Holding

A temporary acquisition cannot be continued for such an extended period as it becomes arbitrary and infringes the constitutional right to property under Article 300A; the respondent must complete permanent acquisition within the time ordered, and rent grievances are to be pursued under Section 34 of the 1894 Act.

Summary

The appellants owned a 10,034 sq. m. plot in Ahmedabad that had been under temporary acquisition by ONGC since 1996 for oil exploration. After purchasing the land in 2005, they were paid a nominal rent of Rs 24 per sq. m. per annum, later increased to Rs 30, and sought a writ to quash the temporary acquisition and release the land. The Gujarat High Court rejected the quash petition, ordered permanent acquisition within twelve months and directed ONGC to consider a rent claim of Rs 1,000 per sq. m. per month. On appeal, the Supreme Court held that a temporary acquisition lasting 20‑25 years loses its purpose, is arbitrary and infringes the constitutional right to property under Article 300A. Consequently, ONGC must complete permanent acquisition within the time specified by the High Court, failing which appropriate consequences will follow. The Court also clarified that any grievance regarding the quantum of rent or compensation is to be pursued under Section 34 of the Land Acquisition Act, 1894. The appeal was dismissed, leaving the High Court’s directions intact.

Issues considered

Whether a temporary acquisition can be lawfully continued for a period of 20‑25 years without violating Article 300A of the Constitution.
Whether the High Court’s order directing permanent acquisition within twelve months is enforceable and what consequences follow if not complied with.
Whether the appellants’ grievance regarding the amount of rent payable under temporary acquisition can be addressed under Section 34 of the Land Acquisition Act, 1894.

Legislation cited

Subjects

temporary acquisitionpermanent acquisitionArticle 300Aland acquisition lawrent grievancecompensationONGCSection 34Section 35constitutional property right

Judgment

[2023] 1 S.C.R. 1021 1021

MANUBHAI SENDHABHAI BHARWAD & ANR. A
v.
OIL AND NATURAL GAS CORPORATION LTD. & ORS.
(Civil Appeal No. 472 of 2023)
JANUARY 20, 2023 B
[M. R. SHAH AND M. M. SUNDRESH, JJ.]
Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013 – Land
Acquisition Act, 1894 – Constitution of India – Art. 300A – The
C
subject land was under temporary acquisition by ONGC since 1996
– Appellant (owner) purchased the subject land vide sale deed dated
15.03.2005 – Appellants were paid Rs 24/sq. metre per annum as
rent – Appellants approached the High Court seeking to quash the
temporary acquisition proceedings or to release the land from
acquisition – The High Court rejected the prayer for quashing D
temporary acquisition proceedings and ordered for permanent
acquisition within 12 months – The Court further directed that the
Corporation would consider the claim of the appellants for paying
rent at Rs. 1,000/- per square meter per month till acquisition of the
land on permanent basis – On appeal, held: Temporary acquisition
E
cannot continue for approximately 20 to 25 years and same can be
said to be arbitrary and infringing right to use the property under
Art. 300A of Constitution of India – If the permanent acquisition is
not done within a stipulated time as per the order of the High Court
necessary consequence shall follow – As far rent is concerned, as
per s.34 of the 1894 Act if the appellant is aggrieved by the F
compensation/annual rent, it is open for the appellant to approach
the Collector.
Disposing of the appeal, the Court
HELD : 1. Approximately 26 years have passed and still
the land in question is under temporary acquisition by the ONGC. G
If the land is continued to be under temporary acquisition for
number of years, meaning and purpose of temporary acquisition
would lose its significance. Temporary acquisition cannot be
continued for approximately 20 to 25 years. It cannot be disputed
that once the land is under temporary acquisition and the same is H
1021
1022 SUPREME COURT REPORTS [2023] 1 S.C.R.

