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Supreme Court Rules for NH Act Acquisitions Before 2015 Under 1894 Act Not 2013
The , in a judgment delivered on , clarified a critical aspect of land acquisition law under the (NH Act). A bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran held that when the determines compensation before , the , interest, and must be computed under the , and not under the more generous .
The ruling resolves a recurring dispute: which statute governs the supplementary benefits when land is acquired under the NH Act during the interregnum between the amendment that excluded the 1894 Act, and the 2015 date when the 2013 Act was extended to NH Act acquisitions.
Case Background: A Six-Year Acquisition Saga
The appellant, Manav Bhanot, owned land that was acquired for a national highway project in Jabalpur. The process began on with a notification under . A declaration under followed on , and the determined the compensation at Rs 3.47 crore on . Bhanot received his share of Rs 49.17 lakh on but disputed the quantum, leading to arbitration. The Arbitrator passed an on , which was challenged under the , eventually reaching the Supreme Court.
The core legal question was whether the benefits of (at 100% under the 2013 Act) and interest should be calculated under the 1894 Act ( at 30%) or the 2013 Act, given that the of the was made on —after the 2013 Act took effect () but before the date it was applied to NH Act acquisitions ().
The Battle of Precedents
, appearing for Bhanot, relied heavily on the Supreme Court's decision in Union of India v. Tarsem Singh (Tarsem Singh II), where the Court refused to limit the benefit of and interest to acquisitions after . He argued that denying the 2013 Act's benefits to a landowner whose land was acquired on while granting them to one with acquisition on would be arbitrary. Alternatively, since the Arbitrator's was passed in 2016, after the 2013 Act was made applicable, the appellant should receive benefits under the 2013 Act.
, for , conceded that are entitled to and interest but insisted the rate must be determined by the law in force when the initial was made—here, the 1894 Act. He cited National Highways Authority of India v. Tarsem Singh (Tarsem Singh III) to argue that only awards passed after attract the 2013 Act.
The Court's Analysis: The Date is Decisive
The Supreme Court traced the legislative history. The NH Act was amended in to insert , which made the 1894 Act inapplicable. In Tarsem Singh I (), this provision was struck down as , restoring the to and interest for the whole period from to 2015. However, the Court clarified that Tarsem Singh II did not specify which Act's rates applied; it only held that the benefits could not be denied.
The critical finding was that the 2013 Act, though effective from , was extended to NH Act acquisitions only from , by virtue of and subsequent ordinances. The Court drew an analogy with the Constitution Bench decision in , which held that if no under had been made by , the 2013 Act applies. Applying this logic, the Court stated:
“If a has not been made before , then necessarily the Act of 2013 was to apply. But if a is made by the under the NH Act before , even if it is after , interest and interest of would be payable under the Act of 1894.”
The Court rejected the appellant's alternative argument about the Arbitrator's date, holding that under the NH Act, the 's determination under is the equivalent of an "" under the 1894 Act, not the Arbitrator's subsequent order.
The appellant also relied on a notification stating that if compensation had not been paid to a majority of by , the 2013 Act would apply. The Court noted that the notification referred to "," not "," and established that 1.7 out of 3.08 hectares had been paid for in 2014. Thus, the notification did not assist Bhanot.
Key Observations from the Judgment
The Court highlighted the paramountcy of the date in determining the applicable compensation regime:
“Tarsem Singh-II does not lay down as a proposition that and interest before would also have to be computed based on the provisions under the Act of 2013, not even from its effect, i.e.: ; since for the acquisitions under the NH Act, the Act of 2013 came into effect only from . That benefits of and interest are due to even whose lands are acquired on or before , is unimpeachable, however, the would be determined as to whether the '' was passed before or after ; if before, the will be under the Act of 1894 and if after, under the Act of 2013.”
The Court also rejected the idea that the 2013 Act's application could be based on the notification:
“The word employed in the notification is the majority of the '' and not the ''… The notification does not help the appellant.”
Decision and Implications
The Supreme Court allowed the appeal in part, directing that the compensation determined by the Arbitrator be enhanced by , interest, and as per the 1894 Act. The matter was remanded to the for computation and disbursal.
This judgment provides clarity for hundreds of pending cases involving NH Act acquisitions between and 2015. whose compensation was fixed before will receive benefits under the 1894 Act (30% ), while those with awards after that date will benefit from the more generous 2013 Act (100% together with enhanced interest). The decision underscores that while the right to and interest is guaranteed for all acquisitions during the interregnum, the rate is locked in by the date of the initial compensation determination.
