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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

WRIT PETITION NO. 1397 OF 2017

M/s. Devi Construction LLP … Petitioner

Versus

The State of Maharashtra & Ors. … Respondents

WITH

CIVIL APPLICATION NO. 200 OF 2020

IN

WRIT PETITION NO. 1397 OF 2017

******

Mr. Rompal Singh Kohli a/w Ms. Sejal i/by Ms. C. K. Legal for the

Petitioner.

Mrs. Pooja Patil, AGP for Respondent Nos.1 and 5 to 7-State.

Mr. G. H. Keluskar for Respondent Nos.2 to 4.

******

CORAM:MANISH PITALE AND

SHREERAM V. SHIRSAT, JJ.

RESERVED ON:17

th

FEBRUARY 2026

PRONOUNCED ON :6

th

APRIL 2026

Judgment (Per Manish Pitale, J.) :

. The petitioner has approached this Court seeking a direction

against the respondents for payment of rental compensation as per

the policy of the State, manifested in a number of Government

Resolutions issued from time to time. It is the case of the

petitioner that while the respondents took possession of the

subject land belonging to the petitioner, for establishing an octroi

naka or octroi post, the process of acquisition of land and

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payment of compensation was undertaken much later. The amount

of rental compensation is claimed from the point in time the

respondents took possession of the said piece of land, till the

determination and payment of compensation, as per the land

acquisition award.

2.The petitioner owned lands in survey Nos.10 (part), 11

(part) and 160 (part) of Village Wakad, Taluka Mulshi, Dist. Pune.

The said land was included within the limits of the respondent

No.3-Pimpri Chinchwad Municipal Corporation (PCMC). In the

year 1997 and in the year 2000, PCMC published draft

development plan for the city of Pimpri-Chinchwad. In the draft

development plan, the lands of the petitioner were reserved for

octroi post. It is the case of the petitioner that in the year 2003,

PCMC encroached upon the land and started using it for the

purpose of the octroi post, without initiating any process for

acquisition and in the absence of any negotiation with the

petitioner. Apart from the octroi post, PCMC needed land for the

purpose of 12 meter wide road under the development plan.

3.In this backdrop, on 24

th

February 2006, an agreement/taba

pavati (possession receipt) was executed between the petitioner

and PCMC for handing over 4849.80 sq. mtrs. for the octroi post

and 1379 sq. mtrs. for the 12 meters road. The said agreement

recorded that the petitioner had agreed for the same on the

condition of payment of damages, as advance possession was being

taken.

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4.Thereafter, the petitioner addressed a number of

communications to the respondents, particularly respondent No.3-

PCMC, for taking necessary steps for acquisition of land and for

payment of damages, as advance possession was taken from him.

Certain communications were received from the officers of PCMC

about intended steps to be taken. Eventually, on 16

th

July 2009, a

declaration under Section 6 of the Land Acquisition Act, 1984

(hereinafter referred to as ‘LA Act’ for short) was issued and

published in the official gazette. But, further progress was

extremely slow and therefore, the petitioner was constrained to

send communications and representations to the respondents to

take necessary steps in the matter urgently, particularly because the

petitioner stood deprived of enjoyment of its land.

5.In this context, the petitioner was constrained to file Writ

Petition No.2970 of 2013 before this Court. The said writ petition

was disposed of by an order dated 12

th

June 2013. In the said

order, the Division Bench of this Court took note of the fact that

advance possession of the land of the petitioner was taken and that

apart from seeking acquisition and compensation for the said land,

the petitioner was also pursuing its prayer for rental

compensation. By the said order, the writ petition was disposed of

by directing the respondents to complete acquisition of the said

land under the provisions of the LA Act, within 15 months from

the date of the order. As regards the claim of rental compensation,

the petitioner was permitted to move an application before the

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appropriate Authority, as per the policy of the State and the

concerned Authority was directed to decide the representation

expeditiously and in accordance with law.

6.In this backdrop, the petitioner sent representation to

respondent-PCMC for the payment of rental compensation. This

was followed by a number of letters, but there was no response

from respondent-PCMC. On 22

nd

January 2015, the land

acquisition award was passed. The prayer for rental compensation

was not entertained, on the ground that possession was handed

over by the petitioner to the PCMC by way of private negotiation,

prior to initiation of acquisition proceeding. It was observed that

the issue of rental compensation would therefore be dealt with by

the respondent-PCMC.

7.In this backdrop, the petitioner was constrained to

repeatedly approach respondent-PCMC by making representations

in the year 2015-16. Since there was no response from the said

respondent, in September 2016, the petitioner was constrained to

file Writ Petition No. 12305 of 2016 before this Court, seeking a

direction to the said respondent-PCMC to comply with the order

dated 12

th

June 2013 passed by this Court in Writ Petition No.

