Gujarat High Court
Oil & Natural Gas Corporation Ltd vs Patel Chunilal Khodidas on 23 July, 2025
NEUTRAL CITATION
C/FA/599/2006 JUDGMENT DATED: 23/07/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 599 of 2006
With
R/FIRST APPEAL NO. 600 of 2006
With
R/FIRST APPEAL NO. 601 of 2006
With
R/FIRST APPEAL NO. 602 of 2006
With
R/FIRST APPEAL NO. 603 of 2006
With
R/FIRST APPEAL NO. 604 of 2006
With
R/FIRST APPEAL NO. 605 of 2006
With
R/FIRST APPEAL NO. 606 of 2006
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
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Approved for Reporting Yes No
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OIL & NATURAL GAS CORPORATION LTD
Versus
PATEL CHUNILAL KHODIDAS & ANR.
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Appearance:
M/S TRIVEDI & GUPTA(949) for the Appellant(s) No. 1
MS AGNEYA MANKAD, ASST. GOVERNMENT PLEADER for the
Defendant(s) No. 2
RULE SERVED for the Defendant(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE HEMANT M.
PRACHCHHAK
Date : 23/07/2025
COMMON ORAL JUDGMENT
1. All these appeals involve common questions on law and facts and therefore, they are disposed of by this common Page 1 of 14 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 23:17:16 IST 2025 NEUTRAL CITATION C/FA/599/2006 JUDGMENT DATED: 23/07/2025 undefined judgment.
2. These appeals have been filed against the common judgment and award dated 18.08.2005 passed by the learned Principal Senior Civil Judge, Mehsana, (hereinafter referred to as the "Reference Court") in Land Acquisition Reference Nos.819 of 2003 to 826 of 2003 whereby the References were partly allowed and the present appellant - O.N.G.C. was held liable to pay additional amount of compensation to the original claimants along with interest and costs.
3. The short facts giving rise to present appeal are that the competent authority under the Land Acquisition Act made a proposal for temporary acquisition of the lands at village Bhatariya, Ta.:Viramgam (Detroj), District Mehsana, belonging to the respondents-original claimants. After following due procedure, the lands came to be acquired. Award came to be passed by the competent authority fixing the amount of compensation. 3.1. However, being dissatisfied with the award, the Page 2 of 14 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 23:17:16 IST 2025 NEUTRAL CITATION C/FA/599/2006 JUDGMENT DATED: 23/07/2025 undefined original claimants raised dispute, by way of references. The Reference Court partly allowed the Reference Cases by way of the impugned judgment and award awarding Rs. 8.33 per sq. mtr. from the date of taking possession (i.e. 25.3.1987) upto 31.12.1997, Rs.9/- per sq. mtr. from 1.1.1998 to 31.12.1999, Rs.10 per sq. mtr. from 1.1.2000 to 31.12.2002, Rs.12/- per sq. mtr. from 1.1.2003 to 31.12.2004, and thereafter, Rs.15/- per sq. mtr from 1.1.2005 onwards as against the amount of Rs.1.50 per sq. mtr. respectively. Being aggrieved and dissatisfied with the same, the appellant has preferred these appeals.
4. Heard Ms. Aishwarya Reddy, learned advocate for M/s. Trivedi and Gupta for the appellant and Ms. Agneya Mankad, learned Assistant Government Pleader for respondent No.2.
Though served, none has remained present on behalf of the respondent No.1 - original claimant.
