The Supreme Court of India has recently flagged a significant disparity in how compensation is calculated for landowners whose properties are acquired for national highways. Highlighting a potential violation of constitutional rights, the Court suggested that the Union of India should revisit the legislative scheme to bring parity between the National Highways Act, 1956 (NH Act) and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (2013 Act).
A bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi, and Justice Vipul M. Pancholi observed that landowners under the NH Act seem to be treated as a "separate class" without any clear logic, leading to "grave heartburn" among those receiving lower benefits compared to those covered under newer land acquisition laws.
The Legal Conundrum: A Brief History
The matter reached the Apex Court through an application filed by Anand Prakash Verma on behalf of 21 landowners. Their lands were acquired under the NH Act, but they were unhappy with the compensation amount. Following the procedure under the 1956 Act, they challenged the award before an Additional District Judge under Section 34 of the Arbitration and Conciliation Act, 1996.
However, while their case was pending, the Punjab and Haryana High Court (on March 20, 2025) declared Sections 3G and 3J of the NH Act unconstitutional. The High Court ruled that these sections unfairly denied benefits to landowners that were otherwise available under the 2013 Act.
Believing their pending arbitration petitions were now invalid due to this judgment, the landowners withdrew their cases. Shortly after, the Supreme Court stayed the High Court’s judgment. This left the landowners in a "legal vacuum"—they couldn't file fresh cases because the time limit (limitation period) had expired, and their old cases were already closed.
To remedy this, the Supreme Court invoked its extraordinary powers under Article 142 of the Constitution to revive their original applications, ensuring they were not left "remediless."
Key Issues Flagged by the Supreme Court
During the hearing, the Court identified several structural flaws in the National Highways Act that put landowners at a disadvantage:
1. Lack of Judicially Trained Minds in Arbitration
Under the NH Act, if a landowner wants higher compensation, the matter goes to an Arbitrator appointed by the Central Government—usually a Revenue Officer like a Collector or Commissioner.
The Court noted:
"These officers are generally pre-occupied with multiple administrative responsibilities and they also do not have the desired experience of a judicially trained mind to adjudicate complex issues like determination of market value."
2. Restricted Rights of Appeal
When a court or a judicial body decides compensation (as seen in the 2013 Act), the High Court can re-examine all evidence. However, under the NH Act, landowners are stuck with the "limited scope" of the Arbitration Act, where it is much harder to overturn or modify an award.
3. Absence of "Intelligible Differentia"
The Court pointed out that while the 2013 Act offers widened statutory benefits and higher compensation rates, the 1956 Act remains restrictive. The Bench observed that there is no "intelligible differentia" (logical distinction) to justify why a person losing land for a highway should get less than someone losing land for another government project.
The Constitutional Perspective: Article 300A
The Bench emphasized that the right to property, while no longer a fundamental right, is still a Constitutional Right under Article 300A. This article mandates that no person shall be deprived of their property save by authority of law—and such law must be fair and just.
The Court noted that while the goal of the NH Act—expeditious and time-bound acquisition for infrastructure—is "laudable," it should not come at the cost of fair market value for the citizens.
The Road Ahead
Recognizing that changing a law is the job of the Parliament, the Court stated:
"We implore and suggest that the Union of India should revisit the legislative scheme and consider the desirability of bringing parity... with reference to Article 300-A of the Constitution of India."
The Court has requested the Attorney General for India and the Solicitor General to look into the matter and take a holistic view. The case is scheduled for further consideration on April 21, 2026, and the stay on the Punjab and Haryana High Court judgment will continue until then.
Case Details: M/S RIAR BUILDERS PVT LTD & ANR. v UNION OF INDIA & ORS. Diary No(s). 26933/2025