Synopsis

The Special Land Acquisition Officer made two references: (i) LAR No. 9/2005 under Section 18 for enhancement of compensation for land acquired for railway lines; and (ii) LAR No. 5/2003 under Section 30 for apportionment of compensation between the owner and statutory tenants. The High Court: (i) enhanced the market value from Rs. 3,750 to Rs. 6,200 per sqm, relying on a post‑notification Development Agreement as an indicative circumstance; (ii) apportioned compensation 40% to the owner and 60% to the tenants; (iii) rejected MMRDA's claim to directly receive the tenants' share, holding it had no independent interest in the acquired property; (iv) held that tenants' protected occupation constituted a compensable interest even after rehabilitation.

1. Heading of the judgment

High court of judicature at bombay ordinary original civil jurisdiction

Land acquisition reference no. 9 of 2005 (with land acquisition reference no. 5 of 2003)

Special land acquisition officer (2) (applicant) vs. Rahul arun merchant & ors. (claimants) and the dy. chief engineer (central rly.)(acq.body) (acquiring body)

Coram: hon’ble mr. justice farhan p. dubash

Core Law: Land Acquisition Act, 1894 – Sections 18, 23, 30 – Determination of market value – Apportionment of compensation – Protected tenancy – Comparable sale instances – Post‑notification transactions – Development Agreement as indicative evidence – Nemo dat quod non habet.

Court: High Court of Judicature at Bombay (Ordinary Original Civil Jurisdiction)
Coram: Hon’ble Mr. Justice Farhan P. Dubash (Single Judge)
Date of Judgment: June 17, 2026 (Reserved on March 17, 2026)
Case Nos.: Land Acquisition Reference No. 9 of 2005 and Land Acquisition Reference No. 5 of 2003

2. Legal framework

Major laws and provisions involved:

• Land Acquisition Act, 1894 – Sections 4 (notification), 6 (declaration), 9(3) and 9(4) (notice), 11 (award), 12(2) (notice), 18 (reference for enhancement), 23 (matters to be considered in determining compensation), 23(1-A) (additional amount), 23(2) (solatium), 28 (interest), 30 (dispute as to apportionment), 34 (interest)

• Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 – protected tenancy (statutory tenant)

• Maharashtra Rent Control Act, 1999

• Transfer of Property Act, 1882 – Section 108 (rights of lessee)

• Development Control Regulations for Greater Mumbai – Regulation 29(8)(ii) (restrictions near railway boundary)

Subject matter of the judgment:

Whether the market value of land acquired for railway lines should be enhanced based on a subsequent Development Agreement; how compensation should be apportioned between the owner and statutory tenants in occupation; and whether MMRDA, which rehabilitated the tenants, can claim the tenants' share of compensation directly in Section 30 proceedings.

Key legal principles applied:

• Market value – willing purchaser/willing seller test: Market value is the price a willing purchaser would pay to a willing seller, having regard to existing advantages, location, potentiality and comparable sale instances. (Viluben Jhalejar Contractor; Wallace Flour Mills; Atma Singh; Gajanan)

• Post‑notification transactions as indicative evidence: A sale instance subsequent to the Section 4 notification is not per‑se inadmissible and may be considered as a surrounding circumstance, provided it is otherwise relevant and the

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