Kerala High Court: NHAI Not Obliged to Deposit Compensation Until Arbitration Challenges Are Resolved

he Kerala High Court held that the National Highways Authority of India (NHAI) is not required to deposit compensation amounts awarded in land acquisition cases while an arbitration challenge is pending. The Division Bench of Justice A. Muhamed Mustaque and Justice Harisankar V. Menon considered a writ appeal filed by NHAI against a Single Judge’s direction to deposit the solatium and interest awarded to claimants. The case involved multiple challenges: initially, a Special Deputy Collector determined compensation, which the claimants contested before the Arbitrator. Subsequently, the award was challenged before the District Court, followed by an appeal by NHAI. During this stage, the claimants filed a writ petition seeking immediate deposit. The High Court noted that under Rule 3(i)(b) of the National Highways Rules, 2019, the obligation to deposit arises only after exhaustion of statutory remedies. Allowing NHAI’s appeal, the Court set aside the Single Judge’s order, emphasizing that requiring deposit before the conclusion of legal challenges would be legally unsustainable. This judgment affirms procedural safeguards and protects government agencies from premature financial compliance until appellate processes conclude.