National Highways Authority of India Versus Sri P. Nagaraju @ Cheluvaiah & Anr.

National Highways Authority of India Versus Sri P. Nagaraju @ Cheluvaiah & Anr.

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



 Page 1 of 73
 REPORTABLE

 IN THE SUPREME COURT OF INDIA
 CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL NO. 4671 OF 2022
 (Arising out of SLP (CIVIL) No.19775 of 2021)
National Highways Authority of India …Appellant(s)
Versus
Sri P. Nagaraju @ Cheluvaiah & Anr. ...Respondent(s)
With
C.A. No.4676/2022 @ SLP(C)No.19811/2021
C.A. No.4677/2022 @ SLP(C)No.19958/2021
C.A. No.4678/2022 @ SLP(C)No.19810/2021
C.A. No.4679/2022 @ SLP(C)No.20762/2021
C.A. No.4680/2022 @ SLP(C)No.19729/2021

C.A. No.4681/2022 @ SLP(C)No.2503/2022


J U D G M E N T
C.A. No.4671/2022 @ SLP (C) No.19775 of 2021
C.A. No.4676/2022 @ SLP(C)No.19811/2021
C.A. No.4677/2022 @ SLP(C)No.19958/2021
C.A. No.4678/2022 @ SLP(C)No.19810/2021
C.A. No.4679/2022 @ SLP(C)No.20762/2021
C.A. No.4680/2022 @ SLP(C)No.19729/2021
 Page 2 of 73
A.S. Bopanna,J.
1. Leave granted.
2. The appellant – National Highways Authority of
India (‘NHAI’ for short) is before this Court in these
appeals assailing the judgment dated 26.07.2021 by the
Division Bench, High Court of Karnataka, Bengaluru in
MFA No.2037/2021 (AA) and connected matters. The
appeals filed by the appellant herein before the High
Court were dismissed, whereby the judgment dated
26.02.2021 passed by the Principal District Sessions
Judge, Ramanagara in Arbitration Suit No.22/2019 and
analogous suits as also the judgment dated 27.01.2021
by the Principal and District and Sessions Judge,
Bengaluru Rural District, Bengaluru filed under Section
34 of the Arbitration and Conciliation Act, 1996 (‘Act
1996’ for short) were upheld. The said arbitration suits
under Section 34 of Act, 1996 were filed by NHAI
assailing the award dated 13.08.2019 and 06.01.2020
passed by the Deputy Commissioner and Arbitrator,
National Highway – 275 (land acquisition),
 Page 3 of 73
Ramanagara District, Ramanagara in Case
No.LAQ(A)/NH-275/CR/137/2017-18 and Deputy
Commissioner-1 and Arbitrator Bengaluru Urban
District, Bengaluru in Case No.LAQ/ARB/BNG/NH275/CR/02/2018-19. By the said awards the respective
learned Arbitrators had enhanced the compensation
from Rs.2026/- per sq. mtr and Rs.17,200/- determined
by the Special Land Acquisition Officer (‘SLAO’ for short)
to Rs.15,400/- per sq. mtr and Rs.25,800/- respectively.
Since the learned District Judge and the High Court have
upheld the determination of the compensation based on
the market value determined at Rs.15,400/- and
Rs.25,800 per sq. mtr, the appellant – NHAI, claiming to
be aggrieved is before this Court.
3. Considering that the description of the parties
was different in the hierarchy of the proceedings, for the
sake of convenience and clarity the appellant herein
would be described as ‘NHAI’ and the private
respondents herein (land losers) would be referred to as
the ‘claimants’ hereinafter, wherever the context so
 Page 4 of 73
requires. The claimants – (private respondents in these
appeals) are the owners of the different extent of land in
the various survey numbers which were all part of the
same acquisition which was initiated under the
preliminary notifications dated 01.02.2016 and
02.02.2016 issued under the National Highways Act (‘NH
Act’ for short). The facts arising in the appeal relating to
SLP(C) No.19775/2021 is referred as the lead case. The
facts in the other cases are more or less similar, while
the legal issues raised are the same.
4. The lands situated in Survey Nos. 92/1, 90/2A,
42/1 of Mayaganahalli, survey no.35/3 and 37/1 of
Madapura, survey no.24 of Kallugopahalli and survey
no.40/8 of Kumbalagodu, among others were notified for
acquisition under the preliminary notification dated
01.02.2016 and 02.02.2016. The said acquisition was a
part of the process for formation of the BengaluruMysore (NH-275) Highway. The final notification was
issued on 23.09.2016 and 04.10.2016. The SLAO on
initiating the process for passing the award, on
 Page 5 of 73
consideration of the material available before him, had
passed the award dated 10.03.2017 and 04.01.2017
determining the compensation at Rs.2026/-and
Rs.17200/- per sq. mtr respectively. The SLAO keeping
in view the provisions contained under the Right to Fair
Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 (‘RFCTLARR
Act, 2013’ for short), took note of the sale exemplars
which were available before him but ultimately took note
of the value provided under the notification dated
07.11.2014 issued by the Department of Stamps and
Registration for the purpose of registration of the sale
transactions, to award compensation.
5. The claimants being dissatisfied with the
determination of the compensation awarded by SLAO,
filed their respective petitions before the learned
Arbitrator in terms of the provisions contained under
Section 3G(7) of NH Act. The learned Arbitrator having
taken into consideration the method adopted by the
SLAO while determining the compensation, though has
 Page 6 of 73
adopted the same mode of determination by reckoning
the guideline value provided by the Department of
Stamps and Registration for the purpose of registration
of sale transactions, has however taken into
consideration the subsequent notifications dated
28.03.2016 and 05.12.2018 to reckon the guideline
value. In addition, the learned Arbitrator while applying
the guideline dated 28.03.2016 and 05.12.2018 has
taken note that the lands which were the subject matter
of acquisition were converted for residential use and
industrial purpose, from agricultural purpose. While
adopting the guideline value of residential and industrial
property, the learned Arbitrator has instead of applying
the same value which was provided under the guideline
to the specific survey number in the village wherein the
property under acquisition is situate, has adopted the
guideline value which was separately indicated in the
said notification in respect of a specified residential
layout which is situated in the vicinity. Accordingly, the
market value was determined at Rs.15,400/- per sq. mtr.
 Page 7 of 73
On the said basis, learned Arbitrator had taken note that
the land bearing Survey No.40/8 in Kumbalagodu was
converted for industrial purpose and since the guideline
dated 05.12.2018 provided that an additional amount of
50% is to be added as against what had been indicated
for residential property under the guideline, an amount
of Rs.25,800/- per sq. mtr was determined. Having
arrived at such determination of the market value, the
total extent of the land acquired was considered and the
compensation was awarded.
6. The NHAI claiming to be aggrieved by the method
adopted by the learned Arbitrator in determining the
market value and compensation, filed the arbitration
suit under Section 34 of the Act, 1996 raising various
contentions. It was contended that the award passed is
against the provisions of law and public policy, apart
from being in violation of Principles of Natural Justice.
It was contended that the notification for acquisition was
issued on 01.02.2016, which is the relevant date for
determining the market value. The grievance put forth
 Page 8 of 73
was that the learned Arbitrator in the first set of cases
had taken into consideration the guideline value which
was fixed under a subsequent notification dated
28.03.2016. The further grievance is that even under
the said notification dated 28.03.2016 the guideline
value in respect of the lands which are situated in the
village which was the subject matter of acquisition is
fixed at about Rs.8000/- per sq. mtr but the learned
Arbitrator has without basis adopted the guideline value
of Rs.15,400/- per sq. mtr. which was the guideline
value for a different specified land. In that view, it was
contended that the SLAO on the other hand had taken
into consideration the sale value for which the
transactions had taken place. In the said process, since
the guideline value fixed under the notification dated
07.11.2014, prior to the date of preliminary notification
for acquisition dated 01.02.2016 was fixed and
considering the fact that Section 26 of RFCTLARR Act,
2013 provides for awarding the higher of the value, the
SLAO had adopted the guideline value of Rs.2026/- per
 Page 9 of 73
sq. mtr in respect of lands in survey nos.92/1, 90/2A of
Mayaganahalli and survey no.35/3 and 37/1 of
Madapura while the properties in survey no.42/1 of
Mayaganahalli was awarded Rs.7833/- and the property
in survey no.24 of Kallugopahalli was awarded
Rs.8102/- and the property in survey no.40/8 of
Kumbalagodu was awarded Rs.17,200/-.
7. The learned Principal District and Sessions Judge
while taking note of the contentions as put forth has kept
in view the narrow scope available in a suit/petition
under Section 34 of Act, 1996 and also keeping in view
the provisions contained in Section 26 and 28 of
RFCTLARR Act, 2013 has arrived at the conclusion that
as against the consideration made by the SLAO by
reckoning the land under acquisition as agricultural
land, the learned Arbitrator has taken note that the
lands were converted for residential purpose and in that
light had taken into consideration the guideline value
fixed in respect of the residential extension known as
‘city green’ and ‘Zunadu’ for which the guideline value
 Page 10 of 73
for registration purpose was fixed at Rs.15,400/- per sq.
mtr. In that view, the learned District Judge on taking
note of the decisions laying down that limited scope is
available for interference under Section 34 of Act, 1996,
has dismissed the suit.