2970 of 2013. During the pendency of the said writ petition, on

25

th

October 2016, the PCMC sent a letter to the petitioner,

forwarding a demand draft of Rs.3,22,308/- towards the demand

of rental compensation. Since the petitioner was totally unaware

about the basis on which the amount was calculated, it sent letters

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to the respondent No.3-PCMC, seeking details thereof. Eventually,

on 4

th

November 2016, the respondent No.3-PCMC sent a letter,

furnishing a copy of its order dated 10

th

October 2016. In the said

order, it was recorded that the aforesaid amount was calculated

for the period between August 2003 and 24

th

February 2006 on

the basis of per square foot per annum rent of the area.

8.The petitioner immediately sent a letter dated 11

th

November 2016 to respondent No.3-PCMC, stating that the said

order dated 10

th

October 2016 was not in terms of the policy of

the State, for payment of rental compensation. Thereafter, the

petitioner filed the instant writ petition in this Court. The

petitioner prayed for quashing and setting aside of the said

impugned order dated 10

th

October 2016 issued by the respondent

No.3-PCMC; a further direction to the respondent No.6 i.e. the

Special Land Acquisition Officer (SLAO) to decide the claim of the

petitioner for rental compensation in terms of the Government

Resolutions dated 1

st

December 1972 and 2

nd

April 1979 and 24

th

March 1988; a direction for working out rental compensation and

for payment of the same along with interest at the rate of 6% per

annum, in terms of Government Resolution dated 24

th

March

1988 and in the meanwhile, the petitioner prayed for interim

directions.

9.The respondent No.6-SLAO filed affidavit in reply in the

writ petition, stating that the land acquisition award dated 22

nd

January 2015 had correctly made remarks on the aspect of rental

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compensation claimed by the petitioner and that on the said

aspect, the appropriate Authority was the respondent No.3-

PCMC. The respondent No.1 i.e. the State of Maharashtra

through the Principal Secretary of Urban Development

Department, also took a similar stand in its reply affidavit.

Respondent Nos.2 to 4 filed an additional affidavit, simply placing

on record subsequent Government Resolutions dated 17

th

April

2003, 17

th

October 2003 and 26

th

December 2003, claiming that

the entire scheme of payment of rental compensation as per earlier

Government Resolutions dated 1

st

December 1972 and 2

nd

April

1979, was cancelled and therefore, the petitioner was not entitled

to the relief claimed in the writ petition.

10.The petitioner filed rejoinder affidavit and a further

affidavit, refuting the claims made by the respondents and insisted

upon the relief of rental compensation, as per the policy of the

State. It was submitted that the last Government Resolution dated

26

th

December 2003 inured to the benefit of the petitioner. In this

backdrop, the petition was taken up for hearing.

11.Mr. Rompal Singh Kohli, learned counsel appearing for the

petitioner, submitted that the policy of the State was manifested in

the aforementioned Government Resolutions dated 1

st

December

1972, 2

nd

April 1979, 17

th

April 2003, 17

th

October 2003 and 26

th

December 2003. It was submitted that a proper reading of the said

Government Resolutions demonstrated that the petitioner was

entitled for payment of rental compensation at the rate of 8% per

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annum on the quantum of the compensation determined in the

land acquisition award from the point in time that possession of

the land was taken, till the full amount in the final award was

paid. It was submitted that all the respondents, including

respondent No.3-PCMC, are bound by the said policy and since

the respondents have granted such rental compensation to other

land owners and in some cases, upon directions issued by this

Court, the present writ petition deserves to be allowed. It was

submitted that the impugned order dated 10

th

October 2016 is

wholly unsustainable, as it does not take into account the

aforementioned policy of the State and in any case, it illegally

restricts the payment of rental compensation from August 2003 to

24

th

February 2006.

12.It was submitted that although, formal agreement/taba pavati

(possession receipt) about advance possession of the subject land

was executed on 24

th

February 2006, the possession of the land

was actually taken by the respondent No.3-PCMC much earlier

i.e. in August 2003. As a matter of fact, the petitioner specifically

pleaded in the writ petition that the respondent No.3-PCMC

encroached upon the lands of the petitioner in the year 2003, in

the light of the reservation of the said lands for establishment of

octroi post. On this basis, it was submitted that the period for

which the petitioner is entitled for rental compensation begins

from August 2003. It was submitted that although the respondents

were now claiming that advance possession was taken on 24

th

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February 2006, the impugned order which calculates payment of

compensation from August 2003 belies the aforesaid stand taken

by the respondents.

