SC asks NHAI to pay farmers higher land compensation

Coming down heavily on the National Highways Authority of India (NHAI) for paying “peanuts to landowners”, the Supreme Court has asked the highways authority to deposit the entire enhanced amount of land compensation to be paid to landowners/farmers whose lands were acquired for widening of National Highway No. 24 on the Bareilly-Sitapur Section of Uttar Pradesh. The apex court also allowed the landowners to withdraw half of the amount so paid by the NHAI.

The direction to pay compensation at commercial rates was given by the district judge and was subsequently upheld by the Allahabad High Court in April last year. Initially, the competent authority in October 2012 had determined the compensation of the land according to circle rates applicable to the agricultural land, since it was so recorded in the revenue record. However, landowners had moved the district magistrate, Shahjahanpur, seeking higher compensation on the grounds that their acquired lands were used for commercial purposes. The district judge had in August 2020 set aside the arbitral award and ordered for paying of enhanced compensation, treating the subject land to be commercial land.

However, the NHAI is objecting to the enhanced compensation, saying it could not have been done merely on the basis of the alleged use of the land for non-agricultural/commercial purpose. Landowners had not proved such illegal/unauthorised use, thus this would not entitle them to claim compensation on a commercial basis, it said.

A bench led by Chief Justice NV Ramana, while seeking responses from the landowners/farmers on various petitions filed by NHAI, stayed the HC’s April 19, 2021 order, subject to deposit of the entire amount by the highways authority before the concerned district court as determined by the district judge, Shahjahanpur, and upheld by the HC.

Counsel Anshuman Srivastava, appearing for some of the landowners, said that they had been waiting since 2009 for their dues. “In many cases, the lands which have been acquired were being used as commercial spaces with requisite permission from the government itself. The lands are surrounded with petrol pumps, vehicle showrooms, etc. Both the district court and high court have rightfully held in favour of these landowners,” he told FE.

Senior counsel Prag Tripathi, appearing for the NHAI, argued that the district judge, while deciding the objections, wrongly modified the award of the sole arbitrator and enhanced the compensation. He said that under Section 34 of the Arbitration and Conciliation Act, the district judge only had the power to set aside an arbitral award, but did not have the power to modify it.

The competent authority had rightly held that the compensation for the acquired lands be determined and paid as per circle rates applicable to agriculture land, but the district judge ignored the fact that the subject land was recorded as agricultural land at the time of publication of 3A notification, and relied upon the so-called evidence which was not tenable in law, the NHAI stated in its appeal, adding that “no part of it is entered in the revenue record as residential or commercial land”.

In the absence of conversion of land use from agricultural to commercial use, no reliance could have been placed on the unauthorised use, if any, of the subject land, it said.

“The HC wrongly held that the landowners had adduced evidence regarding petrol pump, showroom, tractor agency, dhaba, etc. All these assertions were bald assertions, without any proof, whatsoever, and in any case, no proof that any such activity was going on, on the date of publication of Section 3A notification,” the appeal stated.

The NHAI had acquired land for the purposes of widening, maintenance, management and operation of National Highway No. 24 from 262 km to 288 km (Bareilly- Sitapur Section), under the National Highways Act, 1956.