A being used by the ONGC for oil exploration, it may not be possible
for the landowners to use the land; to cultivate the same and/or
to deal with the same in any manner. To continue with the
temporary acquisition for number of years would be arbitrary and
can be said to be infringing the right to use the property
guaranteed under Article 300A of the Constitution of India. Even
B
to continue with the temporary acquisition for a longer period
can be said to be unreasonable, infringing the rights of the
landowners to deal with and/or use the land. As such, in the
impugned judgment and order, the High Court has granted time
to the ONGC and the State to acquire the land in question
C permanently within twelve months from the date of the impugned
order, i.e., within twelve months from 26.04.2022, i.e., on or
before 26.04.2023. Therefore, if the land in question is not
acquired as per the writ issued by the High Court within a
stipulated time, necessary consequence shall follow. [Para
7][1027-F-H; 1028-A-B, C-E;]
D
2. Now so far as the grievance with respect to the quantum
of annual rent paid is concerned, the High Court has already
issued directions in terms of para 7(iii) of the impugned judgment
and order. Even otherwise, as per section 34 of the 1894 Act, if
the appellants are aggrieved by the amount of compensation/
E annual rent, it will always be open to the appellants/landowners
to approach the Collector and the Collector shall refer such
reference to the decision of the Court. [Para 8][1028-F-G]
CIVIL APPELLATE JURISDICTION : Civil Appeal No.472 of
2023.
F
From the Judgment and Order dated 26.04.2022 of the High Court
of Gujarat at Ahmedabad in R/Special Civil Application No.9258 of 2021.
Gopal Sankaranarayanan, Sr. Adv., Jatin Zaveri, Neel Kamal
Mishra, Ms. Aditi Gupta, Advs. for the Appellants.
G Vikramjit Banerjee, ASG, Deepak Jain, Pradeep K.B., Ms.
Jaspreet Aulagh, Tanpreet Gulati, Vaibhav Manu Srivastava, Ms.
Deepanwita Priyanka, Ms. Swati Ghildiyal, Ms. Devyani Bhatt, Advs.
for the Respondents.

H
MANUBHAI SENDHABHAI BHARWAD v. OIL AND 1023
NATURAL GAS CORPORATION LTD. [M. R. SHAH, J.]

The Judgment of the Court was delivered by A
M. R. SHAH, J.
1. Leave granted.
2. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 26.04.2022 passed by the High Court of Gujarat at B
Ahmedabad in SCA No. 9258/2021, by which the High Court has
dismissed the said writ petition preferred by the appellants – original
writ petitioners for quashing temporary acquisition proceedings, the
original writ petitioners – landowners have preferred the present appeal.
3. That the land bearing survey No. 837/1 situated at Village C
Vastral, Taluka Vatva, District Ahmedabad admeasuring 10034 square
meters is under temporary acquisition by Oil and Natural Gas Corporation
Ltd. (ONGC) since the year 1996 for the purposes of oil exploration,
which land was undisputedly purchased by appellant No.1 under a
registered sale deed dated 15.03.2005. It is required to be noted that as
such now the land in question falls in the city of Ahmedabad and it D
cannot be disputed that the prices of the land have increased manyfold
and even the surrounding lands are already developed. At present, the
appellants are being paid the rent at the rate of Rs. 24/- per square
meter per annum for temporary acquisition.
3.1 That the appellants herein approached the High Court in the E
year 2016 by way of SCA No. 3992/2016 seeking a direction to the
respondents to either acquire the land on permanent basis or release the
land from acquisition. The said writ petition came to be disposed of vide
order dated 23.02.2017 on the stand taken by the respondents that they
will initiate the process for acquiring the land permanently. However
F
thereafter no concrete steps were taken to acquire the land permanently.
On the contrary, ONGC approached the Special Land Acquisition
Officer/Collector. The Land Acquisition Officer addressed a
communication to the Deputy Collector that there shall be huge cost
involvement in acquiring the land on permanent basis under the new
Land Acquisition Act, 2013. However thereafter the acquisition G
proceedings were kept on hold and the appellants continued to be paid
the rent @ Rs. 24/- per square meter per annum for temporary acquisition.
That after the disposal of the writ petition in 2017 and though it was
assured that the process for permanently acquiring the land would be
initiated, nothing was done thereafter and therefore the appellants again
H
1024 SUPREME COURT REPORTS [2023] 1 S.C.R.

