2025 Supreme(Pat) 148

IN THE HIGH COURT OF JUDICATURE AT PATNA
KHATIM REZA, J.
Miscellaneous Appeal Nos.130 with 163 of 2022
(15.4.2025)
National Highway Authority, NH 83 ... Appellant (in both)
vs.
Surendra Prasad Sharma & Anr. (in 130)
Dinesh Sharma & Anr. (in 163) ... Respondents

Headnote:

National Highway Authority of India Act, 1956 – Section 3(A) – Arbitration and Conciliation Act, 1996 – Section 37 – Acquisition of land – Dispute over payment of compensation – Question of nature of land could be considered in determining market value under Section 3G of NHAI Act – Factors to be considered while determining compensation, must consider market value of land, any damage sustained by person interested and reasonable expenses for changing residence for business if applicable – In the process of determination, Arbitrator shall follow provision of Arbitration Act – If amount determined by competent authority is not acceptable to either party, it can be referred for arbitration – Competent authority has to determine fair market value of land and compensation with more responsibility and "Arbitrator" has to determine with judicial approach as "Reference Court" – Market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when let out in its most advantageous manner – For determining market value of land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors in comparison with land under acquisition by placing the two side by side – Competent authority shall determine market value and compensation by applying judicial mind – He can also examine witnesses, call for documents from revenue authority and make enquiry with revenue officials to determine fair market value and fair compensation. (Paras 21, 22, 23, 26 and 27)

Arbitration and Conciliation Act, 1996 – Section 34 – National Highway Authority of India Act, 1956 – Section 3(A) – Acquisition of land – Dispute over payment of compensation – Arbitrator shall determine compensation as per guiding factor mentioned in Section 3-G(7) of NHAI Act, following procedure stated in Arbitration Act, 1996 – Substantive law is NHAI Act and procedural law is Arbitration Act 1996 – As per provision of Section 3G(5) of NHAI Act – Land owners have no right to seek appointment of Arbitrator – Appointment of Arbitrator is an independent act of Central Government – Duty cast upon Arbitrator to determine compensation, is different from ordinary arbitration dispute arising in commercial contract matters – This type of statutory arbitration cannot be equated with functions of Arbitrator discharging under agreement entered between parties to arbitration – Arbitrator is duty bound to adjudicate dispute relating to compensation and determine fair compensation – Arbitration proceedings relating to determination of compensation are not governed by agreement to regulate process of arbitration – Scheme of statutory arbitration under NHAI Act is different from commercial arbitration mentioned in Arbitration Act – Amount required to be paid as compensation is to be first determined – Value of land rises manifold and deprivation amounts to violation of human right to hold property – Constitutional obligation rests upon both Competent Authority and Arbitrator to determine fair and just compensation to restore life of land holders as per theory of restitution – Direction of Arbitrator given to Competent Authority for determination of compensation on the basis of residential MVR after measurement of land over which structure is standing is beyond scope/jurisdiction of Arbitrator. (Paras 29, 30, 32, 33 and 34)

Arbitration and Conciliation Act, 1996 – Section 34 – National Highway Authority of India Act, 1956 – Section 3(A) – Acquisition of land – Payment of compensation – Power of court under Section 34 of Act to make interference with award is always a factual subject – After passing of award, competent authority calculated amount as per residential MVR which has not been assailed in present appeal by NHAI – Arbitrator has determined market value as residential MVR of land of land holder on the basis of subsidy granted to respondent – Since Competent Authority has calculated compensation for acquired land on the basis of agriculture MVR, it was necessary for Arbitrator to direct competent authority to calculate compensation amount on the basis of residential MVR after measurement of land occupied by structure after satisfaction of competent authority that structure was raised before date of notification – Compensation amount has not been challenged by appellant and calculation on the basis of residential MVR has taken its finality – No interference in impugned order is required – Appeals dismissed. (Paras 35 to 38)