[Cites 8, Cited by 0]
Bombay High Court
Project Director, National Highway ... vs Nanasaheb Vishwanath Kadam And Another on 30 March, 2026
2026:BHC-AUG:13382
1 Arba5.2023
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
ARBITRATION APPEAL NO. 5 OF 2023
. THE PROJECT DIRECTOR,
The National Highways Authority of India,
PIU-Nashik, Kenstar Apartment, B-Wing,
S.No.318/1/10, Plot No.1, Pathardi Phata,
Nashik-422010 (Maharashtra) .. Appellant
Versus
1. NANASAHEB VISHWANATH KADAM,
Age: Major, Occu,: Farmer,
R/o.: At post, Savali Vihir Bk.,
Tal.: Rahata & Dist. Ahmednagar,
State Maharashtra
2. THE COMPETENT AUTHORITY OF LAND
ACQUISITION AND SUB-DIVISIONAL OFFICER,
Shirdi, Tq. Rahata, Dist.: Ahmednagar .. Respondents
...
Advocate for Appellant:
Mr. P. R. Katneshwarkar, Senior Advocate i/b. Mr. V. T. Sakolkar
Advocate for Respondent No.1: Ms. P. S. Talekar
Respondent No.2 - served
...
CIVIL APPLICATION NO. 8402 OF 2025
...
CORAM : ARUN R. PEDNEKER, J.
DATE : 30.03.2026
ORDER:
1. Heard.
2. By the present Arbitration Appeal, the Appellant -
National Highway Authority of India challenges the order passed
under Section 34 of the Arbitration and Conciliation Act, 1996,
2 Arba5.2023
thereby dismissing the application filed by the respondent herein
and directing the Appellant herein to pay the compensation to the
respondent as determined by the Competent Authority vide award
dated 15.07.2019 i.e. at the rate of Rs.4821/- per Sq. Mtr. with
other components as mentioned in the Award.
3. The brief facts leading to filing of the Arbitration Appeal
is that the respondent purchased a land of 200 Sq.Mtr. on
18.08.1992 out of land bearing Gut No.1/4, situated at village
Savalivihir Budruk, Taluka Rahata, adjacent to the Ahmednagar-
Manmad road, National Highway No.160, from one Bapusaheb
Sadafal. The previous owner of the land had obtained permission
for conversion of the land for non-agricultural purpose on
16.06.1983. Thereafter, permission to construct building was
taken on 30.08.2006 and completion certificate of the same
obtained on 30.08.2006 and for long period the respondent was
running Restaurant with bar lincence in the premises.
4. On 06.03.2017, notification was issued under Section 3
of the National Highways Act for acquisition of 100 Sq.Mtrs. From
Gut No.1/4 of the respondent's and other lands. On 15.07.2019, an
Award of compensation was passed by the Competent Authority. It
determined the compensation at the rate of Rs.4821/- per Sq.Mtr.
but final amount payable was shown as Zero due to letter dated
3 Arba5.2023
04.10.2018 from the Assistant Director of Town Planning,
Ahmednagar. The Competent Authority for Land Acquisition
(CALA) in it's Award observed as under:
"बिनशेती जमिनी बाबत रस्ता रुंदीकरणाखालील क्षेत्र विनामोबदला संबंधित
विभागाकडे हस्तांतरित करणे बंधनकारक असल्याने त्या जमिनीवरील
फळझाडे, वनझाडे, बांधकामे, पाईपलाईन, विहिरीचेही मूल्यांकन देय होत
नाही. त्यामुळे संयक्तु मोजणी नकाशात नमूद केलेल्या बाबी व त्यानुसार
खालील प्रमाणे प्राप्त झालेल्या मूल्यांकनाचा मोबदला दिलेला नाही."
Although, CALA computed compensation but did not
grant the same as land was required to be surrendered to the State
in N.A. plotting.
5. The Respondent challenged the Award of CALA before
this Court in Writ Petition No.6815 of 2020, wherein following
prayers were made:
A. To quash and set aside the impugned communication
dated 04.10.2018 issued by the respondent No.4 -
Assistant Director, Town Planning, Ahmednagar by
issuing writ of certiorari or any other writ, order or
direction, as the case may be."
"B. To quash and set aside the final award dated
15.07.2019 passed by the respondent No.3 - CALA to
the extent of the petitioner, thereby, refusing to pay
compensation to the acquisition of NA land and the
structure erected thereon by issuing writ of certiorari
or any other writ, order or direction, as the case may
be."
"C. To direct the respondent No.3 to pass revised award
under Section 25 r/w Section 30 of the Right to Fair
Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 and the
procedure prescribed therein, in respect of the
petitioner's land from Gut No.1/4 at village Savilivihir
4 Arba5.2023
(Bk), Tq. Rahata, by issuing a writ of mandamus or any
other writ, order or direction, as the case may be."
This Court considered the matter and by order dated
07.07.2021, observed at Paragraphs No.4, 7 and 8, as under:
"4. The pleadings in this petition are complete. None of
the respondents can indicate from any provision of law
that the N.A. portion of land belonging to any person,
which may be acquired in a road widening project,
would not entitle the land owner to any compensation.
There is no dispute in accepting the legal position that,
with reference to an N.A. land, there would be no
compensation for fruiting trees or a garden or a pipe
line or a well since the land is not being used for
agricultural purposes. However, none of the
respondents have been able to show us any provision of
law or a judicial pronouncement indicating or laying
down the law that N.A. land acquired for road widening
would not fetch any compensation to the land owner.
