Methodology for calculating temporary acquisition rent may be adopted from Government Resolutions regardless of retrospective applicability.

The lands of the claimants in Village Dingucha and Village Saij, Gujarat, were temporarily acquired by ONGC for drilling purposes under Section 35 of the Land Acquisition Act, 1894.

For Dingucha (1997-1999) and Saij (1988), the Special Land Acquisition Officer (SLAO) awarded nominal rental compensation (Rs. 1.65/sq mtr and Rs. 0.80/sq mtr respectively).

The claimants sought a reference, and the Reference Court at Kalol enhanced the compensation to Rs. 18.15/sq mtr and Rs. 12.70/sq mtr respectively.

The Reference Court arrived at these figures by adopting a methodology from a State Government Resolution (GR) dated 06.07.2015, which prescribes rent at 15% of the market value for government land leased to ONGC.

ONGC appealed, arguing the appeals should be heard on merits despite the small claim amounts (less than Rs. 5 lakh) and that the 2015 GR was applied retrospectively.

1. Whether the appeals should be dismissed based on the "principle of smallness" of the amount involved as per State Circular No. PRC/Lok Adalat/102013/1793/GH.

2. Whether the Reference Court erred in applying the 15% market value methodology derived from the 2015 Government Resolution to acquisitions occurring in the 1990s.

3. Whether the statutory interest rate of 9% was correctly applied to rental compensation.

The court primarily applied the principle of "smallness of amount" derived from the State of Gujarat’s Circular dated 25.10.2016, which mandates the withdrawal/dismissal of appeals where the claim is less than Rs. 5 lakh.

The Court relied on the Constitutional Bench decision in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi (1975) 1 SCC 421, establishing that statutory corporations like ONGC are "State" under Article 12 of the Constitution and thus bound by government policy.

It distinguished State of Maharashtra v. Maimuma Banu (2003) 7 SCC 448 regarding interest rates, noting it applied to private negotiations outside the Land Acquisition Act.

The Court rejected ONGC’s contention that the appeals should be heard on merits to avoid inconsistency, holding that since ONGC is an instrumentality of the State under Article 12, it is bound by the 2016 Circular regarding the Rs. 5 lakh threshold for litigation.

On the merits, the Court found that the Reference Court did not retrospectively apply the 2015 GR, but rather adopted the methodology (15% of market value) as a fair yardstick for determining "fair rental value" in the absence of other evidence from ONGC.

The Court reasoned that if the Government charges 15% for its own land, private citizens are entitled to the same rate for compulsory temporary acquisition.

Precedents cited by ONGC (e.g., Shanahi Nathaji Dabhi) were distinguished due to geographical distance and stays by the Supreme Court.

The Court upheld the Reference Court’s determination of rental compensation based on 15% of market value and the 9% interest rate.

The Registry was directed to return the Record and Proceedings, and the Reference Court was ordered to disburse the deposited compensation to the claimants after due verification.