Orissa High Court
(In The Matters Of Appeals Under Section … vs Kuntala Behera on 15 May, 2026
Author: Sanjeeb K Panigrahi
Bench: Sanjeeb K Panigrahi
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Signed by: BHABAGRAHI JHANKAR
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Location: ORISSA HIGH COURT, CUTTACK
Date: 21-May-2026 17:57:39
IN THE HIGH COURT OF ORISSA AT CUTTACK
ARBA No.13 of 2021
And
ARBA No.14 of 2021
(In the matters of Appeals under Section 37 of the Arbitration and
Conciliation Act, 1996)
The Competent Authority & Special ... Appellant (s)
Land Acquisition Officer, Sambalpur
-versus-
Kuntala Behera ... Respondent (s)
(In ARBA No.13 of 2021) .
Sarojini Pradhan
(In ARBA No.14 of 2021)
Advocates appeared in the case through Hybrid Mode:
For Appellant (s) : Mr. Ajit Patnaik, Advocate.
For Respondent (s) : Mr. R.N. Debata, Adv.
Mr. S.K. Mishra, Adv.
CORAM:
DR. JUSTICE SANJEEB K PANIGRAHI
DATE OF HEARING:-07.03.2026
DATE OF JUDGMENT:-15.05.2026
Dr. Sanjeeb K Panigrahi, J.
1. The present Appeals have been preferred seeking setting aside of
judgments and orders dated 26.8.2021, passed by the Ld. District Judge,
Sambalpur in ARBP No.1 of 2018 and ARBP No.2 of 2018. As both
matters arise out of the same land acquisition proceedings relating to
Village Naxapali, are founded upon identical notifications issued under
the National Highways Act, 1956, and involve common and
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overlapping questions of law, particularly concerning the applicability
of the RFCTLARR Act, 2013, they are being taken up together and dealt
with vide this common judgment.
I. FACTUAL MATRIX OF THE CASE:
2. The lands involved in these connected appeals are situated at Village
Naxapali under Maneswar Tahasil in the district of Sambalpur and
were acquired for the purpose of widening and development of
National Highway No. 42/55 under the provisions of the National
Highways Act, 1956.
3. The acquisition process commenced with the publication of a
preliminary notification under Section 3A of the Act on 29.10.2012.
After completion of the statutory formalities and consideration of
objections, a declaration under Section 3D was published on 21.5.2013,
upon which the acquired lands vested absolutely in the Union of India,
free from all encumbrances. Thereafter, the Competent Authority-cum-
Special Land Acquisition Officer, Sambalpur undertook the process of
determination of compensation under Section 3G of the Act in respect
of the acquired lands.
4. The estimate and determination of compensation were completed and
the award was finalized on 18.10.2014. On the same date, the
Competent Authority issued a formal requisition to the National
Highways Authority of India seeking sanction and release of the
requisite funds for disbursement of the awarded compensation.
5. The award was duly entered in the Award Register, reflecting the land
value, solatium, and other statutory components. In so far as the lands
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at Village Naxapali are concerned, the award was recorded in the
names of the recorded tenants or vendors, which was Iswar Pandey
and Krushna Pandey in the subject land in ARBA No. 13 of 2021 as the
revenue records had not been mutated in favour of the respondents at
the relevant point of time and the present Respondent herself in the
subject land in ARBA No. 14 of 2021.
6. Pursuant to the requisition dated 18.10.2014, the National Highways
Authority of India released the compensation funds, and for Village
Naxapali, such funds were released on 8.12.2014.
7. Consequently, it is the Appellant’s case that the entire awarded amount
stood sanctioned, released, and available with the Competent
Authority for disbursement well before 31.12.2014.
8. The date 1.1.2015 is of significance, as certain provisions of the Right to
Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 were extended to
acquisitions under the National Highways Act with effect from that
date by virtue of Section 105(3).
9. The respondent in ARBA No. 13 of 2021 claims to have purchased the
acquired lands during the years 1984-1985. However, at the time of
acquisition and passing of the award, the lands continued to stand
recorded in the names of her vendors, no mutation had been effected in
favour of the respondent, and the lands were found to be vacant and
barren on field verification. No objections were filed by the respondent
pursuant to the notifications under Sections 3A or 3D of the National
Highways Act. Immediately after the award dated 18.10.2014, the
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respondent raised oral objections before the Competent Authority,
objecting to payment of compensation in favour of her vendors and
claiming entitlement in her own right, whereupon she was advised to
submit formal written objections with supporting documents.
10. The first written representation was submitted by the respondent in
ARBA No. 13 of 2021 on 4.2.2015, after the cut-off date of 1.1.2015,
seeking release of compensation in her favour. In the said
representation, the respondent acknowledged knowledge of the award
and furnished detailed break-ups of the compensation awarded,
indicating access to award-related information soon after 18.10.2014. As
all original and authenticated documents were not initially furnished,
verification and apportionment could not be immediately completed.
In ARBA No. 13 of 2021, an amount of Rs. 3,13,051/- was ultimately
credited through NEFT on 8.9.2015 to the present Respondent as she
managed to bring forward all relevant documents to showcase that she
was in fact the owner of the subject land.
11. In contrast, in ARBA No. 14 of 2021, the respondent Sarojini Pradhan
was already the recorded owner and the Record of Rights stood in her
name. The compensation determined under the award was credited
directly to her bank account on 17.4.2015 in the sum of Rs.32,34,923/-.
12. Dissatisfied with the quantum and manner of determination of
compensation, the respondents in both cases invoked the remedy under
Section 3G(5) of the National Highways Act. The Collector-cum-
Arbitrator rejected their claims by arbitral awards dated 16.2.2018.
These awards were set aside by the Ld. District Judge, Sambalpur by
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judgments dated 26.8.2021, leading to the present appeals filed in the
year 2021 and heard analogously.
13. This Court shall now endeavour to summarise the contentions of the
Parties and the broad grounds that have been raised.
