Compensation challenges under the National Highways Act must be pursued through statutory arbitration remedies, not writ jurisdiction.

The petitioners filed a writ petition under Article 226 of the Constitution challenging the order dated 10 June 2015 passed by the Arbitrator-cum-Collector, Rewa, concerning compensation for land acquired under the National Highways Act, 1956.

They sought quashing of the order, reconsideration of the reference, determination of compensation by treating the acquired land as commercially diverted plots, and grant of solatium and interest.

The petitioners submitted that the original compensation award was made on 20 March 2015 and that the Arbitrator/Commissioner, Rewa, subsequently enhanced the compensation to ₹13,72,410 with 9% interest by order dated 28 January 2017, while directing proper computation and disbursement.

According to the petitioners, the compensation remained inadequate and solatium had not been granted.

The respondents contended that the petitioners had already availed the statutory remedy under Section 3G(5) of the National Highways Act and that any further challenge should be pursued under Section 3G(6) of that Act read with Section 34 of the Arbitration and Conciliation Act, 1996.

Whether the petition under Article 226 was maintainable for reassessing the nature of the acquired land and the quantum of compensation after the petitioners had availed the statutory arbitration remedy under Section 3G(5) of the National Highways Act, 1956?

Whether the petitioners should be relegated to the alternative remedies available under Section 3G(6) of the National Highways Act read with Section 34 of the Arbitration and Conciliation Act, 1996?

Whether the petitioners could seek exclusion of the time spent prosecuting the writ petition by invoking Section 14 of the Limitation Act, 1963, if limitation arose before the competent forum?

The Court applied Article 226 of the Constitution, recognising that writ jurisdiction should not ordinarily be exercised where an effective statutory remedy is available, particularly in matters requiring factual assessment and determination of compensation.

Section 3G(5) of the National Highways Act, 1956 provides for reference to an arbitrator where the amount determined as compensation is disputed, while Section 3G(6) makes the Arbitration and Conciliation Act, 1996 applicable to such arbitration proceedings.

The Court consequently indicated that a challenge to the arbitral determination could be pursued under Section 34 of the Arbitration and Conciliation Act, 1996.

It further held that the petitioners could seek the benefit of Section 14 of the Limitation Act, 1963, by demonstrating that they had prosecuted the writ proceedings in good faith and with due diligence before a court lacking jurisdiction or otherwise unable to entertain the matter.

The Court found that the petitioners’ grievance required determination of the precise character of the acquired land, including whether it should be treated as commercially diverted land, and reassessment of the consequential compensation, solatium and interest.

These matters involved factual and technical evaluation, which the High Court considered inappropriate to undertake directly in writ jurisdiction.

Since the petitioners had already invoked the statutory mechanism under Section 3G(5), the Court held that any further challenge should be taken before the forum contemplated by Section 3G(6) of the National Highways Act and Section 34 of the Arbitration and Conciliation Act.

The Court also clarified that, if limitation became an issue before that forum, the petitioners could apply under Section 14 of the Limitation Act on the ground that they had bona fide pursued the writ petition.

It specifically permitted them to seek exclusion of the period spent prosecuting the writ petition under Section 14 of the Limitation Act, subject to establishing bona fide and diligent prosecution.

No substantive order enhancing compensation, awarding solatium, or remanding the matter directly to the Arbitrator was granted.