The Supreme Court has cast a sharp spotlight on what it described as a built-in imbalance in the way compensation is fixed for land taken under the National Highways Act, 1956, warning that affected landowners are left at a clear disadvantage compared to those whose property is acquired under other laws.
Examining a clutch of cases, the Court noted that the compensation framework under the 1956 law operates on an entirely different footing. Unlike acquisitions under the older Land Acquisition Act or the newer 2013 law, disputes over valuation in highway projects are not decided by courts. Instead, they are pushed into arbitration handled by government officers—typically District Collectors or Commissioners—who juggle heavy administrative responsibilities and lack judicial training to resolve complex questions of market value and statutory benefits.
The Court pointed out that this design sharply narrows the remedies available to landowners. Challenges to such arbitral awards are confined to the tight limits set by the Arbitration and Conciliation Act, leaving little room for a meaningful re-examination. By contrast, landowners under the other acquisition laws have their claims assessed by judicial forums and enjoy broader appellate safeguards.
This structural difference, the Bench observed, effectively creates two classes of landowners without any convincing justification. Those whose land is taken for national highways, it said, often feel short-changed when compared with similarly placed owners whose land is acquired for other public purposes.
While acknowledging that the National Highways Act was crafted to ensure speed and efficiency in infrastructure development, the Court made it clear that urgency alone cannot justify unequal treatment. It suggested that the objective of fast-tracked highway construction can still be preserved while ensuring that compensation is assessed on the same footing as under other acquisition laws.
Invoking the constitutional protection of property, the Bench urged the Union Government to re-examine the legislative scheme and explore ways to bring parity in compensation determination. It also asked the Attorney General to consider the issue, directing that its observations be shared with the Solicitor General as well.
The matter arose from a series of challenges linked to a ruling of the Punjab and Haryana High Court, which had struck down key provisions of the National Highways Act dealing with compensation through arbitration. Those provisions form the backbone of the current mechanism, under which valuation disputes are resolved by government-nominated arbitrators with only limited judicial oversight.
With those provisions under a cloud, the Supreme Court’s intervention signals a broader rethinking of how the law balances speedy development with fairness to landowners—raising a fundamental question: should the road to national highways be paved at the cost of equal compensation?
