Bombay High Court Refuses to Interfere With Enhanced Compensation In NH-6 Land Acquisition Arbitration Case

The Bombay High Court has refused to interfere with enhanced compensation awarded to landowners for acquisition of land for widening National Highway-6 from Jalgaon to the Gujarat boundary, holding that no case was made out for interference under the limited scope of appellate review.

Dismissing a batch of arbitration appeals filed by the National Highways Authority of India (NHAI), a single-judge bench of Justice Arun R. Pedneker upheld the arbitral awards as well as the orders passed under Section 34 of the Arbitration and Conciliation Act.

“Considering the totality of the circumstances, this Court is of the opinion that no case is made out for interference with the award passed by the Arbitrator. The Arbitrator has assessed the value of the land considering the relevant material before him and has granted compensation for severance, loss of business, and loss of easementary rights. The same is based on the material on record and is in accordance with the law as noted in the above-referred judgments of this Court. Consequently, while exercising jurisdiction under Section 37 of the Arbitration and Conciliation Act, 1996, this Court finds no reason to interfere with the impugned judgment under Section 34 and the award, passed by the Arbitrator"

The dispute arose from acquisition proceedings initiated for widening National Highway-6, with a notification under Section 3A of the National Highways Act issued on November 11, 2011, followed by publication on January 23, 2012 and a declaration under Section 3D on October 10, 2012.

The Competent Authority for Land Acquisition had initially awarded compensation at Rs. 340 per sq. meter.

Dissatisfied with the amount, landowners invoked arbitration under Section 3G(5) of the Act, relying on sale deeds dated November 22, 2005, January 25, 2010 and February 13, 2012. By an award dated July 26, 2021, the arbitrator enhanced compensation to Rs. 2800 per sq. meter along with statutory benefits, including compensation for severance and easementary rights.

Rejecting NHAI's challenge, the High Court held that there is no absolute bar on considering post-notification sale deeds, provided they are proximate in time, genuine and not shown to be inflated.

“Considering the aforesaid judgments, there is no absolute bar in taking into consideration a post-notification sale deed; however, the market value is required to be determined with reference to the date of the notification.... There is no evidence on record to indicate that the sale price mentioned therein is inflated and the transaction itself has not been challenged as not being genuine. There is also no contest as regards the bona fide nature of the said sale deed,” the Court observed.

The Court also upheld the grant of compensation towards severance and allied losses, noting that such claims can be considered even in the absence of specific issues if supported by evidence on record.

Emphasising the narrow scope of interference under Sections 34 and 37 of the Arbitration Act, the Court reiterated that reappreciation of evidence is impermissible and interference is warranted only in cases of patent illegality or perversity.

Finding no such grounds, the Court dismissed the appeals