Bombay High Court
Municipal Corporation Of Greater ... vs M/S S.N. Desai Hospitalities And ... on 7 August, 2024
Author: B. P. Colabawalla
Bench: B. P. Colabawalla
2024:BHC-AS:32981-DB
ia_3657-24(1).docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
INTERIM APPLICATION NO. 3657 OF 2021
IN
FIRST APPEAL NO. 541 OF 2021
LAXMI
SUBHASH
SONTAKKE
Municipal Corporation of Greater Mumbai .. Applicant/
Digitally signed
by LAXMI
Appellant
SUBHASH
SONTAKKE
Date: 2024.08.17
22:04:16 +0530
Versus
M/s. S. N. Desai Hospitalities and
Developers LLP Mumbai & Anr. .. Respondents
Mr. Girish Godbole, Senior Counsel a/w Pallavi Khale for the
Applicant.
Mr. Fredun De Vitre, Senior Counsel a/w Rohaan Cama, Pheroze
Mehta, M. S. Federal, Rashne Mulla-Feroze, Shrinivasan Mudaliar,
Dinkar Desai & Sejal Jain i/b. M/s. Federal & Company for
Respondent No.1.
CORAM: B. P. COLABAWALLA &
FIRDOSH P. POONIWALLA, JJ.
DATE: AUGUST 07, 2024
P. C.
1. The above Appeal, and which is a First Appeal, is filed against
the impugned Judgment and Award dated 30 th March 2021 passed by the
Land Acquisition, Rehabilitation and Resettlement Authority [for short the
"said Authority"]. By the impugned Judgment and Award, the said Authority
enhanced the compensation payable to the 1 st Respondent - LLP for
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acquisition of its land by an amount of Rs. 1591,12,24,012.30/- (approx.
Rs.1,591 crores).
2. Originally, after an Award was passed by the Special Land
Acquisition Officer ("SLAO") granting compensation of
Rs.510,07,99,510.00/- (approx. Rs.510 crores) to the 1 st Respondent - LLP,
they filed a reference in this Court. This reference was thereafter transferred
to the said Authority pursuant to an order dated 10 th January 2019 passed by
a learned Single Judge of this Court. Thereafter, on 27 th June 2019, the
Appellant - MCGM filed a review petition seeking a review of the order of
transfer. This review petition was initially dismissed for non-removal of office
objections and then restored. This Review Petition is still pending. In the
meanwhile, the said Authority has passed the impugned Judgment and
Award [enhancing the compensation payable to the 1 st Respondent - LLP],
and which is assailed in the above First Appeal.
3. The above Interim Application is filed by the Appellant - MCGM
seeking a stay of the implementation and execution of the impugned
Judgment and Award dated 30th March 2021 passed by the said Authority.
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4. In support of the above Interim Application [seeking a stay of
the impugned Judgment and Award], Mr. Godbole, the learned Senior
Counsel appearing for the Appellant - MCGM, submitted that firstly the said
Authority lacked jurisdiction to hear the reference because the said reference
was filed in this Court, and under the scheme of the MRTP Act, 1966, the said
reference could continue only in this Court and could not have been
transferred. This argument of Mr. Godbole is premised on the basis that the
Award passed by the SLAO was under Section 11 of the Land Acquisition Act,
1894. The second argument canvassed by Mr. Godbole was that the amount
awarded by the said Authority [the enhanced compensation of Rs.1,591
crores] is wholly excessive and illegal. He submitted that in fact it is the case
of the Appellant - MCGM that what was originally awarded [i.e. Rs.510
crores to the 1st Respondent - LLP] by the SLAO, was itself excessive and
therefore the question of the said Authority enhancing the said compensation
was completely unwarranted. Mr. Godbole also briefly touched on the merits
of the matter and submitted that (i) certain discounting factors have either
not been applied or incorrectly applied; (ii) the land rate calculated is on the
basis of the wrong zone, namely, the lands that were acquired were of two
different villages, namely, the Oshiwara village and the Ambivali village.
