High Court of Gujarat
R/First Appeal No. 2172 of 2014 (with R/First Appeal Nos. 2173, 2174, and 2175 of 2014).
August 24, 2026.
Mr. Justice J. C. Doshi.
The Group General Manager, ONGC (Appellant) vs. Bhanuji Rupaji Vaghela & Anr. (Respondents / Original Claimants).
"Disclaimer: This article is a simplified summary of the court judgment prepared for informational and educational purposes only. It does not constitute legal advice or an official legal document. For complete facts and full context, please refer to the official judgment attached below."
What Was the Case About
The Oil and Natural Gas Corporation Limited (ONGC) acquired agricultural land in Pansar village, Kalol Taluka, District Gandhinagar, for public industrial works under the Land Acquisition Act, 1894. While the Special Land Acquisition Officer originally awarded compensation at Rs. 13 per square meter, the Reference Court increased the market value to Rs. 343.80 per square meter and ordered interest to be calculated from the date ONGC took temporary possession in 1986. ONGC filed first appeals in the Gujarat High Court to challenge both the increased land valuation and the starting date for calculating statutory interest.
Key Arguments
- ONGC's (Appellant's) Arguments: ONGC argued that the Reference Court erred by relying on an award from an adjoining village (Dhamasana) rather than a local sale deed from Pansar village. Furthermore, ONGC contended that statutory interest under Section 28 cannot be charged from the date of temporary occupation in 1986, but must only run from the date of permanent acquisition or award in 2000.
- Landowners' (Respondents') Arguments: The landowners argued that the market value of Rs. 343.80 per square meter was already affirmed by the Supreme Court of India in a batch of similar cases concerning the same village. They maintained that the local sale deed cited by ONGC was already evaluated during the initial award and did not reflect true market appreciation.
What Did the Court Decide
The High Court partly allowed ONGC's appeal by modifying the interest starting date while maintaining the market compensation rate [13, 13.1, 13.3]. Citing Supreme Court precedent for Pansar village, the Court confirmed the market value of Rs. 343.80 per square meter (additional compensation of Rs. 330.80 per square meter), along with 30% solatium and 12% annual statutory increase [9, 12, 13.1, 13.2]. However, the Court ruled that interest under Section 28 cannot be awarded from the temporary possession date of February 27, 1986. Instead, the Court held that interest on excess compensation must run from May 2, 2000 (the date of the land acquisition award) at 9% per annum for the first year and 15% per annum thereafter until realization, with rent already paid for temporary occupation adjusted against the final dues [11, 13.3, 13.4].
Why This Judgment Matters to Everyday Citizens
This judgment provides vital legal clarity for landowners whose properties are acquired by government entities or public sector corporations for public projects. It confirms that landowners are entitled to fair, market-aligned compensation based on consistent judicial precedents and regional land appreciation. Crucially, it clarifies the legal distinction between temporary land occupation and permanent land acquisition, establishing that statutory interest on enhanced compensation applies only from the date of formal permanent acquisition rather than initial temporary possession [7, 13.3].
Applicable Laws and Sections
- Acts Applicable:
- Land Acquisition Act, 1894
- Code of Civil Procedure, 1908 (CPC)
- Key Sections:
- Section 4 of the Land Acquisition Act, 1894: Requires public notification of the government's intention to acquire private land for public purposes.
- Section 11 of the Land Acquisition Act, 1894: Empowers the acquisition officer to determine land area, total value, and initial compensation awards.
- Section 18 of the Land Acquisition Act, 1894: Allows dissatisfied landowners to file a formal court reference for higher land compensation.
- Section 23(1-A) & Section 23(2) of the Land Acquisition Act, 1894: Mandates statutory benefits, including a 12% annual additional amount and a 30% solatium on the determined market value [3, 13.2].
- Section 28 of the Land Acquisition Act, 1894: Governs court-ordered interest on excess compensation, running from the date of taking permanent possession or award [7, 10, 13.3].
- Section 54 of the Land Acquisition Act, 1894 / Section 96 of CPC: Authorizes filing a First Appeal in the High Court against a reference court award.