IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Akil Kureshi, B.N. Karia, JJ.
General Manager - Appellant
Vs.
Chaudhary Mahotbhai Hirabhai - Respondent
First Appeal Nos. 1399, 1400, 1401 of 2018; Civil Application No. 2 of 2018
Decided On : 25-07-2018
Land Acquisition Act, 1894 - Section 28, 4(1), 23(1A), 16, 11, 35, 5A, 18 - Land Case - Appellant is engaged in oil extraction and refining - Necessarily includes the activity of oil exploration - Not every exploration succeeds in yielding positive results - In other words, often times, even after initial possibility of oil being found, after prolonged efforts, the ONGC may find that oil or at any rate, sufficient supply of oil is not available and therefore, would abandon further exploration - Held, However, the concept of not paying interest prior to the commencement of proceedings under the said Act, even though the possession is found to be wholly unauthorized, emanates from the fact that it is the commencement of the acquisition proceedings with declaration of intention under Section 4(1) of the Act, which triggers the liabilities arising under the Act - Consistently, in various judgments of the Supreme Court as well as of this Court, the date of commencement of liability of paying interest has been pegged back to the date of publication of Notification under Section 4(1) of the Act - Court, therefore, hold that in the present cases, the reference Court committed an error in awarding interest under Section 28 of the Act from the date of taking possession. Such liability would arise only from the date of publication of Notification under Section 4(1) of the Act and not from any period prior thereto - Appeal disposed of. (Paras 31, 32)
Akil Kureshi, J.
The sole ground pressed in these appeals by the appellant-ONGC is of the date from which the claimants would receive interest under Section 28 of the Land Acquisition Act, 1894 ("the Act" for short) on the enhanced compensation. No other issue is argued or pressed before us by the learned counsel for the appellant-ONGC. They, however, clarify that this concession would not bind them in any other land acquisition proceedings. In other words, question of market rate of the acquired land is kept open. We would, therefore, confine our discussion in this judgment on this single legal issue.
2. The facts necessary to decide this question are as under;
3. The appellant-ONGC, as is well known, is engaged in oil extraction and refining. This necessarily includes the activity of oil exploration. Not every exploration succeeds in yielding positive results. In other words, often times, even after initial possibility of oil being found, after prolonged efforts, the ONGC may find that oil or at any rate, sufficient supply of oil is not available and therefore, would abandon further exploration. For such purposes, the ONGC is required to occupy private lands, often times, initially, on temporary basis. In many cases, such temporary occupation may convert into final acquisition of land under the said Act and in some cases, it may not. In the present group of cases, we are concerned with a situation where, after initial occupation of land on temporary basis, the ONGC ended up acquiring the lands under the said Act.
4. On 01.01.1989 the ONGC temporarily occupied lands bearing Block/Survey No.404/1, 360, 404/2 and 403 of Village Pachot, District Mehasana in terms of Section 35 of the Act. This temporary occupation of the lands continued uninterruptedly. The land owners would receive periodic rent. Finally, many years later, the ONGC decided to acquire such lands. A preliminary Notification under Section 4(1) of the Act was issued on 18.12.1996 followed by the Notification under Section 6 of the Act on 18.09.1997. The Land Acquisition Officer published his award under Section 11 of the Act on 13.03.1999 granting compensation to the land owners at the rate of Rs. 13.50 per square meters.
5. Aggrieved by the rate of compensation, the claimants preferred reference before the Civil Court. The reference Court, by its award dated 25.10.2017, granted additional compensation at the rate of Rs. 65 per square meters. The reference Court also awarded interest on the additional compensation, including solatium and additional 12% under Section 23(1A) of the Act.
In the context of the date from which such interest would be computed, the reference Court referred to the judgment of the Supreme Court in case of Baldevji Shakraji Thakor v. Group General Manager, ONGC & Another dated 23.01.2017 passed in Civil Appeal No(s).834-835 of 2017. Relying on the observations made in the said judgment, the reference Court directed that interest at the rate of 9% per annum for the first year and 15% per annum thereafter would be payable on such compensation from the date of taking possession or from the date of publication of Notification under Section 4(1) of the Act, whichever is earlier.
6. This award, the ONGC has challenged in these appeals.
7. The sole contention of the appellant is that in terms of the provisions contained in the said Act, interest on the enhanced compensation can be granted only from the date of taking possession of the land under Section 16 of the Act or at any rate from the date of passing of the award by the Land Acquisition Officer under Section 11 of the Act. Learned counsel for the appellant-ONGC had taken us extensively through the provisions contained in the said Act and argued that the concept of grant of interest under Section 28 of the Act cannot be applied to the instances of temporary occupation under Section 35 of the Act. All throughout the temporary occupation of land by ONGC, the land owners received rent. No grie
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