5. Ms. Reddy, learned Counsel for the appellant-ONGC, has submitted that the impugned judgment and award Page 3 of 14 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 23:17:16 IST 2025 NEUTRAL CITATION C/FA/599/2006 JUDGMENT DATED: 23/07/2025 undefined passed by the Reference Court is erroneous, unjust and against the settled principle of law. She has submitted that the jurisdiction of Reference Court under Section 35(3) of the Land Acquisition Act is limited to determining questions of sufficiency of compensation and that too only in case of a difference between the Collector and persons interested that arose at the relevant point of time. Learned advocate for the appellant has submitted that the reference court has no power to consider the compensation beyond the period of three years. She has submitted that the reference court has committed serious error while allowing all the reference cases. She has submitted that in light of escalating interest rates levied every three years, this Court in First Appeal No.867- 874 of 2007, ONGC vs. Patel Somabhai Prabhudas & Anr., dated 08.07.2015, has held as follows :
"14. So far as the direction issued with regard to the interest is concerned, as it is not permanent acquisition but it was temporary acquisition and therefore, the interest cannot be awarded under Section 28 of the Limitation Act, as if it is a regular acquisition. Therefore, the direction issued qua interest also deserves to be quashed and set aside and the same is hereby quashed and set aside."Page 4 of 14 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 23:17:16 IST 2025
NEUTRAL CITATION C/FA/599/2006 JUDGMENT DATED: 23/07/2025 undefined 5.1 Ms. Reddy, learned advocate for the appellant has submitted that in light of the directions issued by this Court, the only escalation in rent/compensation permissible is after the completion of three years from the date of possession taken by ONGC. She has submitted that the direction of the Reference Court, to the effect that the compensation fixed at Rs.15/- per sq. mtr. With effect from 01.01.2005 shall be increased by 15% every three years, is contrary to the order of this Court and beyond the jurisdiction of the Reference Court. She has further submitted that this Court has categorically set aside any observations granting additional compensation over and above the rent fixed by ONGC from time to time and by necessary implication, this would also preclude any period increase in compensation as directed by the Reference Court, except in accordance with the specific escalation allowed only three years after ONGC takes possession, as per this Court's mandate. She has submitted that the observation made by the Reference Court that ONGC is in illegal possession of eh land Page 5 of 14 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 23:17:16 IST 2025 NEUTRAL CITATION C/FA/599/2006 JUDGMENT DATED: 23/07/2025 undefined beyond the three-year period under Section 35(1) of the Land Acquisition Act and that ONGC stands in the category of a trespasser are beyond its jurisdiction. She has submitted that this Court has already clarified that the Reference Court was only dealing with a particular acquisition and its jurisdiction is limited to determining the sufficiency of compensation under Section 35(3) of the Act. She has submitted that without considering the facts of the case, the reference court has passed the impugned judgment and award in favour of the opponent original claimants. She has also submitted that even the reference Court has also exceeded jurisdiction while awarding interest beyond a period of three years, because when the Court has no power to award the compensation beyond period of three years, there is no question of awarding interest, as it was awarded by the reference court in the present case. She has submitted that the lands of the claimants were acquired in the year 1987 and till the date of award i.e. 18.08.2005, the concerned parties have failed to restore the possession of Page 6 of 14 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 23:17:16 IST 2025 NEUTRAL CITATION C/FA/599/2006 JUDGMENT DATED: 23/07/2025 undefined the land belonging to the claimants or the occupiers or the interested persons.
5.2 Ms. Reddy, learned advocate for the appellant referred to and relied upon the decision of this Court in case of Oil & Natural Gas Corporation Ltd. vs. Chaudhari Shamjibhai Devraj through Heirs Chaudhari Shivram & Ors., dated 21.3.2006 passed in First Appeal No.792 of 2003 and allied matters, wherein, this Court has established the definitive legal position on future rate of compensation and urged that the impugned judgment and award passed by the Reference Court may be quashed and set aside.
6. I have gone through the record of the appeals and relevant documents. I have also examined the record and proceedings of the appeal and the material placed on record.
7. It appears that present appeals came to be admitted vide order dated 21.3.2006 passed by coordinate bench of this Court and conditional interim relief was grated by Page 7 of 14 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 23:17:16 IST 2025 NEUTRAL CITATION C/FA/599/2006 JUDGMENT DATED: 23/07/2025 undefined the coordinate bench of this Court vide order dated 4.8.2006 passed in Civil Application Nos. 3407 to 3414 of 2006.
8. While considering the legal position on future rate of compensation, it is appropriate to refer to the observations made by this Court in the case of O.N.G.C. (supra) referred and relied upon by the learned advocate Ms. Reddy, in paragraphs 5.2, 5.3 and 6, which are reproduced hereunder :
"5.2 On the facts of the case, it is evident that the Reference Court has also determined the further rent which issue was not before it. I am, therefore, of the opinion that the contention raised by the learned Advocate for the appellant that the observation or direction issued by the Reference Court in the operative part of the orders require to be quashed and set aside, is required to be accepted. If the said direction is allowed to remain then it would amount to granting the rent which is over the rent fixed by the appellant-O.N.G.C. from time to time. Moreover, the same has been fixed without considering as to what would be the future rent fixed by the appellant- O.N.G.C, which is beyond the scope of reference. Hence if the said observation is allowed to remain then, in that event such compensation would be much more than the amount which has been found to be adequate by the Court.
