Bombay High Court
National Highway Authority Of India, … vs Saluba Pandu Sangle And Another on 18 March, 2026
2026:BHC-AUG:11874
IN THE JUDICATURE OF HIGH COURT AT BOMBAY
BENCH AT AURANGABAD
ARBITRATION APPEAL NO. 10 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Suresh Pandharinath Matre,
2. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. Bondar Uttam
Bajirao
...
AND
ARBITRATION APPEAL NO. 11 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Madinabi Faiyaz Khan,
2. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. R. B. Bagul
...
AND
ARBITRATION APPEAL NO. 12 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Gaurav Ambadas Matre,
2. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
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Arb Appeal 10-2026 and Oth
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. R. S. Sarvadnya
...
AND
ARBITRATION APPEAL NO. 13 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Sursing Manikrao Chandanse (Died)
Through Its L.Rs.
1.1 Madhurabai Sursing Chandanse,
1.2 Sanjay Sursing Chandanse,
1.3 Sandip Sursing Chandanse,
1.4 Shobha Dhumsing Jadhav,
1.5 Manisha Suresh Patil,
1.6 Jyoti Ravindra Suryawanshi,
2. Sahebrao Manikrao Chandanse,
3. Bhimrao Manikrao Chandanse,
4. Ramrao Manikrao Chandanse (Died)
Through Its L.Rs.
4.1 Kaushalyabai Ramrao Chandanse,
4.2 Shivaji Ramrao Chandanse,
4.3 Pratibha Raju Pawar,
4.4 Santosh Ramrao Chandanse,
4.5 Rupali Jivan Pawar,
4.6 Varsha Vishal More
5. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. S.W.Munde
...
AND
ARBITRATION APPEAL NO. 14 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Asaram Devrao Talekar (Died)
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Arb Appeal 10-2026 and Oth
Through L.Rs.
a) Shevantabai Asaram Talekar,
b) Jayshree Asaram Talekar,
c) Amol Asaram Talekar,
d) Atul Asaram Talekar
2. Kaduba Pundalik Talekar,
3. Nandu Kaduba Talekar,
4. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. S. S. Deve
...
AND
ARBITRATION APPEAL NO. 15 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Usha Babasaheb Guthe,
2. Varsha Vitthalrao Ghanwat,
3. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr.N. T. Bhagat
...
AND
ARBITRATION APPEAL NO. 16 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Fayaz Khan Ahmad Khan,
2. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Page 3 of 51
Arb Appeal 10-2026 and Oth
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. N. T. Tribhuwan
...
AND
ARBITRATION APPEAL NO. 17 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Radhakisan Pandharinath Matre,
2. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr.N. U. Yadav.
...
AND
ARBITRATION APPEAL NO. 18 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Sursing Manikrao Chandanse (Died)
Through L.Rs.
1.1 Madhurabai Sursing Chandanse,
1.2 Sanjay Sursing Chandanse,
1.3 Sandip Sursing Chandanse,
1.4 Shobha Dhumsing Jadhav,
1.5 Manisha Suresh Patil,
1.6 Jyoti Ravindra Suryawanshi,
2. Sahebrao Manikrao Chandanse,
3. Bhimrao Manikrao Chandanse,
4. Ramrao Manikrao Chandanse (Died)
Through L.Rs.
4.1 Kaushalyabai Ramrao Chandanse,
4.2 Shivaji Ramrao Chandanse,
4.3 Pratibha Raju Pawar,
4.4 Santosh Ramrao Chandanse,
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Arb Appeal 10-2026 and Oth
4.5 Rupali Jivan Pawar,
4.6 Varsha Vishal More,
5. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr.Krushna Salunke
...
AND
ARBITRATION APPEAL NO. 19 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Usha Babashaeb Guthe,
2. Varsha Vitthalrao Ghanwat.
3. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr.Nitin Salunke
...
AND
ARBITRATION APPEAL NO. 20 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Shaikh Hamid Shaikh Mahemood,
2. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr.Rajesh Mewara
...
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Arb Appeal 10-2026 and Oth
AND
ARBITRATION APPEAL NO. 21 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Sudam Shankarrao Talekar,
2. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. A. S. Jadhav
...
AND
ARBITRATION APPEAL NO. 22 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Shaikh Bhikan Shaikh Maheboob,
2. Shaikh Baba Sahikh Maheboob,
3. Shaikh Rasul Sahikh Maheboob,
4. Shaikh Rahenabi Noor Ahemad
5. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Ms. Mayuri Kasturkar.
...
AND
ARBITRATION APPEAL NO. 23 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
Page 6 of 51
Arb Appeal 10-2026 and Oth
1. Shaikh Habib Shaikh Najimoddin,
2. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. A. D. Kulkarni
...
AND
ARBITRATION APPEAL NO. 24 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Sukhdev Assaram Talekar,
2. Bhanudas Bapurao Rajale,
3. Bhagwan Bapurao Rajale
4. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. R. R. Bangar
...
AND
ARBITRATION APPEAL NO. 25 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Yasin Bakshu Patel (Died)
Through L.Rs.
1.1 Shaikh Yousif Shaikh Yasin,
1.2 Shaikh Younus Shaikh Yasin,
1.3 Shaikh Aslam Shaikh Yasin,
1.4 Shaikh Akram Shaikh Yasin,
1.5 Shaikh Azam Shaikh Yasin,
1.6 Jamilabai Shaikh Sardar
1.7 Rashidabi Noor Hemaed
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Arb Appeal 10-2026 and Oth
2. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. U. B. Bondar
...
AND
ARBITRATION APPEAL NO. 26 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Saluba Pandu Sangle,
2. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr.R. B. Bagul
...
AND
ARBITRATION APPEAL NO. 27 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Hiralal Balal Bariwale (Gawali) (Died)
Through L.Rs.
a) Gangubai Hiralal Bariwale,
b) Suresh Hiralal Bariwale,
c) Mukesh Hiralal Bariwale,
d) Nitesh Hiralal Bariwale,
e) Shall Hiralal Bariwale,
2. Ganesh Gokul Gawali,
3. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Page 8 of 51
Arb Appeal 10-2026 and Oth
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. R. S. Sarwadnya
...
AND
ARBITRATION APPEAL NO. 28 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Shankar Pandharinath Matre,
2. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr.S.W.Munde
...
AND
ARBITRATION APPEAL NO. 29 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Shaikh Nawaz Shaikh Bhikan,
2. Shaikh Ishaq Shaikh Bhikan,
3. Shaikh Harun Shaikh Bhikan,
4. Shaikh Umar Shaikh Bhikan,
5. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. A. R. Borulkar
...
AND
ARBITRATION APPEAL NO. 30 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
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Arb Appeal 10-2026 and Oth
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Shaikh Nawaz Shaikh Bhikan,
2. Shaikh Ishak Shaikh Bhikan,
3. Shaikh Harun Shaikh Bhikan,
4. Shaikh Umar Shaikh Bhikan,
5. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. S. S. Deve
...
AND
ARBITRATION APPEAL NO. 31 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Akshay Ambadas Matre,
2. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. R. D. Sanap
...
AND
ARBITRATION APPEAL NO. 32 OF 2026
National Highway Authority Of India,
Project Implementation Unit-Chh.Sambhajinagar,
Through its Project Director - Amrish Mankar, ...Appellant
VERSUS
1. Usha Babasaheb Guthe
2. Ranjana Vitthalrao Mhaske
3. The Competent Authority Land
Acquisition National Highway No.211
and Sub Divisional Officer, Aurangabad. ...Respondents
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Arb Appeal 10-2026 and Oth
...