8. The High Court, in an appeal under Section 37 of
Act, 1996 while adverting to the very contentions put
forth by NHAI in attacking the award passed by the
learned Arbitrator has taken into consideration that
NHAI had sufficient opportunity to put forth their
contentions in the proceedings before the learned
Arbitrator. The reliance placed on the guideline value
notification dated 28.03.2016 was adverted to by the
High Court and it was noted that the said guideline value
had been notified in the official gazette which was to the
knowledge of all concerned. In that light, keeping in view
the fact that the SLAO though had taken note of the
guideline value for the earlier period, the market value
was fixed unscientifically since the lands which were
converted to commercial, industrial and residential
 Page 11 of 73
purposes had not been taken into consideration. The
contention of the claimants that the acquired land was
situated near to the lands in ‘Zunadu’ Extension and
‘city greens’ was held justified. In this regard, the High
Court had taken into consideration that in
Kallugopahalli, even under the earlier notification dated
07.11.2014 under Stamp Act, the guideline value fixed
for registration was Rs.8,073/- per sq. mtr for converted
land and for sites in ‘Zunadu’, it was Rs.13,993/- per sq.
mtr. In comparison, under the guideline value
notification dated 28.03.2016 the market value for
‘Zunadu’ is Rs.15,400/- per sq. mtr. In that light, taking
note of the fact that the notification dated 28.03.2016
contained reference to a notification dated 14.09.2015
proposing the registration value which was earlier to the
acquisition notification was of the opinion that reckoning
of the value specified in the notification dated
28.03.2016 by the learned Arbitrator, which was upheld
in the suit under Section 34 of the Act, 1996 is justified.
Similar consideration is made in respect of the extent of
 Page 12 of 73
land situate in the remaining survey numbers which
have reference to the acquisition process. The issue
relating to industrial land is referred separately here
below. The market value determined at Rs.15,400/- per
sq. mtr in respect of all the lands has accordingly been
upheld by the High Court. In that view, the High Court
was of the opinion that in the limited scope available in
an appeal under Section 37 of Act, 1996 an examination
beyond the scope provided under Section 34 of Act, 1996
is not to be undertaken and has indicated that if a
plausible view is taken by the learned Arbitrator, it
should not be substituted by another view of the Court
under Sections 34 and 37 of Act, 1996. Accordingly, the
appeals filed by NHAI have been dismissed.
9. It is in that view the NHAI claiming to be aggrieved
is before this Court in these appeals.
10. We have heard Ms. Madhavi Divan, learned
Additional Solicitor General for NHAI, Mr. S. Nagamuthu
learned senior counsel, Mr. Naresh Kaushik and Mr. K.
Parameshwar being assisted by the advocates on record
 Page 13 of 73
for the respective claimants. We have also perused the
appeal papers in great detail.
11. From the narration of the sequence made above it
would be clear that the factual aspects involved in the
instant case are to be considered in the background of
the legal contentions urged. While doing so, what is also
to be borne in mind is that these appeals arise out of the
proceedings whereunder an award had been passed by
the learned Arbitrator in arbitration proceedings. In that
light, the limited scope available under Act, 1996 to
assail an award as provided under Section 34 of the said
Act is also to be kept in view even in these appeals. While
doing so, what cannot also be lost sight of is the fact that
the arbitration was not initiated based on an agreement
entered into between the contracting parties under a
contract but is under a statutory provision which
provides for such arbitration in lieu of ‘reference’ under
the regime for acquisition of land for public purpose. One
of the parties to such arbitration proceedings would also
be a land loser and the adjudication in the arbitration
 Page 14 of 73
proceedings is not based on any definite terms of the
contract providing for mutual obligations determinable
under the contract but for determination of ‘just
compensation’ in respect of land which is compulsorily
acquired for a public purpose. Notwithstanding the
same, the broad perspective relating to the limited
grounds to challenge an award under Section 34 of Act,
1996 also is to be kept in perspective since the
arbitration is governed by Act, 1996.
12. In order to consider whether an award is in
accordance with law, at the outset the scope of
jurisdiction of an arbitrator while determining the
compensation under NH Act vis-à-vis RFCTLARR Act,
2013 to which detailed reference is made by the learned
Additional Solicitor General is to be noted. It is
contended that the factors to determine the
compensation payable to the land loser as provided in
Section 3G(7)(a) of the NH Act can only be the basis. In
that view, it is contended that the parameters contained
in Section 28 of RFCTLARR Act, 2013 cannot be taken
 Page 15 of 73
into consideration. The contention in that regard is that
while determining the market value, the definite
parameters as contained in Section 3G(7)(a) of NH Act
alone would be applicable and in view of the provisions
contained in Section 3J of NH Act the provisions of the
Land Acquisition Act shall not be made applicable. It is
therefore contended that by invoking Section 28 of
RFCTLARR Act, 2013 the seventh factor stated therein,
namely, the ground relating to the fixation of the market
value based on equity, justice and benefit to the affected
families cannot be a criteria to determine the market
value. To press home the point, the learned Additional
Solicitor General has referred to a comparative
statement between the two provisions under the said two
enactments which is taken note as hereunder:
Section 28 of the LA Act,
2013
Section 3G (7) (a) of the NH
Act
28. Parameters to be
considered by Collector in
determination of award.- In
determining the amount of
compensation to be awarded
for land acquired under this
Act, the Collector shall take
into consideration- firstly,
the market value as
3G. Determination of amount
payable as compensation.
xxx
(7) The competent authority or
the arbitrator while
determining the amount under
sub-section (1) or sub-section
(5), as the case may be, shall
take into consideration-
 Page 16 of 73
determined under Section 26
and the award amount in
accordance with the First and
Second Schedules;
secondly, the damage
sustained by the person
interested, by reason of the
taking of any standing crops
and trees which may be on
the land at the time of the
Collector’s taking possession
thereof;
thirdly, the damage (if any)
sustained by the person
interested, at the time of the
Collector’s taking possession
of the land, by reason of
severing such land from his
other land;
fourthly, the damage (if any)
sustained by the person
interested, at the time of the
Collector’s taking possession
of the land, by reason of the
acquisition injuriously
affecting his other property,
movable or immovable, in any
other manner, or his
earnings;
fifthly, in consequence of the
acquisition of the land by the
Collector, the person
interested is compelled to
change his residence or place
of business, the reasonable
expenses (if any) incidental to
such change;
sixthly, the damage (if any)
bona fide resulting from
diminution of the profits of
the land between the time of
the publication of the
declaration under Section 19
and the time of the Collector’s
taking possession of the land;
and
(a) the market value of the land
on the date of publication of
the notification under Section
3 A;
(b) the damage, if any,
sustained by the person
interested at the time of taking
possession of the land, by
reason of the severing of such
land from other land;
(c) the damage, if any,
sustained by the person
interested at the time of taking
possession of the land, by
reason of the acquisition
injuriously affecting his other
immovable property in any
manner, or his earnings;
(d) if, in consequences of the
acquisition of the land, the
person interested is compelled
to change his residence or
place of business, the
reasonable expenses, if any,
incidental to such change.
 Page 17 of 73
seventhly, any other ground
which may be in the interest
of equity, justice and
beneficial to the affected
families.

13. It is contended that the applicability of the
provisions of the RFCTLARR Act, 2013 is limited to the
provision contained in Section 26 thereof for
determination of the market value by the Collector which
provides the basic factors to be taken into consideration
in view of notification dated 28.08.2015 and the Act
cannot be made applicable beyond the same.
14. The contention on behalf of the claimants is that
the determination of the compensation requires all
factors to be taken into consideration for fixing the ‘fair
and just compensation’ and as such the parameters
contained in Section 28 RFCTLARR Act, 2013 are also
applicable since the NH Act finds a place in the Fourth
Schedule to RFCTLARR Act, 2013.
15. On this aspect, it would be appropriate to take note
of the decision rendered by this Court in Union of India
 Page 18 of 73
vs. Tarsem Singh, (2019) 9 SCC 304 relied on by both
sides, wherein it has been held as hereunder:
“51. We were also referred to an order in Sunita
Mehra v. Union of India, in which this Court held:
“5. The only point agitated before us by the
learned Solicitor General is that in para 23 of the
impugned judgment of the High Court, it has
been held that landowners would “henceforth” be
entitled to solatium and interest as envisaged by
the provisions of Sections 23 and 28 of the Land
Acquisition Act, 1894. In the ultimate paragraph
of the impugned judgment it has, however, been
mentioned that in respect of all acquisitions made
under the National Highways Act, 1956, solatium
and interest in terms similar to those contained
in Sections 23(2) and 28 of the Land Acquisition
Act, 1894 will have to be paid.
6. The learned Solicitor General has pointed out
that there is an apparent inconsistency in the
judgment, which needs to be clarified. It has also
been submitted by the learned Solicitor General
that the order of the High Court should be clarified
to mean that the issue of grant of interest and
solatium should not be allowed to be reopened
without any restriction or reference to time. The
learned Solicitor General has particularly
submitted that to understand the order of the
High Court in any other manner would not only
seriously burden the public exchequer but would
also amount to overlooking the delay that may
have occurred on the part of the landowner(s) in
approaching the Court and may open floodgates
for en masse litigation on the issue.
7. We have considered the submissions advanced.
In Gurpreet Singh v. Union of India , this Court,
though in a different context, had restricted the
operation of the judgment of this Court
in Sunder v. Union of India and had granted the
benefit of interest on solatium only in respect of
pending proceedings. We are of the view that a
similar course should be adopted in the present
 Page 19 of 73
case also. Accordingly, it is directed that the award
of solatium and interest on solatium should be
made effective only to proceedings pending on the
date of the High Court order in Golden Iron and
Steel Forging v. Union of India i.e. 28-3-2008.
Concluded cases should not be opened. As for
future proceedings, the position would be
covered by the provisions of the Right to Fair
Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement
Act, 2013 (came into force on 1-1-2014), which
Act has been made applicable to acquisitions
under the National Highways Act, 1956 by
virtue of notification/order issued under the
provisions of the 2013 Act.”