A approached the High Court for quashing of the acquisition proceedings
and to direct the respondents to release the said land from temporary
acquisition and to handover vacant and peaceful possession of the land
in question to the appellants.
3.2 It was the case on behalf of the appellants that to continue the
B temporary acquisition for nearly 25 years would be absolutely
unreasonable and arbitrary and that too by paying abysmally low rent. It
was pointed out that in the neighbouring area, Ahmedabad Metro Rail
Corporation is paying Rs. 1000/- per square meter per month as rent
whereas now the rate of rent fixed for the subject land is Rs. 30/- per
square meter per annum.
C
3.3 In response to the notice issued by the High Court, the
respondents appeared before the High Court. It was again submitted
that the competent authority has accorded approval for acquisition of
the subject land on permanent basis and the same is under process. A
statement was made on behalf of the ONGC before the High Court that
D the acquisition proceedings would be concluded within 12 months. An
undertaking on behalf of the ONGC was also placed on record. Relying
upon the said undertaking, the High Court, by the impugned judgment
and order, has rejected the prayer for quashing temporary acquisition
proceedings. However, taking note of the fact that the Corporation made
E a show of having paid enhanced rent from Rs. 24/- per square meter per
annum to Rs. 30/- per square meter per annum, which can be said to be
abysmally on the lower side and not commensurate with the prevalent
market rent and the statutory authorities of the State under similar
circumstances having paid Rs. 1,000/- per square meter per month, the
High Court has directed that the Corporation would consider the claim
F of the appellants for paying rent at Rs. 1,000/- per square meter per
month till acquisition of the land on permanent basis from the date of
purchase of the land by the appellants i.e., from 15.3.2005.
3.4 Feeling aggrieved and dissatisfied with the impugned judgment
and order passed by the High Court refusing to quash the temporary
G acquisition proceedings and as such not passing any order to increase
the rent per month for temporary acquisition, the landowners have
preferred the present appeal.
4. Shri Gopal Sankaranarayanan, learned Senior Advocate
appearing on behalf of the appellants – landowners has vehemently
H submitted that to continue the temporary acquisition for number of years,
MANUBHAI SENDHABHAI BHARWAD v. OIL AND 1025
NATURAL GAS CORPORATION LTD. [M. R. SHAH, J.]

namely, in the present case, twenty five years and that too on payment A
of a meagre rent per annum is nothing but arbitrary, unreasonable and
violative of right to hold property guaranteed under Article 300A of the
Constitution of India.
4.1 It is submitted that even in the year 2016, an assurance was
given to the High Court that to acquire the land permanently, proceedings B
shall be initiated and on that assurance the High Court disposed of the
earlier writ petition. It is submitted that thereafter also, after a period of
six years, no further concrete steps are taken to acquire the land
permanently and the appellants are being paid meagre rent at present at
the rate of Rs. 30/- per square meter per annum.
C
4.2 It is further submitted that the area in question in which the
land under temporary acquisition is situated is now forming part of the
city area and is a fully developed area and the prices have gone very
high. It is submitted that therefore to offer/pay rent at the rate of Rs. 30/
- per square meter per annum and that too for the entire area of the land
in the developed area is absolutely unreasonable, arbitrary and violative D
of Article 300A of the Constitution of India. It is submitted that because
of the temporary acquisition for 25 years, the appellants are not in a
position to use the land in question. They are not in a position to fetch the
market price. They are also not getting the adequate compensation/rent.
It is submitted that if the land would have been acquired permanently E
earlier, the appellants would have got sufficient compensation and the
appellants would have utilised that money for purchase of other land,
which the appellants could not because of non-payment of compensation
due to non-acquisition of the land permanently.
5. Shri Vikramjit Banerjee, learned Additional Solicitor General of F
India has submitted that the land in question has been acquired by the
ONGC for its oil exploration and production activities on temporary basis.
It is submitted that for the aforesaid the landowners are being paid the
annual rent revised from time to time by the Committee comprising
Collector, Town Planning Officer, Deputy Collector, Assistant Collector,
Special Land Acquisition Officer and the representative of the ONGC G
with respect to the land situated in Gujarat. It is submitted that the
appellants are accepting the periodically revised upward rent voluntarily.
5.1 It is further submitted that after the High Court passed an
order in Special Civil Application No.3992/2016, which was disposed of
on the statement made by the respondents that they would initiate the H
1026 SUPREME COURT REPORTS [2023] 1 S.C.R.

