The Himachal Pradesh High Court has determined that landowners must receive interest payments when government bodies fail to deposit awarded compensation on time. According to LiveLaw, the bench directed authorities to pay interest at a rate of 7.5% per annum for a delay lasting 367 days. The decision, issued on October 8, 2026, establishes that internal administrative instructions do not justify withholding funds if no competent court has issued a stay order.
The case concerned land in Village Bhuppur-II within the Sirmaur district, taken for the four-laning of National Highway No. 72. The Competent Authority for Land Acquisition finalized Award No. 3/2022 on February 14, 2022, setting the compensation value at ₹3,78,76,160. LiveLaw reported that the government did not deposit this sum until February 16, 2023. The authorities cited pending arbitration proceedings as the reason for the hold, despite the initial award being final.
Justice Sandeep Sharma ruled that the petitioners were owed interest for the period between February 15, 2022, and February 16, 2023. The judge noted that no stay order existed during this window. The Arbitrator only granted a stay on July 23, 2024, long after the deposit deadline had passed. The court dismissed the argument that the petitioners' delay in handing over possession justified the financial penalty, stating that the land vested in the Central Government upon the publication of the acquisition declaration.
The High Court emphasized the mandatory nature of Sections 3H(1) and 3H(2) of the National Highways Act, 1956. These provisions impose a statutory obligation on the Central Government to deposit compensation and on the Competent Authority to disburse it. The court held that administrative directives cannot override these legal mandates. The petitioners received the principal amount during the writ petition but sought interest for the prolonged delay. The judgment reinforces that financial penalties are mandatory when administrative delays occur without legal justification.