State directed to frame policy preventing revenue officers from making "casual" mutation entries for lands already acquired by Government.

In brief

The question

1. Whether the original owner or his heirs retained title to the land after the publication of the declaration under Section 3D of the National Highways Act, 1956

The court held

The Court dismissed the petition, holding that the Competent Authority did not err in directing disbursement to the purchaser

It also directed

It held that title was lost upon the 2018 declaration and the subsequent transfer of interest for consideration precluded the petitioners from claiming the award

The Court directed the Secretary, Revenue Department, to formulate a policy within four weeks to prevent revenue officers from making casual mutation entries on lands already vested in the Government through acquisition

01Facts

The land in question was acquired under the National Highways Act, 1956, with a Section 3D declaration published on 28.06.2018

p. 2

A compensation award was declared on 14.02.2020 in the name of the original owner, Hareshkumar Babubhai Desai

p. 2

Following his death on 27.04.2021, the petitioners (heirs) obtained a revenue heirship entry (No. 2143) on 16.06.2021

p. 2

On 04.03.2023, Petitioner No. 1 executed a registered sale deed for the land in favor of Respondent No. 3 for Rs. 62,22,000/-

p. 2, 4

Subsequently, the petitioners sought disbursement of the official compensation award, which the Competent Authority denied, instead directing payment to the purchaser (Respondent No. 3) via an order dated 23.01.2026

p. 4

02Issues

i.1. Whether the original owner or his heirs retained title to the land after the publication of the declaration under Section 3D of the National Highways Act, 1956

pp. 2-3

ii.2. Whether the right to receive compensation for acquired land is a transferable right that passes to a purchaser via a sale deed executed after the award

p. 4

03Law Applied

The court applied Section 3D(1) of the National Highways Act, 1956, which mandates that land vests absolutely in the Central Government free from all encumbrances upon publication of the declaration

p. 2

The principle established by the Apex Court in Khorshed Shapoor Chenai v. Asstt. Controller of Estate Duty [(1980) 2 SCC 1], which holds that the right to receive compensation is akin to a right to property and is legally transferable

p. 4

Provisions in the judgment · 1

National Highways Act, 1956 Section 3D

04Reasoning

The Court reasoned that once the Section 3D declaration was published on 28.06.2018, the original owner was legally divested of his title, and the land stood vested in the Central Government

p. 3

The revenue authorities erred in recording an heirship entry in 2021 for land that no longer belonged to the deceased

p. 2

Consequently, the only surviving interest held by the heirs was the "right to receive compensation"

p. 3

By executing a registered sale deed and accepting a consideration of Rs. 62,22,000/- after the award was declared, Petitioner No. 1 effectively transferred that right to the purchaser (Respondent No. 3)

p. 4

The Court found the petitioners’ claim for compensation—after having already "sold" their interest—to be misconceived, as they had already parted with the crystallized right to receive the award money

p. 4

05Holding

The Court dismissed the petition, holding that the Competent Authority did not err in directing disbursement to the purchaser

p. 4

It held that title was lost upon the 2018 declaration and the subsequent transfer of interest for consideration precluded the petitioners from claiming the award

p. 4

p. 5

LawLens.Gujarat High Court

Original Court PDF