Advocate for Appellant : Mr. Sagar Varma holding for Mr. Ladda Sagar
Somnath
Advocate for Respondent No.1 : Mr. R. M. Patil holding for Mr. P. H. Patil
Advocate for Respondent No.2- Competent Authority : Mr. N. T. Tribhuwan
...
...
CORAM : ARUN R. PEDNEKER, J.
Dated : March 18, 2026
JUDGMENT :
1. The present Arbitration Appeals are filed under Section 37 of the
Arbitration and Conciliation Act, 1996, by the appellants- National Highway
Authority challenging the Judgment and Order dated 16/10/2025 passed by
the learned Principal District Judge, Aurangabad in the proceedings filed
under Section 34 of the Arbitration and Conciliation Act, 1996. By the said
judgment, the learned Principal District Judge, Aurangabad dismissed the
applications filed under Section 34 of the Act and upheld the arbitral award
passed by the learned Arbitrator.
2. All the Arbitration Appeals involve common issues and arise out of
acquisition of lands for the expansion of highway in village Gandheli
wherein uniform compensation for the acquired lands are granted. Hence,
they are taken up together for hearing and are being decided by this
common judgment.
3. The following questions arise for consideration of this Court in the
present appeals:
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Arb Appeal 10-2026 and Oth
a) Whether Section 29A of the Arbitration and Conciliation
Act, 1996 applies to the arbitration proceedings conducted
under Section 3G(5) of the National Highways Act, 1956 ? If
so, whether the provisions of Section 29A as introduced by the
Arbitration and Conciliation (Amendment) Act, 2015, brought
into force with effect from 23/10/2015, apply to the present
arbitration proceedings, or whether the amended provisions of
Section 29A as substituted by the Arbitration and Conciliation
(Amendment) Act, 2019 would govern the proceedings ?
b) If Section 29A is held to be applicable, whether the
award passed under Section 3G(5) of the National Highways
Act beyond the prescribed period of mandate under Section
29A in absence of order of continuation of mandate of the
arbitrator would be without jurisdiction and is liable to be set
aside ?
c) Whether the Arbitrator has failed to apply the
parameters laid down under Section 26 of the Right to Fair
Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 while determining
the compensation, and thereby the award passed suffers from
patent illegality ?
4. For the sake of convenience, the facts in Arbitration Appeal No.10 of
2026 alone are referred to. The brief facts of the appeal are as under :
The Central Government issued a notification under Section 3A of
the National Highways Act, 1956 (hereinafter referred to as the “NH Act“)
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Arb Appeal 10-2026 and Othon 18/09/2015 declaring its intention to acquire the lands specified therein
for the purpose of widening National Highway No.211. Thereafter, the final
declaration under Section 3D of the NH Act was published on 16/09/2016.
5. The Competent Authority for Land Acquisition (CALA) determined
and published an award under Section 3G(1) of the NH Act determining
compensation of Rs.83,19,534/- @ Rs.1086/- per Square Meter for
acquisition of an area admeasuring 3400 square meters belonging to the
respondents/claimants. Being aggrieved by the said award, the
respondents/ claimants invoked the provisions of Section 3G(5) of the NH
Act seeking reference to arbitration.
6. The learned Arbitrator thereafter passed an award enhancing the
compensation to Rs.1,83,70,388/- @ Rs. 1742/- per Square Meter. The
appellants challenged the said arbitral award by filing an application under
Section 34 of the Arbitration and Conciliation Act, 1996 before the learned
Principal District Judge on 27/06/2024. The learned Principal District Judge
dismissed the said application by judgment dated 16/10/2025. Being
aggrieved thereby, the present Arbitration Appeal is filed under Section 37
of the Act.
The Competent Authority for Land Acquisition (CALA) awarded
different rates of compensation to the claimants depending upon the area,
yield and nature of the land (being bayagat / jirayat/hangami-bagayat),
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Arb Appeal 10-2026 and Oth
ranging from Rs.486/- to Rs.1,500/- per square metre. However, the
Arbitrator awarded compensation at a uniform rate of Rs.1,742/- per square
metre in all the matters.
7. The primary contention raised on behalf of the appellants is that the
arbitral award has been passed after a period of nearly six years from the
date of the Arbitrator entering upon the reference and beyond the mandate
of Section 29A and therefore the award suffers from patent illegality.
8. The learned Counsel Mr. Sagar Varma holding for Mr. Sagar
Ladda for appellants submit that Section 29A(1), as introduced by the
Amendment Act of 2015 with effect from 23/10/2015, provides that the
arbitral tribunal shall make an award within a period of twelve months from
the date it enters upon the reference. The said provision was further
amended by the Amendment Act of 2019 with effect from 30/08/2019,
whereby the period of twelve months is to be reckoned from the date of
completion of pleadings under sub-section (4) of Section 23 of the Act.
9. The learned Counsel for the appellants thus submits that in 19
matters out of 23 before this Hon’ble Court, the applications under section
3-G (5) were preferred on 11/04/2018, and thus the provision of 29A as
introduced by Amendment Act Act 3 of 2016 w.e.f. 23.10.2015, would be
applicable to the impugned arbitration.
10. The learned Counsel further submits that as per Section 29A(1) of
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Arb Appeal 10-2026 and Oth
the Act (as it stood prior to the 2019 amendment), the Ld. Arbitrator was
mandated to pass the award within a period of twelve months from the
date of entering upon the reference. This period could be extended by the
express consent of the parties for a further period not exceeding six
months. The award in the present case was passed on 12.01.2024, which is
nearly five years and nine months after the commencement of the
proceedings, and well beyond the statutory maximum period of twelve
months. The fact that no extension was ever sought by either of the parties
section 29A (3) cannot now be invoked to claim the grace period of 6
months. Even otherwise, the impugned award is in vehement violation of
section 29A of the Act of 1996.
11. It is further submitted by the learned Counsel for the appellants that
no application was ever moved before the Court under Section 29A(3) of
the Act for extension of the Ld. Arbitrator’s mandate. Consequently, the
mandate of the Ld. Arbitrator stood terminated automatically upon the
expiry of the statutory period as per section 29A (4) of the Act of 1996. An
award passed by a tribunal whose mandate has been terminated is a
nullity, coram non judice, and patently illegal.
12. The learned Counsel for the appellant further submits that merely
because the parties to the arbitration proceeded with the arbitration
without any express objection does not mean that the consent for
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Arb Appeal 10-2026 and Oth
extension of arbitration was impliedly given by the parties and for this
purpose relies upon the Judgment of the Hon’ble High Court of Bombay in
Mahaveer Realities & Ors. Versus Shirish J. Shah (Arbitration
Petition No. 125 of 2023).
13. The learned Counsel for the appellants further relied upon the
judgments of the High Court of Himachal Pradesh in Rattan Chand and
another vs. National Highways Authority of India and another
(Arbitration Appeal No.9 of 2023 decided on 13/06/2025) and Hari
Singh vs. National Highways Authority of India (Arbitration Appeal
No.39 of 2024 decided on 29/05/2024). It is submitted that the Special
Leave Petition filed against the judgment in Rattan Chand has been
dismissed by the Hon’ble Supreme Court. The learned Counsel has also
placed reliance upon the judgments in Tata Sons Pvt. Ltd. (formerly
Tata Sons Ltd.) vs. Siva Industries and Holdings Ltd. and others
and National Highways Authority of India vs. Sayedabad Tea
Company Ltd. and others, reported in (2020) 15 SCC 161.
