Dispute Over Compensation Under NH Act Must Be Referred To Civil Court, Authority Must Withhold Disbursement Till Resolution: J&K&L High Court
The Jammu & Kashmir and Ladakh High Court has held that where a dispute arises as to the entitlement or apportionment of compensation for acquired land, the competent authority is under a statutory obligation under Section 3H(4) of the National Highways Act, 1956 to refer such dispute to the Principal Civil Court of original jurisdiction and withhold disbursement of the amount until the dispute is resolved by that Court.
The Court was hearing a Letters Patent Appeal filed by co-owners of a property who were not impleaded as parties before the Single Judge. The Single Judge had directed the Collector Land Acquisition, Baramulla to ensure payment of compensation as per the award to the private respondent (writ petitioner) within eight weeks, failing which the amount was to carry interest at 6% per annum. The appellants, claiming to be co-owners of the acquired land, contended that the order was passed without hearing them and that the entire compensation was directed to be paid to the private respondent alone, ignoring their lawful share.
The Division Bench of Justice Sindhu Sharma and Justice Shahzad Azeem observed,
“... where there is a dispute as to entitlement or apportionment of compensation, the competent authority is under a statutory obligation to refer such dispute to the Principal Civil Court of original jurisdiction and withhold disbursement till the dispute is resolved.”
Earlier the private respondent had filed a writ petition before the learned Single Judge stating that his land and structures were acquired for widening of the Srinagar-Baramulla National Highway (NH-44). He pleaded that although an award had been passed, the compensation amount assessed in his favour had not been disbursed. On the basis of the material produced, particularly the apportionment statement, the Single Judge directed release of compensation in his favour.
The appellants, who were not arrayed as parties in the writ petition, asserted that the land does not exclusively belong to the private respondent but is joint and unpartitioned property inherited from common ancestors. They stated that a civil suit for partition, possession, declaration, and permanent injunction was pending before the Sub-Judge, Pattan, and that an application under Section 3H(4) of the National Highways Act, 1956, seeking reference to the Principal District Judge, Baramulla, for deciding apportionment of compensation was also pending.
Court's Observation:
The Court noted that the private respondent failed to disclose material facts before the learned Single Judge, namely, the pendency of the civil suit and the application under Section 3H(4) of the National Highways Act. The appellants were not impleaded, and the learned Single Judge was not apprised of the existing disputes regarding title, co-ownership, and apportionment.
The Court examined Section 3H(4) of the National Highways Act, 1956, which provides that if any dispute arises as to the apportionment of the amount or any part thereof or to any person to whom the same or any part thereof is payable, the competent authority shall refer the dispute to the decision of the principal civil court of original jurisdiction within the limits of whose jurisdiction the land is situated.
The Court relied upon the Supreme Court judgment in Vinod Kumar v. District Magistrate, Mau, 2023 SCC OnLine 787, wherein it was held that the competent authority possesses certain powers of the civil court, but in the event of a dispute regarding apportionment, the summary power under Sub-section (3) of Section 3H will not serve the purpose, and the dispute must be referred to the Principal Civil Court.
The Court also cited State of Rajasthan v. Bhawani Singh, (1993) Supp (1) SCC 306, for the proposition that writ jurisdiction should not be invoked to decide complex questions of title.
The Court held that the direction to release compensation solely in favour of the private respondent had the effect of prejudicing the rights of the appellants without affording them an opportunity of being heard, thereby offending principles of natural justice.
The Court thus allowed the appeal and set aside the impugned order to the extent it directed release of compensation exclusively in favour of the private respondent, and directed the Collector Land Acquisition, Baramulla to keep the compensation amount in deposit and to proceed strictly in accordance with Section 3H(4) of the National Highways Act, 1956.
The rights and contentions of all parties with respect to title, partition, and apportionment of compensation were left open to be decided by the competent civil court, the Court concluded.
Case Title: Abdul Aziz Bhat & Ors. v. UT of J&K & Ors.
Citation: 2026 LiveLaw (JKL)