13.The learned counsel for the petitioner referred to the

contents of the aforementioned Government Resolutions. He

submitted that initially as per Government Resolution dated 1

st

December 1972, it was provided that whenever land was taken

over by private negotiation and possession was taken in advance,

rental compensation was payable at the rate of 6½% per annum

from the date on which possession of land was taken over, till the

date on which full amount was paid as per the final award. By

subsequent Government Resolution dated 2

nd

April 1979, the rate

was increased to 8% per annum for calculating the amount of

rental compensation. Thereafter, circular dated 24

th

March 1988

was issued, directing that whenever possession was taken by

negotiation with the land owner, expeditious steps were required

to be taken for acquisition, so that the State Exchequer was not

unnecessarily overburdened. It was submitted that thereafter,

Government Resolution dated 17

th

April 2003 was issued, which

cancelled the earlier Government Resolutions dated 1

st

December

1972 and 2

nd

April 1979, in the light of the financial implications

on the State. It was submitted that the said Government

Resolution itself clarified that it would be implemented from the

date of issuance of the same and that those cases wherein

possession of lands was taken by private negotiation prior to

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issuance of the said Government Resolution, further action would

be taken in the light of the cancelled Government Resolutions

dated 1

st

December 1972 and 2

nd

April 1979. Thereafter, reference

was made to Government Resolutions dated 17

th

October 2003

and 26

th

December 2003, to submit that only the basis of

calculation of rental compensation was changed, but the

entitlement of land owners like the petitioner was not adversely

affected.

14.The learned counsel for the petitioner placed heavy reliance

on judgment of Division Bench of this Court in the case of

Bhagwat s/o. Nathu Patil vs. State of Maharashtra & Ors., 2009

(3) Mh.L.J. 413, wherein the aforementioned Government

Resolutions were taken into consideration and it was eventually

concluded that the land owner was entitled to rental compensation

at the rate of 8% per annum specified in the aforementioned

Government Resolutions and that the said amount would be paid

along with interest at the rate of 6%. It was submitted that in the

said judgment, this Court took into consideration various

judgments of the Supreme Court that recognized the concept of

rental compensation, since the land owners were deprived of

enjoyment of their lands, even before the acquisition proceeding

was undertaken. Attention of this Court was also invited to

judgments in the cases of Jagdish s/o. Kashiprasad Tiwari vs. The

Special Land Acquisition Officer & Ors. (judgment and order

dated 16

th

November 2017 passed in Writ Petition No. 1092 of

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2013) and Uttam Ganpat Ubale & Ors. vs. State of Maharashtra

& Ors., 2012 SCC OnLine Bom 692, wherein this Court granted

relief of rental compensation to similarly situated land owners.

15.As regards reliance placed on behalf of respondent No.3-

PCMC on the judgment of this Court in the case of Ashok s/o.

Masu Bansode & Anr. vs. State of Maharashtra & Ors., 2023 (4)

Mh.L.J. 119, it was submitted that the said case was concerned

with a different set of facts, giving rise to completely distinct

issues. This Court in the said judgment took into consideration the

fact that under the Right to Fair Compensation and Transparency

in Land Acquisition, Rehabilitation and Resettlement Act, 2013

(hereinafter referred to as ‘Act of 2013’ for short), upon

acquisition of land through private negotiation an additional

compensation of 25% was payable.

16.The learned counsel for the petitioner further submitted that

there is no substance in the contention raised on behalf of the

respondent No.3-PCMC that the Government Resolutions pertain

only to irrigation projects, simply for the reason that the policy of

the State cannot be restricted to acquisitions for the purpose of

irrigation projects and that in any case, the Supreme Court had

also recognized the concept of rental compensation and relief had

been granted to land owners. On this basis, it was submitted that

the said judgment is clearly distinguishable and the present writ

petition ought to be allowed.

17.On the other hand, Mrs. Pooja Patil, learned AGP, appearing

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on behalf of respondent No.1 and 5 to 7 i.e. the State Authorities,

submitted that the policy of the State was evident from the

aforesaid Government Resolutions. In terms of Government

Resolution dated 17

th

April 2003, the earlier Government

Resolutions dated 1

st

December 1972 and 2

nd

April 1979 had been

cancelled. It was further submitted that this Court may take into

consideration the subsequent policy of the State, as per

Government Resolutions dated 17

th

April 2003, 17

th

October 2003

and 26

th

December 2003. It was emphasized that the change in

policy was brought about due to heavy financial burden on the

public exchequer in respect of payment of rental compensation.

18.Mr. Keluskar, learned counsel appearing for respondent

Nos. 2 to 4, including respondent No.3-PCMC, submitted that in

the first place, the aforementioned Government Resolutions dated

1

st

December 1972 and 2

nd

April 1979 and even the subsequent

Government Resolutions, all apply only to land acquisition

concerning irrigation projects. Since the present petition concerns

utilization of land for establishment of octroi post, the

Government Resolutions are not applicable at all. It was submitted

that on this basis itself, the writ petition deserves to be dismissed.

It was further submitted that the Government Resolution dated

17

th

April 2003 cancelled the earlier Government Resolutions

dated 1

st

December 1972 and 2

nd

April 1979, thereby

demonstrating a departure from the earlier policy of the State. No

rental compensation is payable in the light of the cancellation of

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the earlier Government Resolutions. It was submitted that the

petitioner was duly compensated for acquisition of its land as per

the award dated 22

nd

January 2015. The petitioner had initiated

reference proceeding for enhancement of the quantum of

compensation and therefore, it cannot be permitted to claim

further relief of rental compensation.