14. Apart from the aforesaid legal submissions of applicability of Section
29A, the learned Counsel for the appellants submits that the Arbitrator has
erred in determining the compensation. The learned Counsel submits that
the compensation ought to have been determined in accordance with the
principles contained in Section 26 of the Right to Fair Compensation and
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Arb Appeal 10-2026 and Oth
Transparency in Land Acquisition, Rehabilitation and Resettlement Act,
2013. It is submitted that the Competent Authority for Land Acquisition had
classified the lands under four different categories and had granted
compensation at different rates depending upon the area, yield and nature
of the land (being bayagat/ jirayat/ hangami-bagayat). However, the
Arbitrator granted uniform compensation without maintaining such
classification. According to the appellants, the Arbitrator has therefore
acted beyond the scope of his authority and the award is patently illegal
and liable to be set aside.
15. The learned Counsel for the appellants submits that Section 26 of
the Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013, the competent authority or
arbitrator as the case may be has to compare similar type of lands with
each other for the purposes of determining market value. That certain
provisions of the Act of 2013 have been made applicable to the NH Act for
the purposes of determining compensation as provided under section 105
of the Act of 2013. Accordingly, the Central Government published
comprehensive guidelines thereby making certain provisions of the Act of
2013 applicable to the acquisitions under the NH Act.
16. The learned Counsel for appellants submits that the Ld. Arbitrator
committed a patent illegality in determining the market value of the
acquired land. The Ld. Arbitrator erroneously re-appreciated the evidence
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Arb Appeal 10-2026 and Oth
and re-calculated the market value by averaging the highest 50% of sale
deeds, some of which were rightly discarded by the Competent Authority
for showing abnormally high prices. The Ld. Arbitrator, in doing so, acted as
a court of appeal over the decision of the Competent Authority, which is
impermissible in law.
17. The learned Counsel for appellants submits that the Ld. Arbitrator
also committed a grave error of law by applying a multiplier of 2.00,
contrary to the applicable government notifications which prescribe a
multiplier of 1.50 for lands falling under a regional plan. The finding of the
Ld. Arbitrator that the land is purely rural is contrary to the record and his
own observation in the award wherein it is observed that the acquired
lands fall beside/near the city Airport and accordingly, cannot be
considered to be rural but however, the claimants have claimed there lands
to be rural lands for the purposes of reaping a higher multiplication factor
of 2. On the other hand, by claiming their lands not to be rural, they are
also seeking higher market value.
18. The learned Counsel for appellants submits that the Ld. District
Court failed to exercise the jurisdiction vested in him under Section 34 of
the Act and failed to appreciate that the award was in conflict with the
public policy of India and suffered from patent illegality apparent on the
face of the record.
Page 18 of 51
Arb Appeal 10-2026 and Oth
19. Per contra, the learned Counsel Mr. R. M. Patil holding for Mr. P. H.
Patil appearing for the respondents/ claimants submits that the arbitration
proceedings under Section 3G(5) of the National Highways Act are
statutory proceedings initiated under a special enactment for
determination of compensation. The learned Counsel submits that the
provisions of the Arbitration and Conciliation Act, 1996 would apply only to
the limited extent as indicated under Section 3G(6) of the NH Act and
would stand excluded where the NH Act contains specific provisions to the
contrary.
20. It is further submitted by the learned Counsel for respondents/
claimants that the provisions of Section 29A of the Arbitration and
Conciliation Act relating to the time limit for making the award and
extension of the mandate of the Arbitrator would not apply to arbitrations
conducted under the NH Act.
21. The learned Counsel for the respondents/ claimants further submits
that, the Central Government appoints an office of Collector or other office
as Arbitral tribunal under Section 3 G (5) by issuing general notifications for
different regions. In the present cases also, the office of the Collector of
Aurangabad was appointed as the arbitral tribunal.
22. It is further submitted by the learned Counsel for respondents/
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Arb Appeal 10-2026 and Oth
claimants that even on facts the arbitral tribunal has properly exercised
jurisdiction. During the pendency of the proceedings, the arbitrators
changed on account of transfers of the incumbent officers and the matter
was heard by different Arbitrators at different stages. In such
circumstances, it cannot be said that a single Arbitrator continued with the
proceedings beyond the prescribed period.
23. It is further submitted that the arbitral proceedings continued
without any objection being raised by the appellants and it is only at the
stage of challenging the award under Section 34 of the Arbitration Act, that
the objection regarding the mandate of the Arbitrator is sought to be
raised.
24. The learned Counsel further submits that the provisions of Section
29A, as amended in the year 2019, would not render the award invalid in
the present case. According to him, an application seeking extension of the
mandate of the Arbitrator had been filed and the same was pending
consideration.
25. In support of the said contention, reliance is placed upon the
judgment of the Hon’ble Supreme Court in Sayedabad (Supra).
26. It is further submitted by the learned Counsel for respondents/
Page 20 of 51
Arb Appeal 10-2026 and Oth
claimants that the determination of compensation by the Arbitrator is
based upon the material available on record and does not call for
interference in exercise of appellate jurisdiction under Section 37 of the
Arbitration and Conciliation Act.
27. On merits, the learned Counsel for the respondents/ claimants
submits that the Arbitrator has acted well within his jurisdiction. It is
submitted that the lands in question are situated in the vicinity of
Aurangabad city and within approximately twenty kilometers from the High
Court Bench. The lands were acquired for expansion of the National
Highway and therefore possessed substantial potential value. According to
the respondents, in such circumstances the lands could not have been
rigidly segregated into different grades as done by the Competent
Authority. The Arbitrator therefore rightly granted uniform compensation
considering the potential value of the lands.
28. The learned Counsel for the respondents/ claimants submits that the
learned Arbitrator has considered the sale deeds produced before him
while determining the compensation. It is submitted that the appellants did
not lead any independent evidence before the Arbitrator and merely relied
upon the determination made by the Competent Authority for Land
Acquisition. According to the respondents, the Competent Authority had
discarded certain higher sale instances without proper justification, and the
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Arb Appeal 10-2026 and Oth
Arbitrator, upon appreciation of the material placed on record, rightly took
into consideration the relevant sale transactions while determining the
compensation.
29. In support of the said submission, reliance is placed upon the
judgment of the Hon’ble Supreme Court in Madhya Pradesh Road
Development Corporation vs. Vincent Daniel and others (Civil
Appeal No.3998 of 2024 decided on 27/03/2025). The learned Counsel
also relies upon the judgments in Union of India vs. Susaka Private
Limited and others, (2018) 2 SCC 182, Girnar Traders (3) vs. State
of Maharashtra and others, (2011) 3 SCC 1, and Project Director,
National Highways Authority of India vs. Saraswatibai
Chandrakant Shinde and others, 2022 SCC OnLine SC 1115.
30. Having considered the rival submissions, the first question that
arises for consideration is whether the provisions of Section 29A of the
Arbitration and Conciliation Act, 1996 relating to the time limit for making
an arbitral award and extension of the mandate of the arbitral tribunal by
court would apply to arbitrations conducted under Section 3G(5) of the
National Highways Act, 1956.
Relevant provisions of the NH Act and Arbitration and Conciliation
Act required to deal with above question are quoted below :
Section 3G (1), (5), (6) of the National Highways Act :
Page 22 of 51
Arb Appeal 10-2026 and Oth
3G. Determination of amount payable as compensation.–
(1) Where any land is acquired under this Act, there shall be paid an
amount which shall be determined by an order of the competent authority.
(2) ……
(3) ......
(4) ......
(5) If the amount determined by the competent authority under sub-
section (1) or sub-section (2) is not acceptable to either of the parties, the
amount shall, on an application by either of the parties, be determined by
the arbitrator to be appointed by the Central Government–
(6) Subject to the provisions of this Act, the provisions of the
Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to every
arbitration under this Act.
