the amount already paid, the enhanced compensation was fixed at ₹1,061,92,48,897.23.

The ₹250 crore withdrawn during the appeals was to be adjusted, and the claimant was relieved of its undertaking concerning that withdrawal. Interest was directed at 9% per annum for the first year from possession and 15% per annum thereafter until payment. MCGM was granted 12 weeks to pay the balance; both appeals were disposed of accordingly.