5.3 It may be noted that the Reference Court was dealing with a particular acquisition and it was not open for the said Court to pass an order in respect of future rent. Such an observation on the part of the Reference Court is clearly bad in law in view of the provisions of Section 35(3) of the Act. In that view of the matter, the observations or direction issued by the Reference Court with regard to additional amount of compensation, requires to be quashed and set aside.Page 8 of 14 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 23:17:16 IST 2025
NEUTRAL CITATION C/FA/599/2006 JUDGMENT DATED: 23/07/2025 undefined 6.0 In the result, these appeals are allowed. The observation "over the rent fixed by O.N.G.C. from time to time with the running interest at the rate of 9% p.a. from the date of due date of running till the day of payment is made", made by the Reference Court in the operative part of the impugned judgments and awards, is quashed and set aside. These appeals are allowed to the aforesaid extent. Rule is made absolute to the aforesaid extent with no order as to costs."
8.1 While considering the contention with regard to delay, it is appropriate to refer to the observations made by this Court in the case of Oil & Natural Gas Corporation Ltd. vs Sankarji Hemaji & Anr. reported in 2008 2 GLR 1226 which reads as under:-
"(B) Land Acquisition Act, 1894 (1 of 1894) - Sec. 35(3)- Limitation Act, 1963 (XXXVI of 1963) - Art.137 - Lands acquired in 1980-
Applications fro reference made in 2001- Held, reference applications were not maintainable on the ground of delay and laches.
(C) Land Acquisition Act, 1894 (1 of 1894) - Sec. 35-Scope of power of reference Court is confined to determine adequacy of compensation / rent - Reference Court gave findings holding that acquisition proceedings were null and void, that possession of acquiring body (O.N.G.C.) was illegal and unauthorized, etc. - Findings and observations, held, were beyond the jurisdiction the reference Court - Observation made that the Judge of the reference Court had "tried to show his own knowledge without proper application of mind to the issue"
25. Even otherwise as stated above, the Special Land Acquisition Officer declared the award under sec.35 of the Act as back as on 11/8/1980 determining the compensation/rent at the rate of 0.35 paise per sq.mtr. per annum which was never objected to by the original land owners / interested persons, but the same came to be accepted without raising any objection and still the respondents herein - original claimants submitted the applications for making reference to the reference court under sub section (3) of sec.35 i.e. after a period of 21 years raising the dispute as to sufficiency of the compensation which was determined while declaring award on 11/8/1980. It is the contention on behalf of the original claimants that as under sub section (3) of sec.58 of the Act on 11/8/2008, no Page 9 of 14 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 23:17:16 IST 2025 NEUTRAL CITATION C/FA/599/2006 JUDGMENT DATED: 23/07/2025 undefined time limit is prescribed and as it is the duty of the Collector to refer the dispute to the Reference Court and as the Collector has failed to perform the duty cast upon him, the application submitted by the claimants are within the period of limitation and/or not barred by delay and laches. It is the contention on behalf of the appellants and the Special Land Acquisition Officer that when there is no limitation prescribed, Article 137 of the Limitation Act would come in picture and within three years from the date of cause of action, the applications could have been made. It is true that under sub section (3) of sec.35 of the Act, no limitation is prescribed. However, that does not mean that the application for reference can be made at any time. Article 137 of the Limitation Act provides that when there is no limitation prescribed or provided, three years would be the limitation and from the date of cause of action within three years, an aggrieved person can initiate proceedings. The reference court has misinterpreted the provisions of Sec.35 of the Act. While considering the submissions with regard to the limitation, the reference court has held that as the entire land acquisition proceedings and the award are null and void, Article 137 of the Limitation Act (reference court has considered sec.137 of the Limitation Act wrongly) would not be applicable, more particularly when the Collector has failed to perform the duty cast upon him, making the reference to the reference court as provided under sub section (3) of section 35 of the Act. As stated above, such a findings and the observations of the Reference Court are perverse and illegal. As held by us, there was no dispute with regard to sufficiency of the possession raised by the claimants at the relevant time when the award was declared, therefore, there was no occasion for the Collector to refer the dispute to the reference court and we have also held that the reference applications are not maintainable. Even otherwise, assuming that it was the duty of the Collector to refer the dispute to the reference court and when the Collector failed to perform his duty, in that case also, the claimants are required to initiate appropriate proceedings within reasonable time, as there is no time limit prescribed under the Act. Certainly the claimants cannot submit the applications and/or raise the dispute after a period of 21 years. Thus, on the ground of delay and laches the reference applications were not maintainable. As such when the applications were submitted after a period of 21 years raising dispute with regard to adequacy of the compensation awarded in the year 1980, the Special Land Acquisition Officer, ought not to have referred the dispute to the reference court. As such the Special Land Acquisition Officer himself has committed an error and/or acted arbitrarily in referring the dispute to the reference Court after a period of 21 years."
