Petitioners can’t be denied relief because their case did not come up for final disposal in 21 years, says HC

Published on: Sep 23, 2026, 07:55:20 IST

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MUMBAI: Thirty-seven years after a 6,900 sq m land parcel in Bhayandar was acquired for the Mahanagar Telephone Nigam Limited (MTNL), the Bombay High Court (HC) has ordered the public sector undertaking to pay fair compensation to the owners of the land, recognising their constitutional right to property. The court said that MTNL, which had been in possession of the land since 1989, should compensate the land owners. The compensation, expected to be a substantial sum, will be determined by the state government based on the land rates of 2005, the year the petition was filed.

A division bench of justices Manish Pitale and Shreeram Shirsat observed in their judgement passed earlier this month, “from the very beginning, the respondent authorities as well as respondent No.7 MTNL were aware about the fact that if the petitioners were to be deprived of the subject land, they deserved to be adequately compensated in accordance with law. But, till date, the petitioners have not been paid any amount towards compensation, despite the fact that they stood deprived of possession of the subject land as far back as on April 17, 1989.”

Chirag Shashikant Shah and others, the petitioners in the case, bought the land from its erstwhile owner Evelyn Paul Pereira in 1982. The claim for fair compensation or return of the land was filed in HC in 2005.

The land acquisition

There were two sets of proceedings against the land — one under the Land Acquisition (LA) Act, 1894, and the other under the Urban Land (Ceiling and Regulation) Act (ULCA), 1976. Both legislations were subsequently repealed. The land was notified for acquisition by the state government under the LA Act in 1982. Later, 1984, the deputy collector and competent authority under the UCLA declared 29,939 sq m of the petitioner’s land in Bhayandar as surplus. In a civil suit, the state authorities stated that the 6,900 sq m land was acquired for the benefit of MTNL that had deposited ₹9.13 lakh with the special land acquisition officer (SLAO). In a civil court in Thane the petitioners agreed to hand over the land earmarked for MTNL if the status quo order on the rest of their declared surplus under the ULCA land was lifted.

Subsequently, various petitions were filed in the HC over the years. In 1992, the land owners challenged a decision of the appellate authority that held that they can claim compensation only under the ULCA and not the LA Act. In 1999, the SLAO refunded ₹9.08 lakh of the amount deposited by the MTNL saying that the land was no longer needed to be acquired under the LA Act. In 2003, the government authorities excluded the 6,900 sq m land from surplus land under the ULCA and in 2005 the petitioners filed the petition in HC seeking return of the land or payment of fair compensation. In the interim, the court asked the MTNL to deposit ₹5 lakh with the court against the compensation claim of the petitioners.

The petitioner’s advocate Kailas Dewal said this was a “classic case of violation of right to property”. He argued that parallel proceedings under the LA Act and the ULCA by the state authorities had led to petitioners being deprived of their land without receiving any compensation. “MTNL has utilised the said land by making constructions and even earning substantial amounts of money by giving out parts of the structures on rent and lease, while the petitioners have been continuously deprived of their valuable rights,” he said.

The MTNL, however, argued the delay of 16 years in filing the petition – the land was acquired in 1989 and the petition filed in 2005. Their lawyer said that the MTNL has occupied the land for 37 years, and that in this period third parties also came to occupy parts of the structures built on the land. It said on account of the delay, the petitioners had waived their right to the land. It also said that since both the LA Act and the ULCA were repealed, the petition should be dismissed.

The final order

The judges, however, said that the petition was filed in 2005, but the fact that it “could not be taken up for consideration and final disposal for 21 years, cannot be a ground to deprive relief to the petitioners”. Hence, the arguments of delay and waiver stood rejected. The court asked the state government to grant compensation for the land under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 in six months after determining the market rate that prevailed in 2005. The court also asked the collector to determine the rental compensation to be paid to the land owners from 1989 to 2005 in eight weeks.

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