Compensation Dispute Under National Highways Act Need Not Be Referred To Civil Court If Competent Authority Can Decide: J&K&L High Court

The Jammu & Kashmir High Court held that not every dispute relating to compensation under the National Highways Act, 1956 is required to be referred to a civil court, clarifying that only such disputes which the competent authority is unable to decide without adjudication fall within the ambit of reference under Section 3H(4) of the Act.

A bench of Justice Moksha Khajuria Kazmi observed that the nature of dispute contemplated under Section 3H(4) must be assessed from the perspective of the competent authority and not from that of a third party raising objections.

It held that merely because a third party disputes title or may choose to challenge the same does not automatically obligate the authority to refer the matter to a civil court.

The Court was hearing writ petitions challenging an order passed by the competent authority in relation to disbursement of compensation arising out of land acquisition.

The petitioners contended that there existed a dispute regarding title over the property in question and, therefore, the matter ought to have been referred to the civil court under Section 3H(4) of the National Highways Act.

Rejecting the contention, The Court further noted that the petitioners had already availed appropriate remedies by filing a civil suit seeking declaration of rights over the property and had also challenged the mutation in favour of the private respondent before the competent forum.

In such circumstances, referring the dispute under Section 3H(4) would not only be unnecessary but could also prejudice the rights of the respondent in whose favour the compensation had been awarded.

Emphasizing that the statutory mechanism cannot be misused to stall disbursement of compensation, the Court held that the remedy for the petitioners lies in pursuing their civil proceedings independently.

Finding no illegality or perversity in the impugned order passed by the competent authority, the Court dismissed the writ petitions.

However, it clarified that the dismissal would not affect the merits of the pending civil suit and revision proceedings, which shall be decided independently and without being influenced by any observations made in the judgment.

The Court also directed the District Collector, Baramulla, to release the compensation amount in favour of the private respondent in terms of the award.

At the same time, it safeguarded the interests of the petitioners by directing that such release shall be subject to an undertaking by the respondent that, in the event the petitioners succeed in the pending civil proceedings, they would be duly compensated to the extent of their share as determined by the competent court.

Accordingly, the writ petitions were dismissed.

Case-Title: Atiqa Begum and Ors. Vs UT of J&K and Ors.,2026

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