Madras HC Upholds Solatium, Interest But Quashes 12% Additional Compensation In NH-47 Land Acquisition Case

The Madras High Court has recently set aside a Tiruppur district court's direction granting landowners an additional 12% compensation in a batch of land acquisition disputes arising from the six-laning of the Chengapalli-Walayar stretch of National Highway-47.

A Division Bench of Justices P. Velmurugan and K. Govindarajan Thilakavadi held that landowners are entitled to solatium and interest in acquisitions under the National Highways Act. However, they cannot claim the additional 12% amount under Section 23(1-A) of the Land Acquisition Act, 1894.

The bench noted that the Supreme Court in National Highways Authority of India v. Tehal Singh had clarified that Section 23(1-A) of the Land Acquisition Act does not apply to acquisitions under the National Highways Act.

"The Hon'ble Apex Court clarifications affirmed that Section 23(1-A) (the Additional 12% amount for the period from the notification to the Award) does not apply to acquisitions undertaken under the National Highways Act. Therefore, 12% additional compensation awarded under Section 23(1-A) granted by the learned District Judge under NHAI proceedings is unsustainable," the court observed.

The appeals were filed by the National Highways Authority of India (NHAI) against a common judgment of the Principal District Judge, Tiruppur.

The case arose from the acquisition of land in Pongalur village and adjoining areas in Tiruppur district for the Chengapalli-Walayar highway project.

The landowners approached the District Collector, Tiruppur, acting as arbitrator, seeking enhanced compensation. The arbitrator declined to increase the market value of the acquired lands.

Relying on the Supreme Court's decision in Union of India v. Tarsem Singh, the arbitrator nevertheless granted solatium and interest.

NHAI challenged the awards before the district court. The court upheld the grant of solatium and interest. It also directed payment of an additional 12% amount to the landowners.

Before the High Court, NHAI contended that the district court had granted a benefit that was not awarded by the arbitrator. It further argued that a court exercising jurisdiction under Section 34 of the Arbitration and Conciliation Act cannot modify an arbitral award.

The landowners supported the grant of solatium and interest. They conceded that the additional 12% compensation was not payable.

Referring to Tarsem Singh, the High Court noted that landowners whose lands are acquired under the National Highways Act are entitled to solatium and interest.

"Therefore, the land owners are not entitled for any amount under Section 23(1)(A) of the Land Acquisition Act, 1894," the bench held.

Allowing the appeals, the court set aside the district court's direction granting the additional 12% compensation. The grant of solatium and interest was left undisturbed.

For Appellant (National Highways Authority of India): Advocate Mr. Srinivasan Su.

For Respondents (District Collector, Tiruppur and Competent Authority): Government Advocate M. Hemanth Kumar. 

For Landowners: Advocates Shase for C. Ramaraj, B.I. Azees, V. Anandhamoorthy, C. Munusamy and Deepan Uday.