52. There is no doubt that the learned Solicitor
General, in the aforesaid two orders, has conceded
the issue raised in these cases. This assumes
importance in view of the plea of Shri Divan that
the impugned judgments should be set aside on
the ground that when the arbitral awards did not
provide for solatium or interest, no Section 34
petition having been filed by the landowners on
this score, the Division Bench judgments that are
impugned before us ought not to have allowed
solatium and/or interest. Ordinarily, we would
have acceded to this plea, but given the fact that
the Government itself is of the view that solatium
and interest should be granted even in cases that
arise between 1997 and 2015, in the interest of
justice we decline to interfere with such orders,
given our discretionary jurisdiction under Article
136 of the Constitution of India. We therefore
declare that the provisions of the Land
Acquisition Act relating to solatium and
interest contained in Sections 23(1-A) and (2)
and interest payable in terms of Section 28
proviso will apply to acquisitions made under
the National Highways Act. Consequently, the
provision of Section 3-J is, to this extent,
violative of Article 14 of the Constitution of
India and, therefore, declared to be
unconstitutional. Accordingly, appeal arising out
of SLP (C) No. 9599 of 2019 is dismissed.”
(emphasis supplied)
 Page 20 of 73
16. While arriving at the conclusion that notification
bearing SO No.2368(E)dated 28.8.2015 whereunder the
provisions of RFCTLARR Act, 2013 are made applicable,
it is noted that NH Act is also one of the enactments
specified in the Fourth Schedule. The relevant portion
of the notification dated 28.08.2015 reads as hereunder:
“And whereas, the Central Government considers
it necessary to extend the benefits available to the
land owners under the RFCTLARR Act to similarly
placed land owners whose lands are acquired
under the 13 enactments specified in the Fourth
Schedule; and accordingly the Central
Government keeping in view the aforesaid
difficulties has decided to extend the beneficial
advantage to the land owners and uniformly apply
the beneficial provisions of the RFCTLARR Act,
relating to the determination of compensation and
rehabilitation and resettlement as were made
applicable to cases of land acquisition under the
said enactments in the interest of the land owners;
 Now, therefore, in exercise of the powers
conferred by sub-section (1) of Section 113 of the
Right to Fair Compensation and Transparency in
Land Acquisition, Rehabilitation and Resettlement
Act, 2013 (30 of 2013), the Central Government
hereby makes the following Order to remove the
aforesaid difficulties, namely;-
 1. (1) This Order may be called the Right to Fair
Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement
(Removal of Difficulties) Order, 2015.
 (2) It shall come into force with effect from the
1st day of September, 2015.
 2. The provisions of the Right to Fair
Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act,
 Page 21 of 73
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 shall apply to all cases of land
acquisition under the enactments specified in the
Fourth Schedule to the said Act.
 [F.No. 13011/01/2014-LRD]
 K. P. KRISHNAN, Addl. Secy."
17. The observations contained also in para 29, 30 and
31 in Tarsem Singh (supra) will make it more than
evident that this Court was concerned about
discrimination in determination of compensation under
different enactments though in that case the issue was
limited to solatium and interest. The said paras read as
hereunder:-
“29. Both, P. Vajravelu Mudaliar and Nagpur
Improvement Trust clinch the issue in favour of the
Respondents, as has been correctly held by the Punjab
and Haryana High Court in Golden Iron and Steel Forging.
First and foremost, it is important to note that, as has been
seen hereinabove, the object of the 1997 Amendment was to
speed up the process of acquiring lands for National
Highways. This object has been achieved in the manner set
out hereinabove. It will be noticed that the awarding of
solatium and interest has nothing to do with achieving this
object, as it is nobody’s case that land acquisition for the
purpose of national highways slows down as a result of
award of solatium and interest. Thus, a classification made
between different sets of landowners whose lands happen to
be acquired for the purpose of National Highways and
landowners whose lands are acquired for other public
 Page 22 of 73
purposes has no rational relation to the object sought to be
achieved by the Amendment Act, i.e. speedy acquisition of
lands for the purpose of National Highways. On this ground
alone, the Amendment Act falls foul of Article 14.
30. Even otherwise, in P. Vajravelu Mudaliar, despite the
fact that the object of the Amendment Act was to acquire lands
for housing schemes at a low price, yet the Amendment
Act was struck down when it provided for solatium at the rate
of 5% instead of 15%, that was provided in the Land
Acquisition Act, the Court holding that whether adjacent lands
of the same quality and value are acquired for a housing
scheme or some other public purpose such as a hospital is a
differentiation between two sets of landowners having no
reasonable relation to the object sought to be achieved. More
pertinently, another example is given – out of two adjacent
plots belonging to the same individual one may be acquired
under the principal Act for a particular public purpose and one
acquired under the Amending Act for a housing scheme,
which, when looked at from the point of view of the
landowner, would be discriminatory, having no rational
relation to the object sought to be achieved, which is
compulsory acquisition of property for public purposes.
31. Nagpur Improvement Trust has clearly held that
ordinarily a classification based on public purpose is not
permissible under Article 14 for the purpose of determining
compensation. Also, in para 30, the Seven-Judge Bench
unequivocally states that it is immaterial whether it is
one Acquisition Act or another Acquisition Act under which
the land is acquired, as, if the existence of these two Acts
would enable the State to give one owner different treatment
from another who is similarly situated, Article 14 would be
infracted. In the facts of these cases, it is clear that from the
point of view of the landowner it is immaterial that his land is
acquired under the National Highways Act and not the Land
Acquisition Act, as solatium cannot be denied on account of
this fact alone.”
18. In that view of the matter, though Section 3G(7)(a)
of the NH Act provides the parameters to be taken into
consideration, it only provides the basic parameters to
be taken note of, for determining the amount payable as
 Page 23 of 73
compensation. While applying the said parameters for
determination of compensation, since RFCTLARR Act,
2013 is also applicable as NH Act is contained in Fourth
Schedule, the factors as provided under Section 26 and
28 RFCTLARR Act, 2013 including the seventh factor will
also be applicable in appropriate cases for the
determination of the market value as fair compensation
for the acquired land. When land is acquired from a
citizen, Articles 300A and 31A of the Constitution will
have to be borne in mind since the deprivation of
property should be with authority of law, after being duly
compensated. Such law should provide for adequately
compensating the land loser keeping in view the market
value. Though each enactment may have a different
procedure prescribed for the process of acquisition
depending on the urgency, the method of determining
the compensation cannot be different as the market
value of the land and the hardship faced due to
deprivation of the property would be the same
irrespective of the Act under which it is acquired or the
 Page 24 of 73
purpose for which it is acquired. In that light, if Section
28 of RFCTLARR Act, 2013 is held not applicable in view
of Section 3J of NH Act, the same will be violative of
Article 14 of the Constitution. In that circumstance, the
observation in Tarsem Singh (supra) that Section 3J of
NH Act is unconstitutional to that extent though
declared so while on the aspect of solatium and interest,
it is held so on all aspects relating to determination of
compensation. In any event, the extracted portion of the
notification dated 28.08.2015 is explicit that the benefits
available to the land owners under RFCTLARR Act is to
be also available to similarly placed land owners whose
lands are acquired under the 13 enactments specified in
the Fourth Schedule, among which NH Act is one. Hence
all aspects contained in Section 26 to 28 of RFCTLARR
Act for determination of compensation will be applicable
notwithstanding Section 3J and 3G(7)(a) of NH Act.
19. In that background, the award passed by the
Arbitrator is to be examined keeping in view the limited
scope available under Section 34 of Act, 1996 to interfere
 Page 25 of 73
with an award. The learned Additional Solicitor General
while attacking the award has sought to contend that the
award suffers from patent illegality which is a ground to
interfere with an award as provided under Section 34(2A)
of Act, 1996, yet the District Judge and High Court has
failed to interfere. To contend with regard to the facets
which could be considered as patent illegality, reliance is
placed on the decision in the State of Chhattisgarh vs.
Sale Udyog Private Ltd. (2022) 2 SCC 275 with specific
reference to paragraphs 14,15, 16 and 24 therein. The
same is as hereunder:
“14. The law on interference in matters of awards
under the 1996 Act has been circumscribed with
the object of minimising interference by courts in
arbitration matters. One of the grounds on which
an award may be set aside is “patent illegality”.
What would constitute “patent illegality” has been
elaborated in Associate Builders v. DDA [Associate
Builders v. DDA, (2015) 3 SCC 49: (2015) 2 SCC
(Civ) 204], where “patent illegality” that broadly
falls under the head of “Public Policy”, has been
divided into three sub-heads in the following
words:
“42. In the 1996 Act, this principle is substituted
by the “patent illegality” principle which, in turn,
contains three sub-heads:
42.1 (a) A contravention of the substantive law of
India would result in the death knell of an arbitral
award. This must be understood in the sense
that such illegality must go to the root of the
 Page 26 of 73
matter and cannot be of a trivial nature. This
again is really a contravention of Section 28(1)(a)
of the Act, which reads as under:
28. Rules applicable to substance of dispute – (1)
Where the place of arbitration is situated in
India,-
(a) In an arbitration other than an
international commercial arbitration, the Arbitral
Tribunal shall decide the dispute submitted to
arbitration in accordance with the substantive
law for the time being in force in India;’
42.2. (b) A contravention of the Arbitration Act
itself would be regarded as a patent illegality – for
example if an arbitrator gives no reasons for an
award in contravention of Section 31(3) of the Act,
such award will be liable to be set aside.
42.3 (c) Equally, the third sub-head of patent
illegality is really a contravention of Section 28(3)
of the Arbitration Act, which reads as under:
 ‘28. Rules applicable to substance of dispute- (1)-
(2) * * *
(3) In all cases, the Arbitral Tribunal shall decide
in accordance with the terms of the contract and
shall take into account the usages of the trade
applicable to the transaction.’
