“Award Must Include Solatium and Interest at Par with Land Acquisition Act”: Punjab and Haryana High Court Declares Sections 3G and 3J of the National Highways Act Constitutionally Void
Sanchayita Lahkar
In a judgment pronounced on 20 March 2025, the Division Bench of the Punjab and Haryana High Court at Chandigarh allowed two writ petitions concerning the acquisition of land under the provisions of the National Highways Act, 1956. The Division Bench, comprising Justice Sureshwar Thakur and Justice Vikas Suri, considered the petitioners’ challenge to the statutory compensation framework provided under the Act. The petitioners contended that the absence of certain monetary components in the awarded compensation—specifically solatium and interest—resulted in unequal treatment when compared to similarly situated landowners compensated under the Land Acquisition Act, 1894. The Court examined the statutory mechanism under Sections 3G and 3J of the National Highways Act and proceeded to adjudicate upon their validity in view of constitutional protections and judicial precedent.
The writ petitions were filed by Sohan Lal and Others, and Dhurender and Others, who were owners of land compulsorily acquired for the purpose of widening National Highway No. 10 in the district of Hisar. Notification under Section 3A(1) of the National Highways Act was issued on 27 November 2009. It was followed by a declaration under Section 3D(1) on 19 August 2010. Subsequently, an award dated 30 April 2012 was passed under Section 3G determining the compensation at ₹25 lakhs per acre, without granting solatium or interest.
The petitioners argued that this compensation was inadequate and discriminatory, especially in light of judicial precedents such as M/s Golden Iron and Steel Forgings v. Union of India, which acknowledged that land acquired under the National Highways Act should carry the same statutory benefits available under the Land Acquisition Act, 1894.
Petitioners submitted that “refusal of the same or not making available the said benefits, is a blatant disregard of the constitutional protections guaranteed to landowners”. They further relied upon the Supreme Court’s decision in Union of India v. Tarsem Singh and the subsequent order in Miscellaneous Application No. 1773 of 2021 in Civil Appeal No. 7064 of 2019.
They contended that Section 3J, which excludes the applicability of the Land Acquisition Act, is violative of Article 14 of the Constitution and results in discriminatory treatment of similarly situated landowners. It was argued that the arbitration mechanism under Section 3G is neither consensual nor effective as there is no arbitration agreement or clause between the parties.
The learned Amicus Curiae submitted that “the said arbitration clause is not existing in any contract executed between the concerned” and that “the arbitration mechanism created under Section 3G is idly created and has no legal foundation”. It was submitted that the statutory remedy under Section 3G(5) was not functional due to absence of agreement, thereby violating basic tenets of arbitration law.
The respondents, represented by the Union of India and the National Highways Authority of India (NHAI), argued that the awards were made in accordance with the prevailing statutory framework and that the petitioners had failed to pursue statutory remedies in time. The respondents contended that “the provisions of the Conciliation Act have specifically been made applicable for determination of compensation under Section 3G”.
The Court examined the statutory framework under the National Highways Act, 1956, in comparison with the Land Acquisition Act, 1894 and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
The Court held that “in case separate and distinction methodologies for determining compensation become foisted upon the Collector concerned, besides with the thereafter, contra distinct remedies for seeking enhancement become created qua aggrieved, thus respectively in the Act of 1894, and in the Act of 2013, besides in the Act of 1956, therebys the said inter se distinctivity(ies) are not based, upon, any intelligible differentia”.
The Bench examined the implications of the Supreme Court’s verdict in Tarsem Singh, which declared Section 3J of the National Highways Act as unconstitutional and extended the benefits of Sections 23(1A), 23(2), and 28 of the Land Acquisition Act, 1894 to acquisitions under the National Highways Act. The High Court noted that “the verdict (supra), declare Section 3J of the Act of 1956 to be Constitutionally void besides make the provisions of Sections 23(1A) and (2) and the interest payable in terms of Section 28 of the Act of 1894, to be applicable to the launching of acquisition proceedings under the Act of 1956”.
It was observed that “the doctrine of eminent domain which was to be uniformly applied rather has been inconsistently employed, through the creation of an utmost invidious discrimination amongst a common set of land losers”.
The Court stated that Section 3G, which provides for statutory arbitration, lacked consensuality and effective functioning as a remedy. The judgment recorded that “the said arbitration clause is not existing in any contract executed between the concerned” and that “the said provisions are required to be struck down”.
On the issue of retrospective application, the High Court noted that “the verdict (supra) declare Section 3J of the Act of 1956 to be Constitutionally void… Sections 23(1A) and (2) and the interest payable in terms of Section 28 of the Act of 1894, are all made effective both prospectively as well as retrospectively”.
The operative portion of the judgment reads:
“In sequel, both the instant writ petitions are allowed. Moreover Sections 3G and 3J of the Act of 1956 are hereby declared to be Constitutionally void. Further, the respondents are directed to award statutory benefit of solatium @ 30% and interest @ 9% and 15% akin to Section 23(2) and 28 of the Land Acquisition Act, 1894”.
The Court further recorded:
“Though this Court has declared Sections 3G and 3J of the Act of 1956 to be Constitutionally void, therebys when the said provisions is void or non est, therebys when it is completely dysfunctional, as such, all pending arbitration petitions also become completely ineffective”.
Advocates Representing the Parties
For the Petitioners: Mr. Shailendra Jain, Senior Advocate, Ms. Richa Sharma, Advocate, Mr. Abhilaksh Grover, Advocate and Ms. Nandini Gupta, Advocate
For the Respondents: Mr. Satya Pal Jain, Additional Solicitor General of India, Mr. Dheeraj Jain, Senior Panel Counsel, Ms. Geeta Singhwal, Senior Panel Counsel and Mr. M.L. Singhwal, Advocate, Mr. Sanjeev Sharma, Senior Advocate, Dr. Puneet Kaur Sekhon, Advocate and Mr. Vivek Dahiya, Advocate
Amicus Curiae: Mr. Maninder Singh, Advocate, Mr. Ankur Mittal, Advocate
Case Title: Sohan Lal and Others v. Union of India and Others; Dhurender and Others v. Union of India and Others
Neutral Citation: 2025:PHHC:040091-DB
Case Numbers: CWP-19799-2023 & CWP-8072-2024
Bench: Justice Sureshwar Thakur, Justice Vikas Suri
[Read/Download order]
