Section 3-D of the National Highways Act, 1956 and Extinguishment of Leasehold Rights
On 24.12.2008, the respondent – plaintiff executed a lease agreement with the appellant – defendant for a period of three years and handed over possession of the suit property for construction of the administrative building and other structures for operation of Toll Plaza. The plaintiff had retained to receive the compensation in case the land was acquired by the NHAI and in that case, the plaintiff will not claim the lease rental.
On 12.1.2010, Section 3D Notification was issued for acquisition of the suit property. After the acquisition was completed and after lease expired on 23.11.2012, the plaintiff asked the defendant to hand over possession and filed civil suit. The suit was dismissed. However, the District Court allowed the appeal of the plaintiff and directed the defendant to hand over possession with compensation at Rs.50,000/- per month from 23.2.2012.
In the present case the controversy revolves around the issue of vesting of possession of the suit land pursuant to its acquisition during the interim period of the lease agreement.
HELD that since the land vested in the Central Government on the date of notification under Section 3D of the National Highways Act, the plaintiff is not entitled to compensation under the lease agreement.
Judgment dated 9.12.2025 of the High Court of Bombay in Second Appeal No.344 of 2018 of M/s. Mumbai Nasik Express Way Limited Vs. Trambak Parbat Chavan