The provisions of Section 29A were introduced into the Arbitration
Act with effect from 23 October 2015 by Act 3 of 2016. Section 29A was
substituted by Act 33 of 2019 with effect from 30 August 2019. The
provisions of Section 29A as originally inserted and as they stand after the
amendment of 2019 are tabulated below :
SECTION 29-A PRE AND POST 2019 AMENDMENT
Post 2015 Amendment w.e.f. Post 2019 Amendment w.e.f.
23.10.2015 30.08.2019
29A. (1) The award shall be made within 29A. (1) The award in matters other than
a period of twelve months from the date international commercial arbitration
the arbitral tribunal enters upon the shall be made by the arbitral tribunal
reference. within a period of twelve months from
the date of completion of pleadingsPage 23 of 51
Arb Appeal 10-2026 and OthExplanation. – For the purpose of this under sub-section (4) of section 23:
sub-section, an arbitral tribunal shall be
deemed to have entered upon the Provided that the award in the matter of
reference on the date on which the international commercial arbitration may
arbitrator or all the arbitrators, as the be made as expeditiously as possible
case may be, have received notice, in and endeavor may be made to dispose
writing, of their appointment. of the matter within a period of twelve
months from the date of completion of
pleadings under sub-section (4) of
section 23.
(2) If the award is made within a period (2) If the award is made within a period
of six months from the date the arbitral of six months from the date of the
tribunal enters upon the reference, the arbitral tribunal enters upon the
arbitral tribunal shall be entitled to reference, the arbitral tribunal shall be
receive such amount of additional fees entitled to receive such amount of
as the parties may agree. additional fees as the parties may agree.
(3) The parties may, by consent, (3) The parties may, by consent, extend
extend the period specified in sub- the period specified in sub-section (1)
section (1) for making award for further for making award for further period not
period not exceeding six months. exceeding six months.
(4) If the award is not made within the (4) If the award is not made within the
period specified in sub-section (1) or the period specified in sub-section (1) or the
extended period specified under sub- extended period specified under sub-
section (3), the mandate of the section (3), the mandate of the
arbitrator(s) shall terminate unless the arbitrator(s) shall terminate unless the
Court has, either prior to or after the Court has, either prior to or after the
expiry of the period so specified, expiry of the period so specified,
extended the period. extended the period.
Provided that while extending the Provided that while extending the period
period under this sub-section, if the under this sub-section, if the Court finds
Court finds that the proceedings have that the proceedings have been delayed
been delayed for the reasons for the reasons attributable to the
attributable to the arbitral tribunal, arbitral tribunal, then, it may order
then, it may order reduction of fees of reduction of fees of arbitrator(s) by not
arbitrator(s) by not exceeding five per exceeding five per cent for each month
cent for each month of such delay. of such delay.
Provided further that where an
application under sub-section (5) is
pending, the mandate of the arbitrator
shall continue till the disposal of the said
application :
Provided also that the arbitrator shall be
given an opportunity of being heard
Page 24 of 51
Arb Appeal 10-2026 and Oth
before the fees is reduced.
(5) The extension of period referred to (5) The extension of period referred to
in sub-section (4) may be on the in sub-section (4) may be on the
application of any of the parties and application of any of the parties and
may be granted only for sufficient cause may be granted only for sufficient cause
and on such terms and conditions as and on such terms and conditions as
maybe imposed by the Court. may be imposed by the Court.
(6) While extending the period referred (6) While extending the period referred
to in sub-section (4), it shall be open to to in sub-section (4), it shall be open to
the Court to substitute one or all of the the Court to substitute one or all of the
arbitrators and if one or all of the arbitrators and if one or all of the
arbitrators are substituted, the arbitral arbitrators are substituted, the arbitral
proceedings shall continue from the proceedings shall continue from the
stage already reached and on the basis stage already reached and on the basis
of the evidence and material already on of the evidence and material already on
record, and the arbitrator(s) appointed record, and the arbitrator(s) appointed
under this section shall be deemed to under this section shall be deemed to
have received the said evidence and have received the said evidence and
material. material.
(7) In the event of arbitrator(s) being (7) In the event of arbitrator(s) being
appointed under this section, the appointed under this section,t he arbitral
arbitral tribunal thus reconstituted shall tribunal thus reconstituted shall be
be deemed to be in continuation of the deemed to be in continuation of the
previously appointed arbitral tribunal. previously appointed arbitral tribunal.
(8) It shall be open to the Court to (8) It shall be open to the Court to
impose actual or exemplary costs upon impose actual or exemplary costs upon
any of the parties under this section. any of the parties under this section.
(9) An application filed under (9) An application filed under sub-
subsection (5) shall be disposed of by section (5) shall be disposed of by the
the Court s expeditiously as possible Court as expeditiously as possible and
and endeavor shall be made to dispose endeavor shall be made to dispose of
of the matter within a period of sixty the matter within a period of sixty days
days from the date of service of notice from the date of service of notice on the
on the opposite party. opposite party.
(emphasis supplied) (emphasis supplied)
31. Section 3G(6) of the National Highways Act provides that the
provisions of the Arbitration and Conciliation Act, 1996 shall apply to
arbitration proceedings under the said Act. However, the applicability of
Page 25 of 51
Arb Appeal 10-2026 and Oth
the Arbitration and Conciliation Act is subject to the limitation that such
provisions shall apply only to the extent they are not inconsistent with the
provisions of the National Highways Act. Both the National Highways Act
and the Arbitration and Conciliation Act, 1996 are Central enactments.
Nevertheless, the application of the Arbitration Act, 1996 is by way of
reference and only to the extent provided under Section 3G(6).
32. When legislation is applied by reference, subsequent amendments to
the referred statute would also apply to the parent legislation subject to
certain limitation which I will discuss later. Section 3G(6) of NH Act also
limits the applicability of the Arbitration and Conciliation Act, 1996 to the
extent that its provisions are not inconsistent with the National Highways
Act.
33. Since Section 29A of Arbitration Act is introduced by amendment to
Arbitration Act, 1996 reference can be made to the judgment of the
Constitution Bench (5 Judges) of the Hon’ble Supreme Court in Girnar
Traders v. State of Maharashtra, reported in (2011) 3 SCC 1. While
considering the interplay between two statutes, namely the Maharashtra
Regional and Town Planning Act (State Legislation) and the Land Acquisition
Act (Central Legislation), the Supreme Court observed that where
legislation adopts provisions of another statute by reference, subsequent
amendments to the earlier statute are not automatically incorporated into
Page 26 of 51
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the later statute if such incorporation would disturb the scheme of the later
enactment. The Constitution Bench further observed that there may be
instances where the amended provisions of the earlier law, if treated as
incorporated in the principal legislation, may become unworkable or
inconsistent with the scheme of the latter Act. In such circumstances, it
would be inappropriate to interpret the amended law as being incorporated
irrespective of its consequences on the implementation of the principal Act.
34. Paragraphs No.148, 149, 150 of the Judgment in Girnar Traders
(Supra) are relevant reads as under :
“148. ……..it cannot be stated as an absolute proposition of law
that wherever legislation by reference exists, subsequent
amendments to the earlier law shall stand implanted into the later
law without analyzing the impact of such incorporation on the object
and effectuality of the later law. The later law being the principal law,
its object, legislative intent and effective implementation shall
always be of paramount consideration while determining the
compatibility of the amended prior law with the later law as on
relevant date.
149. It will be useful to apply the ‘test of intention’ and ‘test of
unworkability’ with their respective contextual reference while
determining the applicability of either of the doctrines and for that
matter, even on the applicability of the amended law to the later
law. Impact analysis on the workability of the respective legislation
shall be a relevant consideration for resolving such an issue. There
can be instances where the amended law, if applied and treated as
incorporated in the principal legislation, may be apparently
unadjustable to the scheme of that legislation. In that circumstance,Page 27 of 51
Arb Appeal 10-2026 and Othit will be unfair to interpret the amended law as deemed to be
incorporated, irrespective of its consequences on the
implementation of the provisions of the principal Act.
