The Bombay High Court has clarified a critical jurisdictional conflict in land acquisition proceedings, establishing that only the Central Government may determine the multiplier factor for national highway projects under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This ruling resolves a long-standing ambiguity affecting compensation calculations across multiple states and reinforces the constitutional division of powers between Union and State authorities.
Background & Facts
The Dispute
The petitioners, landowners in Nashik district, challenged the application of a multiplier factor of 1.00 to their land acquired for the Surat-Nashik-Ahmednagar Greenfield National Highway project. Although the Union of India, acting through NHAI, had issued a notification under Section 30(2) of the Land Acquisition Act, 2013, specifying a multiplier of 2.00 for rural areas, the Maharashtra State Government issued notifications and Government Resolutions (GRs) reducing the multiplier to 1.00 for all highway acquisitions - including those under the National Highways Act, 1956.
Procedural History
- 09.02.2016: Central Government notified multiplier factor of 2.00 under Section 30(2) of the Land Acquisition Act, 2013.
- 01.11.2021: Central Government issued notification under Section 3-A(1) of the National Highways Act, 1956, initiating acquisition for the national highway.
- 05.10.2021 & 06.10.2021: Maharashtra State Government issued notifications and GRs applying multiplier of 1.00 to national highway acquisitions.
- 27.01.2022: Competent Authority (Deputy Collector) rejected petitioners’ objections and applied 1.00 multiplier.
- 13.01.2023: Acquisition award issued applying 1.00 multiplier.
- 2022: Writ petition filed challenging the State’s notifications and the award.
Relief Sought
The petitioners sought quashing of the State’s notifications and GRs to the extent they applied to national highway acquisitions, and directed the Competent Authority to issue a fresh award applying the 2.00 multiplier as notified by the Central Government. They also sought liberty to challenge any future award on other grounds.
The Legal Issue
The central question was whether the State Government, under Section 30(2) of the Land Acquisition Act, 2013, has the authority to notify a multiplier factor for land acquired by the Central Government under Section 3-A(1) of the National Highways Act, 1956, when the Central Government has already notified a higher multiplier.
Arguments Presented
For the Petitioner
The petitioners argued that Section 3(e)(v) of the Land Acquisition Act, 2013, designates the Central Government as the "appropriate Government" for acquisitions undertaken for Union purposes - including national highways. They relied on Entry 23 of List I of the Seventh Schedule to the Constitution, which vests exclusive legislative power over national highways in Parliament and the Union. The State’s notifications and GRs, they contended, were ultra vires, as they encroached upon the Central Government’s exclusive domain. The petitioners cited State of Maharashtra v. Rameshwar to affirm that statutory powers cannot be usurped by subordinate authorities.
For the Respondent
The State authorities argued that the multiplier factor of 1.00 was a reasonable fiscal measure to control rising acquisition costs. They contended that since the State’s Deputy Collector was the implementing authority, it had inherent discretion to apply uniform rates across all highway projects within its territory. They further argued that petitioners had an alternative remedy under Section 3-G(5) of the National Highways Act, 1956, to challenge the award before a statutory arbitrator, rendering the writ petition maintainable only if that remedy was exhausted.
The Court's Analysis
The Court undertook a detailed statutory and constitutional analysis. It emphasized that Section 3(e)(v) explicitly defines the "appropriate Government" for acquisitions undertaken for Union purposes as the Central Government. The Court held that the term "as may be specified by notification" in Section 30(2) and the First Schedule refers exclusively to the Central Government in the context of national highways.
"The State Government has no power under the National Highways Act, 1956, to initiate acquisition for national highways. That power is vested solely in the Central Government under Section 3-A(1)."
The Court distinguished the State’s notifications as attempts to override a valid Central notification, thereby violating the hierarchy of legislative competence under the Seventh Schedule. It rejected the State’s fiscal argument as legally irrelevant: "The cost of compensation cannot override statutory mandates or constitutional distribution of powers."
The Court also dismissed the alternative remedy argument under Section 3-G(5), noting that the statutory arbitrator is a State-appointed officer with no authority to adjudicate on the validity of Central Government notifications. To allow such a challenge to proceed before a State forum would be to permit a subordinate authority to nullify a superior statutory directive.
The Court further held that the impugned award, which relied on the invalid State notifications, was legally unsustainable. The multiplier factor applied was not merely erroneous - it was ultra vires.
The Verdict
The petitioners succeeded. The Court held that the Central Government alone has the authority to notify the multiplier factor for national highway acquisitions under Section 30(2) of the Land Acquisition Act, 2013. The State’s notifications and GRs applying a 1.00 multiplier to such acquisitions were quashed. The award dated 13.01.2023 was set aside, and the Competent Authority was directed to issue a fresh award applying the 2.00 multiplier.
What This Means For Similar Cases
Central Government’s Notification Prevails Over State Directives
- Practitioners must verify whether an acquisition is initiated under Section 3-A(1) of the National Highways Act before accepting any State-issued multiplier.
- Any State notification attempting to reduce the multiplier for national highway projects is void ab initio.
- Compensation calculations must be based solely on the Central Government’s notification, regardless of local fiscal policies.
Alternative Remedies Do Not Cure Jurisdictional Invalidity
- Challenges to the validity of multiplier notifications cannot be deferred to statutory arbitrators under Section 3-G(5).
- Writ petitions under Article 226 remain maintainable to challenge ultra vires notifications, even if compensation disputes are pending.
- Lawyers must raise jurisdictional objections at the earliest stage to prevent reliance on invalid State directives in awards.
Multiplier Determination Is Not Discretionary
- The multiplier is not a policy choice but a statutory mandate tied to the identity of the "appropriate Government."
- The range of 1.00 to 2.00 under the First Schedule is not open-ended; the Central Government’s specific notification binds all implementing authorities.
- Practitioners should treat any State notification applying a lower multiplier to Union projects as legally non-existent for compensation purposes.
