SC asks Law Commission, Law Ministry to examine Appeal Provisions under Telegraph Act; sets aside Punjab and Haryana HC order

SC seeks clarity on Appeal Rights under Telegraph Act; refers matter to Law Commission and Law Ministry

20/08/2025

NEW DELHI, Aug 20: In a significant legal development with wide-ranging implications for compensation disputes in infrastructure projects, the Supreme Court of India has referred to the Law Commission of India and the Union Ministry of Law and Justice a crucial question: Should there be a statutory right of appeal against orders passed under Sections 16(3) and 16(4) of the Indian Telegraph Act, 1885.
A bench comprising Justice Rajesh Bindal and Justice M.M. Sundresh raised this issue while setting aside a February 2023 judgment by the Punjab and Haryana High Court. The Supreme Court ruled that the High Court's decision suffered from procedural lapses and improper application of legal standards and evidence, particularly in compensation matters related to the erection of power transmission towers.
The apex court's verdict came in a batch of connected appeals, including those filed by Kalpataru Power Transmission Ltd. (now Kalpataru Projects International Ltd.) and Jhajjar KT Transco Pvt. Ltd., challenging compensation awarded to landowners affected by a major power infrastructure project in Haryana.
Background of the Dispute
The case stems from the construction of a 400 kV Jhajjar Power Transmission System (PPP-1), initiated by Haryana Vidyut Prasaran Nigam Ltd. (HVPNL). The project spanned 100 kilometers and passed through the districts of Bhiwani, Jhajjar, Rohtak, and Sonepat. Jhajjar KT Transco was awarded the project, which it later subcontracted to Kalpataru Power Transmission Ltd.
As the transmission lines and towers were erected across various privately owned agricultural lands, the landowners filed petitions seeking compensation for damages under Section 16(3) of the Telegraph Act, which governs disputes regarding the sufficiency of compensation when public utility infrastructure is installed on private land.
The Legal Journey
The initial disputes were heard by the Additional District Judge, Sonepat, who awarded compensation at 85% of the collector rate (?85 lakh per acre) for the tower base area, along with 8% annual interest. Dissatisfied with this outcome, both landowners and contractors approached the Punjab and Haryana High Court through various legal routes, including writ petitions under Article 226 and civil revision petitions under Article 227 of the Constitution.
The High Court, through a common judgment dated February 24, 2023, decided a batch of nine matters. However, the Supreme Court observed that the High Court had made serious procedural and factual errors. The apex court noted that the High Court had treated the matter as if it was hearing it on original jurisdiction, instead of reviewing the trial court's evidence-based judgments.
Supreme Court's Key Observations
One of the primary concerns flagged by the Supreme Court was that the High Court applied compensation rates uniformly, even though the affected lands were spread across multiple districts with differing market values. The High Court, relying solely on sale deeds and collector rates from district Sonepat, extended the same valuation to lands in Jhajjar, which the Supreme Court found factually and legally incorrect.
The Supreme Court also highlighted discrepancies in how the trial court's evidence was recorded and appreciated. For example, certain documents were referenced in the compensation order that were not properly marked or introduced during trial. These procedural anomalies, the Court held, led to flawed findings that the High Court failed to notice or correct.
Moreover, the Supreme Court criticized the High Court for relying heavily on the 2015 Ministry of Power (MoP) guidelines on compensation for tower base areas and Right of Way (ROW) corridors, even though the guidelines were issued after the notification of the project in question. The Court questioned whether administrative guidelines, particularly those issued after the fact, could retroactively dictate compensation standards in the absence of express statutory adoption by the states.
Lack of Statutory Appeal Mechanism
One of the most consequential issues the Court addressed was the absence of an appellate mechanism under Section 16 of the Telegraph Act, which governs the assessment and disbursement of compensation by District Judges. According to Section 16(5), the order of the District Judge is considered final, leaving no scope for appeal under the Act.
The Court pointed out that this absence has forced aggrieved parties to seek alternative remedies through writ petitions or revision petitions-routes not designed for factual reevaluation or reappreciation of evidence. The justices emphasized that in disputes involving compensation for land usage, especially when large infrastructure projects are involved, the lack of a proper appellate forum renders the legal remedy "illusionary" for many.
"Unless a statutory remedy of appeal is provided where all issues of law and facts can be re-examined, any other remedy may be ineffective," the judgment stated.
Comparison with Other Statutes
The Supreme Court also drew comparisons with other land acquisition and compensation laws such as:
o Land Acquisition Act, 1894 (now replaced by the 2013 Act)
o Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013
o National Highways Act, 1956
o Railways Act, 1989
o Requisitioning and Acquisition of Immovable Property Act, 1952
o Petroleum and Minerals Pipelines Act, 1962
In all these laws, the Court noted, mechanisms for appeal, timelines for filing claims, and interest rates on delayed payments are clearly defined-unlike the Telegraph Act, which lacks these crucial legal safeguards.
Call for Legislative Reform
In view of these issues, the Court has formally directed the Law Commission of India and the Ministry of Law and Justice to examine:
o Whether a statutory remedy of appeal should be provided under Sections 16(3) and 16(4) of the Telegraph Act;
o Whether similar provisions in other statutes (e.g., Petroleum Act) also require legislative reform;
o And whether clear timelines, interest rates, and procedural safeguards should be incorporated to ensure fair and effective adjudication.
The Supreme Court emphasized that statutory reforms are essential to maintain uniformity across states and to ensure that affected landowners are provided with timely and just compensation.
Outcome and Future Course
Setting aside the High Court's judgment, the Supreme Court remitted the matter back for fresh consideration, directing the Punjab and Haryana High Court to hear the cases afresh, considering the appropriate evidence and factual context of each district involved.
The Registry has also been directed to forward the judgment to the Registrar General of the Punjab and Haryana High Court and to the Secretary, Legislative Department, Ministry of Law and Justice, for necessary action.
As infrastructure development continues to expand across India, the Supreme Court's call for a relook at century-old provisions in the Telegraph Act could pave the way for a more equitable and modern framework for compensation and legal recourse.

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