Mere Assertion Of Title Dispute During Acquisition Doesn't Mandate Civil Court Reference Under National Highways Act: J&K&L High Court

The Court held that such a reference can be made only when there exists a genuine and legally cognizable dispute regarding entitlement to compensation between persons interested in the acquired property and the Competent Authority is unable to determine such entitlement without adjudication by a civil court.

A Division Bench of Justice Sanjeev Kumar and Justice Sanjay Parihar made the observation while dismissing two Letters Patent Appeals filed against the judgment of the writ court which had upheld the decision of the Collector, Land Acquisition, declining to refer the dispute regarding compensation to the Principal Civil Court under Section 3H(4) of the National Highways Act.

The Court observed that the scheme of Section 3H does not contemplate automatic reference upon every assertion of title and that the Competent Authority is not divested of its statutory duty merely because an objection has been raised by a third party.

The Bench observed,

"The reference contemplated under Section 3H(4) is not intended to enable adjudication of every claim of title raised by any person. Such reference becomes necessary only when there exists a legally cognizable dispute regarding entitlement to compensation which the Competent Authority is unable to resolve without adjudication."

Background:

The appeals arose out of acquisition proceedings initiated under the National Highways Act, 1956, for construction of the National Highway Bypass at Baramulla. Pursuant to the acquisition notifications, compensation was determined by the Competent Authority in respect of the acquired land and was made payable in favour of respondent No. 5, who was reflected in the revenue records as the owner of the acquired property.

The appellants claimed that the acquired property originally belonged to their predecessor-in-interest and that respondent No. 5 had succeeded in obtaining mutation exclusively in her favour despite the existence of other legal heirs. According to the appellants, mutation entries neither create nor extinguish title and, therefore, respondent No. 5 could not claim exclusive entitlement to the compensation.

Claiming themselves to be co-sharers in the acquired property, the appellants requested the Collector to invoke Section 3H(4) of the National Highways Act and refer the dispute regarding apportionment of compensation to the Principal Civil Court. They asserted that once rival claims regarding title were raised, the Competent Authority lacked jurisdiction to decide the issue and was under a statutory obligation to make a reference.

The Collector, however, rejected the request, observing that the appellants were neither recorded as owners nor tenants in the revenue records and had failed to establish any existing legal right in the acquired property. Aggrieved thereby, the appellants approached the writ court. Upon dismissal of the writ petitions, the present Letters Patent Appeals came to be filed.

Before the Division Bench, the appellants contended that the writ court had erroneously treated revenue entries as conclusive proof of ownership. They argued that the Collector could not examine disputed questions of title and that the very existence of rival claims required mandatory reference to the Principal Civil Court under Section 3H(4).

The respondents opposed the appeals by submitting that the appellants had no subsisting legal interest in the acquired land. It was pointed out that they had neither challenged the mutation within a reasonable time nor succeeded in establishing any legally enforceable right over the property. It was further submitted that a reference under Section 3H(4) cannot be invoked merely on the basis of speculative or unsupported claims.

Court's Observations:

Examining the statutory framework, the Division Bench undertook an elaborate analysis of Sections 3G and 3H of the National Highways Act, 1956. The Court observed that while Section 3G deals with determination of compensation, Section 3H regulates deposit and disbursement of compensation, including situations where disputes arise regarding entitlement or apportionment.

The Court observed that the legislative object behind Section 3H(4) is not to convert every acquisition proceeding into a title suit before the civil court. Rather, the provision is intended to resolve genuine disputes amongst persons who possess legally recognizable claims to the compensation payable in respect of acquired land.

Referring to the scheme of the Land Acquisition Act, the Court held that Section 3H(4) of the National Highways Act is substantially analogous to Section 30 of the Land Acquisition Act, under which the Collector does not adjudicate title but only refers disputes that he is genuinely unable to determine administratively.

Relying upon the judgments of the Supreme Court in Raja Harish Chandra Raj Singh v. Deputy Land Acquisition Officer, Sharda Devi v. State of Bihar and Shyamali Das v. Illa Chowdhry, the Bench observed that land acquisition proceedings are not intended to adjudicate complicated questions relating to ownership. Such questions fall within the exclusive jurisdiction of competent civil courts in properly instituted civil proceedings.

The Court clarified, however, that this principle does not imply that every person asserting a rival claim automatically becomes entitled to a statutory reference.

The Bench observed that before making a reference under Section 3H(4), the Competent Authority is required to satisfy itself that a bona fide and legally cognizable dispute actually exists regarding entitlement to compensation and that such dispute cannot be resolved on the basis of available records.

The Court held that if every unsupported assertion of title were treated as sufficient to trigger a civil court reference, the statutory process of land acquisition and payment of compensation would become vulnerable to indefinite delay at the instance of strangers or speculative claimants.

Applying these principles to the facts of the case, the Division Bench noted that respondent No. 5 had consistently remained recorded as owner of the acquired land in the revenue records. The appellants, on the other hand, had failed to establish any subsisting proprietary right or any legally recognized interest entitling them to compensation under the Act.

The Court also took note of the fact that although the appellants had instituted civil proceedings challenging the mutation, they subsequently had made an attempt to withdraw the same. However, owing to the fact that there was nothing on record to demonstrate that the withdrawal had actually been allowed the court remarked, 

"... Consequently, the civil suit concerning the entire property, including the acquired land, continues to remain sub judice, and it shall be for the appellants to establish their entitlement before the competent civil court."

Observing that the Collector had examined the material placed before him and had rightly concluded that no legally cognizable dispute existed requiring reference under Section 3H(4) the bench maintained that the decision reflected due application of mind and could not be characterized as arbitrary or contrary to the statutory scheme.

Rejecting the submission that the Collector lacked jurisdiction altogether, the Court observed that the Competent Authority is under a statutory obligation to examine whether the dispute raised is genuine and legally sustainable. Only where such examination reveals the existence of a real dispute incapable of administrative resolution does the obligation to make a reference arise, the Court underscored. 

Holding that the appellants had failed to establish any legally recognizable entitlement to the compensation or any genuine dispute warranting adjudication by the Principal Civil Court, the Division Bench dismissed both Letters Patent Appeals.

Case Title: Atiqa Begum & Ors. v. Union Territory of J&K & Ors.

Citation: 2026 LiveLaw (JKL) 286

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