The Chhattisgarh High Court has reaffirmed that statutory interest on land acquisition compensation is an absolute right of the landowner, and administrative delays or procedural ambiguities between the National Highway Authority of India and the Competent Authority for Land Acquisition cannot justify non-payment. This judgment clarifies that once an award is passed, the obligation to pay full compensation including interest is non-delegable and must be fulfilled without delay.
Background & Facts
The Dispute
The dispute arose from the acquisition of land belonging to Shankar Singh Kothari for the widening and upgradation of National Highway No. 6. The Competent Authority for Land Acquisition (CALA) passed an award on 21.12.2017, determining compensation of Rs. 1,06,49,302 for the acquired land and property, and Rs. 15,93,644 for rehabilitation and settlement. Despite the award, no payment was made to the landowner.
Key Facts
- Land acquisition proceedings were initiated under the National Highways Act, 1956, read with the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013
- Award dated 21.12.2017 was passed by CALA, Rajnandgaon
- Compensation amount of Rs. 1,06,49,302 and rehabilitation amount of Rs. 15,93,644 were determined but not disbursed
- The landowner filed WPC No. 1286 of 2018 seeking payment
- NHAI, through a letter dated 25.01.2018, raised objections to the award, seeking re-examination and a legally valid award
- CALA responded on 04.05.2018 with a memo and calculation sheet, but did not include statutory interest from 06.04.2016
- NHAI, on 01.04.2026, requested CALA to include interest in the 04.05.2018 calculation
- Reminder sent on 13.04.2026 received no response
Procedural History
- 21.12.2017: CALA passes award for compensation and rehabilitation
- 25.01.2018: NHAI writes to CALA objecting to award and seeking re-examination
- 04.05.2018: CALA replies with calculation sheet, excluding interest
- 2018: Writ Petition (WPC No. 1286 of 2018) filed by landowner before Chhattisgarh High Court
- 07.03.2022: High Court directs NHAI to pay compensation within 90 days, and CALA to disburse it
- 2022: NHAI files review petition challenging the 07.03.2022 order
- 09.02.2026: Court directs State to file affidavit on response to NHAI’s 25.01.2018 letter
- 09.03.2026: Affidavit filed by State showing CALA’s 04.05.2018 reply
- 30.03.2026: Court directs NHAI and CALA to clarify whether 04.05.2018 calculation includes interest
- 16.04.2026: NHAI files affidavit confirming it requested inclusion of interest but received no response
The Parties' Positions
Petitioner (NHAI): Argues that the 21.12.2017 award is null and void because CALA had no power to review or modify the earlier award dated 20.07.2017. Claims the 25.01.2018 letter was not a request for review but a request for clarification. Asserts that the 07.03.2022 order erroneously recorded NHAI as seeking review.
Respondent (Landowner): Contends that the award is final and binding. Argues that NHAI’s current objections are an attempt to re-litigate the matter. Emphasizes that statutory interest is mandatory and cannot be withheld due to internal administrative delays.
Relief Sought
The landowner sought payment of the full compensation amount of Rs. 1,06,49,302 plus Rs. 15,93,644 for rehabilitation, along with statutory interest from 06.04.2016 until payment. NHAI sought review and setting aside of the 07.03.2022 order on grounds of error apparent on the face of the record.
The Legal Issue
The central question was whether the Competent Authority for Land Acquisition (CALA) has the power to issue a revised award after the original award, and whether the National Highway Authority of India (NHAI) can withhold payment of statutory interest on the ground that the award did not explicitly include it, or due to internal administrative communication gaps.
Arguments Presented
For the Petitioner (NHAI)
NHAI contended that the award dated 21.12.2017 was a review of the earlier award dated 20.07.2017, and since the National Highways Act, 1956, does not confer review jurisdiction on CALA, the award is ultra vires and void. It further argued that the 07.03.2022 order mischaracterized its 25.01.2018 letter as a request for review, when it was merely a request for clarification. NHAI submitted that the absence of interest in the 04.05.2018 calculation sheet was not an omission but a legal position, and that the court’s direction to pay interest was not supported by the award.
For the Respondent (Landowner)
The landowner argued that the award dated 21.12.2017 was final and binding, and that NHAI had not challenged it under Section 18 of the Land Acquisition Act. He emphasized that statutory interest under Section 34 of the Land Acquisition Act, 1894 (as applicable) is mandatory and accrues from the date of possession. He contended that NHAI’s attempt to reframe its 25.01.2018 letter as non-review was contradictory and an abuse of process. He further argued that the landowner cannot be penalized for NHAI’s failure to coordinate with CALA.
The Court's Analysis
The Court examined the nature of the 25.01.2018 letter and the 04.05.2018 reply, and found that NHAI’s current contention - that it never sought review - contradicted its own pleadings in the original writ petition. The Court noted that the 07.03.2022 order did not rely on any review power of CALA, but rather enforced the finality of the award.
"The respondent/landowner cannot be made to suffer on account of any inter se communication gap or administrative lapses between the authorities, particularly when the land has already been acquired."
The Court held that the power of review is not inherent and must be expressly conferred, but that this principle is irrelevant here because the 21.12.2017 award was not a review - it was a final determination. The Court further observed that the 04.05.2018 memo was not a new award but a clarification, and that the omission of interest was a clear legal error.
The Court emphasized that statutory interest under Section 34 of the Land Acquisition Act, 1894 is not discretionary but mandatory, and accrues from the date of taking possession (06.04.2016). The Court rejected NHAI’s argument that the absence of interest in the calculation sheet absolved it of liability, stating that the obligation to pay just compensation with interest is absolute and non-negotiable.
The Court also held that the grounds raised in the review petition were not errors apparent on the face of the record, but attempts to reargue the merits, which are outside the scope of review under Order XLVII Rule 1 CPC.
The Verdict
The review petition was dismissed. The Court directed NHAI to forthwith pay the full compensation of Rs. 1,06,49,302 and rehabilitation amount of Rs. 15,93,644, along with statutory interest at 9% per annum from 06.04.2016 until actual payment. The Court ordered that the entire amount be disbursed within 30 days from the date of judgment. Costs of Rs. 50,000 were imposed on NHAI.
What This Means For Similar Cases
Statutory Interest Is Non-Negotiable
- Practitioners must assert that interest under Section 34 of the Land Acquisition Act, 1894, accrues automatically from the date of possession, regardless of whether it is mentioned in the award
- Any argument that interest must be expressly included in the award to be payable is legally untenable
- Courts will not permit delay in payment due to internal administrative disputes between NHAI and CALA
NHAI Cannot Use Procedural Gaps to Avoid Liability
- NHAI’s failure to coordinate with CALA or to raise timely objections under Section 18 does not extinguish the landowner’s right to interest
- Any delay in disbursement attributable to NHAI’s internal processes will be treated as a violation of Article 300A
- Landowners may now claim interest from the date of possession even if the award is silent, provided possession is established
Finality of Awards Must Be Respected
- Once an award is passed and not challenged under Section 18, it becomes final and binding
- Subsequent communications seeking clarification cannot be used to reopen the award unless a formal objection is filed within the statutory period
- Courts will not entertain belated challenges to awards under the guise of review or clarification