19.It was submitted that there is no statutory basis for grant of

rental compensation and since such relief is purely based on

executive instructions in the form of Government Resolutions and

since the said Government Resolutions providing for rental

compensation have been cancelled, there is no question of

payment of rental compensation to the petitioner. It was submitted

that the petitioner cannot rely upon judgments passed by this

Court in the cases of Bhagwat s/o. Nathu Patil vs. State of

Maharashtra & Ors. (supra), Jagdish s/o. Kashiprasad Tiwari vs.

The Special Land Acquisition Officer & Ors. (supra) and Uttam

Ganpat Ubale & Ors. vs. State of Maharashtra & Ors. (supra).

The learned counsel for the said respondents placed heavy reliance

on judgment of this Court in the case of Ashok s/o. Masu Bansode

& Anr. vs. State of Maharashtra & Ors. (supra), wherein it was

categorically held that rental compensation is not payable in the

context of the Act of 2013. Since the LA Act has been repealed

and it is no longer available, the petitioner cannot be granted

rental compensation.

20.Having heard the learned counsel for the rival parties, this

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Court is of the opinion that the claim of the petitioner for

payment of rental compensation will have to be decided upon the

policy of the State manifested in the said Government Resolutions

dated 1

st

December 1972, 2

nd

April 1979, 17

th

April 2003, 17

th

October 2003 and 26

th

December 2003. It is to be noted that the

concept of rental compensation is not found in the provisions of

the LA Act and it is payable as per the policy of the State. This

pertains to cases where possession of the subject land was taken

even before initiation of the land acquisition proceedings. The said

concept of rental compensation in the context of the respondent-

State of Maharashtra, came up for consideration before the

Supreme Court in the case of State of Maharashtra & Ors. v/s.

Maimuma Banu & Ors., (2003) 7 SCC 448. In the said judgment,

it was observed as follows :

“7.It is to be noted that the resolutions adopted by the

Government were intended to benefit the landowners whose

lands were acquired. To avoid unnecessary delays in payment

urgency for follow-up action was indicated in the resolutions.

To that extent, learned counsel for the landowners are on

terra firma. But legally the landowners are not entitled to any

interest. There is no provision either in the resolutions or in

the statutes concerned which entitles the landowners to

payment of interest. Whatever is statutorily payable has been

clearly indicated in the Act itself. Section 23(1-A) of the Act

was introduced by the Amendment Act of 1984. There is no

dispute, and in our opinion rightly, that rental compensation

is not relatable to the Act. The entitlement of the claimants is

on the basis of the government resolutions i.e. on the basis of

executive orders.

8.It is crystal clear from a bare reading of the provisions

of the Act that it does not provide for payment of any rental

compensation. Therefore, the appellants are correct in their

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stand to the extent that the liability for rental compensation

does not have its source under the Act. Therefore, the logic of

Sections 17(3-A), 23(1-A) and 28 of the Act and Section 34

has no application in law to rental compensation. That being

the position, the High Court was not justified in relying on

Sections 17(3-A), 23(1-A) or Section 28 of the Act to grant

interest.

9.But the problem does not end there. Admittedly, the

possession of land was taken long years back. Thereafter, the

landowner does not practically possess any right over the land

in question except to the compensation as statutorily provided

for. But it would be illogical and improper to turn a Nelson's

eye to the factual position as highlighted by the respondents.

It is not in dispute that in most of the cases the rental

compensation has not been paid. If that factual position

continues, it clearly is a case where the amount to which a

person is entitled is withheld without any legitimate excuse.

The learned counsel for the appellants strenuously urged that

in most of the cases the proceedings have not yet attained

finality and are pending either before the Reference Court or

in appeal. That does not provide a legitimate excuse to the

appellants to withhold payment of the rental compensation.

The amount calculated on the basis of award by the Land

Acquisition Officer cannot be below than the amount to be

ultimately fixed. If in appeal or the reference proceeding,

there is any variation, the same can be duly taken note of as

provided in law. There is no difficulty and we find none as to

why the compensation on the basis of value determined by the

Land Acquisition Officer cannot be paid. If there is upward

revision of the amount, the consequences will follow and if

necessary, redetermination of the rental compensation can be

made and after adjustment of the amount paid, if any, balance

can be paid. If, however, the Land Acquisition Officer's award

is maintained then nothing further may be required to be

done. In either event, payment of the rental compensation

expeditiously would be an appropriate step. Looking at the

problem from another perspective, one thing is clear that

authorities have clearly ignored the sense of urgency

highlighted in the various resolutions.”

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21.Thereafter, in the said judgment, the Supreme Court

proceeded to grant interest at the rate of 6% from 1

st

April 2000

on the amount of rental compensation payable to the land owner.

