The Supreme Court on Thursday urged the federal government to suitably amend the National Highways Act (NHA), 1956, so that disputes over compensation for land acquired for national highway projects are resolved by “judicially trained minds” rather than government servants, observing that the existing framework is a “special situation” that deserves immediate attention.
A bench led by Chief Justice of India Surya Kant said fixing compensation is a “purely judicial exercise” and questioned why landowners whose properties have been seized under the National Housing Authority should be subjected to a different mechanism than that available under other land acquisition laws.
“Every such law (dealing with land acquisition) provides for application of the procedure laid down in the Central Act. Therefore, for all acquisitions, the determination of compensation, which is a purely judicial exercise, is done by judicially trained minds. This is the only law in which an exception has been made and bureaucrats have been entrusted with this. This is prima facie unacceptable to us. This is a very strange situation. This must be addressed immediately,” the bench said. Either by us or by Parliament.” It includes Justices Joymalia Bagchi and V Mohana.
The remarks came during the hearing of a batch of petitions challenging the Punjab and Haryana High Court ruling that declared Sections 3G and 3J of the National Housing Act unconstitutional. The provisions regulate the mechanism for determining compensation and resolving disputes through legal arbitration when landowners challenge the amount awarded in exchange for the acquisition of their lands.
The crux of the challenge is the alleged distinction between landowners whose lands were acquired under the National Housing Authority and those whose lands were acquired under legislation such as the Land Acquisition Act, 1894, or the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
While compensation disputes under recent legislation are adjudicated by judicial courts through reference procedures, the National Housing Authority requires that such disputes be resolved by arbitrators appointed by the central government, who usually serve bureaucrats such as commissioners or district collectors.
The bench, in earlier hearings, had also pointed out this disparity and observed that unlike other acquisition laws, the NHA does not provide landowners with an immediate judicial forum to adjudicate compensation disputes, raising concerns under Section 300A of the Constitution, which protects the right to property.
Attorney General R Venkataramani told the court on Thursday that the Center was actively considering legislative changes. He added, “The government is seriously considering amending the law. If there is an amendment, it will take care of (the pending issues).”
Recording the statement, the office said: “We have requested the learned Attorney General to discuss the matter with the competent authority to make appropriate amendment in the National Highways Act. He assures that the matter will be taken up as soon as possible.”
Pending such consideration, the Court directed the arbitrators appointed under the law to continue hearing the pending matters, making clear that all such proceedings would remain subject to the final outcome of the current set of cases.
During the hearing, Solicitor General Tushar Mehta, representing the National Highways Authority of India (NHAI), asserted that the National Highways Act was not unique in providing statutory arbitration, noting that at least 12 statutes adopt similar mechanisms. He said that the law includes the Arbitration and Conciliation Act of 1996, and that once the arbitration award is issued by the statutory arbitrator, the parties can resort to the remedies available under the Arbitration Act.
However, the bench sought detailed assistance on whether the unilateral appointment of arbitrators under the National Highways Act could withstand scrutiny in light of the Arbitration Act and the evolving jurisprudence on the independence and impartiality of arbitral tribunals.