II. APPELLANT’S SUBMISSIONS:
14. The Appellant submits that the Ld. District Judge committed a manifest
error in setting aside the arbitral awards dated 16.2.2018 by erroneously
invoking Section 24 of the RFCTLARR Act, 2013, despite the acquisition
having been undertaken under the National Highways Act, 1956, a
special statute. It is urged that the entire foundation of the impugned
judgment rests on a misapplication of law, inasmuch as Section 24 of
the Act of 2013 applies only to acquisitions initiated under the Land
Acquisition Act, 1894, and not to acquisitions under enactments listed
in the Fourth Schedule, including the National Highways Act, 1956
15. It is further contended that Section 105 of the RFCTLARR Act, 2013
clearly excludes the application of the provisions of the said Act to
acquisitions under the National Highways Act, save and except to the
limited extent expressly provided under Section 105(3). By virtue of the
amendments and ordinances issued thereunder, only the First, Second
and Third Schedules of the Act of 2013 were made applicable to
acquisitions under the National Highways Act with effect from
1.1.2015. According to the Appellant, Section 24 does not form part of
these schedules and was never extended to acquisitions under the
National Highways Act 1956, rendering the reasoning adopted by the
Ld. District Judge legally unsustainable.
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16. The Appellant places strong reliance on the admitted factual position
that the award determining compensation was passed on 18.10.2014
and that the requisite funds were requisitioned on the same date and
released by the National Highways Authority of India on 8.12.2014,
well before the cut-off date of 31.12.2014. It is submitted that the
compensation amount was thus fully sanctioned and available for
disbursement prior to 1.1.2015, which is the date from which the
limited application of the RFCTLARR Act, 2013 to National Highways
acquisitions commenced. The Ld. District Judge, it is urged, failed to
consider these admitted dates, despite the same being borne out from
the record and the Additional Affidavit filed before this Court.
17. The Appellant further submits that the arbitral awards dated 16.2.2018
were passed strictly in accordance with Section 3G of the National
Highways Act, 1956 and after considering the materials placed by the
claimants. It is argued that the Ld. Arbitrator neither ignored any
mandatory statutory provision nor acted in conflict with public policy.
The finding of the Ld. District Judge that the arbitral awards were
contrary to public policy under Section 34(2)(b) of the Arbitration and
Conciliation Act, 1996 is assailed as wholly unfounded, being premised
solely on an incorrect assumption regarding the applicability of the Act
of 2013.
18. Lastly, the Appellant submits that the reliance placed by the Ld.
District Judge on the decision of the Hon’ble Supreme Court in Indore
Development Authority v. Manoharlal1 is wholly misconceived. It is
1
(2020) 8 SCC 129
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argued that the said decision deals exclusively with the scope and
interpretation of Section 24 of the RFCTLARR Act, 2013 in the context
of acquisitions under the Land Acquisition Act, 1894, and does not
address, far less extend, the applicability of Section 24 to acquisitions
under the National Highways Act, 1956. On these grounds, the
Appellant seeks setting aside of the impugned judgment dated
26.8.2021 and restoration of the arbitral awards dated 16.2.2018.
III. RESPONDENT’S SUBMISSIONS
19. Per contra, the Respondents submit that the Ld. District Judge
committed no error in setting aside the arbitral awards dated 16.2.2018,
as the determination of compensation by the Competent Authority and
the Arbitrator was contrary to the mandate of the RFCTLARR Act,
2013, which embodies the current public policy governing land
acquisition and compensation. It is contended that the arbitral awards
failed to take into account the beneficial and welfare-oriented
provisions of the Act of 2013, thereby resulting in manifest injustice to
the landowners. According to the Respondents, the approach adopted
by the Arbitrator was mechanical and rooted in the repealed
framework of compensation, warranting judicial interference under
Section 34 of the Arbitration and Conciliation Act, 1996
20. The Respondents argue that Section 24 of the RFCTLARR Act, 2013 was
rightly applied by the Ld. District Judge, as the acquisition proceedings,
though initiated earlier, had not culminated in lawful payment of
compensation prior to the cut-off date. It is urged that mere preparation
of an award or release of funds to the acquiring authority does not
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amount to “payment” of compensation to the landowner. In the present
cases, the compensation was either paid after 1.1.2015 or paid in a
manner disputed by the Respondents, thereby attracting the beneficial
provisions of the Act of 2013. The Ld. District Judge, it is submitted,
correctly appreciated this distinction.
21. It is further contended that the Respondents were not given effective
notice or opportunity at the stage of determination of compensation,
and that the awards were passed without proper consideration of their
rights, title, possession, and the nature of the land and structures. In
ARBA No. 13 of 2021, the Respondent asserts that compensation was
initially awarded in favour of her vendor despite her prior purchase,
while in ARBA No. 14 of 2021, though compensation was credited, the
same was not calculated in accordance with the First Schedule of the
Act of 2013. These deficiencies, according to the Respondents, vitiate
the arbitral awards on the ground of patent illegality.
22. The Respondents also submit that the applicability of the RFCTLARR
Act, 2013 to acquisitions under the National Highways Act, 1956 cannot
be viewed in a narrow or technical manner. It is argued that Section
105(3) of the Act of 2013 reflects legislative intent to extend the benefit
of enhanced and fair compensation to landowners affected by
acquisitions under special enactments, including the National
Highways Act, 1956. The Ld. District Judge, it is urged, rightly
harmonised Section 105(3) with Section 24 to ensure that landowners
are not deprived of just compensation merely due to the timing of
administrative actions.
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23. Lastly, the Respondents contend that the arbitral awards were rightly
held to be in conflict with public policy, as they denied the
Respondents compensation in accordance with the law in force and the
constitutional mandate of fairness and equality. The Ld. District Judge,
it is submitted, correctly relied on the principles laid down by the
Hon’ble Supreme Court while interpreting Section 24 of the Act of 2013
and applied them to the facts of the present cases. The Respondents
therefore pray for dismissal of the appeals and affirmance of the
judgment dated 26.8.2021.
IV. ISSUE FOR CONSIDERATION
24. Having heard the parties and perused the materials available on record,
this court here has identified the following issue to be determined:
A. Whether Section 24 of the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and
Resettlement Act, 2013 is applicable to land acquisitions
undertaken under the National Highways Act, 1956, and,
consequentially, whether the learned District Judge was
justified in setting aside the arbitral awards dated 16.2.2018
passed under Section 3G(5) of the National Highways Act by
applying the provisions of the Act of 2013?
