Rewriting an award is untenable and illegal

By Shilpa Shah and Sharan Kukreja, Singhania & Partners
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Does a competent authority who is appointed under the National Highways Act, 1956 – to determine what compensation is payable to land owners when land is acquired – have the power to make a supplementary award that nullifies an earlier award?

Shilpa Shah Partner Singhania & Partners
Shilpa Shah
Partner
Singhania & Partners

The act is silent on this question and as a result there had been a great deal of ambiguity and uncertainty about the role of a competent authority in this regard. As such, Karnataka High Court resolved an important issue when earlier this year it ruled that a competent authority has no power under the act to make a second award on a subject on which it had already made an award. It went on to say that the concept of a supplementary award is “a total misnomer”.

The court also ruled that a competent authority could make a supplementary award for a portion of land or structures or trees on it that had not been included in the original award.

Factual background

The National Highways Authority of India (NHAI) filed a writ petition, through its counsel Singhania & Partners, challenging a series of supplementary awards made by a competent authority appointed under section 3(a) of the act. These awards had enhanced the compensation to be paid for land acquired, exorbitantly.

The central government had issued a final notification under section 3D of the act to acquire land. The competent authority had made awards for specific acquisitions by exercising its powers under section 3G (1) to (4) of the act.

Compensation for the land acquired had been awarded according to the provisions of section 3G (7) of the act.

However, after the award had been passed, the owners of the acquired lands made representations to the competent authority stating that the award had been wrongly determined.

They argued that they were entitled to be paid the market value for non-agricultural land, as the land was not agricultural as classified in the original award.

Various owners pointed out that their land was situated within the municipal limits or had been converted to non-agricultural use before a preliminary notification for its acquisition was issued.

After considering the representations of the land owners and examining several judgments on valuation of land by the Supreme Court, the competent authority made supplementary awards.

Sharan A Kukreja Associate Singhania & Partners
Sharan A Kukreja
Associate
Singhania & Partners

Heart of the matter

The primary issue was whether the competent authority could pass a supplementary award with respect to subject matter that is covered by the original award.

The NHAI relied on three judgments that dealt with the Land Acquisition Act. Principal among them was a decision of a full bench of Gujarat High Court in Kanchanbhai Jhaverebhai and Another v The State of Gujarat and Others that dealt with the power of a land acquisition officer to pass a supplementary award.

In it the court held that under section 12 of the Land Acquisition Act an award becomes final with regard to the area of land for which it was made. Therefore the question of a supplementary award in respect of the same area or a part of it did not arise.

The decision

After considering the supplementary award passed, the court held that what the competent authority actually did was not something that was supplementary to the original award. Instead what it had done was to review its decision and arrive at a fresh award that nullified the earlier award.

The competent authority had conducted a fresh enquiry and made a new award. In doing so it treated the land differently from when the original award was made. As such, the court held that this exercise could not be seen as making a supplementary award.

The court further held that a supplementary award by its very name suggests something that was not done earlier, which is attempted by way of a fresh exercise.

This is not uncommon when the original award has not dealt with the determination of compensation for a certain part of a piece of land or structures or trees on it. This might be due to non-availability of a valuation report by an expert valuator. In such cases, the court held that a supplementary award could be passed for the portion that is not included in the earlier award.

However, it held that passing an award in place of an earlier award cannot be permitted as it will introduce “total uncertainty and chaos”. As such, the supplementary awards made by the competent authority were quashed as they were without jurisdiction.

Shilpa Shah is a senior partner and Sharan Kukreja is an associate at Singhania & Partners, which is a full-service national law practice. The firm has offices in New Delhi, Noida, Bangalore, Hyderabad and Mumbai.

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