[Cites 13, Cited by 0]
Bombay High Court
Mainabai Mahadev Gund vs The Project Direction, National ... on 23 March, 2026
2026:BHC-AUG:12475
1 Arba46.2025+
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
8 ARBITRATION APPEAL NO. 46 OF 2025
ABARAO EKNATH BELE
VERSUS
THE PROJECT DIRECTOR AND OTHERS
...
Advocate for Appellant :
Mr. Shashikiran N Patil a/w. Mr. N. S. Birajdar
Advocate for Respondent No.1 : Mr. S. P. Urgunde
Advocate for Respondent No.2 : Mr. R. D. Sanap
...
AND
...
9 ARBITRATION APPEAL NO. 57 OF 2025
NAGNATH GANGARAM MASKE
VERSUS
THE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OF
INDIA, AND OTHERS
...
Advocate for Appellant :
Mr. Shashikiran N Patil a/w. Mr. N. S. Birajdar
Advocate for Respondent No.1 : Mr. Urgunde Suhas P.
Advocate for Respondent No.2: Mr. Bangar Ravi Raosaheb
...
AND
...
10 ARBITRATION APPEAL NO. 58 OF 2025
DEVRAO JYOTI GUND
VERSUS
THE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OF
INDIA, AND OTHERS
...
Advocate for Appellant :
Mr. Shashikiran N Patil a/w. Mr. N. S. Birajdar
Advocate for Respondent No.1 : Mr. Urgunde Suhas P.
Advocate for Respondent No.2: Mr. R. B. Bagul
...
AND
...
11 ARBITRATION APPEAL NO. 59 OF 2025
2 Arba46.2025+
JIJABAI RAVSAHEB GUND
VERSUS
THE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OF
INDIA, AND OTHERS
...
Advocate for Appellant :
Mr. Shashikiran N Patil a/w. Mr. N. S. Birajdar
Advocate for Respondent No.1 : Mr. Urgunde Suhas P.
Advocate for Respondent No.2: Mr. R. B. Bagul
...
AND
...
12 ARBITRATION APPEAL NO. 60 OF 2025
MAINABAI MAHADEV GUND
VERSUS
THE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OF
INDIA, AND OTHERS
...
Advocate for Appellant :
Mr. Shashikiran N Patil a/w. Mr. N. S. Birajdar
Advocate for Respondent No.1 : Mr. Urgunde Suhas P.
Advocate for Respondent No.2: Mr. U. B. Bondar
...
AND
...
13 ARBITRATION APPEAL NO. 61 OF 2025
SANDIP SUBHASH KADAM
VERSUS
THE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OF
INDIA, AND OTHERS
...
Advocate for Appellant :
Mr. Shashikiran N Patil a/w. Mr. N. S. Birajdar
Advocate for Respondent No.1 : Mr. Urgunde Suhas P.
Advocate for Respondent No.2: Mr. U. B. Bondar
...
AND
...
14 ARBITRATION APPEAL NO. 62 OF 2025
MAINABAI MAHADEV GUND
VERSUS
THE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OF
INDIA, AND OTHERS
3 Arba46.2025+
...
Advocate for Appellant :
Mr. Shashikiran N Patil a/w. Mr. N. S. Birajdar
Advocate for Respondent No.1 : Mr. Urgunde Suhas P.
Advocate for Respondent No.2: Mr. S. W. Munde
...
AND
...
15 ARBITRATION APPEAL NO. 63 OF 2025
LAXMAN MASAJI MASKE
VERSUS
THE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OF
INDIA, AND OTHERS
...
Advocate for Appellant :
Mr. Shashikiran N Patil a/w. Mr. N. S. Birajdar
Advocate for Respondent No.1 : Mr. Urgunde Suhas P.
Advocate for Respondent No.2: Mr. R. D. Sanap
...
AND
...
16 ARBITRATION APPEAL NO. 64 OF 2025
PRATAP DADARAO ROCKHARI
VERSUS
THE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OF
INDIA, AND OTHERS
...
Advocate for Appellant :
Mr. Shashikiran N Patil a/w. Mr. N. S. Birajdar
Advocate for Respondent No.1 : Mr. Urgunde Suhas P.
Advocate for Respondent No.2: Mr. N. T. Bhagat
...
AND
...
17 ARBITRATION APPEAL NO. 65 OF 2025
ARUN JYOTI GUND
VERSUS
THE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OF
INDIA, AND OTHERS
...
Advocate for Appellant :
Mr. Shashikiran N Patil a/w. Mr. N. S. Birajdar
Advocate for Respondent No.1 : Mr. Urgunde Suhas P.
4 Arba46.2025+
Advocate for Respondent No.2: Mr. N. T. Tribhuwan
...
CORAM : ARUN R. PEDNEKER, J.
