Arbitral award in land acquisition under NH Act vitiated by patent illegality for using obsolete guideline value instead of contemporaneous valuation.

This Civil Miscellaneous Appeal has been filed as against the order passed in Arb.O.P.No.43 of 2017, dated 21.12.2020 by the learned Principal District Judge, Villupuram.

2. The facts leading to the filing of the present appeal are that the appellant is the owner of the lands comprised in S.Nos.8/7B2, 8/11 and 39/5C1(1/4^th), measuring an extent of 0.862 sq.mts. situated at Nangilikondan Village, Gingee Taluk. For the purpose of constructing a Toll Plaza on National Highway No.66 (Tindivanam–Krishnagiri Section), the said lands were acquired by the National Highways Authority of India under the provisions of the National Highways Act, 1956 [hereinafter referred to as “the NH Act, 1956”]. Subsequently, the Competent Authority (Land Acquisition) by Award dated 30.09.2013, fixed the compensation at Rs.50/- per sq.ft., subject to deduction of 50% towards development charges. Being aggrieved by the quantum of compensation so determined, the appellant/landowner preferred Claim Petition No.14 of 2014 before the Arbitrator/District Collector, Villupuram District, seeking fair determination of compensation. The first respondent/Arbitrator, by Award dated 24.11.2015, failed to conduct a proper enquiry and merely confirmed the compensation at Rs.50/- per sq.ft., however, 50% deduction for development charges was deleted. Challenging the said arbitral award, the appellant instituted Arb.O.P.No.43 of 2017 under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as ‘the Act, 1996’] before the learned Principal District Judge, Villupuram, which was dismissed on 21.12.2020. Assailing the said order, the present appeal is preferred by the appellant/landowner.

3. Mr.R.Veeramani, learned counsel for the appellant, submitted that the acquired lands are wet lands, abutting the National Highway No.66 and adjoining residential locality, thereby possessing high potential value. However, the Competent Authority erroneously fixed compensation at a meagre rate of Rs.50/- per sq.ft., by relying on the obsolete guideline value as on 01.08.2007, thereby overlooking the revised guideline value of Rs.120/- per sq.ft., notified by the Government of Tamil Nadu with effect from 01.04.2012, pursuant to the Gazette Notification dated 29.03.2012 under Section 3-A (1) of the NH Act 1956 and its publication on 19.06.2012. It was further submitted that the Arbitrator/District Collector, while exercising statutory powers, erred in merely affirming the rate of Rs.50/- per sq.ft., without considering the contemporaneous guideline value, appreciating the documentary evidence produced by the appellant or conducting a proper enquiry. The learned counsel contended that the refusal to mark such documents and the failure of the Principal District Judge, Villupuram, to consider the same in the proceedings under Section 34 of the Act, 1996, have caused serious prejudice. It was also contended that the omission to award statutory benefits of solatium and interest, vitiates the arbitral award and renders it contrary to law. Even assuming a reasonable annual appreciation of 10% – 20% from 2007 onwards, the revised guideline value of Rs.120/- per sq.ft., as on 01.04.2012 was neither excessive nor unreasonable. The appellant therefore seeks enhancement of compensation in line with the prevailing guideline value and statutory entitlements.

4. Per contra, Mr.Su.Srinivasan, the learned Standing Counsel appearing for the third respondent submitted that the subject lands were acquired under the provisions of the NH Act, 1956. The second