However, the calculation of enhanced compensation is done on the basis of
the rate applied only for Oshiwara village [and which was a higher rate], for
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the entire land; (iii) 40% enhancement granted on account of the fact that the
acquired land could be loaded with TDR, 28% enhancement because fungible
FSI could be used on the said acquired land, and 30% enhancement on the
ground that the land acquired has many advantages, was also wholly
erroneous and unwarranted. Mr. Godbole also submitted that normally when
large lands are acquired under the law, there is a 50% deduction, whereas the
said Authority, in the present case, has only granted a deduction of 15%. Mr.
Godbole submitted that when one looks at all these facts, coupled with what
is stated in paragraphs 14, 15 and 16 of the Interim Application, this is a fit
case for granting an unconditional stay of the impugned Judgment and
Award dated 30th March 2021.
5. Mr. Godbole then submitted that the Appellant is the MCGM,
and it is not as if in the event the Appeal is dismissed, the 1 st Respondent -
LLP would not be able to recover the decretal amount from the Appellant. He
submitted that the Appellant being a public body, was undertaking various
public projects including the Mumbai Coastal Road Project, the Mumbai
Costal Road Project-North, the Water Conveyance Tunnel-Yewai to Kasheli,
amongst many others. If the Appellant - MCGM is directed to deposit the
entire decretal amount, it would seriously hamper implementation of various
public projects due to financial constraints. This is another reason why a
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blanket stay [of the impugned Judgment and Award] ought to be granted,
was the submission. In the alternative, Mr. Godbole submitted that in the
event this Court is not inclined to grant a blanket stay of the impugned
Judgment and Award, then the Appellant - MCGM is willing to deposit in this
Court Fixed Deposits (FDs) standing in the name of the MCGM, and which
shall be renewed if required, till the disposal of the Appeal. He submitted that
the MCGM would furnish FDs for the entire amount mentioned in the
impugned Judgement and Award, namely, Rs.1591,12,24,012.30/-. According
to Mr. Godbole this would fully secure the 1 st Respondent - LLP, in the event
the Appeal fails.
6. On the other hand, Mr. De Vitre, the learned Senior Counsel
appearing for the 1st Respondent - LLP, submitted that Section 70 of The
Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 [for short "the 2013 Act"] clearly
stipulates that every Award made by the said Authority shall be deemed to be
a decree, and the statement of the grounds of every such Award, a Judgment
within the meaning of clause (2), and clause (9) of Section 2 of the Code of
Civil Procedure, 1908 (for short the "CPC"). In other words, it is a money
decree. If it is a money decree, then, under the provisions of the CPC, and
more particularly under Order 41 Rule 5 thereof, a stay of the decree ought
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not to be granted unless the amount under the decree is either deposited in
Court or adequate security is furnished. Normally, in a money decree deposit
and/or furnishing security is the rule and granting an unconditional stay [i.e.
with no security at all] is an exception, was the submission. Once this is the
case, then, the Appellant - MCGM should be made to deposit the entire
decretal amount, was the submission of Mr. De Vitre.
