Due to "delay and laches," the Bombay High Court in 2018 dismissed builders' compensation claims against the BMC for land turned over for public use. This ruling was reversed by the Supreme Court because it was deemed unfair. The BMC was instructed by Justices B.V. Nagarathna and N.K. Singh to promptly furnish more buildable area and Transferable Development Rights (TDR), valued at approximately INR 500 crore. Despite the BMC's appeals, the Supreme Court maintained the High Court's previous decision mandating compensation. The court decided that under Article 300-A, previous statutes that guaranteed just compensation could not be superseded by modifications that denied compensation.
Builders' claims for compensation against the Brihanmumbai Municipal Corporation (BMC) were denied by the Bombay High Court in 2018, alleging "delay and laches" for land that was given up for public utilities like roads. Nonetheless, the Supreme Court ruled that this dismissal was unfair. Justices B.V. Nagarathna and N.K. Singh reversed the ruling of the High Court, citing the pertinent land acquisition legislation and the 2009 Godrej & Boyce case.
Kukreja Constructions and other parties' petitions were upheld by the Supreme Court, which also ordered the BMC to provide more buildable space and Transferable Development Rights (TDR) to the BMC as soon as possible-ideally within three months. Interestingly, one TDR allotment is more than 6,000 square metres. The BMC is required by this order to extend TDR, which is estimated to be worth INR 500 crore overall.
The Brihanmumbai Municipal Corporation (BMC) had filed three appeals against a portion of the 2018 High Court ruling, which mandated that the BMC provide compensation that ranged from 75% to 100% additional Transfer of Development Rights (TDR) to several landowners and builders, including Apurva Natwar Parikh and Co, who had quickly submitted their applications. The Supreme Court found no merit in the BMC's appeals and upheld the High Court's decision, describing it as "just and proper."
Among the petitioners before both the High Court and the Supreme Court were significant landholders such as Byramjee Jeejeebhoy, a Hindu Undivided Family (HUF), Jitendra Sheth, and others. These landowners, represented by prominent law firms and leading legal counsel including Pravin Samdani, Amar Dave, Samit Shukla, Mahesh Agarwal, and Shikhil Suri, contended that they had constructed the roads at their own expense and had surrendered their land to the BMC. Despite this, they argued that they had not received any compensation, despite their legal entitlement to fair compensation from the state, a right protected under Article 300-A of the Constitution.
They further contended that withholding compensation would constitute "usurpation of citizens' property" without legal authority and violate constitutional rights. The argument was made that regulations specify that if a landowner also contributes to the development of an amenity, they are entitled to receive additional compensatory Transfer of Development Rights (TDR). In response, the state referenced a notification from November 2016 that amended the law to eliminate such compensation. Samdani argued that no amendment can strip an owner of their constitutionally guaranteed right to receive compensation for their land, particularly given that a previous law had conferred this entitlement.
In summary, the Supreme Court overturned the Bombay High Court's denial of builders' compensation claims against the BMC, emphasising the landowners' constitutional right to fair compensation, which includes additional Transfer of Development Rights (TDR). The BMC was ordered to expedite the provision of TDR, highlighting the importance of upholding property rights under the law.
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