NHAI’s power to use acquired land for wayside amenities upheld: establishing a petrol pump on surplus highway land remains a “public purpose” and does not revert to the original owner

NHAI’s power to use acquired land for wayside amenities upheld: establishing a petrol pump on surplus highway land remains a “public purpose” and does not revert to the original owner

Introduction

In Rajinder Singh v. Union of India & National Highways Authority of India, WP(C) No. 1148/2025 (decided on 11 September 2025), the High Court of Jammu & Kashmir and Ladakh (per Sanjay Dhar, J.) addressed a frequently litigated but doctrinally important question in land acquisition law: whether a portion of land acquired for National Highway “four-laning” that remains unused for the carriageway can be leased by NHAI to a private party to set up a petrol pump and other wayside amenities, and whether the erstwhile owner has any right to reclaim or obtain preferential lease of such land.

The petitioner, Rajinder Singh, whose 12 kanals 13 marlas at village Chanderkot (Tehsil & District Ramban) had been acquired in 2018 for upgradation of the Jammu–Srinagar National Highway, claimed that 4 kanals 15 marlas were “unutilized” for road widening, sought to restrain NHAI from leasing that chunk to a private respondent (R-8) for a petrol pump, demanded either restoration of the land to him or a lease in his favour, and asserted that a petrol pump would harm his adjacent hotel and shopping complex business. He invoked a supposed pre-emption/preferential right and relied on the Supreme Court’s decision in Royal Orchid Hotels to argue that the land’s use had deviated from the notified “public purpose.”

The official respondents and NHAI countered that wayside amenities are part of the highway development mandate under the National Highways Authority of India Act, 1988; that the lease followed a transparent tender in which the petitioner did not participate; that the land continues to be used for a public purpose; and that pre-emption rights could not be asserted as the relevant statute stands repealed.

Summary of the Judgment

The High Court dismissed the writ petition in its entirety. The Court held:

  • Land acquired for “four-laning” of a National Highway remains within the “public purpose” when used for development and management of wayside amenities (including petrol pumps) mandated by Section 16(2)(f) of the NHAI Act, 1988.
  • Section 13 of the NHAI Act deems such acquisitions to be for a public purpose; the Ministry’s 1998 guidelines specifically list petrol pumps among permissible highway amenities.
  • Leasing land to a private party, selected as the highest bidder in a tender, to develop a petrol pump does not amount to diversion to a private, alien, or unrelated purpose.
  • Royal Orchid Hotels is distinguishable; that case involved transfer to a real estate developer for group housing—an alien purpose amounting to fraud on the power of eminent domain—unlike the present case where the use is integral to highway development.
  • No right of pre-emption or “preferential” allotment survives: the Jammu & Kashmir Right of Prior Purchase Act stands repealed.
  • Absent participation in the tender, the petitioner has no enforceable claim to a lease or to interdict a valid award to the successful bidder.

Detailed Analysis

Issues framed by the controversy

  • Does the establishment of a petrol pump on land acquired for National Highway four-laning constitute a deviation from the notified “public purpose”?
  • Can NHAI lease such land to a private party for wayside amenities without offending principles governing acquisition and public trust?
  • Does the erstwhile owner enjoy any right of pre-emption, preferential allotment, or reversion over the “unutilized” portion?
  • What is the effect of the petitioner’s failure to participate in the tender process?

Statutory framework and policy guidance

The Court’s reasoning is anchored in two key provisions of the National Highways Authority of India Act, 1988:

  • Section 16(1): NHAI’s functions include development, maintenance, and management of national highways.
  • Section 16(2)(f): For discharging these functions, NHAI may provide such facilities and amenities for users of the highways as are necessary for the smooth flow of traffic.
  • Section 13: Land acquired for NHAI’s functions is deemed to be land needed for a public purpose.

The Ministry of Transport’s Circular No. RW/NH-34032/4/91 dated 03.04.1998 explicitly includes petrol pumps, minor repair shops, toilets, rest rooms, first aid, parking, restaurants, kiosks, and land for future expansion as components of highway wayside amenities. This guidance concretely ties “petrol pumps” to the statutory function of managing and developing highways.