Thus, despite recognizing that there was no statutory obligation, it

was held that the State was liable to pay rental compensation for

the period that the land owner was deprived of enjoyment of its

land, even before initiation of land acquisition proceeding.

22.In a subsequent judgment in the case of R. L. Jain (D) by

LRS. vs. DDA & Ors., (2004) 4 SCC 79, the Supreme Court took

into consideration situations where the land owners stood

dispossessed prior to issuance of preliminary notification under

Section 4(1) of the LA Act. It was found that only possession was

taken over in such situations, while the title continued to vest in

the land owner. In this context, in the said judgment, the Supreme

Court observed as follows :

“18.In a case where the landowner is dispossessed prior to

the issuance of preliminary notification under Section 4(1) of

the Act the Government merely takes possession of the land

but the title thereof continues to vest with the landowner. It is

fully open for the landowner to recover the possession of his

land by taking appropriate legal proceedings. He is therefore

only entitled to get rent or damages for use and occupation

for the period the Government retains possession of the

property. Where possession is taken prior to the issuance of

the preliminary notification, in our opinion, it will be just and

equitable that the Collector may also determine the rent or

damages for use of the property to which the landowner is

entitled while determining the compensation amount payable

to the landowner for the acquisition of the property. The

provisions of Section 48 of the Act lend support to such a

course of action. For delayed payment of such amount

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appropriate interest at prevailing bank rate may be awarded.”

23.Thus, the Supreme Court recognized the fact that as per

State policy, the land owners in such cases would be entitled to

rental compensation and that in any case, the land owner would

be entitled to rent or damages for use of the property, as it would

be just and equitable to grant such relief.

24.A Division Bench of this Court in the aforesaid case Bhagwat

s/o. Nathu Patil vs. State of Maharashtra & Ors. (supra)

considered the aforementioned Government Resolutions in detail

and thereupon, found that the rental compensation would be

payable to such land owners whose lands were taken over even

prior to initiation of land acquisition proceeding. It was found that

where possession was taken over prior to 17

th

April 2003, the

Government Resolutions dated 1

st

December 1972 and 2

nd

April

1979 would apply and that in any case, even if possession was

taken subsequent to 17

th

April 2003, rental compensation would

be payable in terms of the Government Resolutions dated 17

th

October 2003 and 26

th

December 2003. It was held that as per

Government Resolution dated 26

th

December 2003, the basis of

calculating the rental compensation would change and it would be

different from the basis as specified in Government Resolutions

dated 1

st

December 1972 and 2

nd

April 1979. The relevant

observations in the said judgment are as follows :

“8.In answer to the Petition, which claims rental

compensation, a reply has been filed on behalf of respondent

No. 2, by Rambhau Dalsing Rathod, Special Land Acquisition

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Officer, Jayakwadi Project No. 2, Aurangabad. It is admitted

that possession of the petitioner's land was taken by

respondent No. 3 by private negotiations on 17-4-2002 and

award was passed on 9-5-2007. It is, however, pointed out

that by Government Resolution dated 17-4-2003, the State of

Maharashtra has cancelled the Government Resolution dated

1-12-1972. It is then set out that consequent upon the

Government Resolution dated 26-12-2003 there is no

question of granting rental compensation for acquired land

which was acquired by private negotiations. The affiant then,

sets out that, however, it is made clear that in pending cases

lands which are acquired by private negotiations prior to 26-

12-2003 the Government has decided to pay the rental

compensation on the amount of open land awarded by the

Land Acquisition Officer and not on the amount of trees,

structure etc. i.e. total amount of award value. It is reiterated

that rental compensation payable, has to be calculated based

on Government Resolution dated 26-12-2003.

9.There is, therefore, no dispute that rental compensation

in respect of lands where possession was taken prior to 17-4-

2003, the rental compensation is still payable and also in

respect of those lands where possession was taken after that

date, which are covered by Government Resolution dated 17-

10-2003. The question that we are called upcin to answer is,

whether the rental compensation should be paid based on the

Government Resolution dated 1-12-1972 read with

Government Resolution dated 2-4-1979 or based on the

Government Resolution dated 26-12-2003. Reason for

payment of rental compensation is that the State takes

possession of the land even before proceedings are initiated

under the provisions of the Land Acquisition Act. The loss by

way of income to the landowner on account of such dis-

possession is not provided for under the provisions of the

Land Acquisition Act.

10.Is it therefore, open to the State Government, by a

subsequent Resolution dated 26-12-2003, to provide for

determination of rental compensation on a different yardstick

than that provided by Resolution dated 1-12-1972 and 2-4-

1979? Insofar as Resolutions dated 1-12-1972 and 2-4-1979,

we have earlier referred to Para (6). It is clear from the

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language of the said Resolution that, rental compensation is

based on “the award value.” The award value in terms of

section 23 of the Act would be what is payable under section

23 to the exclusion of additional compensation payable under

section 23 (1-A). This, as pointed out earlier, was in issue in

the Judgment before this Court in State of Maharashtra v.

