[Cites 5, Cited by 0]
Bombay High Court
Special Land Acq.Officer (2). vs Smt. Gangabai W/O Devai Khona & Ors & The ... on 5 December, 2025
Author: Manish Pitale
Bench: Manish Pitale
2025:BHC-OS:23615
907_LAR_3_2003.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
LAND ACQUISITION REFERENCE NO. 3 OF 2003
Special Land Acquisition Officer (3), Mumbai ... Applicants
and
Gangabai w/o. Devsi Khona and others ... Claimants
vs.
Deputy Chief Engineer (C),
Metropolitan Transport Project (Railway) ... Acquiring Body
Mr. Dharmendra M. Joshi for claimant Nos.1(c) and 1(d).
Mr. Yahya Ghoghari a/w. Mr. Charul Abuwala and Ms. Urusah M. Irfan, i/b.
Dave and Co. for claimant Nos.2(b) to 2(d).
Mr. Prashant Kamble, AGP for respondent-State.
CORAM : MANISH PITALE, J
DATE : 05th DECEMBER, 2025
P.C. :
. This proceeding has arisen out of a reference made by the
Special Land Acquisition Officer (SLAO), Mumbai and Mumbai
Suburban District, on the question of apportionment of compensation
payable for acquisition of land bearing CTS No.935 pt of Village
Kirol, Taluka Kurla, Mumbai Suburban District. The claimant
Nos.1(a) to 1(g) are the legal heirs of the original owner/lessor,
while claimant Nos.2(a) to 2(d) are the legal heirs of the lessee in
the land. This Court is informed that claimant No.2(a) has expired
and that claimant Nos.2(b) to 2(d) are the remaining legal heirs
pursuing this proceeding. Claimant Nos.3 to 48 were tenants in the
structure constructed by the original lessee in the land in question.
2. It is an admitted position on facts that none of the parties have
challenged the award and the present reference concerns
907_LAR_3_2003.doc
apportionment of the awarded amount amongst the claimants. A
copy of the award annexed to the reference, shows details of
valuation for the market value of the land as also the depreciated
value of the structure built on the said land. Details of solatium and
other components payable towards compensation, are also recorded
in the award.
3. The learned counsel appearing for the claimant Nos.1(c) and
1(d), submitted that in the light of the law laid down by the Supreme
Court in the judgments concerning the aforesaid question of
apportionment of compensation between lessor and lessee, in the
facts and circumstances of the present case, the apportionment
should at least be in the ratio of 50:50. It is emphasized that the
lessee had already enjoyed the property for 38 years before the
acquisition proceeding was undertaken, for the reason that the lease
deed was executed on 08.01.1962 for a period of 99 years. It was
submitted that this factor ought to be taken into consideration, while
deciding the apportionment of compensation.
4. It was further submitted that the lessee cannot claim exclusive
right towards compensation for the depreciated value of the
structure, for the reason that the relevant clause of the lease deed
required certain structures to be handed over to the lessor. Due to
failure to abide by the said clause, a suit was filed for termination of
lease deed and the lease was terminated. It was fairly conceded that
the suit was filed after the acquisition proceeding was undertaken. In
these circumstances, it was submitted that this Court may consider
apportioning the amounts payable towards compensation between
the parties in a just, fair and reasonable manner.
907_LAR_3_2003.doc
5. The learned counsel appearing for claimant Nos.2(b) to 2(d)
i.e. the legal heirs of original lessee, submitted that in most of the
judgments of the Supreme Court, starting from Inder Parshad vs.
Union of India and others [(1994) 5 SCC 239] to Brij Behari Sahai
(Dead) through LRs and others vs. State of U.P. (2004 1 SCC 641),
followed by various High Courts, the apportionment was determined
in the ratio of 75:25, with 75% compensation being disbursed to the
lessee. It was submitted that same formula may be applied by this
Court, in the facts and circumstances of the present case, although it
was brought to the notice of this Court that in the case of Union of
India and others vs. A. Ajit Singh (AIR 1997 SC 2669), the Supreme
Court had determined the apportionment in the ratio of 60:40, with
60% being disbursed to the lessee, in the peculiar facts of the said
case.
