The court affirmed an arbitral award on compensation for land acquisition, stating the determination conformed to relevant statutes, rejecting the appeal for lacking merit.

JUDGMENT :

VIBHU BAKHRU, C.J.

1. The appellant [NHAI] has filed the present appeal under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 [A&C Act] impugning an order dated 01.04.2025 [impugned order passed by the learned IV Additional District Judge and Commercial Court, D.K., Mangaluru [Commercial Court] in A.P No.375/2023 captioned, National Highways Authority of India vs. Shri N. Raviraj Shetty and others.

2. NHAI had preferred the said application under Section 34 of the A&C Act impugning an arbitral award dated 04.05.2023 [impugned award] passed by respondent No.2 [the Arbitral Tribunal] under Section 3G(5) of the National Highways Act, 1956 [the NH Act]. It is the NHAI's case that the impugned award is liable to be set aside inasmuch as it has not determined the compensation for the acquired land in accordance with the guidelines and the relevant statutes.

3. Land measuring 4452 sq. mtrs. in Survey No.129/8 in Thiruvalli Village, Mangalore Taluk [subject land] was acquired under the NH Act. The competent authority and the Special Land Acquisition Officer (respondent No.3) had determined the market value of the subject land at Rs.3,42,80,400/-. After accounting for additional compensation and solatium, the total compensation for the land of 4452 sq. mtrs. was determined at Rs.7,26,85,718/- (Rupees seven crore twenty six lakh eighty five thousand seven hundred and eighteen only).

4. Respondent No.1 had assailed the said determination by filing an application under Section 3G(5) of the NH Act before Respondent No.2. It was the respondent No.1's case that the market value of the land in the area was Rs.10,50,000/- per cent as against Rs.3,11,619/- per cent as determined by respondent No.3. The Arbitral Tribunal did not accept the said claim. The Arbitral Tribunal found no error in determination of the market value of the subject land at the rate of Rs.7,700/- per sq. mtr. as the same was based on the guidance value fixed for the purpose of stamp duty. The application filed by the respondent No.1 under Section 3G(5) of the NH Act culminated in the impugned award, whereby the appellant was directed to pay compensation for the subject land on the basis that the market value of the subject land was Rs.7,700 per sq. mtr.

5. There is certain discrepancy in the impugned award as it mentions the extent of the subject land as 4047 sq. mtr. However, the order dated 22.01.2021 passed by respondent No.3 refers to the extent of the subject land as 4452 sq. mtrs. The learned counsel appearing for NHAI submits that there is a typographical error in the impugned award as well as in the impugned order insofar as the extent of acquired land is concerned.

6. The Arbitral Tribunal noted that although the market value of the land, as fixed by respondent No.3, was determined at the rate of Rs.7,700/- per sq. mtr., while making payments, certain deductions had been made. The Arbitral Tribunal found that such deductions – which were apparently made following a method adopted by CVC – were unsustainable.

7. NHAI preferred an application under Section 34 of the A&C Act assailing the impugned award, apparently confined to the extent that it was directed to pay the compensation as determined at the rate of Rs.7,700/- per sq. mtr. without any further deductions. The learned Commercial Court concurred with the view of the Arbitral Tribunal. And, by the impugned order, rejected the application filed by NHAI for setting aside the impugned award.

8. The learned counsel appearing for the NHAI submitted that the impugned award is cont