Three Forums for Land Acquisition Compensation Enhancement in India – s.64 Reference, NH Arbitration and the Railways Act

After the Removal of Difficulties Order of 2015 and the harmonisation that followed, a landowner acquired under the National Highways Act, 1956 or the Railways Act, 1989 is, in principle, entitled to compensation on the same generous scale as one acquired under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The quantum has been brought broadly into line. Land acquisition compensation enhancement — the route to more — has not.

This is the point most claimants miss, and it is the point that decides cases. Two landowners may be equally under-compensated — the same jantri-driven award, the same ignored sale deeds — and yet one can obtain a full re-determination of value while the other cannot get a rupee more, no matter how plainly the award is wrong on the merits. The difference lies entirely in which statute took the land, because each statute channels the dispute into a different forum, on a different trigger, subject to a very different standard of review.

This article sets the three forums side by side — the s.64 reference under the 2013 Act, the arbitration under s.3G of the National Highways Act, and the arbitration mechanism under Chapter IVA of the Railways Act — and draws out the one structural distinction that should govern strategy from day one: a LARR reference gives you a fresh determination on the merits; an arbitral award, once made, can only be set aside, never enhanced.

This is the third spoke in a nine-part series on fair compensation in Indian land acquisition; see Fair Compensation in Indian Land Acquisition: LARR, Railways and National Highways — A Practitioner’s Map for the full map. The market-value evidence you assemble is what you deploy once you know which of these forums applies to your acquisition — see Determining Market Value in Land Acquisition: The Evidentiary Battleground (Spoke 2).

The three architectures for enhancing land acquisition compensation

(A) RFCTLARR Act, 2013 — reference to the LARR Authority

The 2013 Act is built around a person who is dissatisfied but has not accepted. Once the Collector makes the award under s.23, a person interested who has not accepted it may apply to the Collector under s.64 to refer the dispute to the Land Acquisition, Rehabilitation and Resettlement Authority constituted under s.51. The matters that may be referred are broad: the measurement of the land, the amount of the compensation, the persons to whom it is payable, and the apportionment of the compensation among the persons interested.

The reference is not a mere appeal on the record. Under s.69, the Authority determines the compensation afresh — it holds its own enquiry and makes its own award, applying the market-value machinery of s.26 (the higher of jantri under s.26(1)(a) and the average of the top-50% sale deeds under s.26(1)(b)), the parameters in s.28, the value of assets under s.29, and the solatium and additional components in s.30. This is a full merits re-determination. From the Authority’s award, an appeal lies to the High Court under s.74.

Because the reference under s.69 turns on the same parameters in s.28, it is also the forum in which severance, injurious affection and other frequently-omitted heads must be affirmatively claimed — the subject of The Heads Owners Forget: Severance, Injurious Affection and Partial Taking (Spoke 7).

Two features deserve emphasis. First, there is no arbitration under the 2013 Act at all — the dispute-resolution architecture is Collector → LARR Authority → High Court, a judicial and quasi-judicial chain throughout. Second, the right to seek a reference is hedged by a strict limitation under s.64. A person who has received the award must apply within the period prescribed by s.64 — described qualitatively, a short outer window running from the award or from notice of it. A claimant who accepts the award, or who lets the s.64 period lapse, forfeits the reference altogether. The discipline of the clock is as important here as the merits.

(B) National Highways Act, 1956 — arbitration under s.3G(5)

The National Highways Act runs on a wholly different logic. Compensation is first determined by the Competent Authority under s.3G. If either party — the landowner or the acquiring authority — is dissatisfied with that determination, the dispute does not go to a court. It goes to an arbitrator appointed by the Central Government under s.3G(5), and by force of s.3G(6) the Arbitration and Conciliation Act, 1996 governs those proceedings.

That structural fact carries a criticism that a claimant should understand before entering the process: the arbitrator is appointed by the Central Government, which is, in substance, the party on the acquiring side. The neutrality that the Arbitration and Conciliation Act presumes sits uneasily with a mechanism in which one side names the tribunal. The 2015 harmonisation and the MoRTH guidelines of 28 December 2017 have raised the substantive compensation payable in NH acquisitions to First-Schedule levels; they have not altered who decides or how the decision is reviewed.

Review of the arbitral award lies under s.34 of the Arbitration and Conciliation Act, 1996 — the setting-aside jurisdiction, discussed in detail in The Limits of Challenging a National Highways Arbitral Award under Section 34 (Spoke 4). For present purposes the critical point is the ceiling on that jurisdiction, taken up below.

