Land Acquisition | Apportionment of Compensation Is a Judicial Function, Not Administrative Discretion: Bombay High Court Quashes SDO's Order

Disputes over who gets what from compulsory acquisition cannot be decided by revenue officials— In a detailed and firmly worded judgment, the Bombay High Court struck down an order passed by the Sub-Divisional Officer (SDO), Maval, disbursing ₹34 crores in land acquisition compensation despite an ongoing partition suit and unresolved claims. The Court held that Section 35 of the Maharashtra Industrial Development Act (MIDC Act) requires disputes over apportionment to be referred to the designated authority, and not unilaterally decided by the Collector or SDO.

“The SDO’s order is ex-facie without jurisdiction. Apportionment of compensation is a judicial function that cannot be usurped by revenue authorities.”

The land in question, originally part of the estate of Mayaji Bhau Pavale, had been acquired under the MIDC Act. An award dated 27 February 2023 granted compensation of approximately ₹34 crores. Petitioner Bhaskar Mahipat Pavale claimed a share in the acquired land through descent from one of Mayaji’s sons and filed a civil suit for partition in 2019.

However, despite objections raised, the SDO passed an order on 24 July 2023 disbursing the entire compensation to select respondents—on the ground that their names appeared in revenue records—after obtaining indemnity bonds. The petitioner challenged this order, seeking a reference under Section 35 of the MIDC Act.

“Entries in Revenue Records Are Not Determinative of Title”: Court Criticizes Collector’s Premise

The Court held that the SDO wrongly assumed that names in the revenue records were conclusive for deciding entitlement: “This premise is entirely misconceived… It is well settled that entries in revenue records are never determinative of title.”

The Bench, comprising Justice M.S. Sonak and Justice Jitendra Jain, noted that the petitioner had filed a partition suit well before the award, and the claim could not be dismissed as frivolous. It observed:

“By no stretch can the Petitioner’s claim be described as frivolous. He has established lineage from the original owner and filed a suit well before the impugned order was made.”

“Discretion Under Section 35 Is Not Absolute—It Must Be Judicially Exercised”

Though Section 35 of the MIDC Act uses the word “may” in empowering the Collector to refer disputes, the Court clarified: “Even assuming that some discretion was vested in the SDO… this discretion has been exercised perversely or without regard to relevant considerations. Irrelevant factors, such as non-production of interim orders, have influenced the decision.”

Relying on the Supreme Court’s judgment in Vinod Kumar v. District Magistrate, Mau (2023), the Court reiterated: “There is a fine distinction between determining the amount of compensation and the apportionment of that compensation. The former may be administrative, but the latter is judicial.”

“Even a Minuscule or Contested Share Must Be Adjudicated by the Authority”

The respondents argued that since the petitioner’s claim was “minuscule,” it shouldn’t stall the disbursal. The Court rejected this outright: “This is not a question of the Petitioner’s claim alone. Several other respondents have raised disputes over lineage and title. Apportionment must be adjudicated, not presumed.”

The Court warned revenue officials against “rushing to disburse compensation” before legal rights are clarified, adding:

“There is an unhealthy trend of Land Acquisition Officers usurping judicial functions by hurriedly disbursing compensation despite disputes.”

Setting aside the SDO’s order, the Court directed: “The SDO shall, within one month, refer the apportionment dispute to the competent authority under Section 35 of the MIDC Act.”

The Court also directed that the entire compensation amount, along with accrued interest, be transferred to the authority, and invested in a nationalised bank in terms of Section 37.

“The authority should endeavour to dispose of the apportionment dispute as expeditiously as possible.”

Further clarifying, the Court added: “We have not examined the rival claims on merits. All such contentions are left open for the authority to determine.”

This judgment firmly affirms that compensation for compulsory acquisition cannot be disbursed based on administrative assumptions about title, and that apportionment disputes must be decided by judicial or quasi-judicial authorities. The High Court’s intervention ensures that rightful claimants are not denied due process under the MIDC framework.

“Apportionment is not merely an administrative task—it is a complex judicial function requiring legal scrutiny, evidence, and fairness.”

Date of Decision: 26 March 2025