Maimuna Banu (supra). The Supreme Court in Appeal

accepted the principle, that the landowner is entitled for

rental compensation in terms of the Government Resolution

and that in the event in a reference or otherwise the market

value is enhanced, the rental compensation will have to be re-

determined. Under the Government Resolution of 1-12-1972,

the rental compensation was 6 and ½% of the award value.

By Resolution of 2-4-1979 it has been made 8%. Therefore,

from 2-4-1979, the rental compensation payable would be at

the rate of 8% of the market value.

13.Even if it is to be read that there is a departure in

Government Resolution of 26-10-2003. If possession is taken

after 26-12-2003, the rental compensation would be payable

in terms of Government Resolution dated 26-12-2003. If a

party has acted on a promise by the State to his detriment, the

State would be bound to be held by its promise. The doctrine

of promissory estoppel and the principle thereto has evolved

over a period of time in this Country. The Supreme Court in

M.P. Mathur v. D.T.C., (2006) 13 SCC 706 : AIR 2007 SC

414 has observed that promissory estoppel is based on equity

or obligations. It is not based on vested right. In equity the

Court has to strike a balance between individual rights on one

hand and the larger public interest on the other hand. The

principle of promissory estoppel was invoked by the Supreme

Court in the Case of Union of India v. Anglo Afghan Agencies,

AIR 1968 SC 718, wherein it was laid down that even though

the case would not fall within the terms of section 115 of the

Indian Evidence Act, which indicates the rule of estoppel, it

would be still open to a party who has acted on the

representation made by the Government to claim that the

Government should be bound to carry out the promise made

by it even though the promise was not recorded in the form

of formal contract as required by Article 299 of the

Constitution. The principle has been evolved by equity to

avoid injustice and is neither in the rule of contract nor in the

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rule of estoppel.”

25.On the question of payment of interest on such delayed

payment of rental compensation, after referring to the judgment of

the Supreme Court in the case of State of Maharashtra & Ors. v/s.

Maimuma Banu & Ors. (supra), the Division Bench of this Court

in the aforesaid case of Bhagwat s/o. Nathu Patil vs. State of

Maharashtra & Ors. (supra), held as follows :

“15.We then come to the issue of cases where a party

though entitled to be paid rental compensation on yearly basis

after possession is taken, has not been paid rental

compensation. In State of Maharashtra v. Maimuma Banu

(supra) the Supreme Court while interfering with the interest

awarded by this Court, held as under:

“It would therefore be appropriate if appellants pay

interest @ 6% from 1-4-2000 till amounts payable as

rental compensation are paid to the concerned

landowners. This direction shall not apply to those

cases where the payments have already been made prior

to 1-4-2000.”

It is thus, clear that interest on delayed rental

compensation is also payable, but the same is fixed at the rate

of 6% and from 1-4-2000. The Supreme Court took the

approach as many landowners approached the Court after

considerable lapse of time. In our opinion, therefore, the

interest on unpaid rental compensation, would be payable at

the rate of 6% and that would be from 1-4- 2000. It is true

that we have not fixed any cut off period for payment of

interest in the Judgment of Dinkar Sandipan Gholve (supra),

the same is fixed now, considering the Judgment of the

Supreme Court in State of Maharashtra v. Maimuma Banu.”

26.This Court finds that in the subsequent judgments in the

cases of Jagdish s/o. Kashiprasad Tiwari vs. The Special Land

Acquisition Officer & Ors. (supra) and Uttam Ganpat Ubale &

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Ors. vs. State of Maharashtra & Ors. (supra), this Court followed

the said position and granted relief of rental compensation to the

land owners.

27.The said position of law will have to be applied to the

present case, on the basis of documents available on record.

28.The respondents have placed much emphasis on the fact that

the petitioner itself relied upon the agreement/taba pavati

(possession receipt) dated 24

th

February 2006 executed between

the respondent No.3-PCMC and the petitioner, to contend that

possession by way of private negotiation was taken on the said

date i.e. 24

th

February 2006. On this basis, it was submitted that

since Government Resolution dated 17

th

April 2003 cancelled the

earlier Government Resolutions dated 1

st

December 1972 and 2

nd

April 1979, there was no question of applicability of the concept

of rental compensation as manifested in the said two Government

Resolutions. It was submitted that in any case, possession having

been taken beyond 17

th

April 2003, the petitioner was not entitled

to any relief in this petition. On the other hand, the petitioner

claims that possession of the subject land was taken in the year

2003. In the writ petition, the petitioner has not specified the date

on which the possession was taken in the year 2003, although, it is

claimed that possession was taken in the year 2003 and the land

acquisition award was passed at a belated stage on 22

nd

January

2015.