(C) Railways Act, 1989 — Chapter IVA and its arbitration

Land taken for a “special railway project” under Chapter IVA (ss.20A–20W) of the Railways Act, 1989 follows a parallel design. Notification is under s.20A, declaration and vesting under s.20E, and compensation is determined by the Competent Authority under s.20F, with an arbitration mechanism provided within the Chapter for a dissatisfied party. Structurally, this mirrors the National Highways route far more closely than the LARR route: an administrative determination followed by arbitration, rather than a reference to a judicial authority.

On quantum, the position was corrected by the RFCTLARR (Removal of Difficulties) Order, 2015 dated 28 August 2015, made under s.113(1) read with s.105(3) of the 2013 Act, which extended the compensation, R&R and infrastructure benefits of the First, Second and Third Schedules to the thirteen Fourth-Schedule enactments — the Railways Act among them — deemed effective 1 January 2015. So RFCTLARR-level compensation now applies to Railways Act acquisitions. As with the National Highways Act, the enhancement of quantum did not change the forum or the standard of review, which remains arbitral.

The distinction that decides cases: re-determination versus setting aside

Here is the fault line. Under the 2013 Act, the LARR Authority, on a s.64 reference, re-determines compensation under s.69. If the Collector’s award was too low — because it leaned on jantri and ignored genuine, proximate sale deeds — the Authority can simply fix the correct, higher figure. That is the ordinary function of the forum.

Under the National Highways Act and the Railways Act, the challenge forum is arbitration followed by s.34. And under s.34 a court has no power to modify or enhance the award. This is settled by Project Director, NHAI v. M. Hakeem, (2021) 9 SCC 1, which holds that under s.34 a court may set aside an arbitral award but cannot modify or enhance it, including compensation fixed under s.3G of the NH Act. The court’s grounds are narrow — the setting-aside grounds of s.34, including patent illegality under s.34(2A) for a domestic award, which as Ssangyong Engineering & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 explains reaches a finding based on no evidence or one ignoring vital evidence, but does not license a re-appreciation of evidence.

The practical consequence is stark. Suppose the identical error — a Competent Authority or Collector who valued land at guideline rates and disregarded the sale deeds, contrary to Jawajee Naganatham v. Revenue Divisional Officer and the line of authority on comparable sales (examined in full in Spoke 2). Under LARR, the claimant applies under s.64 and the Authority substitutes the correct market value. Under the NH or Railways route, the best the claimant can achieve under s.34 is to have the award set aside — and even then not always with a re-determination in hand, but potentially a remit that starts the arbitral clock afresh. The same under-valuation is far easier to correct under LARR than under the arbitral route, because only the LARR forum is empowered to give the claimant the higher number directly.

This asymmetry should shape expectations at the outset. Where the acquisition is under the 2013 Act, the objective is a merits re-determination and the effort goes into building the comparable-sales case for the Authority. Where the acquisition is under the NH Act or the Railways Act, the claimant’s leverage is at the arbitration stage — because once the arbitral award is made, s.34 offers a demolition tool, not a re-valuation tool.

Which forum, what it means for you

Limitation discipline across the forums

Each forum keeps its own clock, and each clock is unforgiving.

Under the 2013 Act, the right to a reference exists only if the claimant applies to the Collector within the period prescribed by s.64 and has not accepted the award. Miss the window or accept the award, and the reference is gone.

Under the National Highways Act and the Railways Act, once the arbitral award is made the challenge is governed by s.34(3) of the Arbitration and Conciliation Act, 1996 — three months from receipt of the signed copy of the award, extendable by a further thirty days on sufficient cause, “but not thereafter.” The Supreme Court has read those words strictly: Union of India v. Popular Construction Co., (2001) 8 SCC 470 holds that “but not thereafter” excludes s.5 of the Limitation Act; and State of Maharashtra v. ARK Builders Pvt. Ltd., (2011) 4 SCC 616 fixes the start of the clock at receipt of the signed copy of the award under s.31(5). The strictness of that s.34 clock is examined in The Limits of Challenging a National Highways Arbitral Award under Section 34 (Spoke 4); here it is enough to say that the arbitral route punishes delay far more mechanically than the LARR route, and that a claimant who wishes to preserve a challenge must diarise from the date of the signed copy, not from any later or informal intimation.

