Bombay High Court Enhances Compensation To Wadia Trust For Land Acquired For Mumbai Airport, Cites Amendment To Section 25 Of 1894 Law

Prior to the amendment, Section 25 stipulated that the Court could not grant compensation higher than what was claimed by claimants before the Collector in the inquiry under Section 9 of the Act.

However, after the amended provision of Section 25 came into effect on 24.09.1984, the Court should not award compensation at a lower amount than that awarded by the Collector.

Justice Milind N. Jadhav was considering the A.H Wadia Charity Trust Bombay's (claimant) two Land Acquisition References (LAR) seeking enhancement of the market value of its acquired lands.

Its lands were acquired for the purposes of extension of Mumbai Airport by the Airport Authority of India (AAI)/acquiring body. The Trust argued that the award passed by the Special Land Acquisition Officer (SLAO) was lower than the market value and thus claimed for enhanced compensation.

The AAI however contended that since the present acquisition proceedings commenced in the year 1981/ 1982, prior to coming into effect of the provisions of amended Section 25, the claim of the Trust was to be determined on the basis of unamended Section 25.

It thus argued that the court could not grant compensation higher than what was claimed by the Trust in the inquiry under Section 9 and the Court should apply the unamended Section 25 of the Act to determine the market value.

Here, the High Court noted that the acquisition of the lands commenced in 1982 by publication of notification as per Section 4.

It noted that the notice under Section 9 was issued on 05.06.1985 and the Trust filed a statement of claim before SLAO pursuant to an inquiry under Section 9 on 18.04.1986. Further, the SLAO declared the Award on 23.09.1986.

It observed, “From the above, it is clearly seen and it is an admitted position that inquiry under Section 9 as also declaration of statutory Award in the present cases is after the date of enactment of the amended provisions of Section 25 of the said Act.”

The Court referred to the Supreme Court case of Ashok Kumar vs. State of Haryana (2016), where the notification under Section 4 was issued prior to 24.09.1984 and Award was passed after the said amendment. The Apex Court held that as the award was passed after the amendment, the restriction of unamended Section 25 was not applicable to the case. The Court noted that it could award just and fair compensation taking into consideration the true market value and other relevant facts irrespective of the claim made by the owner under Section 9 or in the Reference Application.

Based on this, the High Court observed that it can grant enhanced compensation if the award is passed after the amendment to Section 25 came into effect. In the present case, it held that the amended Section 25 would apply.

“Therefore, as the Award in the present two LARs has been passed on 23.09.1986, the provisions of amended Section 25 of the said Act would apply prospectively to the present cases.”

Subsequently, the Court examined the Valuation Reports of the Expert Valuer and other evidence. It determined that compensation provided by the SLAO was not at a fair market value.

Calculating the market value, the Court increased the compensation at 12% per annum on the enhanced market value it calculated from the date of notification to the date of possession.

It also said that the Trust in both LARs was entitled to 30% solatium on the enhanced market value as per Section 23(2) of the said Act. Further, to the statutory interest under Sections 28 and 34 of the Act as applicable on the enhanced market value until payment.

Case title: A.H. Wadia Charity Trust & Ors. vs. Airport Authority of India (Land Acquisition Reference No.18 & 19 of 1988)