FA/5012/2007 1/58 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 5012 of 2007 To FIRST APPEAL No. 5016 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE J.R.VORA HONOURABLE MR.JUSTICE M.R. SHAH ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the Civil Judge? ========================================================= DEPUTY GENERAL MANAGER - Appellant(s) Versus PRAJAPATI PARSHOTAMBHAI MADHABHAI & 2 - Defendant(s) ========================================================= Appearance : MR AJAY R MEHTA for Appellant(s) : 1, MR AJ PATEL for Defendant(s) : 1, MR.SUNIT SHAH, GOVT.PLEADER WITH MR.AJ DESAI AND MR.DIPEN DESAI, AGPs for Defendant(s) : 2 - 3. ========================================================= CORAM : HONOURABLE MR.JUSTICE J.R.VORA and HONOURABLE MR.JUSTICE M.R. SHAH Date : 11/04/2008 FA/5012/2007 2/58 JUDGMENT ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE M.R. SHAH) 1. As common question of law and facts arise in this group of First Appeals, they are being disposed of by this common judgment and order. 2. Present Appeals are filed by the appellant – acquiring body – original opponent No.2 – ONGC under Section 54 of the Land Acquisition Act challenging the judgment and award passed by the learned Principal Senior Civil Judge, Gandhinagar dated 04.09.2006 in L.A.R. Nos.171 of 2002 to 175 of 2002 (main LAR No.171 of 2002) by which the learned Reference Court has partly allowed the aforesaid reference cases directing the appellant to pay additional amount of rental compensation at the rate of Rs.5.50 paise per Sq.Mtr. per year from the date of taking possession with interest at the rate of 9% per annum for the additional amount of rent from the date of rent becomes due till realization and also to go on to pay increased rate of rent as per the decision of the ONGC taken on administrative side from time to time. The appellant is also directed to FA/5012/2007 3/58 JUDGMENT pay aforesaid amount of rent from the date of taking possession till possession is handed over back to the original claimants – respondents herein. 3. Private respondents – original claimants (herein after referred to as 'claimants') are the owners of the agricultural lands (herein after referred to as 'lands') at Village – Shertha. As the land was required for drilling oil – wells, Dy.General Manager, Ahmedabad Project submitted proposal for temporary occupation of the lands. Since, it appeared to the appropriate Government that land was needed for public purpose, said proposal was accepted by it and pursuant thereof exercised powers under Section 35(1) of the Land Acquisition Act (hereinafter referred to as 'the Act') and directed the Collector to procure occupation of the lands. After complying with necessary formalities, the Collector procured occupation of the lands in the month of January, 1988. That thereafter, claimants / lands owners were called upon to appear before the Dy.Collector and Special Land Officer (ONGC- Ahmedabad) for determining rental / compensation and FA/5012/2007 4/58 JUDGMENT declared award under Section 35(2) of the Act on 28.02.1988 declaring rental / compensation at the rate of Rs.0.82 paise per.Sq.Mtr. per annum. Since claimants were dissatisfied with the rate of compensation / rental fixed by the Dy.Collector and Special Land Acquisition Officer, they raised dispute by submitting application before the Special Land Acquisition Officer on 15.12.2000 purporting to be under subsection (3) of Section 35 of the Act before the Dy.Collector and Special Land Acquisition Officer and requested to refer the dispute to the Reference Court. In the said Reference Application, the claimants claimed compensation / rental at the rate of Rs.20/- per Sq.Mtr.Per year. The Collector referred difference as to the sufficiency of the compensation to the Court for its decision under Section 35(3) of the Act. Proceedings were numbered as Land Acquisition Reference Cases Nos.171/2002 to 175/2002. Before the Reference Court the claim was made for Rs.20/- per Sq.Mtr.per year. It was the case on behalf of the claimants that compensation / rental awarded to them were totally inadequate and the Land Officer has not properly determined the market rate FA/5012/2007 5/58 JUDGMENT so far as the acquired lands are concerned. It was also stated by the claimants that acquired lands were of great potential and fetch more value. It was submitted that Land Acquisition Officer committed an error in determining actual rent of the acquired lands. It was also averred that the villages where the lands are situated has various facilities such as electricity, water supply, school, hospital etc. According to them annual income from the agricultural produce after deducting 1/5th expenses is Rs.50,000/- to Rs.60,000/- per vigha per year. Therefore, it was requested to award