This last contravention must be understood with
a caveat. An Arbitral Tribunal must decide in
accordance with the terms of the contract, but if
an arbitrator construes a term of the contract in a
reasonable manner, it will not mean that the
award can be set aside on this ground.
Construction of the terms of a contract is
primarily for an arbitrator to decide unless the
arbitrator construes the contract in such a way
that it could be said to be something that no fairminded or reasonable person could do.”

15. In Ssangyong Engg. & Construction Co. Ltd.
v. NHAI (Ssanguyong Engg. & Construction Co.
Ltd. v. NHAI, (2019) 15 SCC 131 : (2020) 2 SCC
(Civ) 213], speaking for the Bench, R.F. Nariman,
 Page 27 of 73
J. has spelt out the contours of the limited scope
of judicial interference in reviewing the arbitral
awards under the 1996 Act and observed thus :
xxx
37. Insofar as domestic awards made in India are
concerned, an additional ground is now available
under sub-section (2-A), added by the Amendment
Act, 2015, to Section 34. Here, there must be
patent illegality appearing on the face of the award,
which refers to such illegality as goes to the root of
the matter but which does not amount to mere
erroneous application of the law. In short, what is
not subsumed within “the fundamental policy of
Indian law”, namely, the contravention of a statute
not linked to public policy or public interest,
cannot be brought in by the backdoor when it
comes to setting aside an award on the ground of
patent illegality.
38. Secondly, it is also made clear that
reappreciation of evidence, which is what an
appellate court is permitted to do, cannot be
permitted under the ground of patent illegality
appearing on the face of the award.
39. To elucidate, para 42.1 of Associate Builders
[Associate Builders v. DDA, (2015) 3 SCC 49 :
(2015) 2 SCC (Civ) 204], namely, a mere
contravention of the substantive law of India, by
itself, is no longer a ground available to set aside
an arbitral award. Para 42.2 of Associate Builders
[Associate Builders v. DDA, (2015) 3 SCC 49 :
(2015) 2 SCC (Civ) 204], however, would remain,
for if an arbitrator gives no reasons for an award
and contravenes Section 31 (3) of the 1996 Act,
that would certainly amount to a patent illegality
on the face of the award.
40. The change made in Section 28 (3) by the
Amendment Act really follows what is stated in
paras 42.3 to 45 in Associate Builders [Associate
Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC
(Civ) 204], namely, that the construction of the
terms of a contract is primarily for an arbitrator to
decide, unless the arbitrator construes the
contract in a manner that no fair-minded or
reasonable person would; in short, that the
 Page 28 of 73
arbitrator’s view is not even a possible view to take.
Also, if the arbitrator wanders outside the contract
and deals with matters not allotted to him, he
commits an error of jurisdiction. This ground of
challenge will now fall within the new ground
added under Section 34 (2-A).
41. What is important to note is that a decision
which is perverse, as understood in paras 31 and
32 of Associate Builders {Associate Builders v.
DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204],
while no longer being a ground for challenge under
“public policy of India”, would certainly amount to
a patent illegality appearing on the face of the
award. Thus, 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.
Additionally, a finding based on documents taken
behind the back of the parties by the arbitrator
would also qualify as a decision based on no
evidence inasmuch as such decision is not based
on evidence led by the parties, and therefore, would
also have to be characterised as perverse.”
16. In Delhi airport Metro Express (P) Ltd. [Delhi
Airport Metro Express (P) Ltd. v. DMRC, (2022) 1
SCC 131] referring to the facets of patent illegality,
this Court has held as under :
29. Patent Illegality should be illegality which goes
to the root of the matter. In other words, every error
of law committed by the Arbitral Tribunal would
not fall within the expression “patent illegality”.
Likewise, erroneous application of law cannot be
categorised as patent illegality. In addition,
contravention of law not linked to public policy or
public interest is beyond the scope of the
expression “patent illegality”. What is prohibited is
for courts to reappreciate evidence to conclude that
the award suffers from patent illegality appearing
on the face of the award, as Courts do not sit in
appeal against the arbitral award. The permissible
grounds for interference with a domestic award
under Section 34 (2-A) on the ground of patent
illegality is when the arbitrator takes a view which
is not even a possible one, or interprets a clause in
the contract in such a manner which no fair-
 Page 29 of 73
minded or reasonable person would, or if the
arbitrator commits an error of jurisdiction by
wandering outside the contract and dealing with
matters not allotted to them. An arbitral award
stating no reasons for its findings would make itself
susceptible to challenge on this account. The
conclusions of the arbitrator which are based on
no evidence or have been arrived at by ignoring
vital evidence are perverse and can be set aside on
the ground of patent illegality. Also, consideration
of documents which are not supplied to the other
party is a facet of perversity falling within the
expression “patent illegality”.
24. The patent illegality committed by the
arbitrator was to apply the 2016 Guidelines which
came into force after the issuance of the Section 3A
notification, contrary to the mandate of Section
3G(7)(a) of the NH Act read with the proviso to
Section 26(1) and Section 11 of the LA Act, 2013.
In the seventh SLP bearing SLP(C) No.2503/2022,
the 2018 Guidelines have been applied showing
complete arbitrariness and whimsicality on the
part of the arbitrators, resulting in wide
inconsistency and uncertainty in the process
relating to a common acquisition.”

20. The learned Additional Solicitor General in order to
contend with regard to the patent illegality has also
relied on the decision in the case of NHAI vs. M. Hakeem
& Anr. (2021) 9 SCC 1 and in Ssangyong Engineering
& Construction Co. Ltd., V/ s. NHAI (2019) 15 SCC
131 holding that the patent illegality appearing on the
face of the award goes to the root of the matter. It is
contended that if an Arbitrator gives no reasons for an
 Page 30 of 73
award and contravenes Section 31(3) of Act 1996, the
same would amount to patent illegality on the face of the
award. In that light, it is contended that in the instant
case there is no reason whatsoever given by the
Arbitrator to rely upon the guideline value fixed in
respect of another property for which value is indicated
in a different serial number, instead of relying on the
value for the same survey number. Without indicating
reasons to draw a comparison with the land under
acquisition, the same is applied though value of the very
same lands containing same survey number was
provided for in the same notification. Further, no
opportunity was given to rebut the same.
21. On the aspect relating to the scope of examination
of an award within the limited power to interfere provided
under Section 34 of Act 1996, the learned senior counsel
and other counsel for the claimants in order to contend
that the award passed by the Arbitrator is sustainable in
the instant case where the Arbitrator is none other than
the Deputy Commissioner who has taken note of the
 Page 31 of 73
market value in the vicinity, has relied on the decision of
this Court in NHAI vs. M. Hakeem & Anr., (2021) 9 SCC
1. The decision in Emkay Global Financial Services
Ltd. vs. Girdhar Sondhi (2018) 9 SCC 49 is relied to
contend that the proceedings under Section 34 of Act,
1996 is summary in nature. Proceedings does not
require framing of issues and leading evidence. The
expression ‘furnishes proof’ in Section 34 is only to
examine the record. However, what is to be noted by us
is the manner in which the proceedings was conducted
by the learned Arbitrator and whether that aspect has
been properly appreciated in the proceedings under
Section 34 and 37 of Act, 1996.
Reliance is placed on MMTC Ltd. vs-Vedanta Ltd.
(2019) 4 SCC 163, wherein it is held that the jurisdiction
under Section 34 is not as an appeal. Supreme Court
should be slow to interfere with concurrent finding and
the interference on merits is on limited grounds under
Section34(2)(b)(ii). Patent illegality would mean
contravention of 1996 Act and of terms of contract and
 Page 32 of 73
illegality appearing on the face of the award but not by
re-appreciation of evidence. In Associate Builders vs.
Delhi Development Authority (2015) 3 SCC 49 it is
held that none of the grounds under Section 34 (2)(a)
deal with merits of the decision rendered by an arbitral
award. Interference is permissible only when findings of
an arbitrator is arbitrary, capricious or perverse or when
conscience of Court is shocked or when illegality is not
trivial but goes to the root of the matter.
22. The case in Ssangyong Engineering and
Construction Company Ltd. (supra) relied on by the
learned Additional Solicitor General is also relied by the
learned counsel for claimants to contend regarding
limited scope. This Court, in that context has referred to
the requirement to be complied in the proceedings before
the arbitrator, which if not complied will be ground of
challenge under Section 34(2)(a)(iii). We deem it
appropriate to note the relevant observation which read
as hereunder:-
“51. Sections 18, 24(3) and 26 are important
pointers to what is contained in the ground of
 Page 33 of 73
challenge mentioned in Section 34(2)(a)(iii). Under
Section 18, each party is to be given
a full opportunity to present its case. Under
Section 24(3), all statements, documents, or other
information supplied by one party to the Arbitral
Tribunal shall be communicated to the other
party, and any expert report or document on
which the Arbitral Tribunal relies in making its
decision shall be communicated to the parties.
Section 26 is an important pointer to the fact that
when an expert's report is relied upon by an
Arbitral Tribunal, the said report, and all
documents, goods, or other property in the
possession of the expert, with which he was
provided in order to prepare his report, must first
be made available to any party who requests for
these things. Secondly, once the report is arrived
at, if requested, parties have to be given an
opportunity to put questions to him and to present
their own expert witnesses in order to testify on
the points at issue.
52. Under the rubric of a party being otherwise
unable to present its case, the standard textbooks
on the subject have stated that where materials are
taken behind the back of the parties by the
Tribunal, on which the parties have had no
opportunity to comment, the ground under Section
34(2)(a)(iii) would be made out.”
