Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Guj) 1182

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D. KARIA, L.S. PIRZADA, JJ.
Oil & Natural Gas Corporation Ltd. - Appellant
Versus
Shri Jayarambhai Becharbhai Patel (Since Deceased) & Ors. - Defendants
First Appeal No. 4876 of 2006 With Civil Application (For Stay) No. 1 of 2006 With Civil Application (For Orders) No. 1 of 2007 With R/First Appeal No. 4877 of 2006 With Civil Application (For Stay) No. 1 of 2006 With Civil Application (For Orders) No. 1 of 2007 With R/First Appeal No. 4878 of 2006 With Civil Application (For Stay) No. 1 of 2006 With Civil Application (For Orders) No. 1 of 2007
Decided On : 22-04-2026

Advocates Appeared:
For the Appellant : M/s Trivedi & Gupta.
For the Defendants : Deceased Litigant Through Legal Heirs/ Represtentatives, Ms. Nirali Sarda, AGP.

A Reference Court under the Land Acquisition Act possesses limited jurisdiction confined to the sufficiency of compensation; it cannot nullify acquisition proceedings, award mesne profits, or order possession restoration. Furthermore, claims for enhancement filed after a significant lapse of time are barred by the law of limitation.

Headnote:(A) Land Acquisition Act - Section 35(3) - Temporary acquisition - Reference for enhancement of compensation - Limitation period - Application of residuary Article of Limitation Act where no time limit is prescribed - Law requires diligent enforcement of rights within a reasonable time. (Paras 25, 26)

(B) Jurisdiction of Reference Court - Scope and ambit - Limited to determining the difference as to the sufficiency of compensation - Court cannot declare acquisition proceedings null and void, award mesne profits, or order restitution of possession - Decision-making must be strictly confined to the scope of the specific dispute referred. (Paras 33, 34, 38, 39)

(C) Delay and Laches - Reference applications regarding compensation adequacy filed after two decades - Barred by limitation - Failure to raise objections at the time of the original determination precludes subsequent claims for enhancement of rent. (Paras 16, 24, 25)

Facts of the case:
Appellants challenged the judgment and award passed by a lower court which significantly enhanced the compensation rent for temporary land acquisition. The original compensation had been determined decades prior and accepted by the claimants without protest. The lower court, acting beyond its mandate, held the entire acquisition process as illegal, designated the acquiring entity as a trespasser, and awarded additional benefits including interest and mesne profits.

Findings of Court:
The Court held that the lower court exceeded its statutory authority by traversing beyond the scope of the reference. The claims were time-barred under statutes of limitation, and the findings regarding the illegality of the acquisition and the status of the occupier as a trespasser were perverse and without jurisdiction.

Issues: Whether the Reference Court possesses the jurisdiction to declare acquisition proceedings null and void, classify the acquiring body as a trespasser, or award mesne profits, and whether reference applications filed after twenty years are maintainable under the relevant legal framework.

Ratio Decidendi: The Reference Court is a tribunal of limited jurisdiction strictly confined to the issues referred to it, specifically the sufficiency of compensation. It lacks the authority to adjudicate on the validity of acquisition notifications or to grant remedies akin to civil court decrees for possession. Furthermore, where no statutory time limit is provided for a claim, the residuary limitation period applies, and a delay of two decades renders the application barred by laches.

Result: Appeals allowed; the impugned common judgment and award are quashed and set aside.

Table of Content
1. overview of land acquisition and reference procedures for temporary occupation under the land acquisition act. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12)
2. arguments regarding maintainability, limitation, and jurisdiction for references under section 35(3) of the act. (Para 13 , 14 , 15)
3. limitation period under article 137 of the limitation act is applicable to section 35(3) references; stale claims are barred by laches. (Para 16 , 17)
4. reference court has no jurisdiction to decide issues outside the scope of compensation sufficiency or declare acquisition proceedings void. (Para 18 , 19)

JUDGMENT :

BHARGAV D. KARIA, J.

1. Heard learned advocate Ms. Aishwarya Reddy with learned advocate Neha Mukherjee for M/s. Trivedi & Gupta for the appellant, learned Assistant Government Pleader Ms. Nirali Sarda for respondent No.2 and learned advocate Mr. Jigar Gadhvi for respondent No.1 in First Appeal No. 4877 of 2006.

2. These appeals arise out of the common Judgement and Award dated 19.10.2005 passed by the learned Reference Court in Land Reference Case Nos. 5492/2003 to 5494/2003 under section 35(3) of the Land Acquisition Act, 1894 (for short ‘the Act, 1894’).

3. The brief facts of the case are that respondent No.1 preferred a Reference being aggrieved by the Award dated 18.05.1981 passed by the Land Acquisition Officer in Compensation Case No. 10/1981 under sections 35 and 37 of the Act, 1894 whereby, the amount of compensation, by way of rent, was fixed at Rs. 00.42 paisa per sq.mtr. Respondent No.1, in each appeal, filed representation to the Special Land Acquisition Officer on 20.12.2002 to refer the matter before the District Court to fix the just and adequate amount of compensation. The Special Land Acquisition Officer made reference to the District Court, Mehsana, for the purpose of determining just and adequate amount of compensation rent as requested by the claimants.

3.1 The Learned Reference Court entertained the reference by holding that the claimants had proved that compensation rent awarded was inadequate and as such, after considering the aspect of delay in preferring the reference, the court enhanced the amount of rent at Rs. 3 per sq. mtr. from the date of taking possession up to 31.12.1982 and thereafter, increasing @15% every year with interest @ 12% per annum up to 13.12.1990 and thereafter, at the rate of @9% per annum till the amount is realized and further held that the amount of compensation fixed at Rs. 15 per sq. mtr. with effect from 01.01.2005 shall be increased at the rate of 15% at every interval of three years commencing from the said date.

Being aggrieved, the appellant-ONGC has preferred these appeals.

4. The Co-ordinate Bench of this Court has admitted these appeals on 12.12.2006 and in Civil Applications (For Stay) following order was passed:

“Rule returnable on January 30, 2007. Ad-interim relief in terms of Para-6(A) is granted on the condition that the applicant deposits, in each case, the amount of compensation at the rate of Rs.7/- per sq.mt. per year, minus the amount of compensation already paid to the claimant/s, from the date of filing of the Reference Application till March 31, 2006 with interest at the rate of 9% per annum thereon for the said period, with the Reference Court on or before the returnable date.”

5. It appears that the appellant-ONGC has preferred Civil Application No. 12124/2007 to 12126/2007 [New No. (CA 1/2007 in the respective First Appeals] for modification of the aforesaid order dated 12.12.2006 passed in Civil Application (For Stay) wherein it was contended that the subject land was permanently acquired and the Special Land Acquisition Officer passed an award under section 11 of the Act, 1894 on 20.01.1989 and the surplus portion of the subject land was surrendered to the original claimant in the Year 1990.

6. The appellant-ONGC has also filed an additional affidavit placing the relevant details with regard to the acquisition proceedings of the

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2026 Supreme(Guj) 1182

Cases Referred (2)