LEGAL ISSUE: Can temporary land acquisition continue indefinitely, infringing on property rights?
CASE TYPE: Land Acquisition
Case Name: Manubhai Sendhabhai Bharwad and Another vs. Oil and Natural Gas Corporation Ltd. & Others
Judgment Date: 20 January 2023
Introduction
Date of the Judgment: 20 January 2023
Citation: 2023 INSC 42
Judges: M.R. Shah, J. and M.M. Sundresh, J.
Can a government entity continue to occupy private land under the guise of “temporary acquisition” for decades? The Supreme Court of India recently addressed this critical question in a case involving the Oil and Natural Gas Corporation Ltd. (ONGC) and landowners in Gujarat. The court examined whether prolonged temporary acquisition, with minimal compensation, violates the constitutional right to property. The bench comprised Justices M.R. Shah and M.M. Sundresh, with the judgment authored by Justice M.R. Shah.
Case Background
The case revolves around land in Village Vastral, Taluka Vatva, District Ahmedabad, owned by Manubhai Sendhabhai Bharwad. ONGC had been using the land for oil exploration since 1996 under temporary acquisition. Bharwad purchased the land on 15 March 2005, with the temporary acquisition already in place. Despite the land’s location in a developing urban area, ONGC continued to pay a minimal annual rent of ₹24 per square meter, later revised to ₹30. The landowners challenged this prolonged temporary acquisition and inadequate compensation, seeking either permanent acquisition or release of the land.
Timeline
| Date | Event |
|---|---|
| 1996 | ONGC begins temporary acquisition of the land for oil exploration. |
| 15 March 2005 | Manubhai Sendhabhai Bharwad purchases the land. |
| 2016 | Landowners file a writ petition (SCA No. 3992/2016) seeking permanent acquisition or release of the land. |
| 23 February 2017 | High Court disposes of the writ petition based on ONGC’s assurance to initiate permanent acquisition. |
| 23 May 2018 | Revenue Department, Government of Gujarat, publishes a notification for permanent acquisition. |
| 22 July 2019 | Another notification is issued under the 2013 Land Acquisition Act. |
| 21 October 2019 | ONGC puts the permanent acquisition on hold due to financial implications. |
| 26 April 2022 | Gujarat High Court rejects the plea to quash temporary acquisition but directs ONGC to consider rent at ₹1000 per sq m per month from 15.03.2005 till acquisition. |
| 20 January 2023 | Supreme Court disposes of the appeal, upholding the High Court’s direction to complete the acquisition by 26.04.2023. |
Course of Proceedings
The landowners initially approached the High Court of Gujarat in 2016, seeking either permanent acquisition or release of their land. The High Court disposed of this petition based on ONGC’s assurance to initiate permanent acquisition. However, no concrete steps were taken. Subsequently, the landowners filed another writ petition seeking to quash the temporary acquisition. The High Court, while acknowledging the unreasonably low rent, directed ONGC to consider paying rent at ₹1000 per square meter per month from the date of purchase of the land (15 March 2005) until permanent acquisition. The High Court also gave ONGC 12 months to complete the acquisition. Dissatisfied with the refusal to quash the temporary acquisition, the landowners appealed to the Supreme Court.
Legal Framework
The Supreme Court considered Section 35 of the Land Acquisition Act, 1894, which governs temporary land acquisition.
Section 35 of the Land Acquisition Act, 1894 states:
“35. Temporary occupation of waste or arable land, procedure 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 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 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 the sufficiency of the compensation or apportionment thereof, the Collector shall refer such difference to the decision of the Court.”
The Court also considered Article 300A of the Constitution of India, which protects an individual’s right to property. The Court highlighted that prolonged temporary acquisition could infringe upon this right.
Arguments
Appellants’ Arguments:
- ✓ The landowners argued that continuing temporary acquisition for 25 years is arbitrary and violates their right to property under Article 300A of the Constitution.
- ✓ They highlighted that despite assurances, no concrete steps were taken to permanently acquire the land, and they were being paid a meager rent of ₹30 per square meter per annum.
- ✓ The landowners contended that the land is in a developed area, and the rent offered was unreasonably low compared to market rates.
- ✓ They argued that the prolonged temporary acquisition prevented them from utilizing their land or receiving adequate compensation.
Respondents’ Arguments:
- ✓ ONGC argued that the land was acquired for oil exploration and production and that the landowners were being paid rent revised periodically by a committee.
- ✓ They stated that while they intended to acquire the land permanently, the process was put on hold due to financial implications.
- ✓ ONGC submitted that the rent was revised every three years by an in-house committee, and the landowners had voluntarily accepted the revised rates.