V. ISSUE A: WHETHER SECTION 24 OF THE RIGHT TO FAIR
COMPENSATION AND TRANSPARENCY IN LAND
ACQUISITION, REHABILITATION AND RESETTLEMENT ACT,
2013 IS APPLICABLE TO LAND ACQUISITIONS UNDERTAKEN
UNDER THE NATIONAL HIGHWAYS ACT, 1956, AND,
CONSEQUENTIALLY, WHETHER THE LEARNED DISTRICTPage 9
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Date: 21-May-2026 17:57:39JUDGE WAS JUSTIFIED IN SETTING ASIDE THE ARBITRAL
AWARDS DATED 16.2.2018 PASSED UNDER SECTION 3G(5) OF
THE NATIONAL HIGHWAYS ACT BY APPLYING THE
PROVISIONS OF THE ACT OF 2013?
25. Before going into the merits of the contentions, it is necessary to outline
the ambit and scope of Section 37(2)(b) of the 1996 Act. The said section
is extracted below:
“37. Appealable orders.–(1)[Notwithstanding anything
contained in any other law for the time being in force, an
appeal] shall lie from the following orders (and from no
others) to the court authorised by law to hear appeals
from original decrees of the court passing the order,
namely:
∗∗∗
(2) Appeal shall also lie to a court from an order of the
Arbitral Tribunal–
(a) accepting the plea referred to in sub-section (2) or
sub-section (3) of Section 16; or
(b) granting or refusing to grant an interim measure
under Section 17.”
26. The Supreme Court and this Court in catena of judgments have held
that the powers of appellate court while exercising jurisdiction under
Section 37(2)(b) of the 1996 Act against orders passed by the Arbitral
Tribunal is very restricted and narrow and the same should be
exercised when the orders seems to be perverse, arbitrary and contrary
to law. The judgment of Wander Ltd. v. Antox India (P) Ltd.2 passed by
the Apex Court, elaborates the ambit and scope of the appeals.
Although the aforesaid judgment is not dealing with the arbitration
proceedings but the same deals with the power of appellate court in
2
1990 Supp SCC 727
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the Civil Procedure Code, 1908 (CPC). Operative paragraphs of the
aforesaid judgment are extracted below:
“13. On a consideration of the matter, we are afraid, the
Appellate Bench fell into error on two important
propositions. The first is a misdirection in regard to the
very scope and nature of the appeals before it and the
limitations on the powers of the appellate court to
substitute its own discretion in an appeal preferred
against a discretionary order. The second pertains to the
infirmities in the ratiocination as to the quality of antox’s
alleged user of the trade mark on which the passing-off
action is founded. We shall deal with these two
separately.
14. The appeals before the Division Bench were against
the exercise of discretion by the Single Judge. In such
appeals, the appellate court will not interfere with the
exercise of discretion of the court of first instance and
substitute its own discretion except where the discretion
has been shown to have been exercised arbitrarily, or
capriciously or perversely or where the court had ignored
the settled principles of law regulating grant or refusal of
interlocutory injunctions. An appeal against exercise of
discretion is said to be an appeal on principle. Appellate
court will not reassess the material and seek to reach a
conclusion different from the one reached by the court
below if the one reached by that court was reasonably
possible on the material. The appellate court would
normally not be justified in interfering with the exercise
of discretion under appeal solely on the ground that if it
had considered the matter at the trial stage it would have
come to a contrary conclusion. If the discretion has been
exercised by the trial court reasonably and in a judicial
manner the fact that the appellate court would have taken
a different view may not justify interference with the
trial court’s exercise of discretion. After referring to these
principles Gajendragadkar, J. in Printers (Mysore) (P)
Ltd. v. Pothan Joseph (SCC OnLine SC para 9)Page 11
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Date: 21-May-2026 17:57:39‘9. …These principles are well established, but as
has been observed by Viscount Simon in Charles
Osenton & Co. v. Johnston “the law as to the
reversal by a court of appeal of an order made by a
Judge below in the exercise of his discretion is well
established and any difficulty that arises is due
only to the application of well-settled principles in
an individual case.”‘
The appellate judgment does not seem to defer to this
principle.”
27. The said judgment is consistently followed in adjudicating petitions
pertaining to the A&C Act by Courts across the Country in Green Infra
Wind Energy Ltd. v. Regen Powertech (P) Ltd.3; Sona Corpn. India (P)
Ltd. v. Ingram Micro India (P) Ltd.4; Manish Aggarwal v. RCI
Industries & Technologies Ltd.5; Tahal Consulting Engineers India (P)
Ltd. v. Promax Power Ltd.6 and Handicraft & Handlooms Exports Co.
of India v. SMC Comtrade Ltd.7.
28. In Reliance Infrastructure Ltd. v. State of Goa8, the Apex Court
noticing its previous decision in MMTC Ltd. v. Vedanta Ltd.9 has noted
the limited scope of interference under Section 34 and further narrower
scope of appeal under Section 37 of the Act particularly when dealing
with the concurrent findings of the arbitrator and that of the Court.
Relevant paragraph ’14’ of MMTC Ltd.(supra) as noted in paragraph
3
2018 SCC OnLine Del 8273
4
2020 SCC OnLine Del 300
5
(2022) 3 HCC (Del) 289
6
2023 SCC OnLine Del 2069
7
2023 SCC OnLine Del 3981
8
(2024) 1 SCC 479
9
(2019) 4 SCC 163
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’26’ in Reliance Infrastructure Ltd.(supra) is to be extracted
hereinunder:–
“14. As far as interference with an order made
under Section 34, as per Section 37, is concerned, it
cannot be disputed that such interference
under Section 37 cannot travel beyond the restrictions
laid down under Section 34. In other words, the court
cannot undertake an independent assessment of the
merits of the award, and must only ascertain that the
exercise of power by the court under Section34 has not
exceeded the scope of the provision. Thus, it is evident
that in case an arbitral award has been confirmed by the
court under Section 34 and by the court in an appeal
under Section 37, this Court must be extremely
cautious and slow to disturb such concurrent findings.”
