NHAI Land Acquisition and Management: Legal Framework, Challenges, and Future Directions

Introduction

The National Highways Authority of India (NHAI) stands as the cornerstone of India’s highway infrastructure development, tasked with the monumental responsibility of managing over 150,000 kilometers of national highways across the country [1]. Established under the National Highways Authority of India Act, 1988, NHAI operates as an autonomous body under the Ministry of Road Transport and Highways (MoRTH), wielding significant powers in land acquisition, highway maintenance, right-of-way management, and infrastructure development [2]. The complexity of NHAI’s land management operations encompasses a intricate web of legal frameworks, regulatory compliance, and operational challenges that demand comprehensive understanding of both statutory provisions and judicial interpretations.

The legal foundation for NHAI’s land management activities rests primarily on two pivotal legislations: the National Highways Act, 1956, and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act) [3]. These statutory frameworks create a unique paradigm where traditional land acquisition procedures are modified to accommodate the specific requirements of highway development, while ensuring fair compensation and rehabilitation for affected landowners.

Legal Framework Governing NHAI Land Acquisition

The National Highways Act, 1956: Core Provisions

The National Highways Act, 1956, serves as the primary legislative instrument empowering NHAI to acquire land for highway development. Section 3A of the Act establishes the fundamental power of the Central Government to acquire land for public purposes. The section stipulates: “Where the Central Government is satisfied that for a public purpose any land is required for the building, maintenance, management or operation of a national highway or part thereof, it may, by notification in the Official Gazette, declare its intention to acquire such land” [4].

The procedural framework under the National Highways Act follows a structured approach beginning with the issuance of a notification under Section 3A. This notification must provide a brief description of the land proposed for acquisition and requires publication in two local newspapers, one of which must be in the vernacular language. The competent authority bears the responsibility of ensuring widespread dissemination of acquisition intentions, thereby fulfilling the constitutional mandate of due process.

Section 3B of the Act grants extensive survey powers to authorized personnel, including the authority to conduct inspections, measurements, valuations, and enquiries. These provisions enable NHAI representatives to “make any inspection, survey, measurement, valuation or enquiry; take levels; dig or bore into sub-soil; set out boundaries and intended lines of work; mark such levels, boundaries and lines placing marks and cutting trenches” [5]. Such comprehensive survey powers are essential for accurate project planning and land requirement assessment.

The objection mechanism under Section 3C provides affected landowners with the opportunity to challenge the proposed acquisition. Any person interested in the land may object within twenty-one days from the publication of the Section 3A notification. The competent authority must provide a fair hearing and may allow or disallow objections after due consideration. Significantly, Section 3C(3) declares that orders made by the competent authority under this provision are final, limiting further judicial review at this stage.

Section 3D establishes the declaration of acquisition procedure. Upon completion of the objection process, the competent authority submits a report to the Central Government, which then declares through Official Gazette notification that the land should be acquired. The Act provides that “on the publication of the declaration under sub-section (1), the land shall vest absolutely in the Central Government free from all encumbrances” [6]. This vesting provision represents a crucial aspect of the acquisition process, as it transfers ownership immediately upon publication, regardless of compensation payment status.

Compensation Determination Under the National Highways Act

Section 3G outlines the compensation determination mechanism, establishing a dual-track approach. The competent authority initially determines compensation amounts, but if either party finds the amount unacceptable, the matter proceeds to arbitration. The arbitrator, appointed by the Central Government, applies the provisions of the Arbitration and Conciliation Act, 1996, to resolve disputes.

The factors for compensation determination under Section 3G(7) include: “(a) the market value of the land on the date of publication of the notification under section 3A; (b) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the severing of such land from other land; (c) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the acquisition injuriously affecting his other immovable property in any manner, or his earnings; (d) if, in consequences of the acquisition of the land, the person interested is compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change” [7]. These provisions make NHAI Land Acquisition a carefully regulated process that balances infrastructure needs with the rights of affected landowners

Integration with RFCTLARR Act, 2013

The relationship between the National Highways Act, 1956, and the RFCTLARR Act, 2013, represents one of the most complex aspects of NHAI land acquisition. Section 105 of the RFCTLARR Act initially excluded enactments specified in the Fourth Schedule, including the National Highways Act, from its application. However, subsequent amendments and judicial interpretations have significantly modified this position.