150. It is emphasized that the object of the principal Act should not
be permitted to be defeated on the basis of either of the doctrines
above referred. Hence, there is need for carving out exceptions to
the rule of legislation by reference as well. Examples where such
reference would be impermissible are as follows :
a) Legislation by reference should not result in defeating
the object and purpose of the later Act;
b) Where the amendments to the earlier law are read into
the subsequent law as a result of legislation by reference, if
the result is irresolvable conflict between their provisions or it
results in destroying the essence and purpose of the principal
Act (later law).
The above exceptions to the doctrine are not exhaustive but are
merely indicative. The possibility of other exceptions to this doctrine
cannot be ruled out as it is difficult for this Court to state all such
exceptions with precision. Furthermore, defining such exceptions
with exactitude will not even aid the ends of justice. We have already
noticed that all the learned counsel appearing for the parties are ad
idem that it would be necessary to carve out such exceptions to
apply the doctrine appropriately, advantageously and objectively.”
35. The Supreme Court in Girnar Traders (Supra) emphasized that the
object and purpose of the principal Act should not be defeated on the basis
of the doctrines of legislation by reference or legislation by incorporation.
Therefore, exceptions to the rule of legislation by reference must be
recognized. Illustratively, such reference would be impermissible in the
Page 28 of 51
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following situations :
a) Legislation by reference should not result in defeating the object and
purpose of the later Act;
b) Where the amendments to the earlier law are read into the
subsequent law as a result of legislation by reference, if the result is
irresolvable conflict between their provisions or it results in destroying the
essence and purpose of the principal Act (later law).
Bearing the above principle in mind as laid in Girnar Trader (Supra)
and the limitation imposed by Section 3G(6) of NH Act, I now proceeds to
examine whether Section 29A of the Arbitration and Conciliation Act is
consistent with the provisions of NH Act.
36. The Hon’ble Supreme Court, in Mohan Lal Fatehpuria v. M/s
Bharat Textiles (MANU/SC/1655/2025), has observed that once the
mandate of an arbitrator expires, continuation of such arbitrator is
impermissible and Section 29A(6) empowers and obligates the Court to
substitute the arbitrator. However, the Supreme Court has also observed
that arbitral tribunal is not always statutory in nature, thereby recognizing
that statutory arbitration may stand on a different footing for the purpose
of applicability of Section 29A.
In Paragraph No.13 of Mohan Lal Fatehpuria (Supra), the Hon’ble
Supreme Court has observed as under :
“13. An arbitrator or an Arbitral Tribunal is not always statutory. It
Page 29 of 51
Arb Appeal 10-2026 and Othis, ordinarily, a forum chosen by the parties for resolution of their
disputes. An Arbitral Tribunal with the consent of the parties decides
their disputes. In the instant case, as stated supra, the mandate of
the sole Arbitrator had terminated on 28.02.2023. When mandate of
arbitrator has expired, his continuation is impermissible. Section
29A(6) empowers and obligates the Court to substitute the
Arbitrator. In so far as submission of the respondents, that, since the
petition filed under Sections 14 and 15 of the Act was rejected on
24.01.2022 by the High Court is concerned, suffice it to say that the
Act provides separate remedies in the circumstances mentioned in
Sections 14, 15 and 29A of the Act. In any case, on 24.01.2022, the
mandate of the sole arbitrator was not terminated. Therefore, the
order dated 24.01.2022 does not have any impact on the decision of
the petition under Section 29A of the Act filed by the appellants. The
substitution of a sole arbitrator is warranted, when his mandate
ceases to exist, to effectuate the object of the Act, which mandates
expeditious resolution of the dispute. In view of the statutory
scheme and undisputed factual position, we are satisfied that the
case warranted the exercise of jurisdiction under Section 29A(6) of
the Act. The High Court erred in granting an extension when the
mandate of the sole arbitrator had ceased to exist.”
37. Section 29A was introduced by the 2015 Amendment prescribing a
time limit for completion of arbitral proceedings, which was subsequently
modified by the 2019 Amendment prescribing the time limit from the date
of completion of pleadings, whereas in earlier 2015 amendment the time
limit was computed from the date of notice of appointment.
38. Section 29A also empowers the Court to substitute the arbitrator.
Page 30 of 51
Arb Appeal 10-2026 and Oth
However, under Section 3G(5) of the National Highways Act, only the
Central Government is empowered to appoint the arbitrator. Section 29A(4)
of the Arbitration Act provides that if the arbitral award is not made within
the prescribed time, the mandate of the Arbitrator shall terminate unless
extended by the Court and the Court may also reduce the fees of the
arbitrator. Section 29(A)(6) of 1996 Act, provides that he Court may
substitute the arbitrator. This provision directly conflicts with the scheme
of the National Highways Act, wherein the power to appoint an arbitrator is
vested exclusively in the Central Government under Section 3G(5).
39. The Hon’ble Supreme Court in Jagdeep Chowgule v. Sheela
Chowgule And Ors., reported in MANU/SC/0093/2026 has clarified
that the expression “Court” under Section 29A refers to the principal Civil
Court of original jurisdiction in a district as defined under the Arbitration
and Conciliation Act. If this principle is applied to arbitration under the
National Highways Act, it would imply that the District Court has the
authority to extend the mandate and reduce fees (no fees are paid to
arbitrator under NH Act) of the arbitrator appointed by the Central
Government under Section 3G(5) and also to appoint a substitute
arbitrator.
40. The Central Government under Section 3 G (5) of the NH Act
appoints institutional arbitrator by designation and it is not disputed that
Page 31 of 51
Arb Appeal 10-2026 and Oth
during the pendency of the arbitral proceedings two or three Arbitrators
were changed on account of transfer of the incumbent officers. The said
changes were not made applying provision of the Arbitration and
Conciliation Act, 1996.
41. In this regard, the judgment of the Hon’ble Supreme Court in
Sayedabad (Supra) assumes significance. In the said case, the Hon’ble
Supreme Court was considering whether an application under Section 11 of
the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator
would be maintainable in view of exclusive jurisdiction of the Central
Government under Section 3G(5) of the National Highways Act, 1956, to
appoint an Arbitrator. The Supreme Court in the case of Sayedabad
(Supra) at paragraphs No.17, 18 and 19 has observed as under : –
“17. In compliance of the mandate of Sections 3A to 3F of the Act,
1956, after the land is acquired, there shall be paid an amount of
compensation which shall be determined by an order of the
competent authority under sub−sections (1) or (2) of Section 3G of
the Act, 1956 and any person who is aggrieved by the amount so
determined by the competent authority or what being determined is
not acceptable to either of the parties, on an application being filed
by either of the parties, has to be determined by the Arbitrator to be
appointed by the Central Government in terms of sub−section (5) of
Section 3G of the Act, 1956.
18. After analysing the scheme, it can be assumed that the
legislature intended the Act, 1956 to act as a complete code in itself
for the purpose of acquisition until culmination including
disbursement and for settlement of disputes and this conclusion is
further strengthened in view of Section 3-J of the Act whichPage 32 of 51
Arb Appeal 10-2026 and Otheliminates the application of the Land Acquisition Act, 1894, to an
acquisition under the Act, 1956.
