Time to Fix Appeal Gap in Telegraph Act Disputes: SC Calls on Law Commission, Centre

The observations came while setting aside a February 2023 decision of the Punjab and Haryana High Court on compensation for damages caused by the erection of transmission towers. The apex court remitted the matter to the high court for fresh consideration, clarifying that compensation cannot be determined mechanically on the basis of the collector’s rate alone.

"There cannot be any hard and fast rule to determine compensation in cases of telegraph lines and electrical lines; certain factors should be looked into," the bench said, adding that land in different villages and districts would require assessment based on their respective characteristics.

"We are not approving the manner adopted by the High Court for assessment of compensation. The fact remains that the compensation has been calculated on the basis of collector’s rate, which will be a matter of evidence pertaining to each area where the land is situated," the bench said.

It noted the case in hand pertained to erection of towers and drawing the power lines, for which right of way was taken. There being no independent provision available for the same in the Electricity Act, 2003, the provisions of the 1885 Act had been adopted in terms of Section 164 of the 2003 Act.

Court also underscored structural gaps in the Telegraph Act. Section 16(3) permits landowners to approach the district judge in case of a dispute over compensation, but the statute sets no limitation period for filing such applications, nor does it provide any timeline for disbursement once compensation is determined. Section 16(5), meanwhile, declares the district judge’s order final, barring any appeal.

"Section 16(5) provides that any order passed by the District Judge under sub-sections (3) or (4) shall be final, thereby precluding any appeal. The same cannot be challenged before Civil Court. Only extraordinary jurisdiction of the High Court can be invoked, wherein normally the findings of facts are not disturbed, and evidence is not reappreciated. The High Court proceeds only on undisputed facts under its power of judicial review," the bench said.

This can also be subject matter of dispute. Furthermore, for determining the rights of various parties to receive compensation in case there is inter se dispute, certain amount of evidence would be required, it pointed out.

"If we examine the scope of first appeal under any statute, entire case is open for re-hearing, both on questions of facts and on law. The First Appellate Court is required to address all the issues considered in the order impugned and decide the same by giving reasons. It is in fact continuation of the original proceedings. The power of the First Appellate Court is co-extensive with that of the trial court, unless the scope thereof is limited by the statute which provides for the appellate jurisdiction," the bench said.

The bench pointed out that when the Telegraph Act was enacted in 1885, land values were low and disputes were limited. But with rapid expansion in the electricity and power sectors, litigation over compensation has grown sharply, exposing gaps in the statute. Among the issues flagged were the absence of defined timelines, lack of clarity on interest payable in case of delays, and the inconsistency in interpretation by courts across the country.

A reading of the provisions of Sections 10 and 16 of 1885 Act reveals that in addition to no remedy of appeal being provided against the order passed by the District Judge, no timelines have been provided regarding payment of compensation to the affected parties after the right under Section 10(d) is exercised by the competent authority; the time during which any party can raise grievance about sufficiency of compensation so assessed. The provisions are also silent about the time during which a landowner can file an application before the District Judge in case sufficiency of compensation is disputed, the court noted.

The Act also does not provide the rate at which interest is to be paid to the landowners in case there is any delay in payment of compensation. This being an Act of Parliament, its application has to be uniform throughout the country. In the absence of defined parameters, it will depend on different courts, how they interpret the provisions, the bench added.

Court said there are different statutes under which the ownership of the land is acquired by the competent authority in exercise of powers conferred under those statutes.

Wherever such a power is exercised, the natural corollary is, the landowner is to be adequately compensated. Detailed procedure and timelines for different actions have been provided under those statutes, the court pointed out.

Court noted that unlike other acquisition statutes where land ownership is taken over by the State with clear procedures and safeguards, the Telegraph Act provisions adopted under Section 164 of the Electricity Act, 2003 remain outdated. It also stressed that even guidelines issued by the Ministry of Power cannot resolve disputes that turn on collector’s rates or conflicting claims to compensation, both of which require evidentiary adjudication.

Highlighting that a first appeal serves as a continuation of trial proceedings and allows re-hearing on facts and law, the bench said such a remedy would ensure fairness and uniformity in compensation disputes.