Supreme Court Directs Mumbai Municipal Corporation to Consider Compensation or Rehabilitation for Long-Time Occupants

The Supreme Court of India recently ruled in Jaffar Ali Nawab Ali Chaudhari & Ors. vs. Municipal Corporation of Greater Mumbai, addressing a long-standing dispute over the eviction and rehabilitation rights of occupants residing on municipal land since 1976. The Court set aside the High Court’s ruling and directed the Corporation to consider the appellants’ claims for either rehabilitation or compensation under the applicable town planning scheme.

Background of the Case

The appellants had been residing on the disputed land since at least 1976, as evidenced by a census certificate dated 24.05.1978. Their possession was also acknowledged by the Mumbai Municipal Corporation, which had assessed them for property tax. However, disputes arose when the Corporation issued multiple eviction notices under the Mumbai Municipal Corporation Act, 1888, and the Maharashtra Regional and Town Planning Act, 1966.

The appellants challenged these notices through multiple lawsuits, securing favorable judgments at the trial court level. However, the Bombay High Court overturned these rulings, leading the occupants to appeal before the Supreme Court.

Arguments by the Petitioner (Jaffar Ali Nawab Ali Chaudhari & Ors.)

The petitioners contended:

They had been residing on the land since 1976 and were thus entitled to rehabilitation or compensation under the Town Planning Scheme, notified on 01.08.1994.
The Mumbai Municipal Corporation had issued multiple circulars confirming the entitlement of long-term occupants to compensation.
Despite paying municipal taxes and being acknowledged as residents, their claims for rehabilitation had not been considered.
The High Court’s ruling disregarded their legal entitlement under the Town Planning Act.

Arguments by the Respondent (Municipal Corporation of Greater Mumbai)

The Mumbai Municipal Corporation countered these claims, arguing that:

The appellants had no legal title over the property, and their continued occupation was unauthorized.
The lawsuit was barred under Section 149 of the Mumbai Municipal Corporation Act, 1888, which restricts certain legal actions against the Corporation.
Their claim was filed after significant delay and could create a precedent leading to numerous similar claims.
The High Court was correct in rejecting their plea as per municipal regulations.

Supreme Court’s Observations

The Supreme Court analyzed the legal standing of the appellants and found the High Court’s ruling to be erroneous. Key observations included:

On Long-Term Occupation and Legal Entitlements:
- The appellants’ possession of the land since 1976 was an undisputed fact.
- The Town Planning Scheme and municipal circulars had provisions allowing for either rehabilitation or compensation of long-term occupants.
- Despite this, the Corporation had not considered the appellants’ request.
On the High Court’s Error:
- The High Court failed to acknowledge that the appellants’ claim was backed by official policies.
- The ruling ignored fundamental municipal obligations regarding rehabilitation under town planning laws.
On the Corporation’s Responsibility:
- The Corporation could not deny consideration of claims merely on the basis of procedural arguments.
- It had a duty to evaluate and address the appellants’ grievances fairly.

Key Excerpt from the Judgment

“In terms of the Town Planning Scheme, notified on 01.08.1994 and subsequent circulars, the claim of any occupant of the property is required to be considered for rehabilitation or for payment of compensation. The appellants are still in possession of the property… The only prayer of the appellants is that their claim for rehabilitation or payment of compensation be considered in terms of the Town Planning Scheme. The same has not been considered.”

The Court found that the appellants’ demand was legitimate and should have been addressed properly by the municipal authorities.

Final Judgment and Directions

The Supreme Court ruled:

The appeal was allowed, and the High Court’s judgment was set aside.
The Mumbai Municipal Corporation was directed to consider the appellants’ claims for rehabilitation or compensation under the Town Planning Scheme.
The Corporation was given three months to complete this process and issue an appropriate decision.

This judgment reinforces the principle that municipal bodies must adhere to their own policies and fairly assess claims of long-term occupants, ensuring that rehabilitation and compensation provisions are properly implemented.

Petitioner Name: Jaffar Ali Nawab Ali Chaudhari & Ors..
Respondent Name: Municipal Corporation of Greater Mumbai.
Judgment By: Justice Vikram Nath, Justice Rajesh Bindal.
Place Of Incident: Mumbai, Maharashtra.
Judgment Date: 06-11-2023.

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