29. The same view has been expressed in UHL Power Company
Ltd. v. State of Himachal Pradesh10 in paragraph ’16’ while noticing
paragraph ’11’ in MMTC Ltd.(supra):–
“16. As it is, the jurisdiction conferred on courts
under Section 34 of the Arbitration Act is fairly narrow,
when it comes to the scope of an appeal
under Section 37 of the Arbitration Act, the jurisdiction
of an appellate court in examining an order, setting aside
or refusing to set aside an award, is all the more
circumscribed. In MMTC Ltd. v. Vedanta Ltd. [MMTC
Ltd. v. Vedanta Ltd., (2019) 4 SCC 163 : (2019) 2 SCC
(Civ) 293], the reasons for vesting such a limited
jurisdiction on the High Court in exercise of powers
under Section 34 of the ArbitrationAct have been
explained in the following words : (SCC pp. 166-67, para
11)
“11. As far as Section 34 is concerned, the position
is well-settled by now that the Court does not sit10
(2022) 4 SCC 116Page 13
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on merits on the limited ground provided
under Section 34(2)(b)(ii) i.e. if the award is
against the public policy of India. As per the legal
position clarified through decisions of this Court
prior to the amendments to the 1996 Act in 2015,
a violation of Indian public policy, in turn,
includes a violation of the fundamental policy of
Indian law, a violation of the interest of India,
conflict with justice or morality, and the existence
of patent illegality in the arbitral award.
Additionally, the concept of the “fundamental
policy of Indian law” would cover compliance with
statutes and judicial precedents, adopting a
judicial approach, compliance with the principles
of natural justice, and Wednesbury [Associated
Provincial Picture Houses Ltd. v. Wednesbury
Corpn., [1948] 1 K.B. 223(CA)] reasonableness.
Furthermore, “patent illegality” itself has been
held to mean contravention of the substantive law
of India, contravention of
the 1996 Act, and contravention of the terms of the
contract.”
30. In Haryana Tourism Ltd. v. Kandhari Beverages Ltd.11 as noted in
paragraph ’30’ in Reliance Infrastructure Ltd.(supra), it was held on the
scope of interference under Sections 34 and 37 of the Act’ 1996 as
under:–
“30. In Haryana Tourism [Haryana Tourism
Ltd. v. Kandhari Beverages Ltd., (2022) 3 SCC
237 : (2022) 2 SCC (Civ) 87], this Court yet again
pointed out the limited scope of interference
under Sections 34 and37 of the Act; and disapproved
interference by the High Court under Section 37 of11
2022) 3 SCC 237Page 14
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Date: 21-May-2026 17:57:39the Act while entering into merits of the claim in the
following words : (SCC p. 240, paras 8-9)
“8. So far as the impugned
judgment and order [Kandhari Beverages
Ltd. v. Haryana Tourism Ltd., 2018 SCC OnLine
P&H 3233] passed by the High Court
quashing and setting aside the
award and the order passed by the Additional
District Judge under Section 34 of
the Arbitration Act are concerned, it is required to
be noted that in an appeal under Section 37 of
the Arbitration Act, the High Court has entered
into the merits of the claim, which is not
permissible in exercise of powers
under Section 37 of the Arbitration Act.
9. As per settled position of law laid down by this
Court in a catena of decisions, an award can be set
aside only if the award is against the public policy
of India. The award can be set aside
under Sections 34/37 of the Arbitration Act, if the
award is found to be contrary to : (a) fundamental
policy of Indian Law; or (b) the interest of India; or
(c) justice or morality; or (d) if it is patently
illegal. None of the aforesaid exceptions shall be
applicable to the facts of the case on hand. The
High Court has entered into the merits of the
claim and has decided the appeal
under Section 37 of the Arbitration Act as if the
High Court was deciding the appeal against the
judgment and decree passed by the learned trial
court. Thus, the High Court has exercised the
jurisdiction not vested in it under Section 37 of
the Arbitration Act. The impugned
judgment andorder [Kandhari Beverages
Ltd. v. Haryana Tourism Ltd., 2018 SCC OnLine
P&H 3233] passed by the High Court is hence not
sustainable.”
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31. It was, thus, observed in paragraph ’33’ of Reliance Infrastructure
Ltd.(supra) as under:–
“33. Keeping in view the aforementioned principles
enunciated by this Court with regard to the limited scope
of interference in an arbitral award by a Court in the
exercise of its jurisdiction under Section34 of the Act,
which is all the more circumscribed in an appeal
under Section 37, we may examine the rival submissions
of the parties in relation to the matters dealt with by the
High Court.”
32. It is observed in Punjab State Civil Supplies Corpn. Ltd. v. Sanman
Rice Mills12 that:
“9. The object of the Act is to provide for a speedy and
inexpensive alternative mode of settlement of dispute
with the minimum of intervention of the courts. Section
5 of the Act is implicit in this regard and prohibits
interference by the judicial authority with the arbitration
proceedings except where so provided in Part-I of the
Act. The judicial interference, if any, is provided inter-
alia only by means of Sections 34 and 37 of the Act
respectively.
10. Section 34 of the Act provides for getting an arbitral
award set aside by moving an application in accordance
with sub-Section (2) andsub-Section (3) of Section 34 of
the Act which inter-alia provide for the grounds on which
an arbitral award is liable to be set aside. One of the main
grounds for interference or setting aside an award is
where the arbitral award is in conflict with the public
policy of India i.e. if the award is induced or affected by
fraud or corruption or is in contravention with the
fundamental policy of Indian law or it is in conflict with
most basic notions of morality and justice. A plain
reading of Section 34 reveals that the scope of12
2024 SCC OnLine SC 2632Page 16
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Section 34 is very limited and the court is not supposed
to travel beyond the aforesaid scope to find out if the
award is good or bad.
11. Section 37 of the Act provides for a forum of appeal
inter-alia against the order setting aside or refusing to set
aside an arbitral award under Section 34 of the Act. The
scope of appeal is naturally akin to andlimited to the
grounds enumerated under Section 34 of the Act.
