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2026 Supreme(Mad) 1490

IN THE HIGH COURT OF JUDICATURE AT MADRAS
P. VELMURUGAN, K. GOVINDARAJAN THILAKAVADI, JJ.
Rayadurai – Appellant
Versus
The Arbitrator/District Collector, Villupuram – Respondent
C.M.A. No. 3246 of 2021
Decided On : 15-04-2026

Advocates Appeared:
For the Appellant : R. Nalliyappan
For the Respondents: P. Gurunathan, Su. Srinivasan

Narrow scope of judicial interference under Sections 34/37 Arbitration Act in NHAI land awards; cannot re-appraise evidence or enhance compensation without perversity.

Headnote:Under National Highways Act, 1956 (Sections 3A, 3D, 3G), lands acquired for highway development classified as agricultural based on market value at notification date using comparable sales data (Rs.37/sq.mtr.). Claimant sought enhanced valuation as house sites near amenities but failed to produce supporting documents before arbitrator (District Collector). District Court rightly dismissed Section 34 Arbitration Act challenge, upholding award. Issues framed: Whether lands near residential areas qualify as house sites warranting higher compensation; scope of court interference under Sections 34/37 Arbitration Act absent perversity or procedural flaws. Ratio: Arbitrator's factual determination on valuation final; courts cannot re-appraise evidence or enhance awards without statutory grounds like public policy violation (para 6,12). Appeal dismissed; impugned order upheld, no interference warranted (para 14).

Table of Content
1. land acquisition under nh act for highway; compensation based on market value at s.3a notification. (Para 2 , 7 , 10)
2. claimant seeks house site valuation; respondents defend agricultural rate with data evidence. (Para 4)
3. limited judicial review under arbitration act; no re-appreciation of evidence or enhancement. (Para 6 , 9 , 11 , 13)
4. appeal lacks merit; award and section 34 dismissal upheld. (Para 14)

JUDGMENT :

K. GOVINDARAJAN THILAKAVADI, J.

1. This appeal is filed by the claimant/land owner against the fair and decreetal order dated 21.12.2020 passed in Arbitration O.P.No.175 of 2019 on the file of the Principal District Judge, Villupuram.

2. The brief facts which are necessary for disposal of this appeal are as follows:

The lands in Survey Nos.263/9B, 263/9, 263/10A, 263/10B, 263/11A, 263/12, 263/13, 263/14A and 263/15A, situated in Chinnasalem Village, Chinnasalem Taluk, Villupuram District, belonging to the appellant/land owner, were acquired by the 2nd respondent for laying 4-way lane road under the National Highways Authorities Act for the Salem-Ulundurpet section of National Highway No.68. The 2nd respondent had considered the land as Manai land and, after collecting 262 sales statistics for the reasonable period from 25.06.2007 to 26.06.2008, selected a data land in S.F.No.222/4 as per Document No.2216/2008 dated 18.06.2008 and fixed the value of the petitioner's land at Rs.37/- per sq.mtr. Additionally, a data land in S.F.No.330/5 as per Document No.2156/2008 dated 16.06.2008 was also considered for fixing the value of house site lands at Rs.80/- per sq.ft. (Rs.860/- per sq.mtr.). Accordingly, the 2nd Respondent awarded a total compensation of Rs.7,84,027/- (Main Award - Chq.No.355835 dt.13.10.09) and Rs.67,399/- (Additional Award - Chq.No.477764 dt.30.11.2010), totalling Rs.8,51,426/- as compensation to the land owners in proceedings No.286/2009 dated 07.09.2009.

2.1. The appellant/land owner, dissatisfied with the said amount, filed an application before the 1st respondent/Arbitrator/District Collector on 25.11.2009 seeking enhanced compensation under Section 3G(5) of the National Highways Act, 1956. However, the 1st respondent, in the proceedings before the Arbitrator/District Collector dated 01.03.2019, considered the location of the land and passed an award in Na.Ka.(Arbit) A2/2204/2017 dated 01.03.2019, rejecting the appeal of the appellant/land owner and holding that the value fixed by the 2nd respondent on the basis of the data land at Rs.37/- per sq.mtr. for agricultural lands is the market value as on the date of 3A(1) notification and that there is no necessity to enhance the same. The petitioner has failed to submit any document that could serve as basis for further enhancement.

2.2. Aggrieved by the Arbitration Award dated 01.03.2019, the appellant/land owner filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 in Arb.O.P.No.175 of 2019 before the Principal District Judge, Villupuram, praying to set aside the said award and to direct the respondents to pay enhanced compensation. The learned Principal District Judge, Villupuram, dismissed the said application on 21.12.2020. Aggrieved by this, the present appeal is preferred.

3. The learned counsel for the appellant/land owner would submit that the 1st respondent/Arbitrator failed to appreciate that the properties acquired by the 3rd respondent are house sites existing very near to the residential area, school, hotel, hospital, shopping complex, etc., and hence the same ought to have been valued as plotable site and not as agricultural land. He further submitted that the 1st respondent, without properly considering the location and nature of the acquired land, dismissed the application of the appellant along with other claimants without applying his mind to the individual facts of each case. He further submitted that the properties acquired are adjacent to Chinnasalem Town and that the petitioner's land me

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