Permissibility of interference is on specific grounds
of (i) arbitrator not adopting judicial approach (ii) breach
of principles of natural justice (iii) contravention of
statute not linked to public policy or public interest, as
being patent illegality under Section 34(2A) and (iv) most
basic notions of justice.
 Page 34 of 73
The decision in Delhi Airport Metro Express Pvt.
Ltd. vs. Delhi Metro Rail Corporation Ltd. (2022) 1
SCC 131 is relied upon to indicate that there should be
minimal interference in arbitral awards, save, it suffers
from patent illegality. What is patent illegality is
delineated in para 29 which is as hereunder: -
“29. Patent illegality should be illegality which
goes to the root of the matter. In other words, every
error of law committed by the Arbitral Tribunal
would not fall within the expression “patent
illegality”. Likewise, erroneous application of law
cannot be categorized as patent illegality. In
addition, contravention of law not linked to public
policy or public interest is beyond the scope of the
expression “patent illegality”. What is prohibited is
for Courts to reappreciate evidence to conclude
that the award suffers from patent illegality
appearing on the face of the award, as Courts do
not sit in appeal against the arbitral award. The
permissible grounds for interference with a
domestic award under Section34(2-A) on the
ground of patent illegality is when the arbitrator
takes a view which is not even a possible one, or
interprets a clause in the contract in such a
manner which no fair-minded or reasonable
person would, or if the arbitrator commits an error
of jurisdiction by wandering outside the contract
and dealing with matters not allotted to them. An
arbitral award stating no reasons for its findings
would make itself susceptible to challenge on this
account. The conclusions of the arbitrator which
are based on no evidence or have been arrived at
by ignoring vital evidence are perverse and can be
set aside on the ground of patent illegality. Also,
consideration of documents which are not
supplied to the other party is a facet of perversity
falling within the expression “patent illegality”.
 Page 35 of 73
23. Having taken note of the rival contentions and
while examining the scope available under Section 34 of
Act 1996 in the backdrop of the precedents, what is also
to be kept in perspective is the decision referred to in the
case of NHAI vs. Sayedabad Tea Company Ltd. (2020)
15 SCC 16. In the said case, this Court while examining
the question as to whether the land loser can seek the
appointment of an Arbitrator in terms of Section 11 of
Act, 1996, it was noted that such power would not be
available in view of the provisions contained in Section
3G(5) of NH Act since Arbitrator is to be appointed by the
Central Government to discharge its functions as per the
provisions of the Arbitration and Conciliation Act.
Having taken note of the said decision, though it is seen
that it was held so while considering the maintainability
of petition under Section 11 of the Act, 1996 to exclude
the right of the land loser to seek the appointment of an
Arbitrator keeping in view the statutory provision in the
NH Act, the larger perspective of such limited right to the
land loser in the process of arbitration is also to be kept
 Page 36 of 73
in view. Unlike the arbitration in a contractual matter
where the parties from the very inception at the stage of
entering into a contract would mutually agree to refer
any future dispute to an arbitrator, at that very stage are
aware that in the event of any dispute arising between
the parties the contours of the right, remedy, and scope
from the commencement of the arbitration up to the
conclusion through the judicial process. The terms of
arbitration and the rights and obligations will also be a
part of the agreement and a reference to the same in the
award will constitute sufficient reasons for sustaining
the award in terms of Section 31(3) of Act, 1996.
Whereas, in the arbitration proceedings relating to NH
Act, the parties are not governed by an agreement to
regulate the process of arbitration. However, in the
process of determination of just and fair compensation,
the provisions in Section 26 to 28 of RFCTLARR Act,
2013 will be the guiding factor. The requirement therein
being adverted to, should be demonstrated in the award
to satisfy that Section 28(2) and 31(3) of Act, 1996 is
 Page 37 of 73
complied. Therefore, what is also to be kept in
perspective while noticing the validity or otherwise of an
award regarding which the non-furnishing of reasons is
contended as patent illegality is the reason assigned for
determining just compensation in terms thereof. The
situation which may arise in cases when a lesser
compensation is determined in the arbitration
proceedings and the land loser is complaining of the
award is also to be kept in perspective since the
requirement of reasons to be given by the learned
Arbitrator in cases for determination of market value and
compensation should indicate reasons since the same
will have to be arrived at on a comparative analysis for
which the reasons should be recorded and Section 26 to
28 of RFCTLARR Act will be relevant. Neither the land
loser nor the exchequer should suffer in the matter of
just and fair compensation. Hence the reasons under
Section 31(3) is to be expected in that manner, the
absence of which will call for interference under Section
34 of Act, 1996.
 Page 38 of 73
24. Leaving aside the facts in the instant case for a
while, if in a matter as against the determination of the
market value by the SLAO, the land loser had referred to
the exemplar sale deeds and seeks higher compensation
than prescribed in the guidance value, and in that
circumstance, if no reasons are assigned by the learned
Arbitrator for such determination and either approves
the SLAO award or awards a lesser amount than the
actual entitlement, in such circumstance the arbitration
process which is thrust on the land loser should not be
an impediment and limited interference should not be a
reason to deny the just and fair compensation. In such
cases while examining the award in the limited scope
under Section 34 of Act, 1996, the Court is required to
take note as to whether the evidence available on record
has been adverted to and has been taken note by the
Arbitrator in determining the just compensation failing
which it will fall foul of Section 31(3) and amount to
patent illegality. Therefore, while examining the award
within the parameters permissible under Section 34 of
 Page 39 of 73
Act, 1996 and while examining the determination of
compensation as provided under Sections 26 and 28 of
the RFCTLARR Act, 2013, the concept of just
compensation for the acquired land should be kept in
view while taking note of the award considering the
sufficiency of the reasons given in the award for the
ultimate conclusion. In such event an error if found,
though it would not be possible for the Court
entertaining the petition under Section 34 or for the
appellate court under Section 37 of Act 1996 to modify
the award and alter the compensation as it was open to
the court in the reference proceedings under Section 18
of the old Land Acquisition Act or an appeal under
Section 54 of that act, it should certainly be open to the
court exercising power under Section 34 of Act, 1996 to
set aside the award by indicating reasons and remitting
the matter to the Arbitrator to reconsider the same in
accordance with law. The said exercise can be
undertaken to the limited extent without entering into
merits where it is seen that the Arbitrator has on the face
 Page 40 of 73
of the award not appropriately considered the material
on record or has not recorded reasons for placing
reliance on materials available on record in the
background of requirement under RFCTLARR Act, 2013.
25. In that context it will be apposite to note the
decision relied on by the learned Additional Solicitor
General in Dyna Technologies (P) Ltd. vs. Crompton
Greaves Ltd. (2019) 20 SCC 1 wherein inter alia it is held
as under:
“34. The mandate under Section 31(3) of the Arbitration
Act is to have reasoning which is intelligible and
adequate and, which can in appropriate cases be even
implied by the courts from a fair reading of the award
and documents referred to thereunder, if the need be.
The aforesaid provision does not require an elaborate
judgment to be passed by the arbitrators having regard
to the speedy resolution of dispute.
35. When we consider the requirement of a reasoned
order, three characteristics of a reasoned order can
be fathomed. They are: proper, intelligible and
adequate. If the reasonings in the order are improper,
they reveal a flaw in the decision-making process. If
the challenge to an award is based on impropriety or
perversity in the reasoning, then it can be challenged
strictly on the grounds provided under Section 34 of
the Arbitration Act. If the challenge to an award is
based on the ground that the same is unintelligible,
the same would be equivalent of providing no reasons
at all. Coming to the last aspect concerning the
challenge on adequacy of reasons, the Court while
exercising jurisdiction under Section 34 has to
adjudicate the validity of such an award based on the
 Page 41 of 73
degree of particularity of reasoning required having
regard to the nature of issues falling for
consideration. The degree of particularity cannot be
stated in a precise manner as the same would depend
on the complexity of the issue. Even if the Court
comes to a conclusion that there were gaps in the
reasoning for the conclusions reached by the
Tribunal, the Court needs to have regard to the
documents submitted by the parties and the
contentions raised before the Tribunal so that awards
with inadequate reasons are not set aside in casual
and cavalier manner. On the other hand, ordinarily
unintelligible awards are to be set aside, subject to
party autonomy to do away with the reasoned award.
Therefore, the courts are required to be careful while
distinguishing between inadequacy of reasons in an
award and unintelligible awards.
36. At this juncture it must be noted that the
legislative intention of providing Section 34(4) in the
Arbitration Act was to make the award enforceable,
after giving an opportunity to the Tribunal to undo
the curable defects. This provision cannot be brushed
aside and the High Court could not have proceeded
further to determine the issue on merits.
37. In case of absence of reasoning the utility has been
provided under Section 34(4) of the Arbitration Act to cure
such defects. When there is complete perversity in the
reasoning then only it can be challenged under the
provisions of Section 34 of the Arbitration Act. The power
vested under Section 34(4) of the Arbitration Act to cure
defects can be utilised in cases where the arbitral award
does not provide any reasoning or if the award has some
gap in the reasoning or otherwise and that can be cured so
as to avoid a challenge based on the aforesaid curable
defects under Section 34 of the Arbitration Act. However, in
this case such remand to the Tribunal would not be
beneficial as this case has taken more than 25 years for its
adjudication. It is in this state of affairs that we lament that
the purpose of arbitration as an effective and expeditious
forum itself stands effaced.
 Page 42 of 73
42. From the facts, we can only state that from a
perusal of the award, in the facts and circumstances
of the case, it has been rendered without reasons.
However, the muddled and confused form of the
award has invited the High Court to state that the
arbitrator has merely restated the contentions of both
parties. From a perusal of the award, the inadequate
reasoning and basing the award on the approval of
the respondent herein cannot be stated to be
appropriate considering the complexity of the issue
involved herein, and accordingly the award is
unintelligible and cannot be sustained.”
