Supreme Court's divisional bench led by Justices MR Shah and MM Sundresh ruled on January 20 that, “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 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.”

Gopal Shankaranarayanan, Senior Advocate, representing appellant submitted that, “to continue the temporary acquisition for number of years, namely, in the present case, twenty five years and that too on payment 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.”

ASG Senior Advocate Vikramjit Banerjee representing respondent side stated that , “the land in question has been acquired by the ONGC for its oil exploration and production activities on temporary basis. The landowners are being paid the annual rent revised from time to time by the Committee…the appellants are accepting the periodically revised upward rent voluntarily.”

In his decision, Justice Shah writes, “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 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.”

Justice Shah then holds, “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 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.”

Regarding the amount of rent that the Respondents must pay the Appellants, Justice Shah states: “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/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.”

The appellants, who were also the original writ petitioners and the landowners, had filed a civil appeal with the Supreme Court after being dissatisfied with the High Court of Gujarat's decision to reject their writ petition request to stop temporary acquisition proceedings. The bench issued the aforementioned decision in that case.

The respondents appeared before the Gujrat High Court and reiterated their claim that the acquisition of the subject land on a permanent basis has received approval from the competent government and is currently being processed. Before the High Court, an official from ONGC stated that the acquisition proceedings will be finished in a year. The ONGC also entered into an agreement that was recorded. By relying on the aforementioned undertaking, the High Court rejected the request to halt the temporary acquisition proceedings and increased rent from Rs. 24 per square metre per year to Rs. 30 per square metre per year in the aforementioned judgement and order.

Case title: Manubhai Sendhabhai Bharwad and Another Versus Oil and Natural Gas Corporation Ltd. & Others

Citation: Arising from S.L.P.(Civil) No. 13885/2022