19. It is settled principles of law that when the special law sets out a
self−contained code, the application of general law would impliedly
be excluded. In the instant case, the scheme of Act, 1956 being a
special law enacted for the purpose and for appointment of an
arbitrator by the Central Government under Section 3G(5) of Act,
1956 and sub−section (6) of Section 3G itself clarifies that subject to
the provisions of the Act 1956, the provisions of Act 1996 shall apply
to every arbitration obviously to the extent where the Act 1956 is
silent, the Arbitrator may take recourse in adjudicating the dispute
invoking the provisions of Act, 1996 for the limited purpose. But so
far as the appointment of an Arbitrator is concerned, the power
being exclusively vested with the Central Government as envisaged
under sub−section (5) of Section 3G of Act 1956, Section 11 of the
Act 1996 has no application.”
42. The Hon’ble Supreme Court in Sayedabad (Supra) observed that
the National Highways Act, 1956 is a special legislation and a
comprehensive code enacted by the Parliament for acquisition of land for
national highways, determination of compensation, and its disbursement.
The Act provides a complete mechanism for determination of
compensation and adjudication of disputes arising therefrom.
43. The Court further observed that if the amount determined by the
Competent Authority under sub-section (1) or sub-section (2) of Section 3G
is not acceptable to either of the parties, the amount shall, upon an
Page 33 of 51
Arb Appeal 10-2026 and Oth
application by either party, be determined by an Arbitrator to be appointed
by the Central Government under Section 3G(5) of the Act.
44. The Supreme Court held that since the power to appoint an
Arbitrator is specifically vested with the Central Government under Section
3G(5) of the Act of 1956, the provisions of Section 11 of the Arbitration and
Conciliation Act, 1996 would have no application. The Court further
observed that if the Central Government fails to appoint an Arbitrator
within a reasonable time, it would be open for the aggrieved party to seek
appropriate relief by filing a writ petition under Article 226 of the
Constitution of India or by adopting other appropriate legal remedies, but
the remedy under Section 11 of the Arbitration and Conciliation Act would
not be available for appointment of an Arbitrator.
45. The Hon’ble Supreme Court in Sayedabad (Supra) has further
observed that when a special statute sets out a self-contained code, the
application of the general law stands impliedly excluded. In the present
context, the scheme of the National Highways Act, 1956 being a special
law provides a complete mechanism for acquisition of land and
determination of compensation, including appointment of an Arbitrator by
the Central Government under Section 3G(5) of the Act.
46. It appears that while considering the applicability of Section 29A of
Page 34 of 51
Arb Appeal 10-2026 and Oth
the Arbitration and Conciliation Act, the Himachal Pradesh High Court did
not consider the pronouncements of the Hon’ble Supreme Court in
Sayedabad (Supra) which clearly recognize the National Highways Act,
1956 as a special enactment providing a complete statutory mechanism for
appointment of the Arbitrator.
47. The Bombay High Court in the case of Zeal Infraproject Private
Limited vs. The State of Maharashtra ( Arbitration petition No.162 of
2024, decided on 22/04/2025), without referring to the judgment in
Sayedabad (supra), substituted the Arbitrator under Section 15 of the
Arbitration and Conciliation Act, 1996. The said order was challenged by
the National Highways Authority of India before the Supreme Court of India
in SLP (Civil) No. 17737 of 2025. By order dated 29/07/2025, the Special
Leave Petition was disposed of. However, the disposal was on the peculiar
facts of the case, and the questions of law arising for consideration were
expressly kept open. It is to be noticed that in the proceedings before the
Supreme Court of India, the National Highways Authority of India had
specifically objected to the application of Section 15 of the Arbitration and
Conciliation Act, 1996 to arbitration proceedings conducted under the
National Highways Act, 1956. The relevant observations of the
Supreme Court in above noted order dated 29/07/2025 are reproduced
below :
“5. According to Mr. Mehta, the following questions of law fall for the
Page 35 of 51
Arb Appeal 10-2026 and Othconsideration of this Court : –
“1. The National Highways Act, 1956 in general and
Section 3G i particular being a self-contained Code, is it not
necessary that the Arbitration is conducted by an arbitrator
appointed by the Centra Government under Section 3G(5) of
the National Highways Act 1956 ?
2. In view of the fact that Section 3G(6) which starts with
the expression “subject to the provisions of the Act”, will the
National Highways Act, 1956 not override the provisions of
Arbitration and Conciliation Act, 1996 ?
3. Even if, in arguendo, it is accepted that Section 11
read with Section 15 of the Arbitration and Conciliation Act,
1996 applies to an arbitration under National Highways Act,
1956, would either the appointment of arbitrator under
section 11 of the Act substitution / replacement under Section
15(2) be strictly in accordance with Section 3G(6) of the
National Highways Act, 1956 i.e. by an officer appointed by
the Central Government and not any other arbitrator chosen
by the Court exercising powers either under Section 11 or 15
of the Code particularly in view of Section 15(2) of the Act of
1996 ?
6. In the peculiar facts and circumstances of this case, we would
not like to interfere with the impugned order passed by the High
Court appointing an Arbitrator.
7. However, the questions of law, referred to above, are kept
open for being considered in any other appropriate matter.”
It is significant to note that in the National Highways Authority of
India had specifically objected to the application of Section 15 of the
Arbitration and Conciliation Act, 1996 to arbitration conducted under the
Page 36 of 51
Arb Appeal 10-2026 and Oth
National Highways Act, 1956. It was specifically contended by the National
Highway Authority before the Supreme Court that arbitration can be only
be conducted by the arbitrator appointed by the Central Government under
Section 3-G (5) and the provisions of NH Act would override the provisions
of the Arbitration Act for Arbitration conducted under the NH Act. The
Supreme Court, while dismissing the petition on the peculiar facts of the
case, did not finally decide the legal issue and expressly kept the questions
of law open for consideration in an appropriate case.
48. The application of Section 29A of the Arbitration and Conciliation Act,
1996 to arbitrations conducted under the National Highways Act, 1956
would render the statutory scheme of appointment of arbitrators and
conduct of proceedings of the arbitrator under the National Highways Act
unworkable. Under the scheme of Section 3G(5) of the National Highways
Act, the Central Government appoints an “officer” for a particular region to
act as the Arbitrator. The appointment is not of a specifically named
individual in each case rather, the designated office for that region acts as
the Arbitraal tribunal for all matters arising within that region.
Consequently, the arbitration is attached to the office and not to the
individual occupying that office. When the incumbent officer is transferred
or otherwise ceases to hold that office, the successor who assumes the
office automatically functions as the Arbitrator in the matters pertaining to
that Region. In such a statutory framework, the application of Section 29A
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Arb Appeal 10-2026 and Oth
of the Arbitration and Conciliation Act, 1996, which contemplates extension
of the mandate of a specific arbitrator and substitution of the arbitrator by
the Court, becomes impracticable. Since the arbitration under the National
Highways Act is conducted by the incumbent officer holding the designated
office, the concept of substitution of an arbitrator for the purpose of
extension of mandate under Section 29A would be inconsistent with the
statutory scheme. Therefore, the application of Section 29A to arbitrations
under the National Highways Act would, per se, render the arbitration
mechanism under the NH Act unworkable.
49. This Court, for the reasons discussed above, holds that Section 29A
of the Act, which provides for a time limit for the conclusion of arbitration
proceedings , extension of mandate of Arbitrator, reduction of fees of
arbitrator and for substitution of the arbitrator, would not apply to an
arbitrator appointed under Section 3G(5) of the National Highways Act.
50. If the arbitrator does not decide within reasonable period the power
of this Court under Article 226 of the Constitution of India can be invoked
as held in the case of Sayedabad (Supra) in cases where the arbitrators
are not appointed by the Central Government.