26. Under the scheme of the Act 1996 it would not be
permissible to modify the award passed by the learned
Arbitrator to enhance or reduce the compensation based
on the material available on record in proceeding
emanating from Section 34 of Act, 1996. The option
would be to set aside the award and remand the matter.
In this regard it would be apposite to take note of the
observation in M. Hakeem (supra), as hereunder:-
“42. It can therefore be said that this question has
now been settled finally by at least 3 decisions of
this Court. Even otherwise, to state that the
judicial trend appears to favour an interpretation
that would read into Section 34 a power to modify,
revise or vary the award would be to ignore the
previous law contained in the 1940 Act; as also to
ignore the fact that the 1996 Act was enacted based
on the UNCITRAL Model Law on International
Commercial Arbitration, 1985 which, as has been
pointed out in Redfern and Hunter on International
Arbitration, makes it clear that, given the limited
judicial interference on extremely limited grounds
not dealing with the merits of an award, the
“limited remedy” under Section 34 is coterminous
 Page 43 of 73
with the “limited right”, namely, either to set aside
an award or remand the matter under the
circumstances mentioned in Section 34 of the
Arbitration Act, 1996.”
27. In the above backdrop, the contention relating to
‘patent illegality’ in an award in terms of Section 34(2A)
of Act 1996 as put forth by the learned Additional
Solicitor General needs consideration. On such
consideration, only if the award passed in the instant
case falls foul of any such requirement so as to bring it
within the power of review under Section 34 of Act 1996,
the interference would be warranted. As noted, strong
reliance is placed by the learned Additional Solicitor
General to the decision in the case of State of
Chhattisgarh (supra) to contend with regard to the
different facets of patent illegality in an award including
violation of requirement under Section 28(2) and 31(3) of
Act 1996.
28. In order to demonstrate that the award passed in
the instant case suffers from such patent illegality, the
learned Additional Solicitor General has contended that
the compensation determined by the SLAO is not just an
 Page 44 of 73
offer as was the case under the Land Acquisition Act in
view of the provision contained in Section 3G (5) of NH
Act. In that regard, it is contended that Section 3G (5) is
explicit that either of the parties if dissatisfied with the
amount determined by the competent authority under
sub-section (1) or sub-section (2) of Section 3G of NH Act
are entitled to file an application to the Arbitrator
appointed by the Central Government for determination.
Hence, it is contended that unlike Section 18 of the Land
Acquisition Act wherein the land loser alone could seek
reference for enhancement of the compensation, under
NH Act the acquiring authority is also granted the liberty
of filing an application before the learned Arbitrator if the
compensation determined by the SLAO is excessive. In
that view, it is contended that when there is
determination made by the SLAO based on the material
available before him with opportunity to both the parties,
such determination cannot be disturbed by the learned
Arbitrator in a mechanical manner unless the award
passed by SLAO is pointed out to be erroneous in law. In
 Page 45 of 73
that regard, it is contended that in the instant case, the
SLAO has taken into consideration the various sale
deeds as exemplars to note the sale value of the property
in different transactions relating to certain other
properties situate in the area. Having thus assessed the
average value, the SLAO has taken into consideration the
guideline value of 2014 which was prior to the date of
the acquisition notification and on finding that the
guideline value of the property fixed for registration is
more than the value for which sale transactions have
been made, has adopted the guideline value as provided
under Section 26(1)(a) of the RFCTLARR Act, 2013.
29. The learned senior counsel for the claimants
however, sought to contend that even under the
provisions of the Land Acquisition Act the determination
of market value if was excessive, it was open for the
Acquiring Authority to seek reference to determine the
just compensation, wherein it was open to the reference
court to determine the just compensation. In this regard,
reliance is placed on the judgment of this Court in Abdul
 Page 46 of 73
Karim Alarakha vs. State (1982) 3 SCC 227. In that
light, a perusal of the said judgment would indicate that
this Court while taking note of the facts therein under
Section 18 of Rajasthan Land Acquisition Act held that
the government also can seek reference as the scope was
wider.
30. Be that as it may, in our opinion the mere
provision as contemplated under Section 3G(5) of NH Act
providing for either of the parties to assail the
determination made by the SLAO by itself does not
provide a better status to the award passed by the SLAO.
Even the award passed by the SLAO under the
provisions of NH Act would still continue to remain as an
offer of compensation by the Acquiring Authority to the
land loser and the materials relied on by the SLAO even
if discussed in detail does not provide the status of a
judicially considered order so as to interfere with the
same only if error is pointed out. It is not necessary to
critically examine the award made by SLAO before
considering enhancement. Notwithstanding the
 Page 47 of 73
documents relied upon by the SLAO it would still be open
for the learned Arbitrator to rely upon any additional
material that may be brought before the learned
Arbitrator not necessarily to point out an error in the
consideration made by SLAO but such material could be
considered despite the consideration made by the SLAO
if such material aids in deciding just and fair
compensation. Though, as contended by the learned
Additional Solicitor General it is seen that in Tarsem
Singh (supra) it is held that there is a regime change and
the stage to offer an amount by way of compensation is
removed, it only means that the process of award notice
etc. from Section 9 to 15A, before possession under
Section 16 of L.A. Act is removed, which only alters the
procedure and enables immediate vesting of the land
with the acquiring authority but does not take away the
character of the SLAO award from being an offer of
compensation. Hence, in the present case, though the
SLAO has taken note of the guideline dated 07.11.2014
it would be open for the learned Arbitrator to take note
 Page 48 of 73
of any other evidence that would be more relevant than
the said guideline to re-determine the compensation in
terms of the parameters under Sections 26 and 28 of
RFCTLARR Act, 2013.
31. The further contention of the learned Additional
Solicitor General is that the award passed by the learned
Arbitrator is ex-facie erroneous amounting to patent
illegality since the learned Arbitrator while redetermining the compensation has taken into
consideration the guideline value as provided under the
notification dated 28.03.2016. In that regard, it is
contended that the notification under Section3A of NH
Act was issued on 01.02.2016. The provision in Section
3G (7) of NH Act provides that the competent authority
or the Arbitrator while determining the amount under
sub-section (1) or sub-section (5) shall take into
consideration the market value of the land as on the date
of publication of the notification under Section 3A. It is
contended, despite the said provision to consider the
market value as on the date of the acquisition
 Page 49 of 73
notification, the entire basis on which the learned
Arbitrator has re-determined the compensation is based
on a notification dated 28.03.2016 issued by the
Department of Stamps and Registration which is notably
the market value fixed on a date subsequent to the
acquisition notification dated 01.02.2016. It is therefore,
contended that the award passed by the learned
Arbitrator would not be sustainable. That apart, a
reference is made to para 49 and 50 in the case of M.
Hakeem (supra) to contend that in fact this Court has
indicated that the reliance placed on the guideline
determining the market value for registration would not
be justified. On that aspect it is necessary for us to clarify
at this stage itself that such observation as contained in
M. Hakeem (supra) is not made with reference to any
provision of the Act. In contrast, a reference to Section
26(1)(a) of the RFCTLARR Act, 2013 indicates that the
statutory provision itself provides for the market value
specified in the Indian Stamp Act, 1899 for the
registration of sale deeds or agreement to sell, in the area
 Page 50 of 73
where the land is situated to be adopted by the Collector
for assessing and determining the market value of the
acquired land. In view of the said provision, it is open for
the SLAO as well as the learned Arbitrator to rely upon
the guideline and if the value provided therein is higher
than the value of the property indicated from the other
documents, it would be open to place reliance on the
guideline issued for the purpose of the registration under
the Stamp Act to determine the market value to be
tendered as compensation for acquisition.
32. In that view, the question that would arise for
consideration in the case on hand is as to whether the
award passed by the learned Arbitrator would stand
vitiated merely because the guideline dated 28.03.2016
which is marginally subsequent in point of time is
reckoned, when the acquisition notification under
Section 3A of NH Act was prior to the same i.e. on
01.02.2016. As already noted, Section 3G(7)(a) of NH Act
provides for determination of the market value on the
date of publication of the acquisition notification under
 Page 51 of 73
Section 3A. In a normal circumstance, for the
determination of the market value, the rate prevailing
prior to the date of the notification shall be the basis
more particularly when the determination is made based
on sale exemplars, as otherwise there is a likelihood of
manipulation with escalated price being dishonestly
indicated in the subsequent transactions. While taking
note of the documents relied on for the purpose of
determination of the market value, the existence of
appropriate documents in the facts of each case would
also become relevant. In circumstances where a
document which is proximal to the date of acquisition is
not available, it would be open to rely on a document
which is much prior in point of time and if the time gap
is more, determination could be made by providing for
reasonable escalation depending on the area wherein the
acquired property is situate and nature of property.
Similarly, in a circumstance where no document which
is prior to the date of the acquisition notification is
available and the exemplars are subsequent to the date
 Page 52 of 73
of acquisition notification, the value therein could be
noted and reasonable de-escalation be considered to
determine the appropriate value. Needless to mention
that no strait-jacket formula can be applicable to all
cases with arithmetical precision in the matter of
determination of compensation.
33. In that backdrop, in the instant case it is no doubt
true that the notification issued by the Department of
Stamps and Registration on 07.11.2014 is prior to the
acquisition notification dated 01.02.2016. It is also to be
noted that there was a time gap of more than one year
between the two. In a normal circumstance, even if the
notification dated 07.11.2014 was taken into
consideration it would be open for the learned Arbitrator
to consider certain amount of escalation to determine the
market value. The said process could have been adopted
if there was no other document. At this juncture, it is
necessary to note that the SLAO in fact had relied on the
said notification dated 07.11.2014 and determined the
market value but had ignored the fact that the lands
 Page 53 of 73
regarding which the market value was to be determined
had been converted for purposes other than agriculture.
