Compensation Cannot Be Withheld After Acquisition Vesting: J&K High Court

The High Court of Jammu & Kashmir and Ladakh, in the case of Bharat Bhushan vs Rano Devi & Others, dated February 12, 2026, held that once acquired land vests in the Central Government and compensation is determined under the National Highways Act, 1956, the landowner’s statutory right to payment crystallizes and cannot be defeated by subsequent project realignment or proposed de-notification.

The dispute arose from the acquisition of land for the Delhi–Ludhiana–Amritsar–Katra Expressway, where compensation determined by the Competent Authority was later revised pursuant to an arbitral award under Section 3G (5) of the National Highways Act, 1956. Although challenges to the arbitral determination were dismissed under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, the petitioner-landowner approached the Court alleging continued non-disbursement of compensation.

The respondents sought to justify the delay on the basis of earlier litigation and a subsequent proposal to de-notify portions of the acquired land due to alignment changes in the project. The Court rejected this contention, observing that the statutory scheme under Sections 3G and 3H of the National Highways Act mandates the deposit and disbursement of compensation once acquisition is completed and vesting occurs. The Court stated that allowing the delay of compensation because of the proposed de-notification would let the acquiring authority keep the benefits of the land acquisition without fulfilling its legal responsibilities, which is not allowed and goes against Article 300A of the Indian Constitution, 1950.

Accordingly, the Court directed disbursement of compensation to the petitioner within two months, with interest at 12% per annum upon default. The Court also dismissed connected arbitration appeals challenging the compensation determination, reiterating the limited scope of interference under Section 37 of the Arbitration and Conciliation Act.