Unchallenged Amended Award Attains Finality, NHAI Bound to Pay Full Compensation: Gujarat High Court - 2025-08-25

Legal Articles | Court & Judgment Updates

Gujarat HC Orders NHAI to Release Withheld Compensation, Cites Finality of Unchallenged Award

Ahmedabad: The Gujarat High Court, in a significant ruling on land acquisition compensation, has directed the National Highways Authority of India (NHAI) and the competent authority to disburse the remaining compensation amount to a religious trust for land acquired for a national highway. The bench, comprising Chief Justice Sunita Agarwal and Justice D.N. Ray , held that an amended compensation award, which the NHAI had consented to and never challenged, has attained finality and must be honored in full.

The Court also ordered the authorities to compute and pay benefits of solatium and interest to the petitioner, in line with the Supreme Court's landmark decision in Union of India v. Tarsem Singh , which declared Section 3J of the National Highways Act, 1956 unconstitutional.

Background of the Dispute

The case was brought by Shri Swaminarayan Satsang Seva Sahitya Prachar Samitee, a trust whose land measuring 2472 sq. meters in Vasad, Anand district, was acquired for a national highway project.

Initially, in 2013, the competent authority passed an award of approximately Rs. 34.73 lakhs, treating the land as agricultural. However, upon the petitioner's representation that the land was non-agricultural at the time of acquisition, the authority, with the consent of the NHAI, passed an amended award in 2015, significantly increasing the compensation to Rs. 2.84 crore.

While compensation for a portion of the land (1018 sq. meters) was paid, the payment for the remaining 1454 sq. meters was withheld based on an order from the competent authority in 2018, following a request from the NHAI Project Director. This prompted the petitioner to approach the High Court.

Court's Analysis and Key Findings

The High Court meticulously dismantled the NHAI's contentions and established clear directives based on the undisputed facts of the case.

Finality of the Amended Award

The NHAI argued that the competent authority had become functus officio (an authority whose mandate has expired) after the first award and could not have passed the amended award. The Court firmly rejected this argument. It highlighted that the NHAI itself had consented to the correction and, crucially, had never legally challenged the amended award of 2015.

The judgment noted:

"At the cost of repetition, it is reiterated here that since the award dated 14.05.2015 has not been challenged by the NHAI, it has attained finality. The result is that the compensation determined under the award dated 14.05.2015 is to be disbursed to the land holder, viz. the petitioner herein."

The Court found that the initial award was a result of an error by the competent authority, which was rightly rectified in the amended award with due process and consent from the NHAI.

Possession Dispute and Court's Solution

A factual dispute arose regarding the physical possession of the 1454 sq. meters of land. To resolve this, the Court devised a practical solution, ordering the competent authority to conduct a formal process of taking over possession from the petitioner and handing it over to the NHAI. This process is to be completed by September 16, 2025, in the presence of representatives from both parties, with a formal possession memo to be prepared.

Entitlement to Solatium and Interest

The Court also addressed the petitioner's claim for solatium and interest, which are denied under Section 3J of the National Highways Act. Relying on the Supreme Court's judgment in Tarsem Singh , which struck down Section 3J as being violative of Article 14 of the Constitution, the High Court directed the competent authority to prepare an additional award.

This additional award must grant the petitioner the benefits of solatium and interest as per the provisions of the Land Acquisition Act, 1894. The Court gave a strict timeline of four weeks for the preparation of this additional award and warned that any dereliction of this duty would be "viewed very seriously."

Final Orders and Implications

The Gujarat High Court has directed the following: 1. Possession Handover: The competent authority must complete the formal process of taking over possession of the 1454 sq. meters of land from the petitioner and handing it to the NHAI by September 16, 2025. 2. Disbursement of Compensation: The process for disbursing the withheld compensation for the 1454 sq. meters must be initiated simultaneously. 3. Additional Award for Solatium: The competent authority must prepare an additional award within four weeks to grant solatium and interest benefits to the petitioner, in compliance with the Tarsem Singh judgment.

The case is scheduled for a follow-up hearing on September 18, 2025, to ensure compliance with the court's orders. This judgment reinforces the principle that an administrative authority cannot arbitrarily withhold dues determined by a final and unchallenged award, and reiterates the entitlement of landowners under the National Highways Act to the same benefits as those under other land acquisition laws.