Himachal Hc Nhai Contractor Rs 2 23 Crore Compensation

The Himachal Pradesh High Court on Monday directed the National Highways Authority of India (NHAI) and a contractor to equally share Rs 2.23-crore compensation for the collapse of a multi-storey residential building during the construction of a four-lane highway on the outskirts of Shimla during the 2025 monsoon.

A bench of Chief Justice Gurmeet Singh Sandhawalia and Justice Bipin Chander Negi gave the direction while hearing a suo motu PIL arising from a letter received from Chanda Devi, who complained that her three-and-a-half-storey house was rendered unsafe following the collapse of the neighbouring structure near Bhattakuffar-Chamiyana.

The NHAI and M/s Gawar Shimla Highway Private Limited were thus directed to pay 50 per cent each of the compensation to the affected family within four weeks.

The court made it clear that the NHAI, as the authority responsible for the Parwanoo-Dhali four-laning project, could not disassociate itself from the consequences of the construction activity, particularly where questions arose regarding hill cutting and work supervision. The manner in which hill cutting was undertaken triggered controversy and led to a confrontation between NHAI officials and locals in the presence of Panchayati Raj Minister Anirudh Singh after the building collapse.

The court noted that despite the compensation having been assessed as early as July last year, neither the NHAI nor the contractor has made any payment to the affected family.

The court also directed the state authorities to assess the damage suffered by Chanda Devi’s adjoining house. This assessment must be carried out according to the procedure prescribed by the committee notified by the government on June 8, 2022, for assessing damage to private land and buildings situated beyond the right of way.

House collapsed during highway construction

The multi-storey house collapsed on June 30, 2025, at Mathu Colony in the Bhattakuffar area, near the road leading towards the Chamiyana Super Speciality Hospital, following a landslide, according to contemporary reports.

The structure was owned by Shreya, Shaurya, and Ranjana Verma. There were no casualties as residents had been evacuated after the structure was considered to be at serious risk. Two adjoining buildings were also reported to be under threat.

The collapse was attributed by an inquiry committee to the hill cutting being carried out for the four-laning work. The committee, headed by Additional District Magistrate (Law and Order) Pankaj Sharma, was constituted on July 4, 2025, and submitted its report on July 18. The inquiry reportedly found that hill cutting for the highway expansion had caused damage to the building.

The Shimla district administration subsequently directed the construction company to pay compensation of about Rs 5.61 crore, based on the broader assessment that included the value of the building, land, structure, and household goods. The reported assessment included Rs 2.80 crore towards the building and Rs 57 lakh towards the land, besides Rs 1.65 crore for the structure and Rs 58 lakh for other goods.

While dealing with the issue, the court observed that NHAI could not simply “wash its hands” of responsibility for the four-lane highway project. It questioned whether the hillside cutting was carried out properly and under adequate supervision, particularly given that a multi-storey building collapsed within seconds.

In another significant observation, the court said the companies involved in the project have a corporate social responsibility (CSR) towards the people of Himachal Pradesh, particularly in view of the nature of the work being undertaken and the profits generated from projects originating in the state.

The court observed that the companies executing such large infrastructure projects should also consider their responsibility towards residents who suffer damage or hardship during such construction.

The observation comes against the backdrop of recurring concerns over slope cutting, landslides, structural damage and the vulnerability of buildings located along major road construction projects in the ecologically fragile hill state.

The building collapse had also triggered a political and administrative controversy. NHAI officials who visited the site were allegedly manhandled, leading to the registration of an FIR and further straining relations between the state government and the highway authority over the four-laning work. The controversy centred on allegations that hill cutting associated with the highway project had destabilised the slope and contributed to the damage to nearby buildings.

The court has listed the matter for further hearing on September 23.