12. It is pertinent to note that an arbitral award is not
liable to be interfered with only on the ground that the
award is illegal or is erroneous in law that too upon
reappraisal of the evidence adduced before the arbitral
trial. Even an award which may not be reasonable or is
non-speaking to some extent cannot ordinarily be
interfered with by the courts. It is also well settled that
even if two views are possible there is no scope for the
court to reappraise the evidence and to take the different
view other than that has been taken by the arbitrator. The
view taken by the arbitrator is normally acceptable and
ought to be allowed to prevail.
xxxxxx
14. It is equally settled law that the appellate power
under Section 37of the Act is not akin to the normal
appellate jurisdiction vested in the civil courts for the
reason that the scope of interference of the courts with
arbitral proceedings or award is very limited, confined to
the ambit of Section 34 of the Act only and even that
power cannot be exercised in a casual and a cavalier
manner.
xxxxxx
16. It is seen that the scope of interference in an appeal
under Section37 of the Act is restricted and subject to the
same grounds on which an award can be challenged
under Section 34 of the Act. In other words, the powers
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under Section 34 of the Act.”
Here, the Hon’ble Supreme Court has once again reiterated that even
an award which may not be reasonable or is nonspeaking to some
extent cannot ordinarily be interfered with by the courts. It is also well
settled that even if two views are possible there is no scope for the court
to reappraise the evidence and to take the different view other than that
has been taken by the arbitrator. The view taken by the arbitrator is
normally acceptable and ought to be allowed to prevail.
33. In Konkan Railway Corpn. Ltd. v. Chenab Bridge Project13 referring
to MMTC Limited (supra) it has been held that:
“19….The scope of jurisdiction
under Section 34 and Section 37 of the Act is not akin to
normal appellate jurisdiction. It is well-settled that
courts ought not to interfere with the arbitral award in a
casual and cavalier manner. The mere possibility of an
alternative view on facts or interpretation of the contract
does not entitle courts to reverse the findings of the
arbitral tribunal…”
34. In Dyna Technology Private Limited v. Crompton Greaves Limited14,
the Apex Court observed as under:
“24. There is no dispute that Section 34 of the
Arbitration Act limits a challenge to an award only on
the grounds provided therein or as interpreted by various
courts. We need to be cognizant of the fact that arbitral
awards should not be interfered with in a casual and
cavalier manner, unless the court comes to a conclusion
that the perversity of the award goes to the root of the13
(2023) 9 SCC 85
14
(2019) 20 SCC 1
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interpretation which may sustain the arbitral award.
Section 34 is different in its approach and cannot be
equated with a normal appellate jurisdiction. The
mandate under Section 34 is to respect the finality of the
arbitral award and the party autonomy to get their
dispute adjudicated by an alternative forum as provided
under the law. If the courts were to interfere with the
arbitral award in the usual course on factual aspects,
then the commercial wisdom behind opting for alternate
dispute resolution would stand frustrated.
25. Moreover, umpteen number of judgments of this
Court have categorically held that the courts should not
interfere with an award merely because an alternative
view on facts and interpretation of contract exists. The
courts need to be cautious and should defer to the view
taken by the Arbitral Tribunal even if the reasoning
provided in the award is implied unless such award
portrays perversity unpardonable under Section 34 of the
Arbitration Act.”
35. Judicial scrutiny of arbitral awards is stringently limited under Indian
law. Section 34 of the Arbitration and Conciliation Act, 1996, provides
the exclusive grounds upon which an arbitral award can be challenged.
Courts, therefore, are not empowered to interfere merely because
another interpretation or outcome may seem more reasonable. The
jurisdiction under Section 34 is confined to procedural and legal
infirmities such as lack of jurisdiction, violation of natural justice, or
patent illegality. Consequently, appellate jurisdiction under Section 37
is even narrower in its scope. Its purpose is to evaluate whether the
court adjudicating under Section 34 has remained within the
permissible statutory boundaries. The appeal court cannot re-evaluate
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evidence or reconsider the factual matrix afresh. The statutory
framework thus reflects an overarching legislative intent to insulate
arbitral decisions from excessive judicial intervention. The entire
architecture of Sections 34 and 37 reinforces the finality and autonomy
of arbitral proceedings. Arbitration is designed to offer an efficient,
expert-led, and expedited alternative to litigation. Courts must
therefore resist the temptation to intervene unless the decision by the
court under Section 34 itself amounts to a significant transgression of
legal boundaries.
36. Now this Court shall endeavour to answer the main question framed
herein. The question of applicability of Section 24 of the RFCTLARR
Act, 2013 to acquisitions under the National Highways Act, 1956 must
be examined first through the lens of legislative design. The National
Highways Act is not a general acquisition statute but a special
enactment intended to facilitate time-bound development of national
infrastructure.
37. Parliament, recognising the unique requirements of highway projects,
deliberately carved out a separate acquisition mechanism under
Sections 3A to 3J. This framework governs notification, vesting,
determination of compensation, and payment, independent of the
general land acquisition law. The insertion of Section 3J in 1997 is of
decisive importance, as it unequivocally declares that nothing in the
Land Acquisition Act, 1894 shall apply to acquisitions under the
National Highways Act, 1956 thereby severing any statutory linkage
between the two regimes.
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38. This legislative separation was consciously preserved even when
Parliament enacted the RFCTLARR Act, 2013. Section 105 of the 2013
Act embodies a clear policy choice to exclude certain enactments from
its general application. The Fourth Schedule appended to the Act lists
thirteen such enactments, including the National Highways Act, 1956.
Section 105(1) categorically exempts these enactments from the
operation of the 2013 Act, while Section 105(3) empowers the Central
Government to selectively apply beneficial provisions relating to
compensation, rehabilitation, and resettlement. The structure of Section
105 thus makes it clear that inclusion in the Fourth Schedule is not
accidental but reflects Parliament’s intent to preserve special
acquisition regimes while permitting limited, controlled harmonisation
in matters of compensation.
39. The RFCTLARR Act came into force on 1.1.2014. However, the
applicability of even its limited provisions to acquisitions under the
National Highways Act, 1956 was deferred and phased. Through
Amendment Ordinance No. 9 of 2014 and subsequent ordinances, the
Parliament provided that only specific provisions would apply with
effect from 1.1.2015. This culminated in the notification dated 28.8.2015
issued under Sections 105 and 113 of the Act. That notification is of
central relevance, as it precisely enumerates the provisions extended to
National Highways Act acquisitions. These are confined to
determination of compensation in accordance with the First Schedule,
rehabilitation and resettlement under the Second Schedule, and
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infrastructure amenities under the Third Schedule. Section 24 does not
find mention in this notification.
