Supreme Court Allows Appeal in Land Acquisition Reference Case Due to Liberty Reserved by High Court — Limitation Period Not Applicable When Claimants Pursued Earlier Remedies. The Court held that the reference under Section 18 of the Land Acquisition Act, 1894 was not barred by limitation because the claimants had challenged the acquisition and the High Court had reserved liberty to seek enhancement, and the reference was filed within six months of the dismissal of the special leave petition.

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2026-05-19 01:01:13

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Case Note & Summary

The Supreme Court allowed the appeal filed by the original claimants (appellants) against the judgment of the Gujarat High Court which had upheld the Reference Court's order dismissing their reference under Section 18 of the Land Acquisition Act, 1894 as barred by limitation. The facts are that a notification under Section 4 of the Act was issued on 30.07.2008 for acquiring the appellants' lands for a gas compressor station. The award under Section 11 was made on 6.4.2011, fixing compensation at Rs. 69 per square meter, and notice under Section 12(2) was served on 25.04.2011. The appellants challenged the acquisition and the award by filing a writ petition before the High Court, which was dismissed on 7.8.2012, but the High Court reserved liberty to the appellants to pursue remedies for enhancement of compensation. The appellants then filed a special leave petition before the Supreme Court, which was dismissed on 11.4.2013. Thereafter, on 1.7.2013, the appellants filed a reference under Section 18 for enhancement of compensation. The Reference Court dismissed the reference as barred by limitation, holding that it was filed beyond six months from the date of notice under Section 12(2). The High Court confirmed this. The Supreme Court held that in view of the liberty reserved by the High Court, the reference could not be dismissed as barred by limitation. The Court noted that the appellants had pursued bona fide remedies and filed the reference within six months of the dismissal of the SLP. The Court distinguished the decisions in Shah Manilal Chandulal and Mahadeo Bajirao Patil, stating that those cases did not involve similar facts where liberty was reserved. The Court quashed the orders of the High Court and the Reference Court and remitted the matter to the Reference Court to decide the reference on merits within nine months.

Headnote

A) Land Acquisition - Limitation for Reference - Section 18(2) of Land Acquisition Act, 1894 - Time Limit - The period of six months for filing a reference under Section 18(2) is mandatory and cannot be extended under Section 5 of the Limitation Act, 1963. However, in the peculiar facts of the case where the claimants had challenged the acquisition proceedings and the High Court had reserved liberty to seek enhancement of compensation, the reference filed within six months of the dismissal of the special leave petition was held not barred by limitation. (Paras 7-10)

B) Land Acquisition - Liberty Reserved by Court - Effect on Limitation - Section 18 of Land Acquisition Act, 1894 - When a court reserves liberty to the claimant to pursue a remedy for enhancement of compensation, the time spent in pursuing the earlier proceedings may be excluded, and the reference cannot be dismissed as barred by limitation if filed within a reasonable time after the conclusion of those proceedings. (Paras 7-9)

C) Land Acquisition - Just Compensation - Right to - Sections 18, 23 of Land Acquisition Act, 1894 - The landowners are entitled to just compensation for their acquired lands. The court directed the Reference Court to decide the reference on merits within nine months, emphasizing that the claimants should not be deprived of their right to seek higher compensation due to technicalities of limitation when they had acted bona fide. (Paras 10-11)

Issue of Consideration

Whether the reference under Section 18 of the Land Acquisition Act, 1894 filed beyond six months from the date of notice under Section 12(2) is barred by limitation, when the claimants had earlier challenged the acquisition and the High Court had reserved liberty to seek enhancement of compensation.

Final Decision

The Supreme Court allowed the appeal, quashed the orders of the High Court and the Reference Court, and remitted the matter to the Reference Court to decide the reference on merits within nine months.

Law Points

Limitation for reference under Section 18 of Land Acquisition Act
1894
cannot be extended by Section 5 of Limitation Act
but time spent in bona fide pursuing other remedies may be excluded in peculiar facts
Liberty reserved by court to seek enhancement of compensation can override limitation bar
Reference filed within six months of dismissal of SLP is not barred

Case Details

2022 LawText (SC) (12) 22

Civil Appeal No. 9004 of 2022 (Arising from SLP(Civil) No.19053/2022)

2022-01-01

M.R. Shah

Manharlal Shivlal Panchal & Others

The Deputy Collector & Special Land Acquisition Officer & Others

Nature of Litigation

Civil appeal against dismissal of reference under Section 18 of Land Acquisition Act, 1894 as barred by limitation.

Remedy Sought

The appellants (original landowners) sought enhancement of compensation for their acquired lands.

Filing Reason

The Reference Court dismissed the reference as barred by limitation, and the High Court confirmed that dismissal.

Previous Decisions

The High Court had dismissed the writ petition challenging the acquisition but reserved liberty to seek enhancement. The Supreme Court dismissed the SLP on 11.4.2013.

Issues

Whether the reference under Section 18 of the Land Acquisition Act, 1894 is barred by limitation when the claimants had earlier challenged the acquisition and the High Court had reserved liberty to seek enhancement. Whether the time spent in pursuing the writ petition and SLP can be excluded for the purpose of limitation.

Submissions/Arguments

Appellants argued that the reference was filed within six months of the dismissal of the SLP and in view of the liberty reserved by the High Court, it should not be dismissed as barred by limitation. Respondent No.3 argued that the limitation period of six months from the date of notice under Section 12(2) had expired and the reference was time-barred, relying on Shah Manilal Chandulal and Mahadeo Bajirao Patil.

Ratio Decidendi

The limitation for filing a reference under Section 18 of the Land Acquisition Act, 1894 cannot be extended under Section 5 of the Limitation Act, but in the peculiar facts where the High Court had reserved liberty to the claimants to seek enhancement of compensation and the claimants had bona fide pursued other remedies, the reference filed within six months of the dismissal of the SLP is not barred by limitation.

Judgment Excerpts

In view of that liberty, the appellants – original landowners thereafter and after dismissal of the special leave petition by this Court filed reference. Therefore, in view of the liberty reserved by the High Court in favour of the appellants to pursue such remedy as may be available to them for enhancement of compensation, the reference application could not have been dismissed as barred by limitation under Section 18(2) of the Act, 1894. As such, on a fair reading of the entire judgment and order passed by the High Court, the observations made that it is too late to make the grievance with respect to the inadequacy of the compensation, those observations are to be read while considering the prayer of the appellants challenging the acquisition proceedings.

Procedural History

Notification under Section 4 issued on 30.07.2008; Declaration under Section 6 on 1.6.2009; Award under Section 11 on 6.4.2011; Notice under Section 12(2) on 25.04.2011; Writ Petition No. 1428/2012 filed challenging acquisition and award; High Court dismissed writ petition on 7.8.2012 reserving liberty; SLP (CC) 7382/2013 dismissed by Supreme Court on 11.4.2013; Reference under Section 18 filed on 1.7.2013; Reference Court dismissed reference as barred by limitation on 20.10.2021; First Appeal No. 492/2022 dismissed by High Court on 10.03.2022; Present Civil Appeal filed.