No statutory interest is payable where delayed compensation results from unresolved consolidation disputes absent governmental lapse.

The petitioners’ land in Village Dyalpura Bhaika and Village Gaunspura, District Bathinda, was acquired pursuant to a notification dated 22.12.2020 issued under Section 3A of the National Highways Act, 1956.

Compensation awards were passed on 09.07.2021 and 24.03.2023. Although part of the assessed compensation was paid in 2023, the remaining amount of approximately ₹2.54 crore was released only on 23.02.2026.

The petitioners had earlier approached the High Court for release of compensation, resulting in directions dated 02.02.2026 in CWP No.19297 of 2025. They subsequently sought interest under Section 80 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, alleging delayed payment.

The respondents contended that payment of the disputed amount was delayed because of consolidation proceedings under Section 42 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948.

The consolidation dispute was resolved on 15.10.2025, the necessary correction was entered in the LA-7 Register on 06.02.2026, the petitioners supplied the requisite documents on 09.02.2026, and payment followed on 23.02.2026.

Whether the petitioners were entitled to interest under Section 80 of the 2013 Act on the compensation amount allegedly paid after delay.

Whether the respondents were responsible for the delay in releasing the remaining compensation, or whether the delay was justified by the pending consolidation dispute.

The Court considered Section 80 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which provides for interest on delayed payment of compensation.

The acquisition itself was undertaken under Section 3A of the National Highways Act, 1956.

The Court also considered the effect of proceedings under Section 42 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948, which had to be resolved before the revenue and ownership records could be corrected and the disputed compensation safely disbursed.

The governing principle applied was that interest for delayed payment could be directed only where the delay was attributable to the acquiring authority; no such liability arose where payment was withheld bona fide because of a genuine dispute affecting entitlement and disbursement.

The Court found that the respondents had paid the undisputed portion of the compensation in 2023, thereby demonstrating a bona fide intention to comply with the awards.

The balance could not reasonably be released while the consolidation dispute remained pending, since premature payment could have created competing claims and further litigation.

The dispute was resolved by the Director, Consolidation of Holdings, on 15.10.2025; the correction was thereafter incorporated in the LA-7 Register on 06.02.2026, and payment was made shortly after the petitioners supplied the required documents on 09.02.2026.

On this chronology, the Court concluded that the delay was not attributable to any lapse by the respondents and therefore did not warrant interest under Section 80.

It held that the respondents were not liable to pay interest on the delayed component of compensation because the amount had been withheld due to a genuine consolidation dispute and was released promptly after the dispute was resolved and the requisite records and documents were completed.

The writ petition seeking release of interest under Section 80 of the 2013 Act was accordingly dismissed.