51. Coming to the merits, it is submitted that the Arbitrator has not
applied the provisions of Section 26 of the Right to Fair Compensation and
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Transparency in Land Acquisition, Rehabilitation and Resettlement Act,
2013, though the said provision has been made applicable by the Central
Government in exercise of powers under Section 105(3) of the said Act. The
relevant provisions, namely Section 26 and Section 105 of the said Act, are
reproduced below:
Section 26 – Determination of market value of land by Collector
(1) The Collector shall adopt the following criteria in assessing and
determining the market value of the land, namely–
(a) the market value, if any, specified under the Indian Stamp Act, 1899 for
the registration of sale deeds in the area where the land is situated; or
(b) the average sale price for similar type of land situated in the nearest
village or vicinity area, ascertained from the highest fifty per cent of the
sale deeds of the preceding three years; or
(c) the consented amount of compensation agreed upon under sub-
section (2) of section 2 in case of acquisition of lands for private companies
or public-private partnership projects,
whichever is higher.
(2) The market value so determined shall be multiplied by a factor
specified in the First Schedule.
Section 105 – Provisions of this Act not to apply in certain cases or
to apply with certain modifications
(1) Subject to sub-section (3), the provisions of this Act shall not apply
to the enactments relating to land acquisition specified in the Fourth
Schedule.
(2) The Central Government may, by notification, omit or add to any of
the enactments specified in the Fourth Schedule.
(3) The Central Government shall, by notification, direct that any of the
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provisions of this Act relating to determination of compensation in
accordance with the First Schedule and rehabilitation and resettlement
specified in the Second and Third Schedules, being beneficial to the
affected families, shall apply to the cases of land acquisition under the
enactments specified in the Fourth Schedule, with such exceptions or
modifications as may be specified.
52. The Central Government, in exercise of powers under Section 105(3)
of the Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013, issued a notification dated
24/04/2017, whereby the provisions relating to determination of
compensation contained in the First Schedule and rehabilitation and
resettlement provided in the Second and Third Schedules were made
applicable to land acquisition under the enactments specified in the Fourth
Schedule, including the National Highways Act, 1956. Consequently, the
principles governing determination of market value as contemplated under
Section 26 of the said Act became applicable to acquisitions under the
53. The learned Counsel appearing for the National Highway Authority
has contended that the Competent Authority categorized the lands into six
different heads, whereas the Arbitrator treated them as one category and
proceeded to determine the market value without applying the principle of
Section 26 of the 2013 Act. According to the learned Counsel for National
Highway Authority, such an approach amounts to an patent illegality in the
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arbitral award and therefore the award is liable to be set aside.
54. On the other hand, the learned Counsel for respondents submitted
that the Arbitrator has in fact followed the mandate of Section 26 of the
RFCTLARR Act, 2013. The landowners produced as many as 193 sale deeds
from village Gandheli itself, covering proximate periods and relating to the
very same revenue groups which were relied upon by the Competent
Authority for Land Acquisition. However, the Competent Authority, despite
referring to 228 sale instances in the award, arbitrarily discarded about 199
sale deeds and confined the determination of market value to an average
of only 15 low-value transactions, without assigning any reasons for such
exclusion.
55. Such selective exclusion of higher-value sale instances is contrary to
the mandate of Section 26 and also contrary to the law laid down by the
Hon’ble Supreme Court in Vincent Daniel (Supra). In the said decision,
the Hon’ble Supreme Court extended the jurisprudence evolved under the
Land Acquisition Act, 1894 in relation to determination of market value and
clarified that, while computing the market value under the framework of
Section 26, the precedents and principles evolved by the Supreme Court
and the High Courts may be taken into consideration, subject to the
modifications envisaged in Section 26, so as to ensure that no injustice is
caused to the landowners.
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56. The Hon’ble Supreme Court further clarified in Vincent Daniel
(Supra) that the Collector is required to record reasons for discounting or
enhancing the market value in terms of Explanation 4 to Section 26 of the
RFCTLARR Act, 2013. In the present case, it is submitted that the
Competent Authority for Land Acquisition discounted as many as 199 sale
deeds out of the 228 sale instances mentioned in the award without
assigning any reasons for doing so.
57. It is further submitted that the Arbitrator has taken into account all
genuine and comparable sale instances from village Gandheli and
determined that the said transactions support a higher market value of
approximately Rs.2,183/- per square meter. However, in order to avoid
discrimination and to maintain parity with earlier awards relating to
similarly situated landowners from the same village, the Arbitrator
moderated the operative rate to Rs.1,742/- per square meter so as to
ensure uniformity.
58. The learned Counsel has further submitted that once an arbitral
award is passed, the scope of interference under Section 34 of the
Arbitration and Conciliation Act, 1996 is extremely limited. The award
cannot be set aside merely because another view on the merits of the
matter is possible. Unless the award suffers from patent illegality or falls
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within the limited grounds specified under Section 34, the Court cannot
interfere with the award.
59. It is further submitted that the present proceedings arise under
Section 37 of the Arbitration and Conciliation Act, which provides an
appellate remedy against an order passed under Section 34. The scope of
interference under Section 37 is even more limited, and this Court would
therefore be slow to re-appreciate the evidence or re-examine the
computation of the market value of the acquired land on merits.
60. The power of the ‘Court’ to interfere with arbitral award under
Section 34 and of this Court under Section 37 of the Arbitration Act needs
to be noted before considering the above submissions on merits of arbitral
award. The Supreme Court in the case of PSA Sical Terminals Private
Limited Vs. Board of Trustees of V.O. Chidambaranar Port Trust
Tuticorn and Anr. reported in (2023) 15 SCC 781 has observed that it
is a settled legal position, that in an application under Section 34, the court
is not expected to act as an appellate court and reappreciate the evidence.
The scope of interference would be limited to grounds provided under
Section 34 of the Arbitration Act. The interference would be so warranted
when the award is in violation of “public policy of India”, which has been
held to mean “the fundamental policy of Indian law”. A judicial intervention
on account of interfering on the merits of the award would not be
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permissible. However, the principles of natural justice as contained in
Section 18 and 34(2)(a)(iii) of the Arbitration Act would continue to be the
grounds of challenge of an award. The ground for interference on the basis
that the award is in conflict with justice or morality is now to be understood
as a conflict with the “most basic notions of morality or justice”. It is only
such arbitral awards that shock the conscience of the court, that can be set
aside on the said ground. An award would be set aside on the ground of
patent illegality appearing on the face of the award and as such, which
goes to the roots of the matter. However, an illegality with regard to a mere
erroneous application of law would not be a ground for interference.
Equally, reappreciation of evidence would not be permissible on the ground
of patent illegality appearing on the face of the award.
61. The Hon’ble Supreme Court in PSA Sical Terminals Private
Limited (supra) has further observed that a decision which is perverse,
though would not be a ground for challenge under “public policy of India”,
would certainly amount to a patent illegality appearing on the face of the
award. However, a finding based on no evidence at all or an award which
ignores vital evidence in arriving at its decision would be perverse and
liable to be set aside on the ground of patent illegality.
62. To appreciate the test of perversity, the Hon’ble Supreme Court in
PSA Sical Terminals Private Limited (supra) in para 42 has further held
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as under :-
“42. To understand the test of perversity, it will also be appropriate to refer
to paragraph 31 and 32 from the judgment of this Court in Associate Builders
(supra), which read thus:
31. The third juristic principle is that a decision which is perverse or so
irrational that no reasonable person would have arrived at the same is
important and requires some degree of explanation. It is settled law that
where:
(i) a finding is based on no evidence, or
(ii) an Arbitral Tribunal takes into account something irrelevant to the
decision which it arrives at; or
(iii) ignores vital evidence in arriving at its decision,
such decision would necessarily be perverse.