The Ministry of Road Transport and Highways issued comprehensive guidelines on December 28, 2017, clarifying the applicability of RFCTLARR Act provisions to National Highway acquisitions [8]. These guidelines, developed in consultation with the Attorney General of India, establish that compensation determination under highway acquisitions must follow the First Schedule of the RFCTLARR Act, even when the acquisition is conducted under the National Highways Act.

Judicial Developments and Case Law

Supreme Court Clarifications on Compensation

The Supreme Court’s decision in National Highways Authority of India vs. Sri P. Nagaraju (2022) provides crucial guidance on compensation determination under the National Highways Act [9]. The Court addressed the interaction between Section 3G(7)(a) of the National Highways Act and the RFCTLARR Act’s compensation provisions, particularly regarding the relevant date for market value determination.

The Court emphasized that Section 3G(7)(a) mandates consideration of “the market value of the land on the date of publication of the notification under section 3A.” However, the judgment also recognized the applicability of RFCTLARR Act’s First Schedule provisions through the notification dated August 28, 2015, which extended RFCTLARR Act benefits to acquisitions under enactments specified in the Fourth Schedule.

In Union of India & Anr. vs. Tarsem Singh & Ors., the Supreme Court addressed discrimination concerns arising from differential compensation structures between the National Highways Act and the Land Acquisition Act, 1894. The Court held that “non-grant of solatium and interest to lands acquired under the National Highways Act, 1956, which is available if lands are acquired under the Land Acquisition Act, is bad in law and violative of Article 14 of the Constitution of India” [10].

Procedural Clarity from Recent Judgments

The Supreme Court in Haryana State Industrial and Infrastructure Development Corporation vs. Deepak Aggarwal (2022) clarified the meaning of “initiation” under Section 24(1) of the RFCTLARR Act. The Court held that “land acquisition proceedings under the L.A. Act begin with the publication of a notification under sub-section (1) of Section 4” for the purposes of determining whether RFCTLARR Act compensation provisions apply to ongoing acquisitions [11].

This interpretation has significant implications for NHAI acquisitions initiated before January 1, 2014, but not completed by that date. Such acquisitions benefit from enhanced compensation under the RFCTLARR Act while following the streamlined procedures of the National Highways Act.

Right-of-Way Management and Regulatory Framework

Defining Right-of-Way Parameters

Right-of-way (ROW) management constitutes a critical component of NHAI’s operational mandate, encompassing not merely the carriageway but the entire corridor required for highway operations. Section 4 of the National Highways Act provides that national highways include “all lands appurtenant thereto, whether demarcated or not; all bridges, culverts, tunnels, causeways, carriageways and other structures constructed on or across such highways; and all fences, trees, posts and boundary, furlong and milestones of such highways or any land appurtenant to such highways” [12].

The Ministry of Road Transport and Highways has established detailed guidelines for ROW management, specifying minimum width requirements based on highway categories. Express highways require a minimum ROW of 60 meters, while four-lane highways need 45 meters, and two-lane highways require 30 meters. These specifications ensure adequate space for future expansion, utility corridors, and safety considerations.

Access Control and Encroachment Prevention

The Standing Committee on Transport, Tourism and Culture noted in its February 2024 report that “encroachment is a prominent reason for accidents on national highways” [13]. The Committee recommended implementing stricter penalties for encroachment violations and streamlining legal processes for swift resolution.

NHAI has responded to encroachment challenges through multiple initiatives. The authority conducts regular surveys using satellite imagery and GIS mapping to document unauthorized constructions within ROW limits. Legal proceedings under Section 8B of the National Highways Act enable prosecution of individuals causing mischief to national highways, with penalties including imprisonment up to five years.

The Ministry has also issued revised guidelines for access permission, establishing standardized procedures for legitimate access to national highways while preventing unauthorized entry points that compromise traffic flow and safety.

Infrastructure Development and Maintenance Obligations

Statutory Responsibilities Under Section 5

Section 5 of the National Highways Act places the responsibility for highway development and maintenance squarely on the Central Government. The provision states: “It shall be the responsibility of the Central Government to develop and maintain in proper repair all national highways” [14]. However, the section also permits delegation of these functions to state governments or subordinate authorities under specified conditions.

