The Supreme Court has asked the Centre to amend the National Highways Act to ensure land compensation disputes are decided by judicial officers instead of bureaucrats. This move aims to protect farmers from potential undervaluation in land acquisition cases for infrastructure projects. The government has indicated it is currently reviewing potential legislative amendments to address these legal concerns.
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The Supreme Court on Thursday directed its focus toward the National Highways Act, 1956, emphasizing that the current process for determining land compensation lacks the necessary judicial oversight. A bench led by Chief Justice Surya Kant stated that allowing government bureaucrats to act as the final authority in compensation disputes is inappropriate for an exercise that involves clear legal and financial rights.
Addressing Disparities in Land Compensation
The court noted a significant inconsistency between the National Highways Act and other land acquisition laws in India. While other frameworks require judicial authorities to oversee compensation awards, the current highways law grants this power to administrative officers. The justices termed this structure unacceptable, highlighting that land acquired for national highway projects is often highly valuable due to its location and commercial potential.
Historically, concerns have been raised that farmers frequently struggle to receive fair market value or statutory benefits like solatium and interest under the current bureaucratic setup. The Supreme Court’s intervention is aimed at ensuring that landholders receive the compensation legally due to them, preventing the long delays and potential litigation that have historically hampered infrastructure development when land owners feel aggrieved by administrative decisions.
Government Response and Future Legislative Steps
Representing the Centre, Attorney General R. Venkataramani informed the bench that the government is already considering amendments to the Act. The court has opted to provide the government time to initiate these legislative changes rather than issuing a direct mandate at this stage. This suggests a preference for a structured legal reform that could standardize compensation procedures across all major infrastructure projects.
For investors and companies involved in the infrastructure sector, the outcome of this development is significant. If the Act is amended, it may bring more transparency and legal certainty to land acquisition processes. While this could potentially change the timeline or cost structure for future highway projects, it also reduces the risk of long-standing litigation and land-related disputes that have often caused construction delays in the past. Investors should monitor the progress of these proposed amendments in the upcoming sessions of Parliament, as any shift toward judicial adjudication will likely lead to a more standardized and predictable framework for land acquisition costs.