40. At this juncture, it becomes necessary to examine the statutory text of
Section 24 of the RFCTLARR Act, 2013 itself, as the controversy
essentially turns on its scope and field of operation. Section 24(2),
which provides for deemed lapse, expressly opens with the words “in
case of land acquisition proceedings initiated under the Land
Acquisition Act, 1894“. The provision, set out verbatim, leaves little
room for interpretive expansion beyond acquisitions traceable to Act
No. 1 of 1894. Its language, structure, and placement all indicate that it
is statute-specific and not intended to operate across disparate
acquisition regimes.
41. The deliberate omission of Section 24 from the notification is legally
significant. Section 24 deals not with the quantum of compensation but
with deemed lapse of acquisition proceedings based on non-payment
or non-possession under the Land Acquisition Act, 1894. The absence of
Section 24 from the notification underscores that Parliament and the
Central Government did not intend to import lapse provisions into the
National Highways Act regime, which has its own timelines, vesting
provisions, and consequences under Sections 3D and 3G.
42. The Hon’ble Supreme Court has repeatedly affirmed this
understanding. In Union of India v. Tarsem Singh15, while examining
the constitutional validity of Section 3J of the National Highways Act,
the Hon’ble Apex Court acknowledged that the RFCTLARR Act was
15
(2019) 9 SCC 304
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not made fully applicable to national highway acquisitions. Although
Section 3J was read down to the extent it denied solatium and interest,
the Court did not hold that the entire 2013 Act stood incorporated into
the National Highways Act. On the contrary, the judgment recognises
that the extension of RFCTLARR provisions is limited and controlled
by statutory notifications, and that the Fourth Schedule exemption
continues to operate.
43. This limited incorporation was further clarified in National Highways
Authority of India v. P. Nagaraju @ Cheluvaiah16. The Hon’ble
Supreme Court, interpreting the 28.8.2015 notification, held that the
applicability of the RFCTLARR Act to National Highways Act, 1956
acquisitions is confined strictly to the provisions specified therein. The
Hon’ble Apex Court emphasised that the National Highways Act, 1956
remains in the Fourth Schedule and that the general provisions of the
2013 Act do not apply unless expressly extended. Section 24, not being
among the provisions notified, was held to have no application to
acquisitions under the National Highways Act, 1956.
44. The doctrinal foundation of this position was strengthened in Bharat
Petroleum Corporation Ltd. v. Nisar Ahmed Ganai17, where the
Hon’ble Supreme Court undertook a textual and purposive
interpretation of Section 24 itself. The Court observed that the language
of Section 24(1)(a) is “very clear and unambiguous” and refers
exclusively to land acquisition proceedings under the Land Acquisition
Act, 1894. The Court categorically rejected the argument that Section 24
16
Civil Appeal No.4671 of 2022 (SC)
17
2022 INSC 1072
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could apply to acquisitions under other statutes merely because those
statutes contain pari materia provisions. It was held that the RFCTLARR
Act repeals only the 1894 Act and does not override or subsume other
acquisition enactments.
45. The reasoning in Bharat Petroleum (supra) is particularly instructive
because it addresses the precise interpretive error often committed by
courts, namely, extending Section 24 by analogy or equity. The Hon’ble
Supreme Court made it clear that Section 24 is not a general equitable
provision but a statute-specific transitional clause. Its operation is
confined to proceedings initiated under the repealed 1894 Act and
cannot be expanded through judicial interpretation to cover
acquisitions under special statutes like the National Highways Act,
1956.
46. A similar constitutional perspective emerges from C.S. Gopalakrishnan
v. State of Tamil Nadu18, where the Hon’ble Supreme Court upheld the
continued operation of state highway acquisition laws even after the
enactment of the RFCTLARR Act. The Court recognised that special
enactments, particularly those protected under Article 254(2) of the
Constitution, retain their independent force unless expressly
overridden. The judgment reinforces the principle that lapse provisions
and timelines under Section 24 are not automatically imported into
special acquisition statutes, whether Central or State.
47. High Court jurisprudence has also been consistent with this settled
position. The Hon’ble Gujarat High Court, while examining the
18
2023 INSC 510
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applicability of RFCTLARR provisions to National Highways Act, 1956
acquisitions, held that the extension of compensation-related provisions
does not imply wholesale application of the 2013 Act. The Hon’ble
Karnataka High Court has similarly emphasised that Section 24 cannot
be read into the National Highways Act regime in view of Section 3J,
Section 105, and the Fourth Schedule. These decisions reinforce that the
statutory text, rather than perceived hardship, must govern the
applicability of Section 24.
48. Another important aspect is the conceptual incompatibility between
Section 24 and the National Highways Act, 1956. Under Section 3D of
the National Highways Act, vesting of land is absolute and occurs upon
publication of the declaration. Possession and vesting are not
contingent upon payment of compensation. Compensation is
determined separately under Section 3G, and disputes are resolved
through arbitration. Importing Section 24, which predicates lapse on
non-payment or non-possession under a different statutory scheme,
would disrupt the internal coherence of the National Highways Act
and undermine its purpose.
49. It is also relevant that the Central Government, while extending
Sections 26 and 28 of the RFCTLARR Act for market value
determination, consciously limited the extension to substantive
compensation principles. Procedural provisions dealing with lapse,
reopening of proceedings, or annulment of acquisitions were not
extended. This distinction reflects a calibrated legislative approach: to
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ensure fair compensation without destabilising infrastructure projects
through retrospective lapses.
50. The consistent thread running through statutory provisions,
notifications, and judicial precedents is that Section 24 is neither
incidental nor ancillary to compensation determination. It is a drastic
transitional provision tied exclusively to the repeal of the Land
Acquisition Act, 1894. To apply it to National Highways Act, 1956
acquisitions would amount to rewriting both statutes and disregarding
the Fourth Schedule exemption.
51. In sum, the legal position is clear. Section 24 of the RFCTLARR Act,
2013 applies only to acquisitions initiated under the Land Acquisition
Act, 1894. The National Highways Act, 1956 constitutes a distinct
acquisition code, expressly exempted from the general application of
the 2013 Act. Only specified provisions relating to compensation,
rehabilitation, and amenities have been extended through the
notification dated 28.8.2015, and Section 24 is not among them. Any
application of Section 24 to National Highway acquisitions under the
1956 Act would be contrary to the express statutory language,
legislative intent, and binding authority of the Hon’ble Supreme Court.
