MUNICIPAL CORPORATION OF GREATER BOMBAY AND ORS. versus THE CENTRAL BANK OF INDIA AND ANR. ETC.

Citation: [1994] 3 S.C.R. 823 · Decided: 02-05-1994 · Supreme Court of India · Bench: K. RAMASWAMY, N. VENKATACHALA

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Judgment (excerpt)

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MUNICIPAL CORPORATION OF GREATER BOMBAY AND ORS. A 
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v. 
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THE CENTRAL BANK OF INDIA AND ANR. ETC. ETC. 
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MAY 2, 1994 
[N. VENKATACHALA AND K. RAMASWAMY, JJ.] 
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Bombay Municipal Co1poratio11 Act, 1888: Sections 2Y8, 299, 301(1) 
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and 504. 
Corporation-Land acquired j(Jr Public Street-Compensation for- c 
Principle for detemiination of-Whether 'pecified by Section 301(1)-<:om-
pensation whether to be determined on market value of acquired lanli-
Method adopted for determination of compensation-What is-Interest on 
payment of compensation-Whether payable. 
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The appellant-Corporation which resolved to improve some public 
streets by widening them, acquired out of the lands of respondents certain 
portions which fell within the regular line of the public streets and took 
their possession as provided for in sub-section (2) of Section 298 and 
sub-section (1) of Section 299 of the Bombay Municipal Corporation Act, 
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1888. The Commissioner who was liable under sub-section (1) of S.ection 
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301 of the Act, to pay compensation to the respondents for their acquired 
portions or lands, offered to pay them compensation at an uniform rate of 
Rs. 80 per square yard of land. But the respondents, who disputed the 
adequacy of the said compensation offered to be paid to them, filed 
applications before the Chief Judge of the Court of Small Causes, Bombay, F 
praying for grant of higher compensation. The Chief Judge decided that 
the compensation payable to the respondents was their market value 
worked out at a rate ranging from Rs. 450 per sq. yard to Rs. 640 per sq. 
yard. The appellant-Corporation assailed the judgment of Chief Judge, as 
granting excessive compensation, by filing appeals in the High Court of 
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Bombay. A Division Bench of the High Court allowed one of the appeals 
partly by reducing the compensation in some measure and dismissed the 
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rest. According to the Chief Judge of the Court of Small Causes, and the 
Division Bench of the High Court, what was payable by way of compensa· 
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lion under sub-section (1) of Section 301 of the Act to the owners for the 
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portions of their lands acquired under either Sction 298 or Section 299 H 
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823 
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824 
SUPREME COURT REP'JRTS 
[1994] 3 S.C.R. 
A thereof was the market value of such portions and therefore, the market 
value obtainable by the owuer for their respective entire lands had to be 
appropriated between the unacquired portion of the land and the acquired 
portion of the fand and it was that much of the market value apporticnable 
to acquired land, which was liable to be paid to the owuer as compensation 
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for his acquired land. Consequently, both the Chief Judge of Court of 
Small Causes and the Division Bench of the High Court determined the 
amount of market value, as such, of the acquired portions of the lands of 
respondents and ordered payment of such amounts of market value as 
compensation along with 6 per cent interest per annum from the date of 
taking possession of the lands till the date of its payment. 
In appeals to this Court on the questions : 
(i) Does the provision in sub-section (1) of section 301 of the Bombay 
Municipal Corporation Act, 1888 specify a principle of determination of 
compensation payable to the owuers of the buildings or lands acquired for 
D a public street under sections 298 and 299 thereof? 
(ii) Does the principle specified in sub-section (1) of Section 301 
warrant deter~ination of such compensation according to the market 
value of such acquired buildings or lands? 
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(iii) What method could be adopted for determining the amount of 
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compensation payable under sub-section (1) of Section 301 of the Act? 
(iv) Does auy interest become payable on the amount of compensa-
tion payable under sub-section (1) of Section 301 to the owuer for his 
acquired property? 
Allo"ing the appeals and setting aside the judgment of the Chief 
Judge of the Small Causes Court and of the High Court, this Court 
HELD : 1. When sub-section (1) of Section 301 of the Bombay 
Municipal Corporation Act, 1888 requires the loss sustained by the owuer 
as a consequence of acquisition and the expenses ·incurred by the o~er 
as a consequence of acquisition, to be made good to such owner by way of 
compensation, what is found in that sub~section cannot be anything other 
than the principle of determination of compensation which is deliberately 
or wantonly specified therein, having regard to the vulnerabil

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