The court observed that Maharashtra's conduct in the matter was not that of a "model state".
The Supreme Court on Wednesday warned the Maharashtra government that it would suspend its freebie schemes unless it pays compensation to a private party whose land was "illegally" occupied by it more than six decades ago.
Coming down heavily on the Maharashtra government, the court said it had a huge amount to "waste on freebies" but does not have money to compensate a private party which lost land to it "illegally".
Observing that Maharashtra's conduct in the matter was not that of a "model state", the court warned it may direct that all the freebie schemes will be suspended until the compensation amount was paid.
A bench of Justices BR Gavai and K V Viswanathan noted while the state has offered to pay Rs 37.42 crore as compensation, the applicant's counsel has contended that it comes to around Rs 317 crore.
Advocate Nishant R Katneshwarkar, appearing for Maharashtra, urged the bench to grant three weeks, saying the matter was being considered at the highest level and certain principle was required to be followed for calculating compensation according to the ready reckoner.
"We will grant you three weeks time and pass an interim order that until we permit, no freebies schemes should be implemented in the state of Maharashtra. We will stop 'Ladki Bahin', 'Ladka Bhau'," the bench said.
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 in the age group of 21 to 65 years whose family income was 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.
During the hearing, Mr Katneshwarkar said he bowed to the directions passed by the court but due to such observations, headlines were made.
"Maybe. We are not bothered about it. We don't read newspapers. We are concerned about the rights of the citizens," Justice Gavai observed.
The bench said it was constrained to make those observations.
"You have thousands of crores of rupees to waste on freebies from the money of the public exchequer, but you don't have money to give to the person whose land has been deprived without following due process of law," it asked.
Referring to the earlier orders passed by the top court, the bench said it had recorded the "glaring facts" in the matter.
It noted since the court was not satisfied with the stand taken by the state in its affidavit filed on August 9, it had asked the state's counsel to discuss with the chief secretary and come out with a proposal which would at least be reasonable.
The bench noted the land belonging to the applicant was illegally taken in possession by the state and later it was allotted to the Armament Research Development Establishment Institute (ARDEI).
It said despite succeeding in the litigation right up to the top court, the applicant was required to run from pillar to post to get their legitimate due.
"We are not impressed with the submissions (of the state). If the state government wants to act with urgency in certain matters, the decisions are taken within 24 hours. However, we are inclined to give some more time to the state government to work out a reasonable compensation," the bench said.
It posted the matter for hearing on August 28 to enable the state to come out with proposal for grant of reasonable compensation.
"Needless to state that if the state government does not come with such a proposal by that date, we will be compelled to pass such order as deemed fit and proper in the circumstances," the bench said.
The state's counsel said they be permitted to file an affidavit so that they can point out the steps taken by them.
The bench said the state may file an affidavit before the next date of hearing.
"But if we find that there is non-application of mind and he (applicant) is being harassed… not only that we will direct all compensation to be paid as per the new Act, we will direct that until that amount is paid, all your freebie schemes will be suspended," it said.
"We are warning you that if we don't find the stand to be genuine, apart from directing the compensation to be paid as per the new Act, the second direction will hit you more," the bench said.
While hearing the matter on Tuesday, the court had asked the state to come up with a "reasonable" amount of compensation.
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 Supreme Court to get possession of the 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.
The government has said subsequently, another piece of land was allotted to the private party in lieu of the land that was in the ARDEI's possession.
However, later it was 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 his favour.