The Gauhati High Court has held that where a dispute arises as to entitlement to compensation or its apportionment under the National Highways Act, 1956, the Reference Court under Section 3H(4) can incidentally decide questions of title. Justice Devashis Baruah observed that in proceedings under Section 3H(4) of the Act of 1956, the Reference Court is equipped with the jurisdiction to incidentally decide questions of title for determining entitlement to compensation or apportionment of compensation.
The observation came in a writ petition challenging a speaking order passed by the Additional District Commissioner, Cachar, which directed the authorities to dispose of the petitioners' representations. The dispute originated from land acquisition proceedings under the National Highways Act for the building, widening, four-laning, maintenance, management, and operation of NH-306 in Cachar district. The notification issued under Section 3D named private respondents and their predecessors-in-interest, while the petitioners' names were not included. The Central Government had deposited the compensation determined under Section 3G for onward disbursement to persons interested.
The petitioners, asserting rights over the land, approached the Competent Authority disputing the private respondents' entitlement and claiming apportionment of compensation. They argued that since they had filed a suit claiming right, title, and interest, no payment should be made to the private respondents. They further contended that although their land was not acquired under the Section 3D notification, possession of their land had been taken.
The Competent Authority had directed that 50% of the zirat compensation—defined as the statutory payment for loss of produce, trees, or structures, separate from the market value of the land—be paid to the private respondents, whose names appeared in the award and who had been dispossessed from the land, to enable them to shift from the site. The remaining 50% was to be deposited before the District and Sessions Judge, Silchar.
The High Court noted that the National Highways Act, 1956, is a self-contained code to decide various aspects relating to land acquisition. It stated that disputes regarding inadequacy of compensation are provided for under Section 3G, while disputes regarding the person entitled or the quantum of entitlement in respect of determined compensation are provided for under Section 3H. The Court observed that if disputes arise regarding inadequacy of compensation, Section 3G provides adequate remedies, and if there is any dispute regarding the person entitled or the amount they are entitled to in respect of determined compensation, Section 3H provides adequate remedies.
On the facts, the Court noted that the names of the private respondents were included in the awards made under Section 3G, their names and those of their predecessors-in-interest were mentioned in the Section 3D notification, and the acquired lands were in their possession. It further noted that the Competent Authority had ordered the release of 50% of the zirat compensation to the private respondents and the deposit of the remaining 50% before the District and Sessions Judge, Cachar at Silchar.
The Court found that the reasons assigned in the impugned order appeared to be in accordance with the scheme of the Act. However, it cautioned that if 50% of the compensation was released to the private respondents, necessary surety such as an indemnity bond was required so that the amount could be recovered if the proceedings under Section 3H(4) were decided against them. The Court emphasized that the Reference Court under Section 3H(4) has the power to decide title questions incidentally while determining entitlement to compensation, and such a direction ensures that the compensation remains recoverable pending the outcome of title disputes.