7. On the arguments canvassed by Mr. Godbole on the merits of the
matter, Mr. De Vitre submitted that the 1 st Respondent - LLP has a lot to say
regarding the jurisdictional point raised by Mr. Godbole. He submitted that it
is totally incorrect on the part of the MCGM to contend that the Authority
had no jurisdiction to entertain or decide the reference filed by the 1 st
Respondent - LLP because as per the law laid down by the Hon'ble Supreme
Court, when compensation is to be determined under the 2013 Act, even the
legal remedies provided therein are to be taken into consideration. As far as
the enhancements granted by the Authority are concerned, Mr. De Vitre
submitted that 40% enhancement was granted by the Authority because the
land could be loaded with TDR, and the guidelines issued under the Ready
Reckoner [by the State] allowed taking the same into consideration for
arriving at the market value of the land. Similar is the case even for the
enhancement granted for fungible FSI. Mr. De Vitre submitted that in fact, in
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the evidence led before the said Authority, the witness of the MCGM himself
admitted that the acquired land is entitled for loading of TDR as well as
fungible FSI. Once this is the case, there was nothing wrong when the said
Authority ordered a 40% enhancement because the land could be loaded with
TDR, and a 28% enhancement because fungible FSI could be used on the said
land. Even as far as the 30% enhancement granted on the ground that the
land had many advantages is concerned, Mr. De Vitre submitted that the said
Authority has given this enhancement after taking into consideration all
aspects of the matter and the evidence led by the parties. Hence, no exception
can be taken to the same, at least at the interim stage. For all these reasons,
he submitted that there was nothing illegal in the impugned Judgment and
Award, and hence, if the MCGM wants the luxury to litigate [by filing the
above First Appeal], they ought to be directed to deposit the entire amount
payable under the impugned Judgment and Award.
8. To be fair to Mr. De Vitre, despite the aforesaid arguments, he
correctly conceded before us that in the impugned Judgment and Award
there is a mistake on the part of the said Authority by applying the wrong rate
to the entire land which was situated in two different villages. He fairly
submitted that out of the entire land that is acquired by the MCGM, 1895.6
sq. mtrs. falls in Oshiwara village and 47,002 sq. mtrs falls in Ambivali
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village. However, the said Authority has applied the rate for Oshiwara village
[which is the higher rate] for the entire land, rather than applying a separate
and a different rate for the land falling in Ambivali village [which is a lower
rate]. He, therefore, submitted that if one takes a weighted average, even
according to the MCGM, the rate of the land would be Rs. 72,100 per sq. mtr.,
and therefore, the total figure payable [without the statutory interest] would
come to approximately Rs.1170,23,89,099 [approx. Rs.1,170 crores]. If one
was to take the interest component into consideration, the figure would go
above Rs.2,000 crores. Therefore, even taking the figure of Rs.1,170 crores
into account, the MCGM ought to be directed to deposit at least Rs. 1,591
crores for us to stay the execution and implementation of the impugned
Judgment and Award. Mr. De Vitre also submitted that in the event the
Appellant - MCGM is asked to deposit the entire amount of Rs.1,591 crores,
the 1st Respondent - LLP ought to be allowed to withdraw 50% of the amount
deposited without furnishing any security but by only giving an undertaking
to the Court that they would bring back the amount in the event the Appeal is
dismissed. The balance 50% can be allowed to be withdrawn on furnishing a
Bank Guarantee and/or adequate security, was the submission.
9. We have heard the learned Counsel appearing for the parties at
length. We have also perused the papers and proceedings in the above
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Interim Application. As far as the argument on jurisdiction is concerned,
though the same was argued briefly before us, both counsels agreed that this
is an issue that we need not go into at the stage of deciding the above Interim
Application. This is for the simple reason that this is an issue that is raised in
the Appeal and would have to be fully argued when the Appeal is finally
heard. Even as far as the merits of the matter are concerned, we do not think
that we can pre-judge the issue in the present Interim Application. Suffice it
to state that the said Authority has granted certain enhancements [as
mentioned by us above] on the grounds mentioned in the impugned
Judgment and Award. Those will be examined at the hearing of the Appeal.
The fact of the matter is that today the Appellant - MCGM is faced with the
impugned Judgment and Award [passed under section 70 of the 2013 Act]
directing them to pay enhanced compensation of Rs. 1,591 crores. It can
hardly be disputed that this would amount to a money decree. Once this is
the case, we are of the opinion that there cannot be an unconditional stay of
the impugned Judgment and Award. No exceptional circumstances have been
made out for granting such a stay. The corollary to this observation would be
that the MCGM would either have to deposit the entire decretal amount or
furnish adequate security to our satisfaction.