Key takeaways

• Quantum has converged; forum has not. After the 2015 Removal of Difficulties Order, NH and Railways acquisitions attract RFCTLARR-level compensation, but the machinery for enhancing land acquisition compensation differs fundamentally between the three statutes.
• LARR gives re-determination; NH and Railways give only setting aside. The LARR Authority re-fixes value on the merits under s.69; an NH or Railways arbitral award can only be set aside under s.34, never modified or enhanced (Project Director, NHAI v. M. Hakeem).
• No arbitration under the 2013 Act. The LARR chain is Collector → LARR Authority (s.51/s.64) → High Court (s.74); it is judicial and quasi-judicial throughout.
• The NH arbitrator is appointed by one side. Under s.3G(5) the Central Government — effectively the acquiring party — appoints the arbitrator, a structural feature claimants should weigh.
• The same under-valuation is easier to correct under LARR. Because only the LARR forum can hand the claimant the higher figure, an identical jantri-driven error is far more readily remedied under the 2013 Act than under the arbitral route.
• Every forum has its own unforgiving clock. The s.64 reference window and the s.34(3) challenge period are both strict; missing either is usually fatal.

Frequently asked questions

My land was taken for a National Highway and I think the award is far too low. Can a court simply increase it?

No. Enhancing your land acquisition compensation doesn’t work that way for NH acquisitions: a challenge to a National Highways arbitral award lies under s.34 of the Arbitration and Conciliation Act, 1996, and under Project Director, NHAI v. M. Hakeem, (2021) 9 SCC 1 a court may set the award aside but cannot modify or enhance it. Your leverage is therefore at the arbitration stage itself, before the arbitrator appointed under s.3G(5) — that is where the valuation must be won.

Is there any arbitration under the RFCTLARR Act, 2013?

No. The 2013 Act contains no arbitration mechanism. A dissatisfied claimant who has not accepted the s.23 award applies under s.64 for a reference to the LARR Authority (s.51), which determines compensation afresh under s.69, with an appeal to the High Court under s.74.

Why is it said that under-valuation is easier to correct under LARR than under the NH or Railways route?

Because the forums do different things. On a s.64 reference the LARR Authority re-determines value and can award the correct, higher figure directly — a genuine land acquisition compensation enhancement. Under the NH or Railways route the challenge is by arbitration and then s.34, where the court’s power is confined to setting aside on narrow grounds — it cannot substitute a higher figure. The same error thus yields a direct remedy in one forum and, at best, a fresh round in the other.

How much time do I have to challenge, and from when does it run?

For an NH or Railways arbitral award, s.34(3) allows three months from receipt of the signed copy of the award, extendable by thirty days on sufficient cause, “but not thereafter” — a limit the Supreme Court applies strictly (Popular Construction), with time running from the signed copy under ARK Builders. For a LARR reference, you must apply to the Collector within the period prescribed by s.64. In both cases, do not wait.

Sources & authorities

• Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 — ss.23, 26 (incl. 26(1)(a), 26(1)(b)), 28, 29, 30, 51, 64, 69, 74; s.105(3); s.113(1)
• National Highways Act, 1956 — ss.3G, 3G(5), 3G(6)
• Railways Act, 1989 — Chapter IVA, ss.20A, 20E, 20F, 20A–20W
• Arbitration and Conciliation Act, 1996 — ss.31(5), 34, 34(2A), 34(3)
• RFCTLARR (Removal of Difficulties) Order, 2015, dated 28 August 2015 (under s.113(1) r/w s.105(3)) — extending First, Second and Third Schedule benefits to the Fourth-Schedule enactments, deemed effective 1 January 2015
• MoRTH guidelines dated 28 December 2017
• Project Director, NHAI v. M. Hakeem, (2021) 9 SCC 1
• Ssangyong Engineering & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131
• Union of India v. Popular Construction Co., (2001) 8 SCC 470
• State of Maharashtra v. ARK Builders Pvt. Ltd., (2011) 4 SCC 616
• Jawajee Naganatham v. Revenue Divisional Officer, (1994) 4 SCC 595

All authorities independently verified on 20 July 2026.

This article is for general information only and does not constitute legal advice. Land acquisition compensation turns on the governing statute, the facts of each acquisition and applicable limitation periods, all of which differ from case to case. Readers should obtain advice specific to their matter before acting. Bhatt & Joshi Associates accepts no liability for reliance on this article without such advice.