29.We find that the document at Exhibit ‘A’, which is the

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impugned order dated 10

th

October 2016, whereby the respondent

No.3-PCMC has determined the amount of rent payable to the

petitioner, itself records such amount payable from August 2003

to 24

th

February 2006. Thus, the said document issued by the

respondent No.3-PCMC itself shows that possession of the

aforesaid land of the petitioner was taken in August 2003 for

establishing the octroi post.

30.Even if that be so, we find that taking over possession of the

aforesaid land of the petitioner was after 17

th

April 2003.

Therefore, the position as regards applicability of Government

Resolutions for payment of rental compensation would be the one

obtaining as per Government Resolution dated 17

th

April 2003. A

perusal of the said Government Resolution shows that the earlier

Government Resolutions dated 1

st

December 1972 and 2

nd

April

1979 were cancelled. This was in the backdrop of the financial

liability on the State Exchequer, due to payment of such sums

towards rental compensation and the need for completing land

acquisition proceeding for public purpose, at the earliest. The said

Government Resolution indeed specified that it came into effect

from 17

th

April 2003 and that those cases where possession was

taken prior to the said date, rental compensation would continue

to be payable under Government Resolutions dated 1

st

December

1972 and 2

nd

April 1979.

31.But, it is crucial to note that subsequent Government

Resolution issued within a few months on 17

th

October 2003,

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specified that in cases where possession was required to be taken

urgently before initiation of land acquisition proceeding as per

four categories identified therein, the Government Resolution

dated 1

st

December 1972 would continue to apply and for other

projects, the Government Resolution dated 17

th

April 2003 would

be applicable.

32.Thereafter, Government Resolution dated 26

th

December

2003 was issued, which clarified that in the light of the financial

burden on the State Exchequer, rental compensation as per the

aforesaid Government Resolutions of the years 1972 and 1979

would be payable on the value of open land. The said Government

Resolutions dated 1

st

December 1972, 2

nd

April 1979, 17

th

April

2003, 17

th

October 2003 and 26

th

December 2003, will all have to

be read together for determining the policy of the State as regards

the entitlement of land owners like the petitioner, towards

payment of rental compensation.

33.A submission was made on behalf of respondent No.3-

PCMC that the policy of rental compensation was applicable only

for irrigation projects and since the present case concerned

utilization of the land for octroi post, the said Government

Resolutions could not be made applicable. We are of the opinion

that the said contention cannot be accepted, for the reason that

there cannot be any discrimination between land owners on the

basis of the purpose for which possession of their lands is taken

over, even prior to initiation of land acquisition proceedings. In

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the case of Union of India & Anr. vs. Tarsem Singh & Ors., (2019)

9 SCC 304, the Supreme Court relied upon its own earlier

judgments in the cases of P. Vajravelu Mudaliar vs. Special Deputy

Collector for Land Acquisition, AIR 1965 SC 1017 and Nagpur

Improvement Trust vs. Vithal Rao, (1973) 1 SCC 500, to hold that

for the land owner the only relevant aspect is deprivation of

enjoyment of its own land and that the public purpose for which

the land is ultimately utilized is hardly of any relevance. It was

found that if held otherwise it would amount to discriminatory

treatment to similarly situated land owners, thereby violating

Article 14 of the Constitution of India. Thus, we find that the

respondents cannot escape liability of suitably compensating the

petitioner, only on the basis of the purpose for which the land has

been ultimately utilized. Hence, we hold that the payment of

rental compensation to the petitioner is governed by the aforesaid

executive instructions in the form of Government Resolutions.

34.This Court in the case of Bhagwat s/o. Nathu Patil vs. State

of Maharashtra & Ors. (supra), after analyzing the effect of

subsequent Government Resolutions dated 17

th

April 2003, 17

th

October 2003 and 26

th

December 2003, in the above quoted

portion of the said judgment, held that if possession is taken after

26

th

December 2003, the rental compensation would be payable in

terms of the said Government Resolution i.e. on the basis of price/

value of open land, instead of the price fixed under the award for

“land” as defined under the LA Act. Hence, we find that the

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24

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respondents cannot escape their liability of payment of rental

compensation to the petitioner on the basis that possession of the

subject land was taken for establishing octroi post after 17

th

April

2003. On a proper reading of Government Resolutions dated 17

th

October 2003 and 26

th

December 2003, we hold that only the

basis of calculation of the rental compensation changed from the

one specified in Government Resolution dated 1

st

December 1972

read with Government Resolution dated 2

nd

April 1979 to the one

specified in Government Resolution dated 26

th

December 2003.

We also find that restricting the effect of Government Resolution

dated 17

th

October 2003 to only certain irrigation projects is also

not sustainable, again in the light of the said position of law

reiterated by the Supreme Court in the case of Union of India &

Anr. vs. Tarsem Singh & Ors. (supra) that the use to which the

land is put cannot be the basis for determining the relief to which

the land owner would be entitled, as the fact that the land owner

has been deprived of enjoyment of its own land in all such cases,

can never be disputed.