NHAI’s role as the implementing agency for highway development has evolved significantly since its establishment. The authority now manages construction contracts worth thousands of crores, oversees public-private partnerships, and ensures compliance with environmental and safety standards across its extensive network.

Funding Mechanisms and Financial Framework

The Union Budget allocated ₹1.68 lakh crore to NHAI for the financial year 2024-25, representing a substantial commitment to highway infrastructure development [15]. This allocation supports various funding mechanisms including:

Direct budgetary support for critical projects requiring government intervention Build-Operate-Transfer (BOT) models enabling private sector participation Hybrid Annuity Model (HAM) combining government and private funding Infrastructure Investment Trusts (InvITs) for asset monetization

The National Highways Fee (Determination of Rates and Collection) Rules authorize NHAI to collect tolls and fees for services rendered on national highways. Section 7 of the National Highways Act provides the legal foundation for fee collection, while Section 8A enables agreements with private entities for highway development and maintenance in exchange for toll collection rights.

Environmental and Social Compliance

NHAI’s infrastructure development activities are subject to comprehensive environmental and social compliance requirements. The Environmental Impact Assessment (EIA) Notification, 2006, mandates environmental clearance for highway projects exceeding specified thresholds. Projects requiring land acquisition above certain limits must also obtain forest clearance under the Forest (Conservation) Act, 1980.

The RFCTLARR Act’s Second and Third Schedules, applicable to NHAI acquisitions through the 2015 notification, establish detailed rehabilitation and resettlement obligations. These include providing replacement land, housing assistance, employment opportunities, and infrastructure development in affected areas.

Regulatory Challenges and Operational Issues

Land Acquisition Delays and Cost Escalation

The Standing Committee on Transport, Tourism and Culture observed that “tenders worth Rs 50,000 crore invited by NHAI are pending for 9-14 months” due to land acquisition challenges [16]. The Committee recommended that “at least 95% of continuous land stretch should be acquired and possessed at the time of bidding, to avoid delays.”

Land acquisition delays stem from multiple factors including complex legal procedures, disputes over compensation, environmental clearances, and local resistance. The requirement for multiple approvals from different authorities creates coordination challenges that can extend project timelines significantly.

Recent data indicates that highway project awards from April 2023 to November 2023 amounted to only 2,815 kilometers, approximately half the projects awarded during the same period in the preceding fiscal year. This decline reflects the ongoing challenges in land acquisition and ROW procurement.

Technological Solutions and Digital Initiatives

NHAI has embraced technological solutions to address operational challenges. The BhoomiRashi portal, launched on April 1, 2018, streamlines the land acquisition process by providing simultaneous Hindi translation, linking to e-gazette for expeditious publication, and offering predefined formats for notifications [17].

The portal includes an award calculator for error-free compensation determination and has processed 8,629 land acquisition notifications since its launch. Nearly 11,70,000 people have visited the portal, demonstrating its effectiveness in improving transparency and accessibility.

The “Harit Path” mobile application enables monitoring of plantations along national highways, supporting NHAI’s environmental commitments. This digital infrastructure represents a significant advancement in project management and stakeholder engagement.

Future Directions and Policy Considerations

Integration of Green Highway Initiatives

NHAI’s Green Highways Division has been entrusted with planning, implementation, and monitoring of roadside plantations along one lakh kilometers of national highways. This initiative aims to generate one lakh direct employment opportunities in the plantation sector over ten years while enhancing environmental sustainability.

The Ministry of Road Transport and Highways launched the green highways program in 2016, emphasizing the integration of environmental considerations into highway development. Future policy directions likely will emphasize climate resilience, carbon neutrality, and ecosystem preservation.

Technological Innovation and Smart Infrastructure

The memorandum of understanding between NHAI and the Indian Space Research Organisation (ISRO) for satellite mapping of highways represents a significant step toward smart infrastructure development. Future initiatives may include intelligent transportation systems, automated toll collection, and real-time traffic management.