rental / compensation at Rs.10/- per Sq.Mtr.Per year. Claimants also claimed solatium, 10% price rise and the interest at the rate of 12% p.a. 4. Aforesaid cases of the claimants were resisted by the original respondents inclusive of the appellants by filing written statement and they denied the averments of the claimants. On behalf of the Special Land Acquisition Officer, objections were submitted at Ex.07. It was submitted on behalf of the Special Land Officer that rental/compensation awarded FA/5012/2007 6/58 JUDGMENT to the claimants are neither at low rate nor inadequate in any way. It was stated that Special Land Officer has considered all the relevant factors while fixing rental / compensation. Therefore, it was requested to dismiss the Reference Cases. 5. On behalf of the appellant – original opponent No.2- ONGC written statement was filed at Exh.9. It was stated that Special Land Officer has unnecessarily referred the cases and therefore, same is not tenable in the eye of law. It was submitted that reference is barred by the principles of res- judicata and estoppel. It was stated that rent awarded by the Special Land Officer is just and proper and based on the contemporaneous evidence and that they cannot be awarded additional compensation without cogent evidence in support of the claim for additional rent. It was submitted that rent is based on yield. Therefore, there cannot be increase at the rate of 10% on the basis of the market value of the land and therefore, it was requested to dismiss the Reference cases. It was submitted on behalf of the appellant that the reference applications are not FA/5012/2007 7/58 JUDGMENT maintainable and are barred by limitation and/or they are required to be dismissed on the ground of delay and laches. 6. Both the Reference Cases were consolidated and common evidence was recorded in LAR No.171/2002. Reference Court framed the issues at Exh.10. On behalf of the claimants one – Natvarbhai Bhagvandas Prajapati – claimant of LAR No.172/2002 came to be examined at Exh.20. He relied upon the judgment and award passed by the Reference Court in LAR Nos.417/1998;780/1998; 312/2000 and 328 of 2000 to 330/2000 with respect to land acquired for the same purpose of Village Shertha, whereby the Reference Court determined the compensation / rental at the rate of Rs.5.50 per.Sq.Mtr.per year. The certified copies of the said judgment were produced at Exh.14,15, 18 and 19. Though in the examination-in- chief, it was deposed by the witness who was examined on behalf of the claimants that they were earing Rs.50,000/- to Rs.60,000/- per vigha per year after deducing 1/5th expenses and that they were taking three crops a year, in the cross-examination he has FA/5012/2007 8/58 JUDGMENT admitted that they have not produced any documentary evidence at the time of acquisition of the lands. He also admitted that he has not produced any report of the expert to prove his land are fertile. He also admitted that he was not maintaining books of accounts. He has also admitted in the cross- examination that he has not produced bills of agricultural produce. He has also admitted that he has not produced extract of village form 7/12. On behalf of the original opponent one – Kamlesh Haribhai Goradiya came to be examined at Exh.23. He was working as Special Land Officer – ONGC, Sabarmati. On behalf of the claimants they heavily relied upon the judgment and award passed by the Reference court in another case with respect to lands of Village – Shertha at Exh.14,15, 18 and 19. By relying upon the decision of this Court in the case of Shivlal v/s. Additional Special Land Acquisition Officer reported in (9) GLR 752, it was submitted on behalf of the claimants that as held by this Court in the aforesaid decision while determining compensation similar award passed by the Court or Land Acquisition Officer can be taken into consideration. Accepting FA/5012/2007 9/58 JUDGMENT the same, Reference Court held that earlier award passed by the Court of 3rd Additional Sr.Civil Judge, in LAR No.321/2000 can be looked into for the purpose of determining actual rent compensation of the acquired lands. 7. On behalf of the original opponent – appellant, decision of the learned Single Judge of this Court in the case of Oil & Natural Gas Corporation Ltd. V/s. Pandya Prahladbhai Manilal & Ors. reported in 2007(2)GLR 1306 was relied upon in support of their submission that Reference Court has no jurisdiction to determine / award rental/ compensation for the period beyond the period of three years from the date of taking possession. It was also submitted on behalf of the original opponent that rental / compensation with respect to temporary acquisition of the land can be determined only on yield basis and no evidence has been adducted by the claimants to prove agricultural income. 