The SLAO had therefore taken into consideration the
registration value which had been fixed in respect of the
agricultural property. In that light, firstly it would have
been open for the learned Arbitrator to take note of the
value fixed for the commercial/industrial lands under
that notification itself and provide certain amount of
escalation.
34. Notwithstanding such option of providing
escalation to the already existing guideline value being
available to the learned Arbitrator, what cannot be lost
sight in the instant case is that, as evident from the
notification dated 28.03.2016 the process for
redetermining the guideline value had commenced
through the notification bearing No.CBC-25/2014-15
dated 14.09.2015 and proceedings of the committee
were also held during 2015-2016 which ultimately led to
the notification dated 28.03.2016. Further, though the
preliminary notification for acquisition was issued on
 Page 54 of 73
01.02.2016, the final notification under Section 3D of
NH Act was issued on 23.09.2016. During the
intervening period the guideline value notification dated
28.03.2016, the process for which had commenced
through the notification dated 14.09.2015, was already
published. Furthermore, when all these proceedings
were in close proximity to the date of the preliminary
notification for acquisition and the revision of the
market value by the Department of Stamps and
Registration itself was within a period of one year and 4
months from the earlier guideline value published on
07.11.2014, it would indicate that the escalation which
was otherwise open for being worked out and applied by
the learned Arbitrator on taking note of the notification
dated 07.11.2014 was undertaken by the Department of
Stamps and Registration and the benefit of considering
such escalation was available to the learned Arbitrator
by taking note of the guideline dated 28.03.2016, though
technically published on a date subsequent to the
preliminary notification dated 01.02.2016. In that view
 Page 55 of 73
of the matter, in the present facts and circumstances,
the reliance placed on the guideline value notification
dated 28.03.2016 for reckoning the market value of the
property acquired under the preliminary notification
dated 01.02.2016, by itself cannot be accepted to be a
patent illegality committed by the learned Arbitrator.
35. It is also to be noted that though the notification
is dated 01.02.2016 the award notice is dated
03.07.2017 by which time the guideline value
notification dated 28.03.2016 was already in vogue.
36. Having arrived at the conclusion that the learned
Arbitrator had not committed any illegality much less
patent illegality in reckoning the guideline value
notification dated 28.03.2016, the issue that would still
remain for further consideration is as to whether an
appropriate consideration has been made by the learned
Arbitrator in the matter of applying the market value
notified as a guideline value under the notification dated
28.03.2016 and as to whether the manner in which the
said guideline was taken into consideration amounts to
 Page 56 of 73
denial of opportunity to NHAI amounting to violation of
principles of natural justice violating Section 28(2). The
further aspect which requires consideration is also as to
whether the guideline value fixed in respect of ‘City
Greens’ and ‘Zunadu’ being applied automatically to the
land in question was justified and as to whether the
learned Arbitrator has indicated sufficient reasons to
place such reliance since the non-assignment of reasons
or discussion would also amount to patent illegality being
contrary to Section 31(3) of Act, 1996.
37. To consider this aspect of the matter what is
necessary to be taken note is that the SLAO had
determined the compensation by taking note of the
market value assigned to agricultural property under the
notification dated 07.11.2014. The claimants were before
the learned Arbitrator in terms of Section 3G(5) of the NH
Act, a copy of which is available at Annexure-P6 to the
appeal papers. The grievance essentially put forth in the
claim petition is that the preliminary notification is dated
01.02.2016 and the notice of award for fixing the amount
 Page 57 of 73
of compensation for the acquired land has been issued
on 03.07.2017. In that light, it was contended that the
market value of the non-agricultural lands adjoining the
Bengaluru Mysuru National Highway such as the one
owned by the claimant has increased considerably after
the acquisition of the schedule land and accordingly the
Registration Department has revised the guideline value.
However, there is no reference to any specific notification
relating to the guideline value much less the notification
dated 28.03.2016. Further, there is no other indication
to the manner in which the notification dated 28.03.2016
was brought on record though the said notification is
published in the gazette. Comparison with lands in
‘Zunadu’ and ‘City Greens’ is also not pleaded. Further,
as pointed out by the learned Additional Solicitor General
the land situate in Madhapura and Mayaganahalli have
been notified at serial Nos. 519, 524 and 525 respectively
with reference the same survey number as that of the
acquired land. The land value for ‘Zunadu’ and ‘City
Greens’ are notified separately at Serial Nos.250 and 529.
 Page 58 of 73
In that circumstance not just to place reliance on the
notification dated 28.03.2016 but also to apply the value
notified for ‘Zunadu’ and ‘City Greens’ to the acquired
lands, necessary pleading in claim petition and evidence
with opportunity to NHAI to rebut the same should have
been placed before the learned Arbitrator. Based on the
same a consideration in that regard was required to be
made by the learned Arbitrator to arrive at a conclusion
with regard to the applicability of the guideline value
fixed under notification dated 28.03.2016 for the lands
that had been converted to purposes other than
agriculture. Further while applying the guideline value
fixed for ‘Zunadu’ and ‘City Greens’ to the acquired lands
by discarding guideline value for the same survey
number, necessary evidence to derive comparison
between the lands so as to apply the value fixed in respect
of another item of land in the same notification was
necessary to be brought on record and was to be
considered by the learned Arbitrator by assigning
reasons.
 Page 59 of 73
38. In that background a perusal of the award passed
by the learned Arbitrator would indicate that the only
discussion worth noting, after narration of the facts is
contained in para 8 of the award which reads as
hereunder:
“8. On perusal of the written statement and
documents produced by the applicant as well as
the written statement and documents produced
by the respondents, it is seen that the land in
dispute has been acquired for the purpose of
expansion of National Highway-275 and while
rendering the Award, the price of the land in
question has been arrived at, by considering it as
dry land. However, since the land in question,
even prior to the issue of 3(A) Land Acquisition
Notification, has been converted for residential
purpose as per Official Memorandum
No.BDS/ALN/SR/89/91-92 dated 20.06.1992 of
the Sub-Divisional Officer, Ramanagara SubDivision, proper price has to be fixed by
considering the lands in question as residential
lands. This procedure has not been adopted.
Further, by revising the market price, the Stamps
and Registration Department has issued a
Notification dated 28.03.2016 in respect of the
lands belonging to City Greens situated in the
Sy.Nos. coming under the said Mayaganahalli
village wherein, the price of converted sites/sites
of layouts approved by competent authority, has
been fixed at Rs.15,400/- per Sq.Mtr. That their
lands are more developed than the lands of Green
City and has hence prayed for grant of
compensation at a higher rate than the same. On
perusal of the said Notification of the Stamps and
Registration Department, it is seen that the price
of the applicant’s converted lands situated in the
survey numbers of Mayaganahalli village is fixed
at Rs.8,000/- per Sq. Mtr. and the price of the
converted lands of Green City in the same village
 Page 60 of 73
has been fixed at Rs.15,400/- per Sq. Mtr. Section
26 of the said Act clearly defines the procedure for
fixing the market price. Even then, it could be seen
that the applicant has not been given the fair
price. Therefore, it is opined that instead of the
present price fixed for the lands in question, its
price has to be fixed on par with the rates fixed by
the Stamps and Registration Department on the
basis of land conversion value in respect of the
similarly situated lands of the same village and
that compensation be awarded accordingly.
Further, since the Award has been passed by
fixing the value of the assets and structures
existing on the lands in question as per the
assessment of the concerned officers, the prayer of
the applicant to enhance compensation for the
same has been rejected and the following order is
passed.”
39. The above extracted portion of the award would
demonstrate, prior to said finding being recorded, the
learned Arbitrator has not referred to the manner in
which the notification dated 28.03.2016 was brought
on record and relied upon in the proceedings. The
award, except for recording that the notification
indicates the value fixed at Rs.8,000/- per sq.mtr in
respect of converted land situate in the survey
numbers of Mayaganahalli village and stating that the
price of the converted lands of the Green City in the
same village has been fixed at Rs.15,400/- per sq.mtr
 Page 61 of 73
has not referred to any evidence relating to the
comparability with that land despite noting the
guideline value of Rs.8000/- fixed for claimant’s land.
The very fact that the layout is named as ‘City Greens’
and ‘Zunadu’ appears to be that the lands therein are
situate in a self-contained and developed lay out with
all civic amenities due to which it is separately
indicated in the notification for specifically fixing the
guideline value. Even if the lands belonging to the
claimants is converted for residential purposes, value
for the same was fixed in the notification by specifying
the survey number. If the value as fixed under the
guideline for ‘City Greens’ and ‘Zunadu’ was to be
adopted as comparable land to the acquired land,
necessary reasons ought to have been indicated in the
award with reference to the evidence brought on
record, with opportunity to NHAI to have their say on
that aspect and reasons justifying such comparison
should have been recorded. Further the manner in
which the notification dated 28.03.2016 has been
 Page 62 of 73
relied upon and the value fixed under the said
notification in respect of two distinct layouts has been
automatically made applicable to the lands in question
despite noting the guideline value notified for the same
survey number would indicate that the said exercise
has been undertaken without sufficient opportunity to
NHAI. Further, appropriate reasons have not been
indicated by the learned Arbitrator to arrive at the
conclusion to uniformly adopt the value of Rs.15,400/-
per sq.mtr fixed in respect of lands in a layout which
was separately indicated in the notification. As stated
above, if there is evidence brought on record in the
manner known to law with opportunity to the opposite
side, it certainly would be open for the learned
Arbitrator to adopt the said value. However, from the
pleading in the claim petition and from the portion
extracted from the award which is the only basis for the
ultimate order made by the learned Arbitrator, it would
indicate that the NHAI did not have sufficient
opportunity before the learned Arbitrator to controvert
 Page 63 of 73
the material sought to be relied upon by the learned
Arbitrator nor has the learned Arbitrator indicated
sufficient reasons which to that extent would indicate
patent illegality in the award passed by the learned
Arbitrator being contrary to Section28(2) and 31(3) of
Act, 1996.