The government’s emphasis on securitized green bonds for BOT projects may provide sustainable financing mechanisms while promoting environmentally responsible development. These financial innovations could ease funding requirements for both NHAI and private concessionaires.

Legislative and Regulatory Reforms

The May 15, 2024 circular issued by the Ministry of Road Transport and Highways regarding RFCTLARR Act applicability reflects ongoing efforts to clarify legal frameworks [18]. Future reforms may focus on streamlining procedures, reducing approval timelines, and enhancing coordination between different regulatory authorities.

The integration of digital processes, standardized procedures, and transparent mechanisms will likely continue evolving to meet the challenges of large-scale infrastructure development while ensuring compliance with constitutional and statutory requirements.

Conclusion

NHAI Land Acquisition represents a complex intersection of statutory authority, constitutional obligations, and practical challenges in infrastructure development. The evolution of legal frameworks, particularly the integration of RFCTLARR Act provisions with National Highways Act procedures, demonstrates the dynamic nature of land acquisition law in India.

The success of NHAI’s mandate depends critically on effective coordination between legal compliance, community engagement, environmental protection, and operational efficiency. Recent technological initiatives and policy reforms indicate a positive trajectory toward more transparent, efficient, and sustainable highway development.

Future developments in NHAI land acquisition and management will likely emphasize digital transformation, environmental sustainability, and enhanced stakeholder participation while maintaining the constitutional imperatives of due process and fair compensation. The authority’s ability to adapt to these evolving requirements will determine its effectiveness in delivering India’s ambitious highway infrastructure goals.

The comprehensive legal framework governing NHAI’s operations, supported by evolving judicial interpretations and technological innovations, provides a robust foundation for addressing the complex challenges of modern highway development. Continued refinement of these systems will be essential for meeting India’s growing transportation needs while protecting the rights and interests of affected communities.

References

[1] Vajira Mandravi. “National Highways Authority of India.” Current Affairs, 2024. Available at: https://vajiramandravi.com/current-affairs/national-highways-authority-of-india/ 

[2] Ministry of Road Transport & Highways. “Land Acquisition.” Government of India. Available at: https://morth.nic.in/land-acquisition 

[3] SCC Times. “Income Tax on Compulsory Acquisition Under the NHAI Act.” SCC Times, February 6, 2024. Available at: https://www.scconline.com/blog/post/2024/05/10/income-tax-on-compulsory-acquisition-under-the-nhai-act/ 

[4] India Code. “The National Highways Act, 1956.” Available at: https://www.indiacode.nic.in/bitstream/123456789/1651/1/AAA1956____48.pdf 

[5] Indian Kanoon. “Section 3A in The National Highways Act, 1956.” Available at: https://indiankanoon.org/doc/160012649/ 

[6] Indian Kanoon. “Section 3D in The National Highways Act, 1956.” Available at: https://indiankanoon.org/doc/2070234/ 

[7] Indian Kanoon. “The National Highways Act, 1956.” Available at: https://indiankanoon.org/doc/1222415/ 

[8] Fox Mandal. “NHAI issues Circular on Land Acquisition Laws.” June 8, 2024. Available at: https://www.foxmandal.in/News/nhai-issues-circular-on-land-acquisition-laws/ 

[9] Legal Research Wing. “Supreme Court clarifies land compensation under National Highways Act: NHAI vs. Nagaraju (2022).” July 11, 2022. Available at: https://research.grhari.com/supreme-court-clarifies-land-compensation-under-national-highways-act-national-highways-authority-of-india-vs-sri-p-nagaraju-2022/ 

[10] IBC Laws. “Union of India & Anr. Vs. Tarsem Singh & Ors. – Supreme Court.” Available at: https://ibclaw.in/union-of-india-anr-vs-tarsem-singh-ors-supreme-court/ 

[11] LiveLaw. “Sec 24(1) RFCTLARR Act- Land Acquisition Proceedings Get ‘Initiated’ From Publication Of Sec 4(1) Notification Under 1894 Act: Supreme Court.” July 31, 2022. Available at: https://www.livelaw.in/top-stories/supreme-court-rfctlarr-initiation-issuance-publication-land-acquisition-haryana-state-industrial-and-infrastructure-development-corporation-vs-deepak-aggarwal-2022-livelaw-sc-644-205255