The Supreme Court has urged the Centre to reconsider land acquisition laws and bring parity in determining market value of acquired land. The Court said landowners under the National Highways Act are unfairly treated compared to those covered under the 2013 land acquisition law.
The Supreme Court of India has urged the Union of India to seriously re-examine the existing legal framework governing compensation for land acquired under the National Highways Act, 1956, and to consider bringing parity with other land acquisition laws, keeping in mind the constitutional protection of property under Article 300-A of the Constitution of India.
A Bench led by Chief Justice of India Justice Surya Kant observed that the issue involves legislative policy and therefore falls primarily within the domain of Parliament.
The Bench stated,
“Since the issue primarily falls within the domain of the legislature, we refrain from expressing any final opinion and leave it in the first place to the entire discretion of the authority concerned to look into this aspect and take a holistic view”.
The Court requested the Attorney General for India to examine the matter.
The Bench further directed,
“The Registry is directed to send a copy of this order to the office of the learned Attorney General for India. Similarly, a copy of this order shall also be forwarded to the office of the learned Solicitor General of India. Post these matters for further consideration on 21.04.2026,”.
The case arose from applications filed before the Supreme Court by Anand Prakash Verma on behalf of 21 landowners whose lands were acquired for national highway projects under the National Highways Act, 1956.
After the competent authority passed the compensation award, the landowners, being dissatisfied with the amount fixed, challenged it by filing petitions under Section 34 of the Arbitration and Conciliation Act, 1996 before the Additional District Judge at Bhiwani.
While these petitions were at the final stage of arguments, the Punjab and Haryana High Court in March 2025 declared Sections 3G and 3J of the National Highways Act, 1956 as unconstitutional. As a result, the statutory arbitration mechanism under the Act stood invalidated at that time.
Acting in haste and without waiting for further clarity, the landowners sought permission to withdraw their Section 34 petitions, which was allowed by the Bhiwani court.
The Supreme Court noted that the arbitral mechanism under the 1956 Act has since been revived, at least temporarily, as the legality of Sections 3G and 3J is still pending final adjudication before it.
However, the Court pointed out that if the landowners were to file fresh Section 34 petitions, they would be barred by limitation under Section 34(3) of the 1996 Act. This would leave them without any legal remedy.
Taking note of this serious injustice, the Bench observed,
“In such circumstances and with a view to render complete justice to the parties, we deem it appropriate to invoke our powers under Article 142 of the Constitution of India and consequently, we set aside the order dated 25.04.2025 passed by the Additional District Judge, Bhiwani, whereby the petitions filed under Section 34 of the 1996 Act were dismissed as withdrawn in light of the High Court judgment dated 20.03.2025. As a necessary corollary, all those petitions under Section 34 of the 1996 Act, filed by the applicants, stand revived and shall be processed further from the stage of their withdrawal. Ordered accordingly”.
During the hearing, the Supreme Court closely examined the remedial framework available to landowners under the National Highways Act, 1956.
It noted that if a landowner is dissatisfied with the compensation fixed by the competent authority, the only remedy is to invoke arbitration under Section 3G(5), read with the provisions of the Arbitration and Conciliation Act, 1996. The Court pointed out that such arbitration is not conducted by a judicial authority but by an officer notified by the Central Government.
The Bench explained,
“Such an arbitration petition is adjudicated not by a judicial authority but by an officer notified by the Central Government. Invariably, the Collectors or Commissioners of the Revenue Districts/Divisions are notified to act as arbitrators. These officers are generally pre-occupied with their multiple administrative responsibilities and they also do not have the desired experience of a judicially trained mind to adjudicate the complex issues like determination of market value of the land or other statutory benefits to which the affected parties are now entitled to in light of the decision of this Court Union of India & another vs. Tarsem Singh & others, (2019) 9 SCC 304, as well as the subsequent amendments made by the Parliament in the 1956 Act. Not only this, the further recourse left to an aggrieved expropriated land owner or any other interested party is to file an appeal under Section 34 of the 1996 Act, followed by a further appeal under Section 37 of the 1996 Act before the High Court,”.
In contrast, the Court highlighted that landowners whose lands were acquired under the Land Acquisition Act, 1894 had a much stronger and judicially robust remedy. They could seek enhancement of compensation through a reference under Section 18 of the old law, which was decided by judicial courts headed by District Judges or Additional District Judges.
There was also a further right of appeal before the High Court, where evidence could be fully re-appreciated to determine the correct market value.
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The Bench further observed,
“Such a recourse for the expropriated land owners and other interested parties has been further widened by the grant of additional statutory benefits and a higher rate of compensation under the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. It may, thus, be seen that the land owners, whose land is acquired under the 1956 Act, vis-à-vis the land owners whose lands are acquired now under the New Act, have been treated as separate classes, apparently without any intelligible differentia. This leads to grave heartburn among the land owners of the first category, namely, those whose lands are acquired under the 1956 Act”.
By making these observations, the Supreme Court has once again flagged the need for a uniform and fair compensation mechanism for all landowners, irrespective of the statute under which their land is acquired, and has called upon the legislature to consider bringing much-needed parity in the law.
Case Title:
M/S RIAR BUILDERS PVT LTD & ANR. vs. UNION OF INDIA & ORS.
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