Statutory tenants remain entitled to apportioned compensation despite subsequent rehabilitation and surrender of premises.

The State of Maharashtra acquired land admeasuring 906.30 square meters in Village Kirol, Ghatkopar (East), for the construction of the 5th and 6th Railway lines

The Special Land Acquisition Officer (SLAO) issued an Award on 22nd December 2000, fixing the market value at ₹3,750/- per square meter

Claimant No. 1 (Owner) filed LAR No. 9/2005 seeking enhancement to ₹19,368/- per square meter based on a 2003 Development Agreement for adjacent land

Simultaneously, LAR No. 5/2003 was referred under Section 30 to resolve a dispute over apportionment between the Owner and 12 Tenants (Claimant Nos. 2–13)

During the proceedings, the Mumbai Metropolitan Region Development Authority (MMRDA/Claimant No. 14) rehabilitated the tenants with free alternate accommodation; the tenants executed undertakings agreeing to transfer their share of compensation to MMRDA

1. Whether the market value determined by the SLAO at ₹3,750/- per square meter reflects the fair market value as of the notification date (12th March 1998)

2. Whether the tenants, having accepted free alternate accommodation from MMRDA, are entitled to any share in the compensation

3. Whether MMRDA is entitled to directly receive the tenants' apportioned share in these Reference proceedings

The Court applied Section 18 of the Land Acquisition Act, 1894 regarding the determination of market value and Section 30 regarding dispute apportionment

Relying on Viluben Jhalejar Contractor v. State of Gujarat, the court applied the "willing purchaser and willing seller" test, considering proximity in time and situation

It followed State of U.P. v. Jitendra Kumar, which permits the use of post-notification sale instances as "other evidence" of market trends provided they are comparable and adjusted for fluctuations

On apportionment, the court followed Dossibai Nanabhoy v. P.M. Bharucha and A. Ajit Singh v. Union of India, establishing that protected tenancy is a compensable interest that must be valued alongside the landlord’s reversionary interest

Regarding jurisdiction, it applied Dattaram Deu Desai v. Nirakar Devasthan, holding that a Reference Court cannot adjudicate independent contractual claims (like MMRDA's undertakings) outside the original reference

Regarding enhancement, the Court found the SLAO’s valuation flawed as it relied on 1994 sale instances for a 1998 acquisition

However, it rejected the Owner’s claim of ₹19,368/- per square meter, noting the acquired land was a narrow, elongated strip subject to railway construction restrictions (D.C. Regulation 29(8)(ii))

The Court used the 2003 Development Agreement as an indicative "market trend" (yielding ₹17,644/sqm) but applied a 60% deduction for the land's restrictive shape, interior location, and encumbrances to arrive at ₹6,200/sqm

On apportionment, the Court held that the tenants’ possessory rights were "extinguished" by acquisition, not by voluntary surrender, thus they remained "persons interested" under the Act

Subsequent rehabilitation by MMRDA could not retrospectively erase the value of the tenancy interest as of the Section 4 notification date

Finally, the Court ruled it lacked jurisdiction to enforce MMRDA’s undertakings directly, as MMRDA held no pre-existing interest in the land at the time of acquisition

The Claimants are awarded a 12% additional component under Section 23(1-A), 30% solatium under Section 23(2), and statutory interest under Sections 28 and 34

In LAR No. 5/2003, the Court ordered apportionment of the total amount in the ratio of 40% to the Owner and 60% to the Tenants

It dismissed MMRDA’s claim for direct payment, holding that any claim based on the tenants' undertakings must be agitated in separate, appropriate proceedings