Bombay High Court Overrules Alternate Remedy Objection, Directs NHAI to Pay Statutory Compensation in Land Acquisition Cases - 2025-05-09

Justice for Landowners: Bombay HC Rejects NHAI’s Procedural Hurdles in Compensation Dispute

In a significant ruling for landowners across Maharashtra, the Bombay High Court has cleared the path for claimants seeking statutory solatium and interest on land acquired for national highways. The court’s decision, delivered on May 9, 2025, by a division bench comprising Justice M.S. Sonak and Justice Jitendra Jain, reaffirms that constitutional protection under Article 226 cannot be sidelined by the mere existence of a procedurally "inefficacious" arbitration remedy.

The Backdrop: A Fight for Fair Compensation

The dispute stems from multiple petitions filed by landowners whose properties were acquired by the National Highway Authority of India (NHAI). While these landowners had already undergone arbitration under Section 3G(5) of the National Highways Act, 1956, to enhance their compensation, they were denied the statutory benefits of solatium and interest—benefits mandated by the Supreme Court’s landmark judgment in Union of India v. Tarsem Singh .

When petitioners attempted to seek these benefits under Section 34 of the Arbitration and Conciliation Act, their claims were rejected. Courts below, citing the precedent in Rishabhkumar v. Secretary to Government of India , held that they lacked the jurisdiction to modify arbitration awards to include such statutory components.

NHAI’s Argument: Procedural Obstruction

Before the High Court, the NHAI sought to dismiss the writ petitions, contending that the claimants had an alternate remedy available under Section 37 of the Arbitration Act. They argued that by bypassing this appeal process, the landowners had violated settled legal procedure.

The High Court’s Reasoning

The High Court categorically rejected the NHAI’s stance, labeling it "unfortunate and unfair." The bench emphasized that the rule of exhausting alternate remedies is a "self-imposed restriction" and not a total bar on the court’s jurisdiction.

The logic was clear: if a specific legal relief cannot be granted by the appellate authority under Section 37—due to the binding precedent of Rishabhkumar —then forcing the petitioners to pursue that avenue would be a "futile" exercise.

"There is no point in relegating the Petitioners to the remedy under Section 37 of the Arbitration Act, when the relief they claim cannot be granted under such proceedings," the court noted.

Key Observations

The Court underscored that the issue was not a disputed question of fact, but a question of law. * On the duty to act: "Article 144 of the Constitution... provides that all authorities, civil and judicial, in the territory of India shall act to the aid of the Hon'ble Supreme Court." * On the futility of alternative remedies: "If we were to relegate the Petitioners to the remedy of Section 37, the Appeal Court... would have no option but to dismiss such appeals... Such a remedy can hardly be called an efficacious one." * On the fairness of proceedings: "NHAI cannot take diversion stances. Ultimately, these are statutory benefits. The entitlement is never seriously disputed."

Conclusion: A Clear Directive

The Court allowed all petitions and directed the NHAI to pay the statutory benefits of solatium and interest in accordance with Tarsem Singh within four months. By opting to exercise its extraordinary writ jurisdiction under Article 226, the Bombay High Court has prioritized substantive justice over rigid, ineffective procedural adherence, ensuring that the law laid down by the Supreme Court reaches the citizens it was intended to protect.