Gujarat High Court

Oil & Natural Gas Corporation Ltd vs Patel Chunilal Khodidas on 23 July, 2025

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                            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
                      ================================================================

                                  Approved for Reporting                       Yes           No

                      ================================================================
                                            OIL & NATURAL GAS CORPORATION LTD
                                                           Versus
                                              PATEL CHUNILAL KHODIDAS & ANR.
                      ================================================================
                      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
                      ================================================================

                         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

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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

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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

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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."

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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

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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

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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

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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.

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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

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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

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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

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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

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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.