32. A good working test of perversity is contained in two judgments. In
Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath & Sons
[1992 Supp (2) SCC 312], it was held:
“7. … It is, no doubt, true that if a finding of fact is arrived at by
ignoring or excluding relevant material or by taking into consideration
irrelevant material or if the finding so outrageously defies logic as to
suffer from the vice of irrationality incurring the blame of being
perverse, then, the finding is rendered infirm in law.”
In Kuldeep Singh v. Commr. of Police (1999) 2 SCC 10, it was held:
“10. A broad distinction has, therefore, to be maintained between the
decisions which are perverse and those which are not. If a decision is
arrived at on no evidence or evidence which is thoroughly unreliable
and no reasonable person would act upon it, the order would be
perverse. But if there is some evidence on record which is acceptable
and which could be relied upon, howsoever compendious it may be, the
conclusions would not be treated as perverse and the findings wouldPage 45 of 51
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63. The Hon’ble Supreme Court at para 14 in the case of MMTC Limited
Vs. Vendanta Limited reported in (2019) 4 SCC 163 has further
observed that 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 Section 34 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.
64. Perusal of the award indicates that the learned Arbitrator has
formulated all the necessary issues. In paragraph No.20 of the award, the
Arbitrator has framed issues with regard to determination of the market
value as well as the applicability of the multiplication factor. However, the
Arbitrator has specifically not granted compensation towards loss of
easementary rights and damages as contemplated under Section 3G(7)(b),
(c) and (d) of the National Highways Act.
65. While determining the price of the acquired land, the Arbitrator has
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applied the provisions of Sections 26 to 30 along with Schedule I of the
Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013. It is noticed that the landowners
had produced several sale transactions from the vicinity of Gandheli
village. The Arbitrator has considered the average of such sale transactions
produced by the applicants, which comes to more than Rs.2183/- per
square meter. The respondents have not produced any contrary evidence,
and therefore the Arbitrator has proceeded to determine the market value
on the basis of the material produced by the applicants.
66. The Arbitrator has also observed that from the award passed by the
Competent Authority for Land Acquisition (CALA), it appears that the
market value fetched by certain lands as such from the sale instances
ranged from Rs.3279/- per square meter to Rs.6989/- per square meter.
The applicants had produced as many as 193 certified copies of sale deeds
executed in the vicinity of village Gandheli. The Arbitrator has fairly
excluded those sale transactions which were already excluded by the CALA
on the ground that they related to lands situated in different Guts. After
such exclusion, reliance was placed on 171 sale transactions out of the 193
sale deeds.
67. The Arbitrator has further observed that the CALA had selected only
29 sale deeds out of the available transactions and thereafter selected only
15 sale deeds for the purpose of calculating the average price. The
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Arbitrator has also noticed that village Gandheli is situated in the vicinity of
the limits of Chhatrapati Sambhajinagar Municipal Corporation and that the
surrounding area has undergone rapid transformation. Therefore, the
Arbitrator has observed that the actual market value of the land is
significantly higher than the value reflected in the sale deeds.
68. It is also noticed that the CALA had awarded compensation at the
rate of Rs.7966/- per square meter to lands situated in Deolai, which shares
a boundary with village Gandheli. The Arbitrator has further observed that
there is no provision in law empowering the land acquisition authority to
arbitrarily reject sale deeds without assigning cogent reasons.
69. Considering the 171 sale transactions and applying the average rate
based on the higher value sale deeds, the Arbitrator has determined the
market value at Rs.1742/- per square meter for the acquired land.
70. The Arbitrator has thus applied Section 26 of the Act of 2013 in
determining the value of acquired land. The Hon’ble Supreme Court in
Vincent Daniel (Supra) has considered the applicability of Section 26 of
the Act of 2013, particularly in paragraphs 18, 19, 20, 21 and 24 which
read as under :
“18. Section 26 deals with the determination of the market value
of the land by the Collector. Sub-section (1) to Section 26 consists of
three Clauses, (a), (b) and (c), each prescribing a criterion or
standard for assessing the market value. Clause (a) prescribes the
consideration of the market value specified in the Stamp Act for thePage 48 of 51
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concerned land is situated.
19. Clause (b) to Section 26(1) requires the Collector to consider
the average sale price for similar types of land situated in the
nearest village or the nearest vicinity. This test of average sale price
is similar to the exemplar test which is adopted and applied in cases
of acquisition under the Land Acquisition Act, 1894, but with
modifications in terms of Explanations 1 to 4. Computation under
Clause (b) is in relative terms. Therefore, while drawing a
comparison with the average price of the other lands under Clause
(b), the Collector must consider all such factors that have been held
to be relevant for accurate valuation by this Court. These include the
theory of deduction, the principle of belting, and accounting for
other advantages or disadvantages of the acquired land, in
comparison to the lands existing in the same vicinity.
20. Clause (c) to Section 26(1) of the Acquisition Act, 2013
requires the Collector to take into consideration the amount of
compensation agreed upon by the parties under Section 2(2) of the
Acquisition Act, 2013 in cases involving the acquisition of land for
private companies or public-private partnership projects. These
agreements are entered into voluntarily, based upon consent terms,
and reflect the market value as settled inter se the parties.
21. It is important to note that the values computed in terms of
Clauses (a), (b) and (c) of Section 26(1) of the Acquisition Act, 2013
are not to be averaged. The highest of the values as determined by
Clauses (a), (b) and (c), is to be treated as the market value under
Section 26(1) of the Acquisition Act, 2013.
24. Explanation 4 requires specific attention, as it brings the element
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of discretion while computing the market value under Section 26(1)
to the forefront. Explanation 4 is divided into two parts. The first part
refers to sub-section (1) to Section 26 – the higher value determined
as per Clauses (a), (b) and (c) of Section 26(1) of the Acquisition Act,
2013. The second part is specific to the average sale price referred
to in Clause (b) to Section 26(1) read with Explanations 1 and 2. In
either case, where the Collector is of the opinion that the value/price
computed by applying these provisions is not indicative of the actual
prevailing market value, they may discount or enhance it to arrive at
the accurate market value.”
71. Considering the law laid down in the aforesaid judgment, I do not
find any error in the award of the Arbitrator in applying Section 26 of the
Act of 2013 for determining the market value.
72. The next issue pertains to the applicability of the multiplication
factor of two. The Arbitrator has observed that the acquired lands situated
in village Gandheli fall within a rural area as per the relevant notification
dated 18/09/2015. The Arbitrator has further taken into consideration the
amendment dated 24/04/2017, by which the multiplication factor of two
became applicable. On both these aspects, the Arbitrator has recorded
findings while determining the applicability of multiplication factor of two.
73. It is also noticed that the Arbitrator has not granted compensation
towards loss of easementary rights and damages as contemplated under
Section 3G(7)(b), (c) and (d) of the National Highways Act.
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74. Considering the Judgment of Supreme Court in PSA Sical
Terminals (Surpa) and MMTC Limited (Supra), it is necessary to bear in
mind the limited scope of interference by the Court while exercising powers
under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996. The
Hon’ble Supreme Court has consistently held that interference with an
arbitral award is permissible only in cases of patent illegality or where the
award is in conflict with the fundamental policy of Indian law.
75. In the present case, I do not find any patent illegality in the
determination of compensation made by the Arbitrator. The Arbitrator has
considered the relevant statutory provisions and the material placed on
record while arriving at the value of the acquired lands.
76. Considering the above, no ground is made out for interference with
the arbitral award in exercise of powers under Section 37 of the Arbitration
and Conciliation Act, 1996. Accordingly, all the appeals stand dismissed.
( ARUN R. PEDNEKER, J. )
vj gawade/-.
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