8. On the basis of the material produced before it, the Reference Court by impugned judgment and FA/5012/2007 10/58 JUDGMENT award dated 04.09.2006 partly allowed the Land Reference Cases solely relying upon the judgment and award passed by the learned 3rd Addl. Senior Civil Judge, Gandhinagar passed in LAR No.312/2000 with respect to the lands situated in the village – Shertha by which the learned Judge fixed rental / compensation at Rs.5.50 per Sq.Mtr.per with respect to award of 1988 and considering the same as comparable instance, determined additional compensation / rental of the land in question at Rs.5.50 per Sq.Mtr.per year, the Reference Court directed the appellant to pay additional compensation at Rs.5.50 paise per Sq.Mtr.Per year from the date of taking possession with interest at 9% per annum for the additional amount of rent from the date of rent becomes due till realization and also to go on to pay increased rent as per the decision taken upon administrative side from time to time. 9. Being aggrieved and dissatisfied with the impugned judgment and award dated 04.09.2006 passed by the learned Principal Senior Civil Judge, Gandhinagar in Land Reference Cases Nos.171/2002 to FA/5012/2007 11/58 JUDGMENT 175/2002 (main LAR No.171/2002), the appellant – original opponent No.2 – ONGC has preferred the present appeals. 10. Learned Advocates appearing on behalf of the respective parties have produced paper book and have taken us to the documentary as well as oral evidence produced and we have gone through the same in detail. We have also called for Record and Proceedings of the respective land reference cases from the learned Reference Court which has been received and we have perused the same. Mr.Ajay Mehta, learned Advocate has appeared on behalf of the respective appellant – ONGC and Mr.A.J.Patel, learned Advocate has appeared on behalf of the respondents – original claimants – land owners. 11. Learned Advocates appearing on behalf of the appellant – ONGC have vehemently submitted that impugned judgment and awards passed by the learned Reference Court in respective LARs are wholly untenable in law and contrary to the provisions of Section 35 of the Land Acquisition Act. Mr.Mehta, FA/5012/2007 12/58 JUDGMENT learned Advocate appearing on behalf of the appellant has heavily relied upon two decisions of this Court in the case of Patel Shambhubhai Bhaichanddas v/s. State of Gujarat & Anr. reported in 2007(1)GLR 713 and in the case of Oil & Natural Gas Corporation Ltd. V/s. Pandya Prahladbhai Manilal & Ors. reported in 2007(2)GLR 1306 and relying upon the aforesaid decisions, it is submitted that the Reference Court would not have any jurisdiction to award compensation / rental for any period beyond three years from the date of taking possession. It is submitted that in the present case, Reference Court has awarded compensation for the entire period which is contrary to the above referred judgments. It is submitted that as provided under Section 35 of the Land Acquisition Act temporary acquisition can be maximum for a a period of three years and therefore, the Reference Court would have jurisdiction to award compensation / rental / damages only for a period of three years and therefore, any award awarding rental beyond period of three years by the Reference Court would be illegal and contrary to provisions of Section 35 of the Act. It is also submitted that FA/5012/2007 13/58 JUDGMENT even the appellant – ONGC has increased rent by giving periodical rise even after three years and the said amount of enhanced rental paid on the basis of administrative instructions have been accepted by the respective claimants – land owners without any objections meaning that there is implied extension of contract and / or agreement and that respective claimants have never objected to continuance of possession of the ONGC beyond period of three years. It is submitted that on the contrary by accepting enhanced rental on the basis of administrative decisions beyond period of three years, they have permitted ONGC to continue with the possession and therefore, also it cannot be said that possession of the ONGC beyond period of three years is unlawful and /or unauthorized occupation. It is also further submitted by Mr.Mehta, learned Advocate appearing on behalf of the appellant submitted that even the order passed by the Reference Court directing the appellant not only to pay additional amount of rental compensation but also to to pay increased rate of rent as per decision taken up on administrative side from time to time is also beyond reference and even FA/5012/2007 14/58 JUDGMENT awarding rental beyond the claim of the respective claimants. It is submitted that the Reference Court ought not to have passed order to pay additional amount of rental compensation