A process of permanent acquisition, on 23.5.2018, Revenue Department,
Government of Gujarat published a notification stating that the land in
question is required by the ONGC for public purpose declaring its intention
to acquire the land for development of its infrastructure. It is submitted
that after the notification dated 23.5.2018, again on 22.07.2019, Revenue
Department of Government of Gujarat published a notification relating
B to land in question required by the ONGC for public purpose, the same
was issued under Right to Fair Compensation and Transparency in Land
Acquisition , Rehabilitation and Resettlement Act, 2013 (hereinafter
referred to as the ‘2013 Act’). It is submitted that however thereafter
on 21.10.2019 through internal communication, GM(HR) I/c LAQ
Section, ONGC, Ahmedabad was informed that the permanent acquisition
C of the land in question is put on hold and the proposal detailing number of
acquisition to be made at Ahmedabad Asset, including its financial
implications have been sent for appraisal to the Executive Committee/
ONGC Board. It is submitted that therefore the respondent-ONGC has
full intention to proceed with the permanent acquisition, but due to the
D reasons so stated in the letter dated 21.10.2019, the process for permanent
acquisition was put on hold. It is therefore submitted that the respondent-
ONGC needs more time to make the acquisition process in conformity
with 2013 Act, to acquire the land permanently.
5.2 Now so far as the grievance on behalf of the appellants that
they are being paid meagre annual rent is concerned, it is submitted that
E as such In-house Executive Committee of the ONGC revises the rate
after every three years. It is submitted that the rate of rent is revised
recently as well with effect from 1.2.2021 from Rs. 24/- per square
meter to Rs. 30/- per square meter for the lands acquired directly by
ONGC on temporary basis. It is submitted that periodical upward rent is
accepted voluntarily by the appellants. It is submitted that the appellants
F again claiming the annual rent/revision of annual rent considering the
market value/market price of the land in question.
6. We have heard learned counsel for the respective parties at
length.
At the outset, it is required to be noted that the land in question
G
owned by the appellants has been under temporary acquisition by the
respondent-ONGC since the year 1996 for the purposes of its oil
exploration. The land in question has been purchased by the first appellant
under a registered sale deed dated 15.3.2005. Therefore, as such, at the
time when appellant No.1 purchased the land in question, the land in
H question was under temporary acquisition by the ONGC. Be that as it
MANUBHAI SENDHABHAI BHARWAD v. OIL AND 1027
NATURAL GAS CORPORATION LTD. [M. R. SHAH, J.]