9. In the above referred observations, Article 137 of Page 10 of 14 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 23:17:16 IST 2025 NEUTRAL CITATION C/FA/599/2006 JUDGMENT DATED: 23/07/2025 undefined the Limitation Act is very well discussed by this Court. Even in the decision of this Court dated 15.6.2015 passed in First Appeal No.4854 of 2008 and yet another decision of this dated 12.8.2010 passed in First Appeal No. 3865 of 2008, the said issue is well discussed.
10. Considering the above referred decisions of this Court vis as vis it is evident from the present record that the reference court, without considering the issue of delay has passed the impugned judgment and award in favour of the opponent original claimants. Even otherwise as stated above, the Special Land Acquisition Officer declared the award under Section 35 of the Act as back as in the year 1983 determining the compensation, which was never objected by the original land owners-interested persons and the same came to be accepted without raising any objection. The contention on behalf of original claimants before the Reference Court that under Subsection (3) of Section 35 of the Act, no time limit is prescribed and as it is a duty of the Collector to refer the dispute to the reference court and as the collector has Page 11 of 14 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 23:17:16 IST 2025 NEUTRAL CITATION C/FA/599/2006 JUDGMENT DATED: 23/07/2025 undefined failed to perform the duty cast upon him, the application submitted by the claimants before the District Court are within a period of limitation and not barred by the delay and laches, would come into play when there is no limit prescribed under Article 137 of the Limitation Act and within three years from the date of cause of action the application could have been made. The said Section 35(3) reads as under:-
"35. Temporary occupation of waste or arable land. Procedure when difference as to compensation exists (1)XXXXXXXXX (2)XXXXXXXXX (3) In case the Collector and the persons interested differ as to the sufficiency of the compensation or apportionment thereof, the Collector shall refer such difference to the decision of the Court."
11. In view of the aforesaid settled legal position, the reference Court committed serious error in entertaining reference almost after 18 years after the lands were acquired by the appellant ONGC in the year 1987. The reference was not maintainable beyond a period of limitation prescribed under Article 137 of the Limitation Page 12 of 14 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 23:17:16 IST 2025 NEUTRAL CITATION C/FA/599/2006 JUDGMENT DATED: 23/07/2025 undefined Act. This Court has on very limited aspect interfered on the ground that it is out of the scope and purview of Section 35(3) of the Act.
12. In view of settled legal position the reference court committed serious error or law and on facts both while determining the reference cases.
13. For the foregoing reasons present appeals are allowed. The judgment and award dated 18.08.2005 passed by the learned Principal Senior Civil Judge, Mehsana, in Land Acquisition Reference Nos.819 of 2003 to 826 of 2003 is hereby quashed and set aside.
14. So far as the direction issued with regard to the interest is concerned, as it is not permanent acquisition but it was temporary acquisition and therefore the interest cannot be awarded under Section 28 of the Limitation Act, as if it is a regular acquisition. Therefore, the direction issued qua interest also deserves to be quashed and set aside and the same is hereby quashed and set aside.
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NEUTRAL CITATION C/FA/599/2006 JUDGMENT DATED: 23/07/2025 undefined
15. Interim relief granted earlier vide order dated 4.8.2006 passed in Civil Application Nos. 3407 to 3414 of 2006 stands vacated forthwith. Record and proceedings be sent back to the concerned trial Court forthwith. The amount, if any, lying with the Reference Court shall be returned to the appellant corporation along with accrued interest thereon, after due verification within period of eight weeks from the date of receipt of copy of present order.
(HEMANT M. PRACHCHHAK,J) Dolly Page 14 of 14 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 23:17:16 IST 2025