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

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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