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10. When one balances the equities on both sides, we are of the view
that the MCGM cannot secure the entire amount by merely furnishing FDs of
the amount of Rs. 1,591 crores. We say this because those FDs will continue
to be in the name of the MCGM, and pending the above First Appeal, the 1 st
Respondent - LLP would not be in a position to withdraw any part of these
FDs. Hence, to balance the equities between the parties, we are of the opinion
that the MCGM ought to be directed to deposit a sum of Rs. 250 crores in this
Court, and for the balance amount of Rs. 1,341 crores, the Appellant - MCGM
can furnish security by depositing FDs in this Court for the aforesaid amount,
and which shall be renewed if required, till the disposal of the Appeal. We are
also of the view that if the cash deposit of Rs. 250 crores is made [as directed
above], the 1st Respondent - LLP ought to be allowed to withdraw the same
by giving an undertaking to this Court that it shall bring back the amount, if
so ordered, together with such rate of interest as this Court may decide at the
hearing of the Appeal.
11. We must mention here that allowing the 1 st Respondent - LLP to
withdraw the sum of Rs.250 crores [to be deposited by the Appellant -
MCGM] was vehemently opposed by Mr. Godbole by submitting that in the
facts and circumstances of the present case, the 1 st Respondent LLP ought not
to be allowed to withdraw any amount. We are afraid we are unable to accept
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this submission. We are of the view that as of today, if one was to take into
consideration the statutory interest that would be payable by the Appellant -
MCGM, what we are permitting the 1 st Respondent - LLP to withdraw is
approximately 10% of the entire amount. In fact, in the very many orders, not
only passed by this Court but also the Hon'ble Supreme Court, especially in
land acquisition matters, the Courts have consistently allowed the
landowners to withdraw 50% of the amount deposited on furnishing an
undertaking and the balance 50% by furnishing adequate security. In the
peculiar facts and circumstances of this case, we are allowing the 1 st
Respondent - LLP to withdraw only a minuscule amount in comparison to
what is actually payable under the impugned Judgment and Award. We,
therefore, do not find that the objection of the MCGM, in the facts of the
present case, is well founded.
12. In view of the foregoing discussion, the following order is
passed:
a. The MCGM shall deposit a sum of Rs. 250 crores in this
Court within a period of eight weeks from today. For the
balance amount of Rs.1,341 crores, the MCGM shall deposit
with this Court FDs of the equivalent amount [i.e. Rs.1,341
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crores] within a period of eight weeks from today and
which shall be renewed on the same terms and conditions,
if required, till disposal of the above Appeal. The renewed
FDs shall then be deposited in this Court. These FDs
[renewed or otherwise] shall be in the sole name of the
MCGM and shall not be subject to any lien or other
encumbrance.
b. There shall be a stay of the impugned Judgment and Award
dated 30th March 2021 for a period of eight weeks from
today, and the said stay shall continue till the disposal of
the Appeal, if the directions contained in clause (a) above
are complied with.
c. It is needless to state that in the event the directions
contained in clause (a) above are not complied with, the
stay granted shall automatically stand vacated, and the 1 st
Respondent - LLP shall be entitled to execute the
impugned Judgment and Award dated 30 th March 2021 in
accordance with law.
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d. In the event the Appellant - MCGM deposits the sum of
Rs.250 crores as directed above, the 1st Respondent - LLP
shall be entitled to withdraw the same on furnishing an
undertaking of each and every partner of the said LLP
stating therein that they shall bring back the said amount
together with the interest as may be determined by this
Court.
13. The above Interim Application is disposed of in the aforesaid
terms. However, in the facts and circumstances of the case, there shall be no
order as to costs.
14. Liberty to both parties to apply.
15. The hearing of the above Appeal and First Appeal No. 268 of
2021 [filed by the 1st Respondent - LLP herein] is expedited.
16. This order will be digitally signed by the Private Secretary/
Personal Assistant of this Court. All concerned will act on production by fax
or email of a digitally signed copy of this order.
[FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.]
AUGUST 07, 2024
Laxmi