and also to pay increased rate of rent as per decisions taken on administrative side from time to time. It is submitted that as per decision taken upon administrative side, ONGC has paid Rs.2.50 paise per Sq.Mtr. from 01/01/1997; Rs.5.00 per sq.mtr. from 01/01/2003 and Rs.7.50 per sq.mtr. from 01/01/2006. It is submitted that jurisdiction of the reference Court arise from statutory provisions and the Reference Court is creature of statue and therefore, Reference Court cannot act dehors the statue and exercise power beyond statutory provisions. Therefore, in exercise of power beyond statutory provisions would be illegal. It is further submitted that as held by this Court in the aforesaid two decisions in the case Patel Shambhubhai (supra) and in the case of Pandya Prahladbhai (supra), the Collector under Section 35 of the Act and /or Reference Court in a case of temporary acquisition has no jurisdiction to award rental compensation FA/5012/2007 15/58 JUDGMENT beyond period of three years. It is submitted that as held by this Court in the aforesaid decisions, in a case of temporary acquisition under Section 35 the Collector is empowered to refer dispute as to compensation for the agreed term and maximum period of three years only. It is submitted that in the present case the Reference court has awarded rental beyond period of three years i.e. from the date of taking possession till possession is handed over back. It is submitted that in the present case periodical rent has been revised and increased by the ONGC from time to time and the said revision has been accepted by the persons interested in the land. Therefore, ONGC has retained possession with the consent of interested persons in the land and thus upon accepting enhanced amount of rental and by implication new agreement has come into existence and/or there is an implied extension of contract. Therefore, it cannot be said that after expiry of agreement period and / or after expiry of three years ONGC is in unauthorized occupation. It is submitted that even otherwise for any dispute with respect to rental beyond period of three years the Collector and FA/5012/2007 16/58 JUDGMENT / or Reference Court would not have any jurisdiction and if the claimants are aggrieved they can approach Civil Court and pray for damages. It is further submitted that even otherwise the Reference Court has materially erred in determining additional compensation / rental solely relying upon earlier awards with respect to another village. The Reference Court has erred in coming to the conclusion that annual rent would be Rs.6.32 per Sq.Mtr. from the date of taking possession. It is submitted that the reference court has materially erred in relying upon the judgment and award with respect to land situated in the Village – Shertha in LAR No.312/2000. It is submitted that the Reference Court ought to have appreciated that while determining rental / compensation with respect to the temporary acquisition of the land, principles applied for determining compensation for permanent acquisition of land cannot be made applicable. It is submitted that rental / compensation with respect to temporary occupation of the land can be determined only on leading proper evidence with respect to income derived from the lands in question and only on yield FA/5012/2007 17/58 JUDGMENT basis. It is submitted that the Reference Court has materially erred in adopting principles of determining market value for the purpose of permanent acquisition and relying upon the judgment and award passed by the Reference Court produced at Exh.14, 15, 16 and 18 with respect to village Shertha. It is submitted that the Reference Court has materially erred in relying upon the decision of this Court in the case of Shivlal (supra). It is submitted that decision in the case of Shivlal(supra) is with respect to permanent acquisition. It is submitted that fertility of the lands vary from village to village and even land to land. It is submitted that the reference court ought to have appreciated that rental can be based only considering yield and considering it Land Acquisition Officer has rightly awarded Rs.0.82 sq.mts. as market rent. It is submitted that as held by the Hon'ble Supreme Court in the case of State of Maharashtra and Ors. V/s. Maimuma Banu and Ors. reported in 2003(7) SCC 448 and this Court in the case of Patel Shambhubhai (supra), provisions of part III of the land acquisition act would not apply to temporary acquisitions. Therefore, FA/5012/2007 18/58 JUDGMENT it is submitted that assessment of market value by the reference court is thoroughly untenable in law. It is submitted that even witness who has been examined on behalf of the claimant has deposed and has so admitted in the cross examination that there is no evidence led qua yield to prove the income