35.In this context, the above quoted observations made by the

Supreme Court in the case of R. L. Jain (D) by LRS. vs. DDA &

Ors. (supra) assume great significance, for the reason that the

Supreme Court, without any reference to executive instructions

like the Government Resolutions issued by the respondent-State of

Maharashtra, observed that a land owner who is deprived of

possession of its land, even before initiation of land acquisition

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proceeding is entitled to get rent or damages for use and

occupation for the period that the State authority has retained

possession of the property even prior to acquisition. Therefore, we

are inclined to read the aforementioned Government Resolutions

to hold that the petitioner is entitled to payment of rental

compensation from the point in time that possession of the subject

land was taken, till the time compensation for acquisition of the

land was actually paid to it under the land acquisition award. As

per Government Resolution dated 26

th

December 2003, the

calculation of rental compensation would be on the price/value of

open land, instead of value determined under the land acquisition

award for “land” as defined under the LA Act.

36.We also find that as per the law laid down by the Supreme

Court in the case of State of Maharashtra & Ors. v/s. Maimuma

Banu & Ors. (supra) followed by this Court in various judgments,

including the judgment of Division Bench of this Court in the case

of Bhagwat s/o. Nathu Patil vs. State of Maharashtra & Ors.

(supra), the petitioner is also entitled to payment of interest at the

rate of 6% on the amount of rental compensation that shall be

determined in the light of the observations made hereinabove.

37.As regards reliance placed on behalf of respondent No.3-

PCMC on the judgment of this Court in the case of Ashok s/o.

Masu Bansode & Anr. vs. State of Maharashtra & Ors. (supra),

suffice it to say that the said judgment is distinguishable on facts.

In the said case, the acquisition was under the provisions of the

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Act of 2013 by way of private negotiations and in terms of the

provisions of the said Act, the land owner was already paid 25%

additional compensation. It was in this context that certain

observations were made with regard to entitlement of rental

compensation under the LA Act and Government Resolutions. In

the present case, the respondent No.3-PCMC simply walked into

the property of the petitioner in August 2003 for establishing

octroi post. Subsequently, it executed the aforesaid document

dated 24

th

February 2006 titled as agreement/taba pavati

(possession receipt).

38.The petitioner had to knock the doors of this Court in writ

jurisdiction, as the land acquisition proceeding initiated by

issuance of declaration under Section 6 of the LA Act in the year

2009, was not followed up by the respondents-Authorities. It was

only after this Court issued specific directions in its order dated

12

th

June 2013 passed in Writ Petition No. 2970 of 2013 filed by

the petitioner that further steps were taken in the matter and the

land acquisition award was eventually rendered on 22

nd

January

2015. In the said order itself, this Court had granted liberty to the

petitioner to make an application to the appropriate Authority for

grant of rental compensation, as per the policy of the State. In that

regard, the respondent No.3-PCMC determined the amount

payable towards rental compensation only for the period between

August 2003 to 24

th

February 2006, as per the impugned order

dated 10

th

October 2016. The said order was not in terms of the

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27

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policy of the State as manifested in the aforementioned

Government Resolutions, culminating in the Government

Resolution dated 26

th

December 2003.

39. Hence, we find substance in the contentions raised on behalf

of the petitioner and further, that the respondents are not justified

in contending that rental compensation is not payable to the

petitioner, despite the admitted position that respondent No.3-

PCMC took possession of the subject land in August 2003 and the

compensation payable under the land acquisition award was

eventually determined as per the award passed after about 12

years on 22

nd

January 2015.

40.In view of the above, the writ petition is allowed in the

following terms :

(a)The impugned order dated 10

th

October 2016 is quashed

and set aside.

(b)The respondent No.3-PCMC is directed to calculate the

amount of rental compensation payable to the petitioner

from August 2003 till the date on which amount of

compensation under the said award dated 22

nd

January 2015

was paid to the petitioner. The amount shall be calculated as

per Government Resolution dated 26

th

December 2003 i.e.

on the basis of the price/value of open land and rental

compensation shall be at the rate of 8% p.a. of the said

price/value, instead of the price/value determined under the

said award, as per the definition of “land” under the LA Act.

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(c)The respondent No.3-PCMC shall pay the aforesaid amount

of rental compensation along with interest at the rate of 6%

p.a. in terms of the judgment of the Supreme Court in the

cases of State of Maharashtra & Ors. v/s. Maimuma Banu &

Ors. (supra) and Bhagwat s/o. Nathu Patil vs. State of

Maharashtra & Ors. (supra).

(d)The said exercise of determining the amount payable in

terms of the directions issued hereinabove, shall be

completed, and the amounts shall be paid to the petitioner,

within a period of four months from today.

(e)The amount of Rs.3,22,308/- already paid to the petitioner

as per the impugned order dated 10

th

October 2016 shall be

adjusted, while making payment of the amount as per the

directions given hereinabove.

41.Pending applications also stand disposed of.

(SHREERAM V. SHIRSAT, J.) (MANISH PITALE, J.)