Disputes over compensation entitlement or apportionment under Section 3H require reference to the District Judge.

The petitioners approached the Gauhati High Court alleging inaction by the land-acquisition authorities in releasing compensation relating to Dag Nos. 1671 and 1676 of Patta No. 1, Village Saruthekerabari, Mouza Rangamati, Darrang, Assam.

Revenue records recorded the names of the petitioners’ predecessors and other persons in the Riyot/Ahiyar column for both dags.

The Circle Officer had issued notice to the petitioners and Respondent No. 5 for determination of their status over the land.

The petitioners contended that the entire compensation for Dag No. 1671 had been paid to Respondent No. 5, although he had earlier undertaken by affidavit to divide the compensation with the petitioners.

The State admitted that the compensation ought to have been divided in accordance with the agreement endorsed in the presence of the Circle Officer.

On that basis, ₹5,07,022 was disbursed to Respondent No. 5 in respect of Dag No. 1671, while compensation for Dag No. 1676 remained undistributed.

Before the Court, Respondent No. 5 disowned the earlier affidavit, asserting that it had been prepared without his proper knowledge.

He claimed that the petitioner No. 2 had transferred his possessory interest to Moniruddin Ahmed and that the remaining portion of Dag No. 1671 was in Respondent No. 5’s possession.

The Court therefore found an apparent dispute regarding entitlement and apportionment of compensation for Dag No. 1671.

Whether the dispute regarding entitlement and apportionment of compensation for Dag No. 1671 was required to be referred to the District Judge under Section 3(H) of the National Highways Act, 1956?

Whether the compensation already disbursed to Respondent No. 5 could be recovered and secured before the Reference Court pending adjudication of the parties’ inter se rights?

Whether the undisputed compensation relating to Dag No. 1676 could be disbursed to the person legally entitled to receive it?

The Court applied Section 3(H) of the National Highways Act, 1956, under which compensation deposited with the competent authority is to be disbursed where there is no dispute concerning entitlement or apportionment; where such a dispute exists, the competent authority cannot adjudicate it and must refer the dispute to the District Judge within whose jurisdiction the land is situated.

The Court further applied the principle that disputed inter se claims to compensation must remain open for adjudication by the competent court and that amounts disbursed on the basis of an undertaking or indemnity may be recovered and secured pending such adjudication.

The Court found that the conflicting materials—including the revenue records, the 3(G) estimate, the earlier affidavit agreeing to division of compensation, and Respondent No. 5’s subsequent denial of that affidavit—created a genuine dispute regarding entitlement to the compensation for Dag No. 1671.

Applying Section 3(H), the Court held that the competent authority was not empowered to determine the competing possessory and entitlement claims and was required to refer them to the District Judge, Darrang at Mangaldoi.

Since Respondent No. 5 had disowned the affidavit on the basis of which ₹5,07,022 had been paid to him, the competent authority was directed to take effective steps to recover the amount and deposit it before the Reference Court in accordance with the indemnity bond furnished by Respondent No. 5.

In contrast, no dispute remained regarding Dag No. 1676 because Respondent No. 5 expressly stated that he did not claim compensation for that dag; the amount could therefore be released to the person interested after verification of the required documents.

The competent authority was directed to refer the dispute concerning compensation for Dag No. 1671 to the District Judge, Darrang at Mangaldoi immediately upon receipt of the certified judgment.

It was further directed to recover ₹5,07,022 disbursed to Respondent No. 5 and deposit it before the Reference Court.

Compensation for Dag No. 1676 was directed to be disbursed to the person entitled, subject to verification of the necessary documents.

The inter se rights and claims of the petitioners and Respondent No. 5 concerning Dag No. 1671 were expressly left open for determination by the District Judge, uninfluenced by the High Court’s observations.