New Delhi: The Supreme Court of India has raised serious concerns about unequal treatment in land acquisition compensation under the National Highways Act, 1956, compared with compensation under other land acquisition laws.
In a recent judgment, the Court emphasised that landowners under the National Highways Act often receive lower or unfair compensation due to structural flaws in the process and urged the Union Government to review the law and bring parity with more modern land acquisition frameworks like the 2013 RFCTLARR Act.
Supreme Court Decision on National Highways Act
A three-judge bench led by Chief Justice Surya Kant, with Justices Joymalya Bagchi and Vipul M. Pancholi, observed that landowners whose land is acquired under the National Highways Act (1956) face disadvantages not experienced by those whose lands are acquired under older or newer land acquisition laws
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The Court pointed out that disputes over compensation under the National Highways Act are handled by government officers such as District Collectors or Commissioners — not by independent judicial bodies — which may lead to biased or legally flawed outcomes.
Major Concerns of National Highways Act
Under the National Highways Act, compensation disputes are first decided by administrative officers appointed by the government. These officers often lack specialized legal training and are burdened with other duties, making it harder to assess market value and statutory benefits fairly.
In contrast, compensation disputes under the Land Acquisition Act, 1894, and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act) are decided by judicial courts.
These courts include judges who are trained to handle complex valuation issues and have broader appellate remedies available.
Limited Legal Remedies
Another concern is that appeals against arbitration decisions under the National Highways Act must be brought within the narrow framework of the Arbitration and Conciliation Act, 1996, which limits judicial review. This contrasts sharply with the more flexible judicial appeal options available under other land acquisition statutes.
Centre Asked to Review Compensation Framework
The Supreme Court recognised that the National Highways Act’s summary procedure was designed for expedient clearance of infrastructure projects. However, it noted that this purpose should not come at the cost of fundamental fairness.
The bench suggested that equal access to judicial determination of compensation should be extended to landowners under the 1956 Act.
The Court specifically asked the Attorney General of India to examine whether legislative changes could introduce parity in compensation mechanisms without slowing down national highway development.
Background of the Case
The case before the Supreme Court arose from special leave petitions (SLPs) linked to a Punjab and Haryana High Court judgment that had struck down Sections 3G and 3J of the National Highways Act, which establish the arbitration system for compensation disputes.
With the arbitration framework temporarily revived by the Supreme Court’s stay order, landowners were left uncertain about their rights and compensation avenues. The bench restored their appeals under Section 34 of the Arbitration Act using its powers under Article 142 of the Constitution to ensure equitable outcomes for affected landowners.