40. That being the fact situation and also the position
of law being clear that it would not be open for the court
in the proceedings under Section 34 or in the appeal
under Section 37 to modify the award, the appropriate
course to be adopted in such event is to set aside the
award and remit the matter to the learned Arbitrator in
terms of Section 34(4) to keep in view these aspects of the
matter and even if the notification dated 28.03.2016
relied upon is justified since we have indicated that the
same could be relied upon, the further aspects with
regard to the appropriate market value fixed under the
said notification for the lands which is the subject matter
of the acquisition or comparable lands is to be made
based on appropriate evidence available before it and on
 Page 64 of 73
assigning reasons for the conclusion to be reached by the
learned Arbitrator. In that regard, all contentions of the
parties are left open to be put forth before the learned
Arbitrator.
C.A. No.4681/2022 @ SLP(C)No.2503/2022
 Leave granted.
41. In the instant case the land acquired is in Survey
No.40/8, Kumbalagodu Village, Bengaluru, South Taluk,
Bengaluru District, measuring 121 sq. mtr. The purpose
of acquisition is the same as in the earlier cases and the
consideration relating to determination of market value
and award of compensation is also similar to those cases.
However, in the instant case the acquisition is under a
different preliminary notification dated 02.02.2016 and
the final notification is dated 04.10.2016.
42. Insofar as determination of the market value, both
by the SLAO and the learned Arbitrator, it is based on the
guideline value notification dated 27.10.2014 published
by the Department of Stamps and Registration as per
which it is fixed at Rs.17,200/- sq. mtr. The guideline
 Page 65 of 73
value notification relied upon in this case is prior to the
acquisition notification and as such there is no grievance
in that regard. Irrespective of the contentions put forth
on behalf of the NHAI at this juncture, the award passed
by the learned Arbitrator would disclose that the NHAI
while opposing further enhancement by the learned
Arbitrator had contended to sustain the determination of
market value at Rs.17,200/- per sq. ft. made by the SLAO
by contending that the market value determined is in
accordance with law.
43. Hence, the issue that arises for consideration
herein is only as to whether the course adopted by the
learned Arbitrator to apply the subsequent notification
dated 05.12.2018 issued by the Department of Stamps
and Registration to reckon the special instructions
contained in that notification so as to enhance the
market value by 50% of the guidance value which is
provided in the notification dated 27.10.2014 and thus
arrive at the market value of Rs.25,800/- per sq. mtr.
 Page 66 of 73
with the aid of two different guideline value notifications
is justified.
44. The learned Additional Solicitor General has
highlighted this aspect of the matter as patent illegality
in passing the award in this case. It is contended that
the learned Arbitrator has chosen to apply the
Notification dated 05.12.2018 to consider enhancement
by 50% for industrial land since it was not specifically
provided for in the guideline, by relying on the special
instruction in guideline of 2018. In such event, the
guideline value which was much lesser in the notification
of 2018 itself should have been taken into consideration.
It is pointed out that the guideline value for residential
land in the 2018 Notification works out to Rs.11,900/-
per sq. mtr. If 50% of the same is added to derive the
value for industrial land, it will be Rs.16,680/- per sq.
mtr. But the learned Arbitrator has chosen to sustain
Rs.17,200/- awarded by SLAO based on the guideline
value of 2014 notification but relied on the 2018
notification to apply the 50% value addition of the same
 Page 67 of 73
to determine market value for industrial land, which is
not sustainable. It is contended that if Clause 6 of special
instruction was applied the market value will work out to
Rs.12,900/- i.e. 75% of Rs.17,200/-.
45. The learned counsel for the claimant contended,
the fact remains that the industrial land belonging to the
claimant has been acquired. It is contended, in the
notification dated 27.10.2014 although Kumbalagodu
Industrial Area is mentioned, the categories of land for
which value has been indicated does not include
industrial plot. As such the value for industrial plot is to
be determined by applying the provision made in special
instructions. It is contended, though the learned
Arbitrator has noted the special instruction under 2018
Notification, even under the 2014 Notification, the special
instruction provides for addition of 50% to arrive at the
value of industrial plot. Hence the enhancement to the
tune of Rs.8600/- per sq. mtr. is justified.
46. Insofar as the learned Arbitrator having adopted
the guideline issued in 2014, the same is prior to the date
 Page 68 of 73
of the notification for acquisition and the aspects
considered relating to date of notification in the earlier
set of cases does not arise. Hence, it is justified. The
value indicated at serial no.51 in the notification is for
Kumbalagodu Industrial Area, but the value stated
therein is for residential sites, the approval for which was
obtained from the different authorities. Though reference
is to Kumbalagodu Industrial Area, the value of the
industrial plot has not been specified. It cannot also be
assumed that the value indicated therein itself is for
industrial site, since in the same entry in Serial No.51,
the value of residential buildings is also indicated.
Hence, in the absence of the SLAO undertaking the
exercise for determining the market value of the
industrial land which was acquired, the learned
Arbitrator was required to do so.
47. The learned Arbitrator, however, while
undertaking the said exercise, as evident from the award
has relied on the market value at Rs.17,200/- sq. mtr.
based on the guideline value Notification dated
 Page 69 of 73
27.10.2014. But for determining the market value, the
special instructions in the notification dated 05.12.2018
is relied upon. Such procedure adopted is not justified
and amounts to material irregularity on the face of the
award. The learned counsel for the claimant contended
that the learned Arbitrator though relied on 2018
notification, the Special Instruction No.3 in the 2014
notification also provides for adding 50% of the rates
applicable if the acquired land is adjoining the National
Highway.
48. Firstly, when we are of the opinion that the learned
Arbitrator has committed patent illegality in applying two
different notifications in determining the market value,
keeping in view the scope available under Section 34 of
Act, 1996 it would not be open for this Court to substitute
our view to that of the learned Arbitrator and modify the
award. Further, the learned Additional Solicitor General
sought to refer to Special Instruction No.6 in the
notification of 2014 to arrive at the market value even if
it is accepted that the value of industrial land is not
 Page 70 of 73
indicated in the notification. These are aspects to which
the learned Arbitrator is required to advert so as to arrive
at the conclusion. In the circumstance where we have
opined that the award passed by the learned Arbitrator
suffers from patent illegality and appropriate
consideration is necessary, the only course open is to set
aside the award and allow the learned Arbitrator to
reconsider the matter on that aspect.
49. From the conclusion reached above, in both the
set of cases it is evident that awards passed by the
learned Arbitrator is to be set aside and the matters be
remanded in terms of Section 34(4) of Act, 1996 so as to
enable the learned Arbitrators to assign reasons to arrive
at their conclusion. In this regard, it is made clear that
we have approved the guideline value notification dated
28.03.2016 being reckoned for determining the market
value. Hence, the claimants in any event would be
entitled to determination of market value at the guideline
value indicated vide notification dated 28.03.2016 for the
respective properties in Madhapura, Mayaganahalli etc.
 Page 71 of 73
as against what is awarded by SLAO if there is no other
evidence indicating higher market value. The
consideration to be made by the learned Arbitrator
however is as to the material and evidence if any available
to treat the acquired land as comparable to the lands
situate in ‘City Greens’ and ‘Zunadu’ layout and award
the compensation based on the guidance value indicated
for the lands in the said layout if found comparable. The
reason for not applying the guideline value indicated for
the lands in the very survey number of the acquired lands
is to be disclosed on such consideration. Needless to
mention that any other sale transaction if higher than the
guideline value can also be considered to arrive at just
and fair compensation. Since in any event the claimants
would be entitled to higher amount than what was
awarded by SLAO, the part of the amount awarded by the
learned Arbitrator which was deposited before this Court
and disbursed to the claimants will be subject to
adjustment based on the quantum of compensation that
would ultimately be decided by the learned Arbitrator. In
 Page 72 of 73
the matter arising out of SLP No.2503/2022 the
applicability of the appropriate special instruction, if any,
is to be considered.
50. For all the aforesaid reasons, (i) the judgment
dated 26.07.2021 in MFA. No.2040/2021(AA) and
connected matters approving the Order dated
26.02.2021 in suits under Section 34 of Act, 1996 and
in MFA No.2041/2021 (AA) approving order dated
27.01.2021 are set aside. Consequently, the awards
dated 13.08.2019 and connected awards, and the
award dated 06.01.2020 which are the subject matter
in these appeals are set aside. (ii) The arbitration
proceedings bearing Case Nos.:
LAQ(A)/NH-275/CR/137/2017-18,
LAQ(A)/NH-275/CR/134/2017-18,
LAQ(A)/NH-275/CR/135/2017-18,
LAQ(A)/NH-275/CR/132/2017-18,
LAQ(A)/NH-275/CR/139/2017-18,
LAQ(A)/NH-275/CR/41/2019-20 are remanded to the
Deputy Commissioner and Arbitrator, NH-275,
 Page 73 of 73
Ramanagar District, Ramanagar and Case
No.LAQ/ARB/BNG/NH-275/CR-02/2/2018-19 is
remanded to Deputy Commissioner and Arbitrator,
Bangalore Rural District.
51. The appeals accordingly are allowed in part with
no order as to costs.
52. The pending applications, if any, stand disposed
of.
.…………...............J.
(INDIRA BANERJEE)
..........................J.
 (A.S. BOPANNA)
New Delhi,
July 11, 2022

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