7. We are not satisfied with the said reply, since these
grounds do not form a part of the order of respondent
No.3 when he concluded that the petitioner would not
be entitled for compensation of 100 square meters of
the N.A. land.
8. In view of the above, this petition is disposed off with
the observations that the petitioner would be entitled
for the compensation to the extent of 100 square
meters of the N.A. land acquired for road widening,
unless there is any other legal impediment which would
dis-entitle the petitioner from claiming compensation.
Needless to state, the structure sanding on his 100
square meters land has already been subjected to
determination of compensation. Therefore, we leave all
contentions of the petitioner open to be considered in
L.A.R.No.02/2019, which is pending before the
Arbitrator at Ahmednagar."
6. This court observed that, the claimant is entitled to
compensation from acquired land. However, since, the arbitration
5 Arba5.2023
proceedings were pending the High Court granted liberty to the
claimant to claim compensation before the Arbitrator. The
Arbitrator passed the Award dated 31.12.2021 and determined the
market rate at Rs.723/- per Sq. Mtr. The same was challenged by
the Respondent by filing application under Section 34 before the
District Court. The District Court by impugned order dated
11.01.2023 has set aside the arbitral award and it has observed
that the arbitrator erred in holding that ownership of the
applicant's acquired land vested with the Government. The
Arbitrator also applied the same logic of CALA without fully
appreciating the observations of the High Court order dated
07.07.2021 in Writ Petition No.6815 of 2020. The District Court
observed that there is no automatic vesting of the land to the
Government without payment of compensation as observed in the
above noted order dated 07.07.2021 of the High Court. As such, the
court held that the arbitrator has acted illegally and quashed and
set aside the arbitral award. However, the court proceeded further
to observe that the compensation as determined by the CALA has
to be paid to the Respondent / Claimant.
7. The learned Senior Advocate appearing for the National
Highways Authority challenges this part of the order of the District
Court wherein it has observed that the claimant is entitled to
6 Arba5.2023
receive compensation in terms of Award dated 15.07.2019 of CALA
at the rate of Rs.4821/- per Sq.Mtr. with other components as
mentioned in the Award of CALA. The learned counsel for the
Appellant submits that the court under Section 34 of the Act can
only quash and set aside the Arbitral Award and cannot direct to
make payment to the respondent if it does not agree with the
Arbitrator's Award.
8. Per contra, the learned counsel appearing for the
Respondent / Claimant submits that in terms of Section 3G(1) of
the National Highways Authorities Act, determination of
compensation is made and the amount is required to be deposited
under Section 3(H) of the National Highways Act. However, on an
erroneous assumption CALA held that the National Highways
Authority is not required to pay the amount in view of the letter of
the Assistant Director of Town Planning. CALA held that the lands
are required to be surrendered to the State and, although, amount
of compensation was determined the final determination was made
as Zero. The Award of CALA was challenged before the High Court
in Writ Petition No.6815 of 2020 and by order dated 07.07.2021 the
High Court observed that there is no procedure where there is
automatic vesting without payment. The land has to be reserved
for expansion but payments for the same on acquiring the land
7 Arba5.2023
have to be made. In view of the observations of the High Court it
was not available to the CALA or any authority not to make
payment of any amount as determined, if there was no other
impediment.
9. Considering the observations of the High Court in Writ
Petition No.6815 of 2020 and also the determination made by
CALA the claimant is entitled to receive compensation at the rate
as determined by CALA, under Section 3G(1) of the National
Highways Act.
10. The court under Section 34 of the Act has not worked
out independent amount, while setting aside the award of
Arbitrator, it has merely said that the determination by CALA has
to be paid to the claimants.
11. In stricto sensu i.e. in strict sense it is possible that the
court under Section 34 may not travel to this extent. However, in
view of the provisions of the National Highways Act, particularly,
Section 3(H) the amount determined by the CALA has to be paid to
the respondent before taking possession of the land. In view of the
High Court order in Writ Petition No.6815 of 2020, dated
07.07.2021, as noticed above, the National Highways Authority was
liable to pay the amount determined.
8 Arba5.2023
12. Considering the above fact of the matter in my
jurisdiction under Section 37 of the Arbitration and Conciliation
Act, 1996 this court would not go into the technicalities to remit
the matter back to the Arbitrator. In any event, the claimant is
entitled to at least the amount determined by CALA, in absence of
any challenge to the same by the National Highways Authorities.
This court in exercise of jurisdiction under Section 37 of the
Arbitration Act would not interfere with the impugned order dated
11.01.2023 of the District Court under Section 34 of the Act.
13. With the above observations, the Arbitration Appeal
stands dismissed.
[ARUN R. PEDNEKER, J.]
14. After pronouncement, the learned counsel for the
Claimant seeks withdrawal of the amount deposited in this court in
the pending Civil Application No.8402 of 2025.
The learned counsel for the National Highways
Authority submits that the authority intends to challenge the order
passed in this Arbitration Appeal and the amount may not be
disbursed.
9 Arba5.2023
15. Since, I have dismissed the Arbitration Appeal, the
amount deposited is permitted to be withdrawn, subject to the
undertaking that, in the event, the Appellant succeeds in getting a
favourable order in the Hon'ble Supreme Court, the claimant would
revert the amount withdrawn within four (04) weeks. Civil
Application No.8402 of 2025 stands disposed of accordingly.
[ARUN R. PEDNEKER, J.]
marathe
