[Cites 6, Cited by 0]
Karnataka High Court
National Highways Authority Of India vs Sri H C Ramachandraiah on 21 January, 2026
-1-
NC: 2026:KHC:3338
MFA No. 2638 of 2020
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF JANUARY, 2026
BEFORE
THE HON'BLE MS. JUSTICE JYOTI M
MISCELLANEOUS FIRST APPEAL NO. 2638 OF 2020 (AA)
BETWEEN:
1. NATIONAL HIGHWAYS AUTHORITY OF INDIA
(MINISTRY OF ROAD TRANSPORT AND HIGHWAYS)
PROJECT IMPLEMENTATION UNIT
SY.NO.13, 14TH KM,
BENGALURU - TUMKUR ROAD
NAGASANDRA, BENGALURU-560 073
REPRESENTED BY SRI S.P.SOMASHEKAR
PROJECT DIRECTOR
2. SPECIAL LAND ACQUISITION OFFICER
AND COMPETENT AUTHORITY
NATIONAL HIGHWAYS AUTHORITY OF INDIA
NH-7, NO.678/3, NEERUBHAVI KEMPANNA LAYOUT,
HEBBAL, BENGALURU-560 024.
Digitally signed by REPRESENTED BY SMT HARISHILPA
PREMCHANDRA M R
Location: HIGH
MANAGER TECHNICAL.
COURT OF ...APPELLANTS
KARNATAKA (BY SRI. CHANDAN K., ADVOCATE)
AND:
1. SRI H.C.RAMACHANDRAIAH,
S/O CHANNATHIMMAIAH,
HOTEPPANAPALYA,
LAKSHMI PURA (POST),
DASANAPURA HOBLI,
BENGALURU NORTH TALUK,
BENGALURU - 562123.
-2-
NC: 2026:KHC:3338
MFA No. 2638 of 2020
HC-KAR
2. THE ARBITRATOR AND SPECIAL DEPUTY
COMMISSIONER,
BENGALURU URBAN DISTRICT,
D.C.OFFICE BUILDING,
REVENUE COMPLEX, K.G.ROAD,
BENGALURU-560 009
...RESPONDENTS
(BY SRI. KHADRI S.A., ADVOCATE FOR R1[ABSENT];
SRI. MANJUNATHA RAYAPPA, AGA FOR R2)
THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER
SECTION 37(1)(c) OF THE ARBITRATION AND CONCILIATION
ACT, 1996.
THIS MISCELLANEOUS FIRST APPEAL IS LISTED FOR
ADMISSION, THIS DAY, THE JUDGMENT IS DELIVERED AS
UNDER:
ORAL JUDGMENT
Sri.Chandan.K., counsel for the appellants and
Sri.Manjunath Rayappa., Additional Government Advocate
for respondent No.2 have appeared in person.
2. The matter was listed on 14.01.2026, on that
day, there was no representation on behalf of respondent
No.1. Hence, for appearance of counsel for respondent
No.1, it was ordered to be listed on 21.01.2026 and it was
also made clear that if none appears for respondent No.1
NC: 2026:KHC:3338
HC-KAR
on the next date of hearing, the Court will proceed to pass
orders on the merits of the case.
The petition is listed today, there is no representation
on behalf of respondent No.1, either personally or through
video conferencing. Hence, this Court proceed to pass
orders on the merits of the case.
3. The appeal is filed to set aside the judgment
and decree dated 12.11.2019, passed by the XIX
Additional City Civil and Sessions Judge Bengaluru (CCH-
18) in A.S.No.67/2018 and the Award dated 07.12.2017,
passed by the second respondent and to confirm the
compensation awarded by the Special Land Acquisition
Officer on 10.04.2008.
4. The Government of India, through the National
Highway Authority of India, acquired several pieces of land
for the widening of the Bengaluru-Nelamangala Road
under the preliminary notification dated 22.11.2006 and
subsequently through a final notification dated
NC: 2026:KHC:3338
HC-KAR
13.11.2007. The Acquisition proceedings were carried out
under the Provisions of the National Highways Act, 1956.
In pursuance of the notifications, the second appellant, the
Special Land Acquisition Officer, acquired several lands in
Madavara Village, Yeshwanthpura Hobli, Bengaluru North
Taluk, Bengaluru under Section 3A(1) and 3D(1) of the
National Highways Act, 1956. Appellant No.2, after hearing
objections filed by the first respondent, determined the
compensation on 10.04.2008 and fixed the land
compensation at Rs.50,00,000/- (Fifty Lakhs only) per
acre for dry/wet/ Garden Lands, Rs.250/- per square feet
for converted land and Rs.300/- per square feet from
Grama Tanna land. In accordance with the above, the
appellant No.2 paid the compensation to the first
respondent.
