Synopsis

The State of Maharashtra appealed against a Reference Court award granting enhanced compensation of Rs.1,500/- per sq.mtr. for land acquired for the New Bombay Project (Section 4 notification dated 24th September 1986). The claimants filed cross-objections seeking Rs.5,000/- per sq.mtr. The High Court dismissed the State’s appeal and partly allowed the cross-objections, fixing compensation at Rs.1,725/- per sq.mtr. (the rate earlier granted by a Division Bench for the adjoining village Roadpali). The court held that: (i) the Reference Court erred in reducing the rate from Rs.1,725/- to Rs.1,500/- merely because the acquired land was 160 meters away from the land in Trimbak Thakur case; (ii) the State had acquiesced in the Rs.1,725/- rate as evidenced by a Law and Judiciary Department letter dated 3rd September 2007; (iii) lease instances (since no sale deeds were available due to the 1970 notification) could be relied upon after making appropriate deductions; and (iv) the claimants are entitled to statutory benefits under Sections 23(1-A), 23(2) and 28.

Court: High Court of Judicature at Bombay

Coram: Honourable Mr. Justice Rajesh S. Patil

Date of Judgment: 17th April 2026

Citation: First Appeal No. 714 of 2018 alongwith Cross Objection (St) No. 31025 of 2025 (unreported)

Core Law: Land Acquisition Act, 1894 – Sections 4 (notification), 11 (award), 18 (reference), 23 (matters to be considered), 24 (matters to be neglected), 54 (appeal); determination of market value – comparative sales method, escalation, deduction for development

2. Legal Framework

Major laws and provisions involved

• Land Acquisition Act, 1894 – Section 4 (notification for acquisition), Section 11 (award by Collector), Section 18 (reference to court), Section 23 (matters to be considered in determining compensation), Section 24 (matters to be neglected), Section 54 (appeal to High Court)

• Evidence principles – burden of proof (on claimant to prove inadequacy of compensation), valuation methodologies (comparative sales method, escalation method, deduction for development)

Key legal principles applied

Market value as on date of Section 4 notification: Compensation must be determined as on the date of publication of notification under Section 4 of the Act. Valuation is to be done as a hypothetical prudent purchaser would do, considering the land’s potential and existing advantages.

Burden of proof on claimant: The claimant is in the position of a plaintiff who must show that the price offered in the award is inadequate based on materials produced in court. The Collector’s award is merely an offer, not a judgment.

Reference Court proceedings are original, not appellate: The court hearing a reference under Section 18 must treat it as an original proceeding and determine market value afresh on the basis of material produced, not as an appeal against the Collector’s award.

Use of lease instances when sale deeds unavailable: Where no sale transactions are available (due to previous acquisition notification prohibiting private sales), lease instances may be considered as a basis for valuation, after making appropriate deductions for development costs and the fact that leasehold creates no transferable title.

Deduction for development (belting): For large tracts of land, appropriate deduction (typically 20%

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