Precedents cited and how they were applied

The petitioner relied on M/s Royal Orchid Hotels Ltd. v. G. Jayarama Reddy, (2011) 10 SCC 608, to argue that using acquired land for a purpose different from the one stated in the Section 4(1) notification is impermissible and amounts to a fraud on the power of eminent domain.

The High Court distinguished Royal Orchid on both facts and principle:

  • Royal Orchid concerned transfer of land acquired for a tourism-related public purpose to a real estate developer for group housing—an alien, private, and unrelated use, bypassing statutory safeguards.
  • In the present case, NHAI’s leasing of land to set up a petrol pump is not alien to the notified purpose of highway development. It is an integral part of NHAI’s statutory mandate under Section 16(2)(f) and recognized by the Ministry’s guidelines.

In short, Royal Orchid condemns diversion to a non-public, unrelated activity. This case involves “incidental” or “ancillary” use within the core public function of highway development and management and thus falls outside the mischief addressed in Royal Orchid.

The Court’s legal reasoning

  1. Public purpose is broader than mere carriageway widening:

    The Section 4(1) notification under the J&K Land Acquisition Act referred to four-laning of the National Highway. The Court emphasized that the statutory architecture of the NHAI Act requires not only physical widening but also development, maintenance, and management of the highway network, which includes creating and operating wayside amenities necessary for the smooth flow of traffic.

  2. Wayside amenities are a mandated component of highway development:

    By invoking Section 16(2)(f) of the NHAI Act alongside the 1998 Ministry guidelines, the Court held that petrol pumps are expressly contemplated as wayside amenities, and therefore, their establishment on acquired land falls squarely within the public purpose of highway development.

  3. Deeming provision bolsters the public purpose characterization:

    Section 13 deems land acquired for NHAI’s functions to be needed for a public purpose. Once the function (provision of amenities) is within NHAI’s statutory brief, the use of land for that function is, by statutory deeming, a public purpose.

  4. Leasing to a private party does not negate the public character:

    The mere fact that the amenity is developed/operated by a private lessee selected through a competitive tender does not convert the use into a private purpose. The end-use remains a highway amenity for public benefit, and the process used (tender) supports transparency and fairness.

  5. No pre-emption or preferential entitlement:

    The petitioner's claim of a pre-emption or preferential right as an adjoining owner fails, both because the relevant statute (J&K Right of Prior Purchase Act) stands repealed and because such a claim cannot override a lawful tender-based process for public assets. Adjacency does not translate into a legally enforceable allotment right.

  6. No right without participating in the tender:

    The petitioner’s failure to participate in the tender was fatal to his claim for allotment. Courts ordinarily will not displace a concluded tender award at the behest of a non-participant absent illegality, mala fides, or arbitrariness—which were neither pleaded nor established here.

  7. Irrelevance of private business impact:

    The petitioner’s apprehension that a petrol pump would affect his hotel/shopping complex is not a cognizable ground to interdict a highway amenity in public interest. Competition or commercial inconvenience is not a legal injury in this context.

Impact and significance

This decision is a reportable ruling that clarifies the scope of “public purpose” in the specific context of National Highway projects in Jammu & Kashmir and Ladakh, with wider persuasive value:

  • Public purpose extends to ancillary and integral amenities: The Court affirms that highway development encompasses wayside amenities, not just road widening. This gives NHAI legal comfort to deploy acquired land for petrol pumps, rest areas, toilets, first aid, kiosks, and related facilities.
  • No automatic reversion of “surplus” or “unutilized” land: Where land is allocated to a use consistent with NHAI’s statutory functions, the erstwhile owner cannot demand restoration merely because the land was not paved into the carriageway.
  • Tender-centric allocation: The judgment implicitly endorses the principle that public resources and rights (like leases over highway land) should be allotted through transparent competitive processes; non-participation defeats claims of entitlement.
  • Royal Orchid boundaries: The ruling delineates a clear distinction between unlawful diversion to unrelated private uses (as in Royal Orchid) and legitimate leasing for public amenities that are part of highway development.
  • Pre-emption claims extinguished: With the repeal of the J&K Right of Prior Purchase Act, adjoining owners cannot assert priority claims over public land leases.

Complex Concepts Simplified

  • Public purpose:

    A constitutionally recognized ground allowing the State (or a statutory authority like NHAI) to compulsorily acquire private property for uses that benefit the public—e.g., roads, schools, or, here, highway amenities essential for safe and efficient travel.