5. The first respondent, not satisfied with the
compensation, approached the second respondent as
provided under Section 3G (5) of the National Highways
Act. The first respondent initiated arbitration proceedings
NC: 2026:KHC:3338
HC-KAR
seeking enhancement of the compensation awarded by the
second respondent on the ground that the subject lands
are near Bengaluru City and have both commercial and
industrial value. The first respondent also alleged that the
compensation determined by the second appellant was
very meager and hence sought enhancement of
compensation.
Upon receipt of the notice, the appellants appeared
and filed their objections and objected to any
enhancement in compensation on the ground that the
compensation was fixed taking into consideration the sale
statistics of the office of the relevant Sub Registrar and
also guidance value of the registration department for the
year 2006-2007 and hence there was no requirement to
enhance the compensation as claimed by the first
respondent.
6. The second respondent, after appreciating the
material provided by the applicants, categorically recorded
in the award that respondent No.1 had failed to produce
NC: 2026:KHC:3338
HC-KAR
any relevant documents in support of their claim;
however, proceeded to enhance the compensation amount
three times of the amount determined by the second
appellant without providing any reasons for such
enhancement on 07.12.2017.
Appellants preferred an appeal under Section 34 of
the Arbitration and Conciliation Act, 1996, before the City
Civil and Session Judge, Bengaluru. The Court, after
hearing both parties, dismissed the suit. Under these
circumstances the appellants have filed the appeal on
several grounds as set out in the memorandum of appeal.
7. Counsel appearing for the respective parties
presented several contentions. Heard the arguments and
pursued the papers with care.
8. The core issue requiring consideration is
whether the Arbitrator was justified in increasing the
compensation amount. To be precise, the central point for
NC: 2026:KHC:3338
HC-KAR
consideration is whether the Arbitrator had cause to
enhance the compensation amount.
9. Suffice it to note that the SLAO determined the
compensation on 10.04.2008 and fixed the land
compensation at Rs.50,00,000/- (Fifty Lakhs only) per
acre for dry/wet/ Garden Lands, Rs.250/- per square feet
for converted land and Rs.300/- per square feet from
Grama Tana land. The compensation was fixed taking into
consideration the sale statistics of the office of the
relevant Sub Registrar and also the guidance value of the
registration department for the year 2006-2007.
The Special Land Acquisition Officer (SLAO), placing
proper reliance on the material on record, rightly
determined the compensation. Consequently, there existed
no sufficient cause for the Arbitrator to enhance the
awarded amount.
10. The order of the arbitrator is furnished and
perused meticulously. Notwithstanding the finding that the
claimant did not submit the necessary documents, the
NC: 2026:KHC:3338
HC-KAR
Arbitrator erroneously enhanced the award amount. In
other words, the Arbitrator erroneously enhanced the
compensation amount despite finding that the claimant
failed to furnish the relevant documents. The arbitral
award, in enhancing the quantum, is in contravention of
the fundamental policy of Indian law, as it relies on an
inference that is demonstrably untenable and goes against
well-settled principles of quantum assessment, thereby
violating Section 34(2)(b)(ii) of the Arbitration and
Conciliation Act, 1996. Furthermore, the finding that the
lands in question can be commercially exploited and
possess a good commercial value is erroneous in law and
fact, and thus, liable to be set aside. The SLAO's
compensation was correctly determined from the record;
the Arbitrator's enhancement lacked justification.
Consequently, the dismissal of the suit is also incorrect.
11. For the foregoing reasons, the arbitral award
and the judgment and decrees in the suit are liable to be
set aside, and they are set aside.
NC: 2026:KHC:3338
HC-KAR
12. The judgment and decree dated 12.11.2019,
passed by the XIX Additional City Civil and Sessions Judge
Bengaluru in A.S.No.67/2018 and the Award dated
07.12.2017, passed by the second respondent, are set
aside, and the compensation awarded by the Special Land
Acquisition Officer on 10.04.2008 is confirmed.
13. Resultantly, the Miscellaneous First Appeal is
allowed.
Because of disposal of the appeal, interim order
granted if any stands discharged and pending interlocutory
applications if any are disposed of.
SD/-
(JYOTI M)
JUDGE
MRP
List No.: 1 Sl No.: 26
