Inadequate compensation under the National Highways Act must be challenged before the statutory arbitrator, not through writ proceedings.

The petitioners, claiming to be the legal heirs and joint owners of land measuring 1 Katha 17 Lessas covered by Dag No. 400 and Patta No. 108 at Lakadubi, Kamrup, Assam, challenged the compensation assessed for the land and structures acquired for construction of National Highway No. 17 under the National Highways Act, 1956 (“NH Act”).

The land was acquired after proceedings under Sections 3A and 3D of the NH Act, and the Additional District Commissioner, Kamrup, was appointed as the Competent Authority for Land Acquisition (“CALA”).

On 29 September 2023, the CALA issued notice under Section 3E, assessing compensation of Rs. 13,34,852 for the land and structures.

Following a subsequent verification by the Public Works Department, the value of the structures was revised from Rs. 6,67,426 to Rs. 25,01,206, resulting in a claimed additional amount of Rs. 18,33,780.

The revised estimate was forwarded by the District Commissioner to the NHIDCL for necessary action, but the additional amount was not released.

The petitioners therefore invoked Article 226 of the Constitution, seeking release of the revised compensation of Rs. 25,01,206, together with solatium and interest.

Whether the subsequent reassessment and revised estimate prepared by the Public Works Department, at the instance of State authorities, could form the basis for directing payment of enhanced compensation when the statutory CALA had already determined compensation under Section 3G(1) of the NH Act?

Whether the petitioners could seek enhancement of the compensation determined under Section 3G(1) through a writ petition under Article 226, or whether they were required to invoke the arbitration mechanism under Section 3G(5) of the NH Act?

Whether the petitioners were entitled to receive the compensation of Rs. 13,34,852 under protest pending adjudication of their claim for enhancement?

Under Section 3D(2), land covered by the acquisition declaration vests absolutely in the Central Government free from encumbrances.

Under Section 3G(1), the CALA is the statutory authority responsible for determining compensation for the acquired land and structures.

Under Section 3H(1), the compensation determined under Section 3G(1) must be deposited with the CALA before possession is taken, and Section 3H(2) requires the CALA to pay the amount to the persons entitled.

Where the amount determined under Section 3G(1) is not acceptable to either party, Section 3G(5) provides the statutory remedy of reference to an arbitrator appointed by the Central Government; the arbitrator must follow the procedure under Section 3G(6) and consider the factors specified in Section 3G(7).

The Court further held that a claim seeking enhancement of compensation, involving factual valuation disputes, should not ordinarily be adjudicated in a writ petition under Article 226.

The Court found that the compensation of Rs. 13,34,852 had been determined by the CALA under Section 3G(1), deposited under Section 3H(1), and followed by the Section 3E notice dated 29 September 2023.

The later reassessment was initiated by the District Commissioner and the jurisdictional Circle Officer and was undertaken through the PWD, without the involvement or direction of the CALA, who alone was the statutory authority under the NH Act for determining compensation.

Consequently, the revised estimate of Rs. 25,01,206 had no independent statutory basis under the NH Act and could not automatically be enforced through a writ of mandamus.

Nevertheless, the petitioners’ substantive grievance—that the compensation determined by the CALA was inadequate—could be considered by the arbitrator under Section 3G(5).

The petitioners were granted liberty to apply to the appointed arbitrator under Section 3G(5) for enhancement of compensation, and the arbitrator was directed to decide the application expeditiously in accordance with Sections 3G(6) and 3G(7).

The official respondents were directed to transmit the relevant acquisition records to the arbitrator if such an application was filed.

The petitioners were also permitted to receive the already assessed amount of Rs. 13,34,852 under protest, and the CALA was directed to release it at the earliest.

There was no order as to costs.