  • Eminent domain:

    The sovereign power to take private property for public use, subject to legal process and compensation. Abuse occurs when land, once acquired for a public use, is diverted to unrelated private ends; courts guard against such “fraud on power.”

  • Wayside amenities:

    Facilities provided along highways to serve users—such as petrol pumps, restrooms, parking, first aid, restaurants. These reduce fatigue, enhance safety, and promote smooth traffic flow. Statutorily recognized under Section 16(2)(f) of the NHAI Act.

  • Deeming provision (Section 13, NHAI Act):

    A legal shortcut: land acquired for NHAI’s functions is “deemed” to be for a public purpose, avoiding repeated proof of public benefit for each specific use, provided it falls within NHAI’s mandate.

  • Pre-emption/right of prior purchase:

    A statutory right (now repealed in J&K) allowing certain persons (like co-sharers or adjoining owners) to purchase property before others. Its repeal eliminates any such priority claim here.

  • Tender process:

    A competitive procedure for awarding public contracts/leases. Participation is typically a prerequisite to claim consideration. Courts avoid disturbing concluded tenders absent proof of illegality or arbitrariness.

  • Units and local terms:

    Kanal and marla are local land measurement units (1 kanal = 20 marlas). Khasra number identifies a parcel in the revenue records. The “Collector” (Land Acquisition) conducts acquisition proceedings and issues the award determining compensation.

Key Takeaways

  • Using acquired highway land for petrol pumps and other amenities is within NHAI’s statutory functions and continues to be a public purpose.
  • Leasing such land to a private party selected through tender does not amount to an impermissible diversion or privatization of a public purpose.
  • Royal Orchid Hotels does not apply where the use remains integral to the notified highway purpose; it applies to diversion to unrelated private projects.
  • No pre-emption or preferential right survives for adjoining owners; the repeal of the J&K Right of Prior Purchase Act forecloses such claims.
  • Non-participation in a tender is fatal to a claim seeking allotment of public land/rights; courts will not bypass competitive processes to create private entitlements.
  • Commercial inconvenience or competition to an adjacent business is not a ground to interdict public amenities serving highway users.

Practical Implications

  • For NHAI and government agencies: Ensure that post-acquisition use of land aligns with Section 16 functions and Ministry guidelines; route allotments through transparent tenders; keep records showing the nexus with highway development.
  • For bidders and private developers: Participation in tender processes is essential; successful leases for highway amenities are defensible if they implement statutory functions.
  • For landowners adjoining highways: Claims to surplus acquired land—whether for reversion or preferential allotment—will not succeed where the land is used for authorized highway amenities, and pre-emption rights no longer exist in J&K.

Conclusion

The High Court’s decision in Rajinder Singh v. UOI & NHAI crystallizes a clear doctrinal rule: land acquired for National Highway four-laning may lawfully be used—and even leased to private operators via tender—for wayside amenities such as petrol pumps, restrooms, parking, and other facilities essential to highway operations, without ceasing to be a “public purpose.” The judgment draws a principled line between unlawful diversion to unrelated private uses (as condemned in Royal Orchid Hotels) and legitimate ancillary uses within NHAI’s statutory mandate.

By rejecting claims of pre-emption or preferential rights and underscoring tender participation as a prerequisite to any allotment claim, the Court reinforces transparency in public resource allocation and the breadth of the public purpose in modern infrastructure development. For future disputes in the region, this ruling will operate as a robust precedent affirming NHAI’s authority to plan, develop, and manage comprehensive highway ecosystems—not merely the asphalt underfoot.

Case Snapshot

  • Court: High Court of Jammu & Kashmir and Ladakh, Jammu Bench
  • Coram: Hon’ble Mr. Justice Sanjay Dhar
  • Date: Reserved 03.09.2025; Pronounced 11.09.2025
  • Case No.: WP(C) No. 1148/2025; CM No. 2715/2025
  • Parties: Rajinder Singh (Petitioner) v. Union of India & Ors., including NHAI (Respondents); private lessee as R-8
  • Disposition: Petition dismissed; order speaking and reportable
  • Core holding: Wayside amenities on acquired NH land are within public purpose; no pre-emption; tender-based lease to private highest bidder upheld

Case Details

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