52. Ld. counsel for the Appellant has also repeatedly contended that where
awards have been passed and compensation deposited prior to
1.1.2015, the authorities become functus officio and lack jurisdiction to
reopen or redetermine compensation by invoking the RFCTLARR Act.
Reliance has been placed on judicial precedents, including Gopa Ram
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v. Union of India and Lanka Prabhakar v. Union of India19, which
categorically hold that Section 24 of the 2013 Act does not apply to
acquisitions under the National Highways Act, particularly where
awards were passed and compensation deposited before the cut-off
date.
53. The argument that administrative authorities under the National
Highways Act become functus officio after passing the award is
grounded in statutory design. Section 3G entrusts the competent
authority with the task of determining compensation, and Section 3G(5)
provides for arbitration if the amount is not acceptable. Once these
statutory functions are discharged, neither the competent authority nor
the arbitrator retains any residual power to reopen concluded awards
in the absence of express statutory authorization. Any direction for
redetermination dehors the statute would therefore be without
jurisdiction.
54. The plea based on principles of equality and uniformity, though
appealing at first blush, cannot override the statutory mandate. Courts
have consistently held that equity cannot supplant law, particularly in
matters governed by clear legislative command. As observed in judicial
reasoning addressing similar contentions, the discomfort or perceived
unfairness experienced by landowners cannot justify judicial extension
of a statutory provision beyond its text. The rule of law requires that
statutory authorities act strictly within the four corners of the statute
conferring power.
19
S.B. Civil Writ Petition No.12746 of 2017 (Rajastan High Court)
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55. This legal position is also reinforced by the express opinion of the Ld.
Attorney General of India, rendered upon consultation by the Ministry
of Road Transport and Highways. The Ld. Attorney General
unequivocally opined that Section 24 of the RFCTLARR Act, 2013
applies only to acquisitions undertaken under the Land Acquisition
Act, 1894, and that Section 105(1) of the 2013 Act excludes the
application of all provisions of the Act to Fourth Schedule enactments,
save to the limited extent permitted under Section 105(3). The opinion
further clarifies that only the First, Second, and Third Schedules have
been made applicable to the National Highways Act.
56. This interpretation has also found reflection in the comprehensive
guidelines issued by the Government of India, Ministry of Road
Transport and Highways, dated 28.12.2017. The guidelines trace the
legislative and administrative evolution of the applicability of the
RFCTLARR Act to National Highways acquisitions and conclusively
state that Section 24 is not applicable to acquisitions under the National
Highways Act, 1956. The guidelines specifically clarify that where the
acquisition process stood completed on or before 31.12.2014–meaning
the award was announced, funds deposited, and compensation paid to
the majority of landowners, the process is deemed settled and cannot
be reopened.
57. The circular records that although the RFCTLARR Act came into force
on 1.1.2014, the applicability of its provisions to enactments listed in the
Fourth Schedule, including the National Highways Act, was governed
exclusively by Section 105 of the Act and subsequent amendment
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ordinances and notifications. It reiterates that, with effect from 1.1.2015,
only select provisions of the RFCTLARR Act were extended to
acquisitions under the National Highways Act.
58. The guidelines specifically state that “it remains an unambiguous and
accepted position that the provisions of the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013,
relating to the determination of compensation in accordance with the First
Schedule, rehabilitation and resettlement in accordance with the Second
Schedule and infrastructure amenities in accordance with the Third Schedule
have been made applicable to all cases of land acquisition under the NH Act,
1956… with effect from 01.01.2015.” By expressly enumerating the
provisions extended, the circular makes it clear that no other provisions
of the RFCTLARR Act stand incorporated into the National Highways
Act acquisition regime.
59. A separate and dedicated portion of the guidelines addresses the
question of applicability of Section 24 of the RFCTLARR Act, 2013 to
acquisitions under the National Highways Act. The circular records
that although an earlier Office Memorandum dated 13.1.2016 had
suggested applicability of Section 24, the issue was revisited in
consultation with the Ld. Attorney General. Upon such reconsideration,
the Attorney General opined that “a reading of Section 24 makes it
abundantly clear that the provision is applicable only to acquisitions that have
been undertaken under the Land Acquisition Act, 1894, inasmuch as the
legislative intent can be ascertained from the specific mention of the ‘Land
Acquisition Act, 1894‘.” The opinion further notes that Section 105(1) of
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the RFCTLARR Act expressly excludes application of the Act to Fourth
Schedule enactments, and that “the only exception to Section 105(1) is
Section 105(3), which makes only the First, Second and Third Schedule
applicable to the Fourth Schedule Acts”.
60. Accepting this opinion, the Ministry categorically concludes in the
guidelines that “as such, it is now clear that Section 24 of the RFCTLARR
Act, 2013 is not applicable to the acquisitions under the NH Act, 1956.” This
clarification represents the final and considered executive position of
the Union of India on the issue and expressly withdraws any contrary
administrative understanding that may have prevailed earlier. The
guidelines thus align executive interpretation with the statutory text of
Section 24 and Section 105 of the RFCTLARR Act.
61. The circular further clarifies the legal position regarding completed
acquisitions by stating that in cases where “the process of acquisition of
land stood completed (i.e. Award under Section 3G announced by CALA,
amount deposited by the acquiring agency with the CALA, and compensation
paid to the landowners in respect of majority of the land under acquisition) as
on or before 31.12.2014, the process would be deemed to have been completed
and settled. Such cases would not be re-opened.” This declaration directly
negates any attempt to invoke Section 24-based lapse or
redetermination in respect of acquisitions completed prior to the cut-off
date.
62. Viewed as a whole, the 28.12.2017 MoRTH guidelines conclusively
affirm that acquisitions under the National Highways Act, 1956
constitute a distinct statutory regime, insulated by the Fourth Schedule
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to the RFCTLARR Act. Only limited provisions of the RFCTLARR Act
relating to compensation, rehabilitation, and infrastructure amenities
have been consciously extended, while Section 24 stands expressly
excluded. These guidelines, grounded in statutory interpretation and
the Ld. Attorney General’s opinion, lend authoritative support to the
conclusion that Section 24 of the RFCTLARR Act, 2013 has no
application whatsoever to land acquisitions undertaken under the
63. Viewed holistically, the statutory text of Section 24, the structure of the
National Highways Act, 1956, the Fourth Schedule exemption under
Section 105, the Ld. Attorney General’s opinion, executive guidelines,
and consistent judicial precedent converge on a single conclusion.
