NEW DELHI: The Supreme Court today came down heavily on the Maharashtra government, noting that it would be forced to suspend its freebie welfare schemes unless it pays compensation to a private party whose land was "illegally" occupied by the state more than six decades ago.

Advocate Nishant R. Katneshwarkar, appearing for Maharashtra, urged the bench to grant three weeks' time, saying the matter was being considered at the highest level and certain principles were required to be followed for calculating compensation according to the ready reckoner. 

A bench of Justices B.R. Gavai and K.V. Viswanathan then stated that they would be granting the state three weeks' time and would pass an interim order that, until further notice, no freebies schemes should be implemented in the state of Maharashtra. "We will stop 'Ladli Bahin', 'Ladka Bhau'," the bench said.

The apex court castigated the state, noting that it has a huge amount to "waste on freebies" but does not have the money to compensate a private party that lost land to the state "illegally." The court also observed that Maharashtra's conduct in the matter was not that of a "model state."

Under the 'Mukhyamantri Majhi Ladki Bahin Yojana' announced by the state government earlier this year, Rs 1,500 is slated to be transferred into the bank accounts of eligible women aged 21 to 65 years whose family income is less than Rs 2.5 lakh. Similarly, under the 'Ladka Bhau Yojana', the scheme's primary goal is to provide financial assistance and practical work experience to young men.

The court was hearing a matter related to the construction of buildings on forest land in Maharashtra, where a private party has succeeded in the apex court in obtaining possession of land that was "illegally occupied" by the state.

The state government has claimed that the said piece of land was occupied by the ARDEI, a unit of the Centre's Defence Department, and that subsequently, another piece of land was allotted to the private party in lieu of the land that was in ARDEI's possession. However, it was later found that the land allotted to the private party was notified as forest land. In its July 23 order, the bench noted that the private party, which has succeeded up to the top court, cannot be denied the benefits of the decree passed in its favor.

A bench of Justices Gavai and Viswanathan noted that while the state has offered to pay Rs 37.42 crore as compensation, the applicant's counsel has contended that the amount should be around Rs 317 crore.