Statutory Interest Cannot Be Diluted: P&H HC Grants Landowners Full Benefit Under 2013 Act in Highway Acquisition

Case Name: Kuldeep Singh and Another v. Union of India and Others

Date of Judgment: 23 April 2026

Citation: CWP-38070-2025

Bench: Hon’ble Mr. Justice Harkesh Manuja

Held: The High Court held that landowners are entitled to statutory interest under Section 72 of the 2013 Act on enhanced compensation, even in acquisitions under the National Highways Act, and such benefit cannot be curtailed by applying lesser interest provisions under the 1956 Act.

Summary: The petitioners, whose land was acquired for the Delhi-Amritsar-Katra National Highway project, sought grant of statutory interest on enhanced compensation awarded by the Arbitrator. As noted on page 2, while the Arbitrator enhanced compensation significantly, interest was granted only at 9% from the date of application till deposit, instead of applying the statutory scheme under Section 72 of the 2013 Act.

The petitioners contended that interest ought to have been awarded at 9% for the first year and 15% thereafter from the date of possession, in line with the beneficial provisions of the 2013 Act. They relied on precedents and earlier awards in similar cases where such higher interest had been granted.

The respondents opposed the petition primarily on maintainability, arguing that the appropriate remedy was under Section 34 of the Arbitration and Conciliation Act.

The Court, after examining the statutory framework, held that although the 2013 Act does not automatically apply to acquisitions under the National Highways Act, Section 105(3) read with the 2015 notification ensures that beneficial provisions relating to compensation are extended to such acquisitions. The Court further relied on the Supreme Court ruling in Tarsem Singh, which recognized that denial of solatium and interest to similarly situated landowners would violate Article 14.

The Court emphasized that “just compensation” includes not only the principal amount and solatium but also interest for delayed payment. It held that interest is an integral component of compensation and cannot be restricted by applying the narrower provisions of Section 3H(5) of the 1956 Act.

Decision: The Court concluded that the Arbitrator erred in limiting interest to 9% from the date of application and failed to apply the statutory mandate under Section 72 of the 2013 Act. It held that landowners are entitled to interest at the rate of 9% per annum from the date of possession and 15% per annum thereafter on the enhanced compensation. The Court allowed the writ petition and directed the respondents to grant statutory interest in accordance with the 2013 Act, thereby ensuring parity and preventing discrimination between similarly situated landowners.