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2025 Supreme(SC) 1577

SUPREME COURT OF INDIA
PAMIDIGHANTAM SRI NARASIMHA AND JOYMALYA BAGCHI, JJ.
Sarjuprasad – Appellant
Versus
National Highways Authority Of India And Others – Respondent
Civil Appeal No.4973, 4974 of 2025 (@ SLP © No. 9667, 9668 of 2025) [@ Diary No(s). 42115 of 2022] with Civil Appeal No. 4975, 4976 of 2025 (@ SLP © No(s). 9669, 9670 of 2025) [@ Diary No(s). 33989 of 2023]
Decided on : 04-04-2025

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 37 - National Highways Act, 1956 - Section 3A, 3D and 3G(2) - Award relating to land acquisition - Appellant challenged the original compensation in favor of an arbitrator who enhanced the compensation. The High Court set aside this enhancement on grounds of patent illegality, stating that the additional evidence was not presented appropriately during arbitral proceedings. (Paras 4, 9, 13)

(B) Legal Principles - An arbitral award cannot be set aside purely on documentary evidence basis without giving an opportunity to the other party to contest it. Procedural fairness must be ensured in arbitral proceedings. (Paras 11, 12)

Facts of the case:
The appellant's land was acquired for highway widening. The initial compensation was deemed inadequate by the appellant who sought enhanced compensation through arbitration. (Paras 4, 5, 8)

Findings of Court:
The court restored the proceedings back to the District Judge for a re-evaluation of the evidence and to formally consider the newly presented sale deeds. (Paras 14)

Issues: Whether the introduction of the newly presented sale deeds after the close of arbitral proceedings warranted setting aside the arbitrator's enhancement of compensation. (Para 10)

Ratio Decidendi: The court emphasized the importance of allowing both parties an opportunity to contest evidence introduced post-proceedings, stressing that procedural justice is paramount in arbitration. (Paras 12, 14)

Result: Civil appeals disposed of; proceedings restored under Section 34 for re-evaluation.

Table of Content
1. acquisition and compensation determination process. (Para 4 , 5 , 6)
2. challenges to the arbitral award and appeals. (Para 7 , 8)
3. court's rationale for setting aside enhancements. (Para 9)
4. arguments regarding the introduction of sale deeds. (Para 10 , 11 , 12)
5. order to restore proceedings under section 34. (Para 13 , 14)
6. conclusion and disposition of civil appeals. (Para 15 , 16 , 17)

ORDER :

1. Delay condoned.

2. Leave granted.

3. These appeals by way of Special Leave Petitions are against the judgment(s) and order(s) of the High Court in Arbitration Appeal Nos. 34, 26, 27 and 37 of 2019 dated 12.08.2022 passed in exercise of jurisdiction under Section 37 of the Arbitration and Conciliation Act, 1996.[Hereinafter referred to as the 'Arbitration Act'.]

4. Brief facts necessary for the disposal of these appeals are as follows. The respondents proposed to acquire two properties belonging to the appellant for widening, maintaining, managing and operating a section of NH-7 of the Nagpur-Hyderabad National Highway. To this effect, the respondents issued a notice under Section 3(a) of the NATIONAL HIGHWAYS ACT , 1956[Hereinafter referred to as the 'NH Act'.] on 21.09.2009, followed by a declaration of acquisition under Section 3(d) on 13.10.2010. The Sub-divisional Officer (Land Acquisition Officer and Competent Authority) rendered an award on 06.08.2011 whereby the appellant was given a total compensation of Rs. 8,14,000/- for the acquisition.

5. Aggrieved by the quantum of compensation, the appellant preferred an application under Section 3-G(5) of the NH Act for determination of compensation by an arbitrator. The Additional Commissioner, Nagpur was appointed as the arbitrator. By his award dated 20.05.2015, the claim was partly allowed and the appellant was given an enhanced total compensation of Rs. 85,55,800/- with another 10% of the total compensation for loss of easementary rights as per Section 3G(2) of the NH Act. In enhancing the compensation, the arbitral tribunal also relied on two sale deeds dated 27.06.2008 and 02.04.2008. Further, the respondents were directed to pay interest @ 9% p.a. on the enhanced compensation calculated from the date of notification under Section 3(d) till the date of actual payment.

6. The respondents challenged the award by filing Civil Miscellaneous Application 688/2015 before the Ld. Principal District Judge under Section 34 of the Arbitration Act. In the Section 34 petition, respondents objected to the arbitrator's reliance on sale deeds dated 27.06.2008 and 02.04.2008 on the grounds that only photocopies of the sale deeds were filed and that they were not proved by examining the concerned valuers. It was also alleged that the said sale deeds were neither attested by an authorised person nor certified copies were filed.

7. By order dated 05.04.2019, the learned Principal District Judge exercising jurisdiction under Section 34 substantially affirmed the award directing the respondents to give 30% of the award amount as solatium in accordance with Section 23(2) of the LAND ACQUISITION ACT . Further, the respondents were directed to pay 12% on the amount of compensation from the date of notification to the date of order of the competent authority for acquisition of land.

8. Against the order under Section 34 , both the appellant and the respondents filed Arbitration Appeal 26/2019 and Arbitration Appeal 34/2019 under Section 37 of the Arbitration Act. The appellant sought a further compensation of 10% p.a. and a separate compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. On the other hand, the respondents challenged the decision in its entirety.

9. By way of the impugned order, the Ld. Single Judge of the High Court dismissed the appeal by the appellant, and virtually allowed the respondent's appeal. The enhancements by the arbitrator and the Principal District Judge were set aside, and the or

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