The Allahabad High Court has held that the Reference Court under the Land Acquisition Act, 1894, acting as an original court for determining compensation, is not empowered to set aside the award passed by the Collector and remand the matter back to the Collector for a fresh determination of compensation. Justice Sandeep Jain observed that the Land Acquisition Act, 1894, is a complete code in itself and provides a specific mechanism for the land owner who is dissatisfied with the compensation awarded by the Collector to seek a reference under Section 18, whereupon the Reference Court determines the compensation in accordance with law. The Act does not vest any power in the Reference Court to set aside the Collector’s award and remand the matter for a fresh decision. The Court clarified that the power of remand is exercised only by an appellate court, whereas the Reference Court functions as a court of original jurisdiction and is denuded of any appellate powers, including the power to remand.
The appeal arose from an order passed by the Presiding Officer, Land Acquisition, Rehabilitation and Resettlement Authority, Basti, acting as the Reference Court in Land Acquisition Case No.1 of 2021. The Reference Court had partly allowed the reference filed by the land owners, set aside the Collector’s award dated 13.11.2019, and remanded the matter to the Collector for determining compensation afresh under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which came into force on 01.01.2014. The State challenged this order in the First Appeal, contending that the Reference Court had acted beyond its jurisdiction. The appellant-State submitted that the land in village Tenua Grunt was acquired for construction of the Maina Rajwaha through notification under Section 4(1) of the 1894 Act dated 27.01.2010, followed by declaration under Section 6 on 09.08.2010, and possession was taken under the urgency clause on 28.09.2010. The Collector passed the award on 13.11.2019 awarding compensation of Rs.1,14,39,264/- on the basis of the exemplar available on record. When the land owners sought enhancement through reference, the Reference Court set aside the award solely on the ground that compensation ought to have been determined under the 2013 Act and remanded the matter for fresh adjudication.
The High Court, after hearing learned counsel for the State and the respondents, categorically held that the Reference Court had exceeded its jurisdiction. It observed that the Reference Court is not an appellate court but only an original court for determining compensation in land acquisition cases, and therefore it could not have exercised the power of remand. The Court placed reliance on its earlier decision in First Appeal No.670 of 1992 (State of UP and others vs. Rahmullah) decided on 23.07.2013, wherein it was held, after relying upon the Supreme Court judgment in Chimanlal Hargovinddas vs. SLAO, Pune, that the reference under Section 18 is not an appeal against the award of the Special Land Acquisition Officer but is in the nature of original proceedings. The claimant is in the position of a plaintiff who must establish that the price offered for the acquired land is inadequate by producing material evidence before the Reference Court. The High Court also referred to the judgment of the Andhra Pradesh High Court in Special Tahsildar, Land Acquisition Railways, Vishakhapatnam vs. Sri Varabalakshmi Narasimhaswamivaru, wherein it was held that a court to which a reference is made under Section 18 has no power to remand the matter to the Land Acquisition Officer, as the jurisdiction is special and no power of remand is provided in the statute. The Madhya Pradesh High Court in Gabbar Singh and others vs. Collector, Gwalior was also cited to the same effect.
The High Court emphasised that under both the 1894 Act and the 2013 Act, the Reference Court can only affirm the award of the Collector or enhance the compensation awarded by it, but it cannot set aside the award and remand the matter to the Collector for deciding it afresh. It observed that in no circumstances whatsoever could the Reference Court have passed the impugned order, which was unsustainable in law. The Court accordingly allowed the appeal, set aside the impugned judgment and award dated 25.03.2023 passed by the Reference Court, and restored L.A.R. No.1 of 2021 on its original number before the Reference Court. The Reference Court was directed to decide the reference on merits in accordance with law after hearing the parties within a period of six months from the date of production of a certified copy of the order, without granting any unnecessary adjournments to either of the parties.
Case Title: State of UP and 2 Others v. Iftekhar Ahmad and Another
Case No.: First Appeal No. 387 of 2026
Date of Judgment: 10 April 2026
Click HERE for full Judgment.
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