may, on and from 15.3.2005, appellant No. 1 is the owner of the land in A
question and therefore can question the temporary acquisition if the
temporary acquisition has been continued for a long period. It is to be
noted that the land in question now falls in the city of Ahmedabad and
the prices of the land have increased manyfold. The appellants are being
paid the annual rent @ Rs. 30/- per square meter per annum as revised.
B
As observed hereinabove, the land in question is under temporary
acquisition by the ONGC since the year 1996 for its oil exploration. The
same is under temporary acquisition under Section 35 of the Land
Acquisition Act, 1894 (for short, ‘1894 Act’). Section 35 of the 1894 Act
reads as under:
“35. Temporary occupation of waste or arable land, procedure C
when difference as to compensation exists – (1) Subject to the
provisions of Part VII of this Act, whenever it appears to the
appropriate Government that the temporary occupation and use
of any waste or arable land are needed for any public purpose, or
for a company, the appropriate Government may direct the
Collector to procure the occupation and use of the same for such D
terms as it shall think fit, not exceeding three years from
commencement of such occupation.
(2) The Collector shall thereupon give notice in writing to the
persons interested in such land of the purpose for which the same
is needed, and shall, for the occupation and use thereof, for such E
term as aforesaid, and for the materials (if any) to be taken
therefrom, pay to them such compensation, either in a gross sum
of money, or by monthly or other periodical payments, as shall be
agreed upon in writing between him and such persons respectively.
(3) In case the Collector and the persons interested differ as to F
the sufficiency of the compensation or apportionment thereof, the
Collector shall refer such difference to the decision of the Court.”
7. Approximately 26 years have passed and still the land in question
is under temporary acquisition by the ONGC. If the land is continued to
be under temporary acquisition for number of years, meaning and purpose
of temporary acquisition would lose its significance. Temporary acquisition G
cannot be continued for approximately 20 to 25 years. It cannot be disputed
that once the land is under temporary acquisition and the same is being
used by the ONGC for oil exploration, it may not be possible for the
landowners to use the land; to cultivate the same and/or to deal with the
same in any manner. To continue with the temporary acquisition for
H
1028 SUPREME COURT REPORTS [2023] 1 S.C.R.

A number of years would be arbitrary and can be said to be infringing the
right to use the property guaranteed under Article 300A of the Constitution
of India. Even to continue with the temporary acquisition for a longer
period can be said to be unreasonable, infringing the rights of the
landowners to deal with and/or use the land.

B However, from the material on record, it appears that in the year
2018 and after the High Court disposed of the earlier writ petition on the
submission made on behalf of the ONGC that the land in question shall
be acquired permanently, efforts were made in the year 2018 to acquire
the land under the provisions of the 2013 Act. However, thereafter the
same is put on hold by the Land Acquisition Officer/State Government
C and the reason seems to be the higher value of the land to be paid towards
compensation. Even before this Court also, learned counsel appearing
on behalf of the ONGC has prayed for some further time to acquire the
land in question permanently. As such, in the impugned judgment and
order, the High Court has granted time to the ONGC and the State to
acquire the land in question permanently within twelve months from the
D date of the impugned order, i.e., within twelve months from 26.04.2022,
i.e., on or before 26.04.2023. Therefore, as such, a writ of mandamus is
already issued by the High Court directing the Corporation ONGC to
complete the acquisition proceedings on or before 26.04.2023. Therefore,
if the land in question is not acquired as per the writ issued by the High
Court within a stipulated time, necessary consequence shall follow. The
E respondent-ONGC is directed to act as per the impugned judgment and
order passed by the High Court, more particularly para 7(ii), failing which
necessary consequence shall follow.
8. Now so far as the grievance with respect to the quantum of
annual rent paid is concerned, the High Court has already issued directions
F in terms of para 7(iii) of the impugned judgment and order. Even otherwise,
as per section 34 of the 1894 Act, if the appellants are aggrieved by the
amount of compensation/annual rent, it will always be open to the
appellants/landowners to approach the Collector and the Collector shall
refer such reference to the decision of the Court.
9. With the aforesaid observations and directions, the present
G
appeal stands disposed of in terms of the above.

Ankit Gyan Appeal disposed of.
(Assisted by : Abhishek Pratap Singh and Aarsh Choudhary, LCRAs)

H