6. It was submitted that the lessee having enjoyed the property
for 38 years, cannot be the only factor to be taken into consideration,
for the reason that the lessee was entitled to undertake further
development of the property. But, he was deprived from doing so,
due to acquisition of the said property in the year 2000. On this
basis, it was submitted that the apportionment ought to be in the
ratio of 75:25.
7. It was submitted that the component of compensation payable
for the depreciated value of the structure, ought to entirely inure of
the benefit of lessee, as he had put in resources for building the said
structure.
8. As regards claimant Nos.3 to 48, it was submitted that they
were merely tenants of the original lessee and since they were
907_LAR_3_2003.doc
already provided alternate accommodation by Mumbai Metropolitan
Region Development Authority (MMRDA), there was no question of
the said claimants being considered for apportionment of
compensation.
9. This Court has considered the rival submissions. At the outset,
this Court finds that although claimant Nos.3 to 48 are represented
by an advocate, there is no representation on their behalf for the past
number of hearings. They have chosen not to participate in the
reference proceeding.
10. In any case, this Court finds substance in the contention that
since the said claimants were merely tenants in the structure
constructed by the lessee and they were provided with alternate
accommodation by MMRDA, they cannot be heard to claim any
percentage of amount of compensation in the present proceeding.
Therefore, the claim of claimant Nos.3 to 48 is rejected.
11. As regards apportionment of compensation between the lessor
and the lessee, whose legal heirs are now contesting the present
proceedings, the component pertaining to compensation payable for
the depreciated value of the structure, will have to be considered at
the outset.
12. This Court finds substance in the contention raised on behalf
of the lessee, now represented by claimant Nos.2(b) to 2(d), that
since resources for building the structure, were entirely put in by the
lessee, who was permitted by the lease deed to undertake building of
such structure, the quantum of compensation for depreciated value
of the said structure, must go exclusively to the lessee.
907_LAR_3_2003.doc
13. The contention raised on behalf of the lessor to the effect that
there was violation of a clause contained in the lease deed and the
suit was filed in that regard, cannot be taken into consideration,
simply for the reason that the suit was admittedly filed after the
acquisition proceeding was undertaken. There is nothing to indicate
that the lessor raised any issue with regard to the same, prior in
point of time. Hence, the component of compensation pertaining to
the depreciated value of the structure, is directed to be exclusively
paid to the legal heirs of the lessee.
14. As regards apportionment of compensation for value of land
acquired in these proceedings, this Court finds that in such situation,
the Courts have not been able to apply a uniform formula, although
some of the judgments of the Supreme Court, followed by High
Courts, have indicated that the apportionment has to be in the ratio
of 75:25, with 75% of the compensation being paid to the lessee.
This is evident from the judgment of the Supreme Court in the case
of Inder Parshad vs. Union of India and others (supra) and Brij
Behari Sahai (Dead) through LRs and others vs. State of U.P. (supra).
15. It is relevant to note that in the case of Brij Behari Sahai
(Dead) through LRs and others vs. State of U.P. (supra), the Supreme
Court took into consideration the judgment in the case of Union of
India and others vs. A. Ajit Singh (supra), where the apportionment
was fixed at 60:40. Taking into consideration the facts pertaining to
the case in Brij Behari Sahai (Dead) through LRs and others vs. State
of U.P. (supra), the Supreme Court preferred the ratio of
apportionment fixed in the case of Inder Parshad vs. Union of India
and others (supra), over the percentage fixed in the case of Union of
India and others vs. A. Ajit Singh (supra). This is found in paragraph
No.21 of the said judgment.
907_LAR_3_2003.doc
16. This Court finds that judgment in the case of Union of India
and others vs. A. Ajit Singh (supra) indicates certain factors that can
be taken into consideration, while ascertaining the apportionment of
compensation between the lessor and the lessee. The relevant
portion of the said judgment reads as follows:
"9. In Col. Sir Harinder Singh Brar Bans Bahadur v.
