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2026 Supreme(Online)(Guj) 10010

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
J. C. Doshi, J
Oil Natural Gas Corporation Ltd – Appellant
Versus
Heirs Of Solanki Babuji Chhaguji – Respondent
R/FIRST APPEAL NO. 2575 of 2006|R/FIRST APPEAL NO. 2576 of 2006|R/FIRST APPEAL NO. 2577 of 2006|CIVIL APPLICATION (FOR STAY) NO. 2 of 2006



Advocates:
For the Appellants/Petitioners: Aishwarya Reddy, Prabhdeep Kaur
For the Respondents: Bharat Vyas, Pinank Raiyani, J K Gandhi

Courts must determine just compensation for land acquisition by referencing established market exemplars for comparable locales, applying a reasonable annual escalation rate to account for temporal gaps between notification dates to ensure fair and equitable valuation for the claimants.

Headnote:(A) Land Acquisition Act, 1894 - Sections 4, 6, 11, 18, and 54 - Determination of market value - Just compensation for acquired land - Need for consistency in valuation for contemporaneous acquisitions - Application of annual escalation principles to adjust for temporal gaps in notification dates. (Paras 1, 11, 12)

(B) Appeals - Scope of appellate intervention - Duty of the appellate court to ensure fair compensation by aligning with established exemplars while accounting for time-based market fluctuations - Limitation on interference with lower court awards unless manifest errors in assessment are present. (Paras 10, 11, 12)

Facts of the case:
The land was acquired for a public purpose with notifications under the relevant act issued in mid-1995. The lower court awarded market value compensation, which was subsequently challenged by the acquiring body in appeal. The central dispute involved the quantum of compensation relative to established exemplars from the vicinity and the temporal difference between relevant acquisition notifications.

Findings of Court:
The court determined that to maintain consistency and fairness, a 10% annual escalation rate should be applied to previously settled compensation rates for similar proximate land acquisitions. By accounting for the time gap between the notifications, the market value was adjusted to arrive at a just compensation of Rs. 85 per square metre for both irrigated and non-irrigated lands.

Issues: The main issues addressed were the determination of an accurate market value for the acquired land, the applicability of earlier judicial precedents to the specific date of notification, and whether the escalation of compensation rates was warranted by the temporal gap in acquisition proceedings.

Ratio Decidendi: When determining compensation for lands acquired for public purposes, courts must utilize established exemplars from comparable lands. Where a temporal gap exists between the reference acquisition and the subject acquisition, an annual escalation factor is appropriate to ensure the compensation reflects the real market value at the specific time of the notification, thereby achieving the constitutional goal of just compensation.

Result: Appeals allowed; compensation modified and set at Rs. 85 per square metre with statutory benefits.

Table of Content
1. procedural context for appeals against land acquisition compensation awards. (Para 1 , 2 , 3 , 4)
2. parties argument regarding the fair market value using comparative sale instances. (Para 5 , 6 , 7 , 8 , 9)
3. determining market value using previous judicial precedents and escalation rates. (Para 10 , 11 , 12)
4. final adjudication and modification of compensation with interest stipulations. (Para 13 , 14 , 15 , 16)

ORDER

1. The captioned appeals filed under Section 54 of the Land Acquisition Act, 1894 (‘the Act’, for short) have arisen from the common judgment and award dated 29.08.2005 passed in Land Reference Case Nos.2191 of 2003 to 2193 of 2003 ( treating L.R.C. No.2193 of 2003 as a lead matter) whereby the learned Principal Senior Civil Judge, Mahesana partly allowed the reference cases and determined market price of acquired land in L.A.Q.Case No.59 of 1994 as Rs.150/- per sq mtr with statutory interest and solatium amount etc.

2. The questioned lands belong to Village Jebuva, Tal.Dist. Mahesana were acquired for the public purpose for ONGC whereby Notification under Sections 4 and 6 of the Land Acquisition Act were published on 11.04.1995 and 24.06.1996 respectively. The LAQ Case was conducted by the Special Land Acquisition Officer and declared the award under Section 11 of the Land Acquisition Act and determined Rs.6.50/- per sq mtr for the acquired land. The claimants whose lands have been acquired being aggrieved claimed to refer the matter to the Reference Court under Section 18 of the Act. Reference Court registered the land reference cases as mentioned hereinabove keeping the LAR No.2193 of 2003 as main matter and permitted the parties to lead the evidence and ultimately passed the award in aforesaid terms.

3. Being aggrieved, ONGC preferred these appeals.

4. Heard learned advocate Ms.Aishwarya Reddy for M/s.Trivedi & Gupta for the appellant and learned advocate Mr.Pinank Raiyani for Mr.J.K.Gandhi, learned advocate for the defendants.

5. Ms.Reddy referred to the judgment of coordinate Bench in the case of General Manager vs. Prajapati Hargovindbhai Ambaram (Decd. Thro LRs.) and others in F.A.No.1698 of 2006 and allied matters and submitted that the cooperate Bench pleased to determine the additional compensation at Rs.77/- per sq mtr for both irrigated and non-irrigated lands. In a land acquired in the year 1994 whereby Notification under Section 4 of the Act was published on 20.12.1994 and Notification under Section 6 of the Act was published on 26.12.1995 for the same village Hebuva and the purpose of acquisition was also public purpose and, therefore, it is submitted that determination of total compensation by the learned Reference Court is illegal, unjust and inappropriate and, therefore she has submitted that these appeals may be allowed. Ms.Reddy, learned advocate further submitted that decreetal amount already deposited before the trial Court.

6. Upon above submissions, she submitted that appeals may be allowed and appropriate order may be passed.

7. Learned Assistant Government Pleader Mr.Bharat Vyas supports the argument of learned advocate Ms.Reddy for the appellants.

8. Mr.Raiyani, learned advocate for the defendants submitted that the learned Reference Court referred to decision in LAR Case No.316 to 318 of 2001 whereby acquisition was made for the same village in a Notification under Section 4 of the Act which was published on 03.09.1993. He would further submit that judgment and award passed by the Reference Court in these LAR cases though have been challenged before the High Court, no interference has been called for and thus the judgment impugned based upon judgment and award passed in those LAR is correct and just. He, therefore, would submit to dismiss these appeals.

9. In rejoinder, Ms.Reddy, learned advocate for the appellants, relying upon the judgment passed in First Appeal No.1603 of 2002 and allied matters, submitted that coordinate Bench of this Court dismissed the app

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