of Rs.50,000/- to Rs.60,000/- per vigha per year. Even it is admitted in the cross examination by the claimants that they have accepted the increased rent of compensation from time to time. It is also further submitted that even the appellant – ONGC has increased rent and has paid rent at the rate of Rs.2.50 per Sq.MTr. per annum with effect from 01.01.1997; Rs.5.00 from 01.01.2003 and Rs.7.50 from 01.01.2006, which has been accepted by the claimants – respondents. Therefore, also award of Rs.5.50 per sq.mtr. for the aforesaid period is not justified. It is therefore, submitted that assessment of rent compensation at the rate of Rs.6.32 per sq.mtr. is wholly unjustified and unsustainable in law and requires to be quashed and set aside. It is submitted by Mr.Mehta, learned FA/5012/2007 19/58 JUDGMENT Advocate appearing on behalf of the appellant that as such the reference applications itself were not maintainable in as much as nothing is on record to suggest that any dispute with regard to sufficiency of compensation was raised by the land owners at the time of award dated 30.01.1988. It is further submitted by him that award was declared by the Special Land Acquisition Officer on 28.02.1988 declaring rental / compensation at the rate of Rs.0.82 paise and the reference applications are filed by the claimants on 15.12.2000 i.e. after a period of 12 years from the date of award as well as taking possession, raising dispute for the first time with respect to sufficiency of compensation / rental. Therefore, the Reference Court / Civil Judge ought not to have entertained said reference cases and ought to have dismissed the same by holding that they are barred by limitation and/or on the ground of delay and laches. It is further submitted that as the reference applications were submitted after almost 12 years, even the Collector / Land Acquisition Officer ought not have referred the dispute to the reference Court. It is submitted that FA/5012/2007 20/58 JUDGMENT it seems that reference applications are referred to the reference Court mechanically without even satisfying by itself that any dispute was raised by the land owners with regard to sufficiency of rental/ compensation at the time of award / taking possession. It is further submitted that even looking to sub-section(3) of Section 35 of the Act, said reference applications by the claimants are not maintainable and as such there is no provision under sub-section (3) of Section 35 of the Act permitting the claimants to submit reference applications like reference applications under Section 18 of the Act i.e. with regard to permanent acquisition. It is also submitted that even the Reference Court has not properly framed the issues and though a specific objection was raised with respect to limitation, no issue has been framed by the learned Reference Court with regard to limitation. 12. It is also submitted that even decision of this Court in the case of Patel Shambhubhai (supra) on the point of limitation and /or on the point of jurisdiction of the Reference Court to award rental FA/5012/2007 21/58 JUDGMENT beyond the period of three years has not been properly appreciated and considered by the Reference Court. Making above submissions, it is requested to allow the present appeals and to quash and set aside impugned judgment and awards. Learned Assistant Government Pleader appearing on behalf of the Special Land Officer has adopted the submissions made on behalf of the appellant and has submitted that the impugned judgment and award passed by the Reference Court is not tenable in law and is without jurisdiction, which requires to be quashed and set aside. 13. All these appeals are opposed by Mr.A.J.Patel, learned Advocate appearing on behalf of the claimants. It is submitted that impugned judgment and award passed by the learned Reference Court and the amount of compensation is worked out on the basis of the earlier award of the same village which have been accepted by the ONGC and payment has already been made by the ONGC and no appeal has been preferred before this Court and therefore, fixation of the amount is not required to be altered and/or FA/5012/2007 22/58 JUDGMENT interfered with. 14. So far as the contention on behalf of the appellant that the Reference Court has no jurisdiction to determine the amount of compensation / rental for the period beyond three years, Mr.Patel, learned Advocate appearing on behalf of the original claimants has submitted that considering Section 35 of the Act, ONGC can retain possession for a maximum period of three years only and any occupation and/or possession of the ONGC after a period of three years from the date of taking possession would be unlawful possession and ONGC can be said to be in unauthorized possession of the land. It is submitted that Section 53 of the