Mumbai, July 18, 2026: The Bombay High Court has ruled that the BMC cannot determine compensation for buildings acquired for public projects under provisions meant for open land, holding that properties with existing structures must be acquired under the land acquisition law to ensure fair compensation.
A bench of Justices Manish Pitale and Shriram Shirsat quashed a 2018 order of the Deputy Municipal Commissioner that determined compensation for land and buildings affected by the flyover project in Goregaon.
The court directed the BMC to initiate fresh acquisition proceedings under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and complete the exercise within one year.
Court Quashes Compensation Order
The judgment was passed on petitions filed by lessees Rohan Tiwari and others and landowners JD and Company Pvt. Ltd., whose properties were acquired for the construction of the road and flyover. The Deputy Municipal Commissioner's order dated June 11, 2018, fixed compensation at Rs 2,17,97,650 for the lessee-petitioners.
According to the petitioners, the BMC informed them in October 2013 that a portion of their property would be required for the proposed flyover and offered them the option of monetary compensation, Transferable Development Rights (TDR) or relocation.
They insisted that compensation be paid before possession was taken. However, in February 2016, municipal officials allegedly began demolishing structures without first paying compensation, prompting the petitions before the High Court.
Wrong Legal Provision Applied
The main dispute before the High Court was regarding the method adopted by the BMC to determine compensation. The civic body relied on Sections 298 to 301 of the Mumbai Municipal Corporation (MMC) Act, which deal with land falling within the regular line of a public street.
The petitioners argued that these provisions apply only to open land or external structures such as platforms or verandahs, and not where permanent buildings exist.
They contended that the acquisition ought to have been carried out under Section 296 of the MMC Act read with the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which provides for fair compensation based on market value.
Agreeing with the petitioners, the High Court held that the BMC had applied the wrong legal provisions. “The moment it is found that a building exists on the land lying within the regular line of a public street, Section 299 of the MMC Act does not apply,” the bench observed.
The court noted that the BMC had demolished the petitioners' buildings for the Goregaon flyover without following the procedure contemplated under the MMC Act.
It held that once buildings existed on the land, the civic body was required to acquire the properties under Section 296 read with the 2013 Act and not determine compensation under Section 301.
Fresh Acquisition Ordered
The bench also found that the compensation order violated the principles of natural justice, as the landowners in one of the petitions were not heard before the compensation amount was fixed.
Setting aside the June 11, 2018, compensation order, the High Court directed the BMC to undertake a fresh acquisition process under the 2013 Act.
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It clarified that disputes between the landowners and lessees regarding their respective shares in the compensation can be decided separately after the fresh compensation award is passed.
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