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This case concerns a recent decision dated 14 October 2025 by the Bombay High Court in the case of NESCO Ltd. v. State of Maharashtra & Ors., wherein Justices G.S. Kulkarni and Aarti Sathe set aside the State's acquisition of NESCO's private land in Goregaon (East) under Section 14 of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 (“Slum Act”). The Hon'ble Court held the acquisition arbitrary and unconstitutional, reaffirming that a private landowner has a preferential statutory right to redevelop its slum-affected land and cannot be dispossessed unless that right is first exhausted. Click here for the full Order
Brief Facts
NESCO owned about 1,500 sq.m. of private land that was later declared a Slum Rehabilitation Area under Section 3C(1). In 2009, a slum-dwellers' society requested acquisition of the land under Section 14(1), alleging neglect by the owner. Despite NESCO not being served proper notice or given an opportunity to submit a redevelopment proposal, the SRA recommended acquisition, and the State issued a notification in 2016. Compensation of only ₹12 lakh was awarded in 2017, prompting NESCO's writ petition challenging the acquisition as arbitrary and violative of Article 300A.
Issues for Adjudication
- Whether the State could acquire private land under Section 14(1) without giving the owner a fair opportunity to redevelop it.
- Whether procedural safeguards under Sections 13 and 14, particularly the 120-day notice to landowners, were complied with.
- Whether the rights of slum societies override the landowner's preferential right to redevelop.
Held
The Court quashed the acquisition, holding that no valid opportunity was given to NESCO to exercise its redevelopment rights. The Bench held that acquisition under Section 14 is a “draconian” power, which is to be used only after the landowner declines or fails to redevelop within the statutory period. Since NESCO was never invited to propose its own Slum Rehabilitation Scheme, the process was illegal. The Court admonished the SRA and State officers to “think before invoking such draconian powers” and cautioned against acting at the behest of private developers.
MHCO Comment
This judgment consolidates the line of authorities protecting private property rights under Article 300A and curbs misuse of Section 14 acquisitions. It emphasizes that landowners retain the first and primary right to rehabilitate slum dwellers on their land, and acquisition is permissible only after this right lapses. Practically, it compels authorities to strictly follow Sections 3C, 13, and 14 of the Slum Act, ensuring procedural fairness and preventing collusion between officials and developers. The ruling will serve as a critical precedent for future disputes where private redevelopment and slum rehabilitation intersect, strengthening judicial oversight over the exercise of compulsory acquisition powers.
This article was released on 16 October 2025.
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