National Highways Act | Tenant Must Pay Rent Even After Land Acquisition Till Possession Is Surrendered: Kerala High Court

The Kerala High Court has held that tenants remain liable to pay rent even after a Section 3-D acquisition notification under the National Highways Act, 1956, until actual surrender of possession.For context, Section 3-D of the NH Act deals with declaration of acquisition of land for building, maintenance, management or operation of a national highway. The declaration of acquisition is made by a notification in the official Gazette. The Division Bench comprising Justice Raja Vijayaraghavan V and Justice K.V. Jayakumar were delivering the judgment in a plea which sought to declare that the petitioners are not liable to pay any rent or arrears to the Travancor Devaswom Board (TDB), when the property has been acquired under Section 3D notification of NH Act. The dispute arose after tenants of a Devaswom-owned shopping complex challenged rent arrears demanded by the TDB. The tenants argued that once a Section 3-D notification was issued in June 2020 vesting the property to the Central Government, the Devaswom Board ceased to be the owner and, consequently, lost the right to collect rent.The respondents countered that the tenants continued in possession until November 2023 and were therefore liable to pay rent for the entire period of occupation.The Court undertook a detailed examination of the statutory scheme under Sections 3-A to 3-F of the National Highways Act, alongside principles of lease under the Transfer of Property Act, 1882.The Court noted that Section 3-D(2) provides for absolute vesting of the land in the Central Government upon notification. The Court however noted that Section 3-E contemplates a subsequent and distinct stage where the actual taking of possession takes place, after compensation is determined and notice is issued. “It is true that the title of the land vests with the Central Government as and when a notification is issued under Section 3-D(1) as stipulated under (2). However, on going through Section 3-E of the Act, the delivery of possession is to be made only after the issuance of a notice under Section 3-E(1), that too, after the fixation of compensation and its payment.” Court noted. The Court added that even after the notification under Section 3-D, some more steps are to be taken before the delivery or surrender of the possession of the land or building including the fixation and disbursement of the compensation. Hence, there should be some gap between the vesting of the ownership of the land in the Central Government and the actual surrender of possession. The Court thus held that if the tenant continues to occupy the land or building even after 3-D notification, he is liable to pay rent/arrears of rent to the landlord. “The tenant cannot wriggle out of the liability to pay the rent, stating that the ownership has transferred to the Central Government by virtue of 3-D notification.” Court added. It thus concluded: “A tenant who opts to occupy the tenanted premises even after 3-D notification is bound to pay the rent to the landlord so long as he occupies the building or surrenders the possession pursuant to Section 3-E notice. It is trite law that a party to a contract shall not be permitted to enrich himself unjustly at the expense of the other party.”The Court thus dismissed the writ petition. Case Title: Sreekumar M.R and Ors. v Travancore Devaswom Board and Ors. Case No: WP(C) 33109/ 2025Citation: 2026 LiveLaw (Ker) 212Counsel for Petitioners: C. Unnikrishnan, D.Jayakrishnan, Vijaykrishnan S. Menon, Vivek Nair P., M.R. Radhakrishnan, K.S. Aravind, G. Gowardhan Dev G. Nair, V. Aswin, Gautham Hritheekaar S., Binitha Maria Thomas, Shibu S., Gargi RamachandranCounsel for Respondents: G. Santhosh Kumar (P.)Click Here To Read/ Download Judgment

National Highways Act | Tenant Must Pay Rent Even After Land Acquisition Till Possession Is Surrendered: Kerala High Court

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