Failure to consider Section 405 of the Gujarat Municipal Corporations Act warrants remand for fresh adjudication.

The respondent-plaintiff owned immovable property bearing City Survey No. 2840, Sheet No. 110, situated on Bedi Road/Pandit Nehru Road, Jamnagar.

The Jamnagar Municipal Corporation acquired a portion of the property for road widening and paid compensation of Rs.1,44,745 on 23 December 2005.

Claiming that the compensation was inadequate, the plaintiff instituted Special Civil Suit No. 61 of 2006 seeking Rs.9,39,867 with interest.

The learned 8th Additional Senior Civil Judge, Jamnagar, enhanced the compensation and awarded interest at 12% on Rs.1,64,722.

The Municipal Corporation challenged that judgment and decree under Section 96 of the Code of Civil Procedure, 1908.

Whether the plaintiff’s claim for enhanced compensation was required to be considered under the reference mechanism prescribed by Section 405 of the Gujarat Provincial Municipal Corporations Act, 1949.

Whether the judgment and decree awarding enhanced compensation could be sustained when the trial court had not examined the applicability and effect of Section 405 of the Act.

Whether the matter required remand for fresh adjudication, including an opportunity to both parties to lead necessary evidence.

The Court considered Section 405 of the Gujarat Provincial Municipal Corporations Act, 1949, which requires a reference to the Judge in specified matters, including disputes concerning the amount or payment of expenses or compensation falling under the Act, rules or bye-laws where no other specific provision applies.

The appeal was governed procedurally by Section 96 of the Code of Civil Procedure, 1908, which permits a first appeal from an original decree.

Since the trial court had not considered the purport and applicability of Section 405, the matter was required to be reconsidered in accordance with law; the High Court expressly refrained from deciding the merits.

The High Court observed that the trial court had enhanced the compensation without examining whether the claim was governed by the statutory reference procedure under Section 405(6) of the Gujarat Provincial Municipal Corporations Act, particularly the provision concerning compensation for which no other specific mechanism was provided.

Because this potentially applicable statutory provision had not been considered, the High Court found it inappropriate to determine the adequacy of compensation or the correctness of the award in the first appeal.

At the request of both parties, it therefore set aside the decree and remanded the proceedings so that the trial court could consider Section 405, permit the parties to lead necessary evidence, and decide all issues afresh.

All contentions were kept open.

The judgment and decree dated 7 October 2008 in Special Civil Suit No. 61 of 2006 were set aside, and the suit was remanded to the Civil Court, Jamnagar, for fresh adjudication in accordance with law, including consideration of Section 405 of the 1949 Act and receipt of necessary evidence.

The trial court was directed to decide the matter expeditiously, preferably within nine months of receiving the order.

The parties were directed to appear before the trial court on 2 September 2026 and cooperate in the proceedings; the Registry was directed to transmit the record and proceedings before that date.

The Court clarified that it had not examined the merits of the case.

Any connected civil application was disposed of as having become unnecessary.