Bihari Lal, (1994) 4 SCC 523: (1994 AIR SCW
2564) since under the Tenancy Act, the tenant is
entitled to the entire land, this Court held that the
tenant is entitled to the total compensation and the
landlord is not entitled to any compensation. In
view of the fact that the appellant is challenging the
apportionment, we think that 60% of the
compensation to the tenant would be justified. The
Court is required to take into consideration relevant
factors, viz., the duration of the lease, the nature of
the right to. enjoyment of the lease-hold interest
and the improvements the tenant made on the land
etc. It is equally settled law that if the Government
is the owner of the land, before initiating the
acquisition, it is entitled to terminate the lease and
take possession of the lands in terms of the lease.
Necessarily, in the above case tenant cannot have
any right to compensation as he is bound by the
terms of the lease. In a case where the Government
in spite of the covenant contained in the sale deed,
chooses to acquire the land, necessarily the tenancy
right of a tenant is required to be assessed and the
compensation has to be awarded suitably. In view of
the fact that the lease is for 99 years and the part of
the lease has been enjoyed for a period of 18 years.
We think that the apportionment of the
compensation in the ratio of 60% to the tenant and
40% to the landlord would be reasonable ratio and
payment should accordingly be made."
17. The Supreme Court thought it fit to refer to the relevant
factors such as duration of lease, nature of right to enjoyment of
leasehold interest and improvement made on the land by the tenant
(in this case, the lessee) on the land in question.
907_LAR_3_2003.doc
18. Applying the said factors to the facts of the present case, this
Court finds that out of 99 years of lease, the lessee was able to enjoy
a period of only 38 years. In the case of Union of India and others vs.
A. Ajit Singh (supra), the Court found that the lessee had been able
to enjoy for a period of only 18 years out of 99 years of lease and
thereupon, fixed the apportionment at 60:40.
19. In this situation, this Court could have accepted the contention
raised on behalf of the legal heirs of the lessor, that the
apportionment in the present case, should take into account the fact
that the lessee was able to enjoy the property for a longer period i.e.
38 years and accordingly, the percentage of compensation payable to
the lessee, be proportionately reduced. But, this Court finds
substance in the contention raised on behalf of the legal heirs of the
original lessee that the lease deed itself provided that the lessee
could develop the property. The development potential could have
been exploited for the remaining period of the lease, but for the fact
that the acquisition proceeding interdicted any such effort on the
part of the lessee.
20. In such a situation, it would be appropriate that the duration
of lease and the specific nature of the right to enjoyment of leasehold
interest, are taken into consideration as also the fact that the lessee
in the present case, had indeed made improvement on the land in
question.
21. On an overall consideration of the facts of the present case and
the law laid down by the Supreme Court in the case of Inder Parshad
vs. Union of India and others (supra) and Brij Behari Sahai (Dead)
through LRs and others vs. State of U.P. (supra), this Court is inclined
907_LAR_3_2003.doc
to hold that the compensation payable for the component of market
value of the subject land, should be apportioned in the ratio of 75%
for the lessee and 25% for the lessor.
22. Accordingly, it is directed as follows:
(a) The legal heirs of the original lessee i.e. claimant Nos.2(b) to
2(d) shall be entitled to the entire amount of compensation
payable for the component of the depreciated value of the
structure.
(b) The amount of compensation payable for the component of
market value of the land, shall be apportioned between the legal
heirs of the original lessee i.e. claimant Nos.2(b) to 2(d) on the
one hand and the legal heirs of the original lessor i.e. claimant
Nos.1(a) to 1(g), on the other, in the proportion of 75% and
25% respectively.
(c) As noted hereinabove, the claim of claimant Nos.3 to 48 for
apportionment of compensation, is rejected.
(d) In view of the directions given hereinabove, the SLAO shall now
undertake the exercise of determining and disbursing the actual
amounts payable to the legal heirs of the lessor and the lessee,
in terms of award, within a period of eight weeks from today.
23. The reference is disposed of in above terms. Pending
applications, if any, stand disposed of.
(MANISH PITALE, J.)
Priya Kambli