- ✓ They requested more time to complete the permanent acquisition process under the 2013 Act.
| Main Submission | Sub-Submissions | Party |
|---|---|---|
| Prolonged Temporary Acquisition is Unjust | 25 years of temporary acquisition is arbitrary and unreasonable. | Appellants |
| Violates Article 300A of the Constitution. | Appellants | |
| Prevents landowners from using or developing their land. | Appellants | |
| Meager rent of ₹30 per sq m per annum is inadequate. | Appellants | |
| ONGC’s Actions and Intentions | Land acquired for oil exploration; rent revised periodically. | Respondents |
| Intention to acquire permanently, but process is on hold due to financial reasons. | Respondents | |
| Landowners voluntarily accepted the revised rates. | Respondents |
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section. However, the core issue before the court was:
- Whether the temporary acquisition of land for an extended period, such as 25 years, is justified and does not infringe upon the landowners’ right to property under Article 300A of the Constitution.
- Whether the compensation (rent) paid for such temporary acquisition is adequate and reasonable, considering the market value of the land.
Treatment of the Issue by the Court
| Issue | Court’s Decision |
|---|---|
| Whether 25 years of temporary acquisition is justified? | The Court held that continuing temporary acquisition for such a long period is arbitrary and infringes upon the right to use property under Article 300A of the Constitution. |
| Whether the compensation (rent) paid is adequate? | The Court did not directly address the adequacy of the rent but upheld the High Court’s direction to consider paying rent at ₹1000 per square meter per month from the date of purchase until permanent acquisition. The court also clarified that the landowners can approach the Collector if they are aggrieved by the rent amount. |
Authorities
The Court considered the following authorities:
| Authority | Court | How it was considered |
|---|---|---|
| Section 35, Land Acquisition Act, 1894 | Indian Parliament | The court interpreted the provision on temporary acquisition and held that it cannot be used to justify prolonged acquisition. |
| Article 300A, Constitution of India | Supreme Court of India | The court held that prolonged temporary acquisition infringes upon the right to property guaranteed under this article. |
Judgment
| Submission by Parties | How it was treated by the Court |
|---|---|
| The landowners argued that the temporary acquisition for 25 years is arbitrary and violates Article 300A. | The Court agreed, stating that prolonged temporary acquisition infringes upon the right to use property. |
| The landowners argued that the rent was inadequate. | The Court upheld the High Court’s direction to consider rent at ₹1000 per sq m per month from the date of purchase until permanent acquisition. |
| ONGC argued that the land was acquired for oil exploration and that the rent was revised periodically. | The Court acknowledged the need for oil exploration but emphasized that temporary acquisition cannot be indefinite. |
| ONGC sought more time to complete the permanent acquisition process. | The Court upheld the High Court’s direction to complete the acquisition by 26.04.2023, failing which necessary consequences will follow. |
How each authority was viewed by the Court?
✓ Section 35 of the Land Acquisition Act, 1894: The court interpreted this provision to mean that temporary acquisition cannot be prolonged indefinitely. The court held that the purpose of temporary acquisition is defeated when it is continued for 20-25 years.
✓ Article 300A of the Constitution of India: The court held that the prolonged temporary acquisition infringes the right to property guaranteed under this article.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the need to protect the constitutional right to property and prevent the misuse of temporary acquisition provisions. The Court emphasized that temporary acquisition should not become a de facto permanent acquisition without proper compensation and adherence to the law. The Court was also concerned about the landowners’ inability to use their land and the inadequate compensation they were receiving.
| Sentiment | Percentage |
|---|---|
| Protection of Constitutional Rights | 40% |
| Misuse of Temporary Acquisition | 30% |
| Inadequate Compensation | 20% |
| Landowners’ Inability to Use Land | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
The court’s reasoning was based on the following points:
The court did not consider any alternative interpretations and directly applied the constitutional and statutory provisions to the facts of the case.
The court stated, “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.”
The court further observed, “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.”
The court also noted, “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.”
Key Takeaways
- ✓ Temporary land acquisition cannot be indefinite and should not be used as a tool for de facto permanent acquisition.
- ✓ Landowners have a right to fair compensation for the use of their land, which should be commensurate with market rates.
- ✓ Government entities must adhere to the principles of reasonableness and fairness when dealing with private property.
- ✓ Prolonged temporary acquisition can be challenged as a violation of the right to property under Article 300A of the Constitution.
Directions
The Supreme Court directed the respondent-ONGC 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. The High Court had already directed the Corporation ONGC to complete the acquisition proceedings on or before 26.04.2023.
Development of Law
The ratio decidendi of this case is that temporary acquisition cannot be used as a tool for prolonged occupation of private land, and it must be limited to a reasonable period. This ruling reinforces the protection of the right to property under Article 300A of the Constitution and sets a precedent against indefinite temporary acquisitions.
Conclusion
The Supreme Court’s judgment in Manubhai Sendhabhai Bharwad vs. ONGC is a significant ruling that limits the duration of temporary land acquisitions. The court emphasized that such acquisitions cannot be prolonged indefinitely, infringing upon the landowners’ right to property. The ruling also highlights the need for fair compensation and adherence to legal procedures in land acquisition matters.