Arbitral awards in land acquisition omitting statutory solatium/interest and ignoring land potentiality are patently illegal and set aside under Arbitration Act public policy.

(Judgment of the Court was made by P.Velmurugan J.)

Challenging the order passed in Arb.O.P.No.177 of 2013, dated

27.01.2021 by the learned Principal District Judge, Villupuram, appellant has filed the above Civil Miscellaneous Appeal.

2. The facts leading to the filing of the present appeal are that the appellant is the owner of 3 ½ acres of land in S.No.265/4B, situated at Thenkeeranur Village at Kallakurichi Taluk. On 09.07.2008 a notification under Section 3A(1) of the National Highways Act, 1956 [hereinafter referred to as the ‘NH Act’] was published in the Gazette of India Extraordinary No.946 by the first respondent, namely the National Highways Authority of India, for acquisition of lands in the Thenkeeranur Village to facilitate expansion of NH-68 four-lane road. Pursuant thereto, the second respondent, Competent Authority (Land Acquisition), initiated acquisition proceedings under the provisions of the NH Act. The appellant submitted objections to the proposed acquisition, which were not duly considered. Subsequently, the Competent Authority passed an Award in R.O.C.No.270/ 2009(NH-68) dated 02.12.2009 and awarded a sum of Rs.33,68,442/- towards compensation, which amount was received by the appellant under protest. Being not satisfied with the quantum of compensation so awarded, the appellant preferred a claim petition under Section 3G (5) of the NH Act before the Arbitrator, namely the District Collector, Villupuram District, seeking enhancement of compensation. However, the fourth respondent/Arbitrator, without conducting a proper enquiry, mechanically confirmed the Award passed by the Competent Authority. Challenging the said arbitral award, the appellant filed Arb.O.P.No.177 of 2013 before the learned Principal District Judge, Villupuram, which was dismissed on 27.01.2021, thereby affirming the arbitral award. The present appeal is directed against the said order.

3. The learned Senior Counsel appearing for the appellant contended that the valuation determined by the Competent Authority is wholly inadequate and arbitrary. At the time of acquisition, the prevailing market rate of the subject land was asserted to be Rs.285/- per sq.mt., however, the Authority arbitrarily fixed Rs.23/- per sq.mt. for agricultural lands and Rs.215/- per sq.mt for the house site portion. Such fixation does not reflect the true market value or the potentiality of the acquired property, which was situated in close proximity to well-developed residential colonies and within a radius of half a kilometer from an International School. It was further contended that the acquired lands ought to have been classified uniformly as house sites rather than agricultural lands, and the failure to adopt a uniform valuation for the entire extent has resulted in manifest injustice to the appellant. It was further contended that the omission to grant statutory benefits of solatium and interest vitiates the award and renders it contrary to law.

4. The learned Senior Counsel further contended that the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 [hereinafter referred to as the ‘Act, 2013’] are applicable, inasmuch as the award proceedings had not attained finality and the claim for enhanced compensation was still pending. It was contended that the beneficial scope of Section 105-A of the Act, 2013, which extends the applicability of the Act to acquisitions under specified enactments, was overlooked by the Court below. The learned Principal District Judge erroneously held that the Act of 2013 was inappl