National Highways Act acquisitions attract Land Acquisition Act solatium and interest, but not additional market value.

The National Highways Authority of India (NHAI) challenged the compensation awards dated 5 December 2011 passed by the Special Land Acquisition Officer under the National Highways Act, 1956 (NH Act), contending that the compensation was excessive.

The Arbitrator/Deputy Commissioner initially reduced the compensation by order dated 16 February 2013. The petitioners, whose lands had been acquired, challenged that determination under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act), and the District Court remanded the matter for reconsideration in accordance with Section 3G(7) of the NH Act.

On remand, the Arbitrator rejected NHAI’s claim for reduction and confirmed the compensation awards by orders dated 4 March 2021.

The District Court’s subsequent orders interfering with the remand awards were set aside by the High Court, which directed the District Court to accept the rectified awards and close the proceedings.

Thereafter, the petitioners sought additional statutory benefits—solatium, additional market value and interest—under Sections 23(1-A), 23(2) and 28 of the Land Acquisition Act, 1894 (L.A. Act). The Arbitrator rejected those applications by orders dated 12 July 2022, leading to the present writ petitions.

Whether landowners whose lands are acquired under the NH Act are entitled to statutory benefits such as solatium and interest under the L.A. Act, notwithstanding the terms of the original compensation award.

Whether the writ petitions were maintainable under Articles 226 and 227 of the Constitution despite the objection that the impugned orders arose under the A&C Act and that an alternative statutory remedy was available.

Whether the petitioners were entitled to additional market value under Section 23(1-A) of the L.A. Act, in addition to solatium and interest.

The Court applied Section 3G of the National Highways Act, 1956, particularly Section 3G(7), governing determination of compensation for acquisition under the NH Act.

It relied principally on Union of India v. Tarsem Singh, (2019) 9 SCC 304, which declared that the statutory provisions of the L.A. Act relating to solatium and interest apply to acquisitions under the NH Act, and that Section 3-J of the NH Act is unconstitutional to that extent as violative of Article 14.

The Court also followed National Highways Authority of India v. Resham Singh, 2023 SCC OnLine P&H 7228, holding that denial of solatium and interest contrary to binding precedent is arbitrary, violates Articles 14 and 300-A, and permits the High Court to exercise its plenary jurisdiction under Article 226 notwithstanding an alternative remedy under the A&C Act.

The Court treated Section 33 of the A&C Act as insufficient to defeat the petitioners’ constitutional challenge and statutory claim for benefits required by binding precedent.

The Court held that the substance of the petitions was not merely a challenge to the procedural rejection under Section 33 of the A&C Act, but a claim for statutory benefits that had been denied in the NH Act acquisition proceedings.

Since Tarsem Singh made solatium and interest applicable to NH Act acquisitions, the failure of the authorities to grant those benefits amounted to arbitrary State action and infringed Articles 14 and 300-A.

Following Resham Singh, the Court held that the existence of a remedy under the A&C Act did not bar exercise of writ jurisdiction where a State instrumentality had failed to follow binding law.

However, while granting relief in respect of solatium and interest, the Court adopted the position that the petitioners were not entitled to additional market value. It therefore remitted the computation and award of the permissible benefits to the Special Land Acquisition Officer.

The petitioners were held entitled to consideration of solatium and interest in accordance with Union of India v. Tarsem Singh, but not to additional market value.

The Special Land Acquisition Officer was directed to reconsider and determine the compensation payable after providing the parties an adequate opportunity of hearing.

The parties were directed to appear before the Special Land Acquisition Officer on 10 September 2026 at 3:00 p.m., without further notice, and the authority was directed to proceed in accordance with law.