DATE : 23.03.2026
PER COURT:
1. Heard.
2. The appellants challenge the impugned Awards passed
by the Arbitrator, so also, the impugned Orders passed by the
Principal District Judge, Osmanabad dismissing the Applications
under Section 34 of the Arbitration and Conciliation Act, 1996.
3. Brief facts giving rise to the present appeals are that
the appellants are the owners of the acquired lands for extension of
the National Highway No.361. Notification dated 24.09.2016 was
issued for acquisition of the lands abutting the National Highway
No.361 by the Ministry of Road Transport and Highways under
Section 3A of the National Highways Act, 1956. Final notification
under Section 3D(1) of the National Highways Act, 1956 was
published on 17.11.2016, acquiring various lands of the different
appellants herein situated at village Tadavala, Taluka Tuljapur,
District Osmanabad for widening of National Highway No.361.
4. The above noted facts are not disputed before this
court. It appears that the Competent Authority for Land
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Acquisition (CALA) awarded compensation in three categories
determining the compensation in Group 1 category at the rate of
Rs.40 per Sq. Mtr., in Group 2 category there are further three
subcategories in which there is compensation granted at the rate of
Rs.680/-, Rs.40 and Rs.79 per Sq. Mtr. and, in Group 3 category at
the rate of Rs.44 per Sq. Mtr.
Thereafter, the appellants filed the Applications under
Section 3G(5) for referring the matters to the Arbitrator. The
Arbitrator maintained the compensation at the rate of Rs.680/- per
Sq.Mtr. for the lands abutting the highway and in respect of all
other lands granted compensation at the rate of Rs.399/- per Sq.
Mtr.
The appellants, who are granted compensation at the
rate of Rs.399/- per Sq. Mtr. challenged the Awards under Section
34 of the Arbitration and Conciliation Act, 1996. The proceedings
are dismissed.
Challenging the Awards of the Arbitrator and the order
of the learned Principal District Judge, Osmanabad dismissing the
Section 34 applications in the present appeals, the learned counsel
for the appellants relies upon the Judgment of the Madhya Pradesh
Road Development Corporation Vs. Vincent Daniel and others,
(2025) 7 SCC 798. He submits that Section 26 of the Right to Fair
Compensation and Transparency in Land Acquisition,
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Rehabilitation and Resettlement Act, 2013 (for brevity "2013 Act")
is made applicable for determination of the compensation under
the National Highways Act. He further submits that Section 105 of
the 2013 Act, notifications are be issued by the Central
Government applying Sections 26 to 30 of the 2013 Act for
determination of the compensation for the lands acquired under
the National Highways Act.
5. The learned counsel for the appellants submits that,
while applying Section 26 of the 2013 Act the highest sale deed has
to be taken into consideration. He also submits that the similarly
placed lands has to be granted similar compensation. He relies
upon paragraphs no.24 and 42 of the above referred Judgment and
submits that while passing the awards the arbitrator has not
applied the principles while determining the compensation and,
thus, the Awards are patently illegal and perverse have to be set
aside.
6. Per contra, the learned counsel appearing for the
Respondents / National Highway Authority submits that the
arbitrator has rightly determined the compensation for 2 different
categories, some lands which are abutting highway are granted
Rs.680/- per Sq. Mtr., whereas the lands little away from the
highway are granted compensation at the rate of Rs.399/- per Sq.
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Mtr. He submits that under Section 34 of the Arbitration and
Conciliation Act, 1996, the power of the court is extremely
restricted and only in cases of patent illegality the award can be
interfered. He also submits that the arbitrator was justified in
bifurcating the lands in 2 different categories and he has has also
taken into consideration NA potential of the lands and has allowed
enhancement of compensation which is granted by CALA at the
rate of Rs.40, 79 and 44 to uniformly Rs.399/- per Sq. Mtr. and the
same is rightly not interfered with by the District Court under
Section 34 of the Arbitration and Conciliation Act, 1996.
7. Considered rival submissions.
8. IN the case of the Madhya Pradesh Road Development
Corporation Vs. Vincent Daniel and others (supra), the Hon'ble
Supreme Court has observed that the courts also needs to apply
the general parameters under Land Acquisition Act as laid down by
the Hon'ble Supreme Court and the High Court, while determining
the compensation under Section 26 of the 2013 Act. One of the
principal contention is that all acquired lands have NA potential
lands and are abutting the highway and they cannot be granted
separate compensation. It is thus submitted that the arbitrator has
committed patent illegality and perversity in differentiating the
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similarly placed lands and, thus, the Awards need to be interfered
with.
9. This court by order dated 18.03.2026 in Arbitration
Appeal No.10 of 2026 with connected appeals, at paragraphs
no.60, 61 and 62, considered the Judgments of the Hon'ble
Supreme Court dealing with the power of the court under Section
34 and 37 of the Arbitration and Conciliation Act to interfere with
the arbitral Award as under:
"60. ...The Supreme Court in the case of PSA Sical
Terminals Private Limited Vs. Board of Trustees of V.O.
