Supreme Court Directs ONGC to Complete Land Acquisition in Ahmedabad

The case of Manubhai Sendhabhai Bharwad & Another v. Oil and Natural Gas Corporation Ltd. & Others deals with the prolonged temporary acquisition of land in Ahmedabad by ONGC for oil exploration. The Supreme Court directed ONGC to complete the land acquisition permanently within the stipulated time, emphasizing that keeping land under temporary acquisition for 25 years is unreasonable and violates property rights.

Background of the Case

The land in question, bearing survey No. 837/1 in Village Vastral, Taluka Vatva, District Ahmedabad, was acquired temporarily by Oil and Natural Gas Corporation Ltd. (ONGC) in 1996 for oil exploration. Appellant No. 1 purchased the land through a registered sale deed on March 15, 2005. Over the years, land prices in the area had significantly increased, making continued temporary acquisition an issue.

The landowners were being paid rent at a rate of Rs. 24 per square meter per annum, later increased to Rs. 30 per square meter per annum. The appellants first approached the Gujarat High Court in 2016, seeking either permanent acquisition or release of the land. The High Court disposed of the petition on ONGC’s assurance that they would initiate permanent acquisition. However, no action was taken, prompting the landowners to file a fresh writ petition in 2021.

In response, ONGC stated that permanent acquisition was under process but cited high costs as a challenge. The High Court refused to quash the temporary acquisition but directed ONGC to consider increasing the rent to Rs. 1,000 per square meter per month till permanent acquisition was completed. Dissatisfied, the landowners appealed to the Supreme Court.

Key Legal Issues

1. Can Temporary Acquisition Be Extended for 25 Years?

The appellants argued that continuing temporary acquisition for 25 years violated their property rights under Article 300A of the Constitution, which guarantees the right to hold and use property.

The Supreme Court observed:

“To continue temporary acquisition for such an extended period defeats the purpose of the law. Temporary acquisition should be limited in duration and cannot become indefinite.”

2. Validity of ONGC’s Delay in Permanent Acquisition

Despite assurances in 2017 and again in 2018 that permanent acquisition would proceed, ONGC did not finalize the process. The Court noted that failure to act on earlier commitments raised concerns about the company’s approach.

The Court observed:

“A public sector undertaking cannot indefinitely delay acquisition proceedings while holding on to private property under the pretext of temporary use.”

3. Fair Compensation for Landowners

The appellants highlighted that Ahmedabad Metro Rail Corporation was paying Rs. 1,000 per square meter per month for similar land, whereas they were receiving only Rs. 30 per square meter per annum. They contended that this disparity was arbitrary and unjust.

The Supreme Court held:

“The compensation/rent must be reasonable and commensurate with market rates. Paying Rs. 30 per square meter per annum in a developed area is grossly inadequate.”

Supreme Court’s Judgment

The Supreme Court ruled in favor of the landowners, directing ONGC to:

Complete the permanent acquisition process within 12 months from April 26, 2022.
If the acquisition is not completed within the stipulated period, necessary consequences shall follow.
Act in compliance with the High Court’s direction to revise rent to a fair amount.

The Court also stated that if the landowners are dissatisfied with the rent amount, they may approach the Collector under Section 34 of the Land Acquisition Act, 1894, to seek fair compensation.

Implications of the Judgment

This ruling has major implications for landowners and government acquisitions:

Limits on Temporary Acquisition: The judgment ensures that temporary land acquisitions cannot continue indefinitely.
Fair Compensation Standards: Landowners can demand fair rent or compensation, especially when land values increase over time.
Accountability for Public Sector Undertakings: The ruling requires ONGC to complete land acquisitions within a reasonable time frame.

Conclusion

The Supreme Court’s decision in Manubhai Sendhabhai Bharwad v. Oil and Natural Gas Corporation Ltd. upholds the rights of landowners against prolonged temporary acquisitions. It sets a precedent ensuring that government agencies cannot hold private property indefinitely without fair compensation or permanent acquisition. The ruling brings clarity to property rights and fair acquisition practices under Indian law.

Petitioner Name: Manubhai Sendhabhai Bharwad & Another.
Respondent Name: Oil and Natural Gas Corporation Ltd. & Others.
Judgment By: Justice M.R. Shah, Justice M.M. Sundresh.
Place Of Incident: Ahmedabad, Gujarat.
Judgment Date: 20-01-2023.

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