Section 24 of the RFCTLARR Act, 2013 is confined exclusively to
acquisitions initiated under the Land Acquisition Act, 1894. It does not
apply, either directly or by implication, to acquisitions under the
National Highways Act, 1956, particularly where awards were passed
and compensation deposited prior to 1.1.2015. Any contrary approach
would amount to judicial legislation and would undermine the
carefully calibrated statutory framework governing national highway
acquisitions.
64. Applying the aforesaid statutory scheme, executive guidelines, and
binding judicial precedents to the facts as found and the dates already
culled out by this Court, the conclusion is inescapable that the
applications under Section 34 of the Arbitration and Conciliation Act,
1996 were erroneously allowed by the Ld. District Judge. The
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acquisition in the present cases was admittedly undertaken under the
National Highways Act, 1956. The notifications under Sections 3A and
3D were issued on 29.10.2012 and 21.5.2013 respectively, and the
awards determining compensation under Section 3G were passed on
18.10.2014. These dates are not in dispute. Thus, the acquisition
proceedings had not only been initiated but had culminated in the
passing of awards well before the cut-off date of 1.1.2015.
65. The record further establishes that on the very date of passing of the
awards, i.e. 18.10.2014, the Competent Authority requisitioned funds
from the National Highways Authority of India, and the requisite
compensation amounts were released on 8.12.2014. Consequently, as on
or before 31.12.2014, the compensation stood fully sanctioned, released,
and made available with the Competent Authority for disbursement. In
terms of the comprehensive guidelines dated 28.12.2017 issued by the
Ministry of Road Transport and Highways, such cases are expressly
treated as having attained finality, it being clarified that where the
award has been announced, funds deposited, and compensation paid
to the majority of landowners on or before 31.12.2014, “the process would
be deemed to have been completed and settled” and “such cases would not be
re-opened”.
66. Even assuming, arguendo, that disbursement to certain claimants
occurred after 1.1.2015 owing to disputes regarding title or
apportionment, such circumstance would not alter the legal position.
The Hon’ble Supreme Court in Indore Development Authority v.
Manohar Lal (supra) has made it clear that non-payment attributable to
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reasons other than inaction of the acquiring authority does not result in
lapse, and that tender or availability of compensation satisfies the
statutory obligation. More importantly, Section 24 itself is confined to
proceedings initiated under the Land Acquisition Act, 1894, and does
not apply to acquisitions under special enactments.
67. In the present cases, the Ld. District Judge proceeded on the
assumption that Section 24 of the RFCTLARR Act, 2013 was applicable
to acquisitions under the National Highways Act, 1956, and on that
basis concluded that the arbitral awards dated 16.02.2018 were in
conflict with public policy. This approach overlooks the express
language of Section 24, the exemption carved out by Section 105 read
with the Fourth Schedule, and the notification dated 28.08.2015, which
extends only the First, Second and Third Schedules of the RFCTLARR
Act to National Highways Act acquisitions. Section 24 is conspicuously
absent from the provisions so extended.
68. The executive position of the Union of India, as crystallised in the
MoRTH guidelines dated 28.12.2017 and founded on the opinion of the
Ld. Attorney General for India, further clarifies that “Section 24 of the
RFCTLARR Act, 2013 is not applicable to the acquisitions under the NH Act,
1956“. This clarification was issued after reconsideration of earlier
instructions and leaves no scope for administrative or judicial doubt.
The Ld. District Judge, however, failed to notice or give effect to this
authoritative clarification and instead relied upon an erroneous
extension of Section 24.
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69. Once it is held that Section 24 of the RFCTLARR Act, 2013 does not
apply to acquisitions under the National Highways Act, 1956, the very
foundation of the impugned judgment collapses. The arbitral awards
dated 16.2.2018 were passed strictly in exercise of powers under Section
3G(5) of the National Highways Act, 1956, after the Competent
Authority had already discharged its statutory function under Section
3G(1). The Ld. Arbitrator, upon adjudication, upheld the determination
of compensation. No ground falling within the limited contours of
Section 34 of the Arbitration and Conciliation Act, 1996 was made out
for interference.
70. In view of the admitted dates, the completion of the acquisition process
prior to 31.12.2014, the non-applicability of Section 24 of the
RFCTLARR Act, 2013 to acquisitions under the National Highways Act,
1956, and the settled legal position declared by the Hon’ble Supreme
Court and clarified by the Union of India, this Court has no hesitation
in holding that the ARBP applications ought not to have been allowed.
The impugned judgment proceeds on a clear error of law apparent on
the face of the record and cannot be sustained.
VI. CONCLUSION:
71. For the reasons recorded hereinabove, this Court is satisfied that the
Ld. District Judge proceeded on an erroneous assumption of law in
applying Section 24 of the RFCTLARR Act, 2013 to acquisitions made
under the National Highways Act, 1956. The acquisition proceedings in
the present cases had culminated in the passing of awards on
18.10.2014, with funds duly released on 8.12.2014, well prior to the cut-
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off date of 1.1.2015. In any event, Section 24 of the Act of 2013 has no
application to acquisitions under the National Highways Act. The
arbitral awards dated 16.2.2018 were thus validly passed within the
statutory framework, and no ground existed for their interference
under Section 34 of the Arbitration and Conciliation Act, 1996. The
impugned judgment, being founded on an incorrect application of law
and an excess of jurisdiction, cannot be sustained.
72. Accordingly, ARBA No.13 of 2021 and ARBA No.14 of 2021 are
allowed. The judgment dated 26.8.2021 passed by the Ld. District
Judge, Sambalpur in ARBP No.02 of 2018 and ARBP No. 01 of 2018 is
hereby set aside. The arbitral awards dated 16.2.2018 passed by the
Collector-cum-Arbitrator, Sambalpur are restored and shall stand
affirmed.
73. There shall be no order as to costs.
(Dr. Sanjeeb K Panigrahi)
Judge
Orissa High Court, Cuttack,
Dated the 15th May, 2026/-
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