Chidambaranar Port Trust Tuticorn and Anr. reported
in (2023) 15 SCC 781 has observed that it is a settled
legal position, that in an application under Section 34,
the court is not expected to act as an appellate court
and reappreciate the evidence. The scope of
interference would be limited to grounds provided
under Section 34 of the Arbitration Act. The
interference would be so warranted when the award is
in violation of "public policy of India", which has been
held to mean "the fundamental policy of Indian law". A
judicial intervention on account of interfering on the
merits of the award would not be permissible. However,
the principles of natural justice as contained in Section
18 and 34(2)(a)(iii) of the Arbitration Act would
continue to be the grounds of challenge of an award.
The ground for interference on the basis that the award
is in conflict with justice or morality is now to be
understood as a conflict with the "most basic notions of
morality or justice". It is only such arbitral awards that
shock the conscience of the court, that can be set aside
on the said ground. An award would be set aside on the
ground of patent illegality appearing on the face of the
award and as such, which goes to the roots of the
matter. However, an illegality with regard to a mere
erroneous application of law would not be a ground for
interference. Equally, reappreciation of evidence would
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not be permissible on the ground of patent illegality
appearing on the face of the award.
61. The Hon'ble Supreme Court in PSA Sical
Terminals Private Limited (supra) has further
observed that a decision which is perverse, though
would not be a ground for challenge under "public policy
of India", would certainly amount to a patent illegality
appearing on the face of the award. However, a finding
based on no evidence at all or an award which ignores
vital evidence in arriving at its decision would be
perverse and liable to be set aside on the ground of
patent illegality.
62. To appreciate the test of perversity, the Hon'ble
Supreme Court in PSA Sical Terminals Private Limited
(supra) in para 42 has further held as under :-
"42. To understand the test of perversity, it will
also be appropriate to refer to paragraph 31
and 32 from the judgment of this Court in
Associate Builders (supra), which read thus:
31. The third juristic principle is that a decision
which is perverse or so irrational that no
reasonable person would have arrived at the
same is important and requires some degree of
explanation. It is settled law that where:
(i) a finding is based on no evidence, or
(ii) an Arbitral Tribunal takes into account
something irrelevant to the decision which
it arrives at; or
(iii) ignores vital evidence in arriving at its
decision,
such decision would necessarily be perverse.
32. A good working test of perversity is contained
in two judgments. In Excise and Taxation Officer-
cum-Assessing Authority v. Gopi Nath & Sons
[1992 Supp (2) SCC 312], it was held:
"7. ... It is, no doubt, true that if a finding of
fact is arrived at by ignoring or excluding
relevant material or by taking into
consideration irrelevant material or if the
finding so outrageously defies logic as to
suffer from the vice of irrationality
incurring the blame of being perverse, then,
the finding is rendered infirm in law."
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In Kuldeep Singh v. Commr. of Police (1999) 2 SCC 10,
it was held:
"10. A broad distinction has, therefore, to be maintained
between the decisions which are perverse and those
which are not. If a decision is arrived at on no evidence
or evidence which is thoroughly unreliable and no
reasonable person would act upon it, the order would be
perverse. But if there is some evidence on record which
is acceptable and which could be relied upon,
howsoever compendious it may be, the conclusions
would not be treated as perverse and the findings would
not be interfered with."
10. In the instant case, the Arbitrator having bifurcated the
lands in different categories has committed patent illegality and
perversity and uniformity ought to have been maintained. The
arbitrator ought not to have differentiated the lands. The little
distance of few feet makes no difference as all the acquired lands
have NA potentiality and are near the highway. Section 26 of the
2013 Act also provides for determination of the compensation
based on average of highest sale deed, as such, the compensation
granted to the land considering highest sale deed of Rs.680/- per
Sq. Mtr. ought to have been applied to the present lands.
11. Considering the above, this court has find that the
Arbitrator has committed patent illegality in granting different
compensation to similarly placed lands. In this view of the matter,
the impugned Awards to the extent of the present appellants,
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wherein compensation is granted at the rate of Rs.399/- per Sq.
Mtr. are quashed and set aside.
12. Appointment of arbitrator under the National Highways
Act is exclusive jurisdiction of the Central Government under
Section 3G(5) of the National Highways Act. The impugned Arbitral
Awards being set aside, have to be again referred to the arbitrator
appointed by the Central Government under Section 3G(5) of the
National Highways Act. Considering this, I deem it appropriate to
directly refer the matters before arbitrator appointed by the
Central Government. The matters are remitted back to the
Arbitrator to be determined within four (04) months. All
contentions are left open.
13. The Arbitration Appeals stand disposed of accordingly.
[ARUN R. PEDNEKER, J.]
marathe
