[Cites 1, Cited by 0]
Karnataka High Court
National Highways Authority Of India vs Mr M A Mohammed Sharief on 21 January, 2026
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MFA No. 3910 of 2024
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. 3910 OF 2024 (AA)
BETWEEN:
NATIONAL HIGHWAYS AUTHORITY OF INDIA
(MINISTRY OF ROAD TRANSPORT AND HIGHWAYS)
PROJECT IMPLEMENTATION UNIT - MANGALORE
NH-169 (NH-13) SANOOR BIKARNAKATTE SECTION,
OFFICE AT DOOR NO 3-29 BETHEL,
THARETHOTA NEAR PUMPWELL, MANGALURU-575002
REPRESENTED BY ITS AUTHORIZED OFFICER,
ABDULLA JAVED AZMI
WORKING AS THE DEPUTY GENERAL MANAGER (TECH)
AND PROJECT DIRECTOR
...APPELLANT
(BY SRI. SANDEEP KATTI, ADVOCATE FOR
SRI. NITHYANANDA M.K., ADVOCATE)
AND:
Digitally signed by
PREMCHANDRA M R 1. MR. M.A.MOHAMMED SHARIEF
Location: HIGH
COURT OF S/O ABDULLA
KARNATAKA AGED ABOUT 56 YEARS
RESIDING AT NO 1-26, HOSA MANE,
TENKAMIJAR VILLAGE,
MOODABIDRE TALUK 574225
DAKSHINA KANNADA DISTRICT
2. THE ARBITRATOR AND DEPUTY COMMISSIONER
D.K.DISTRICT, MANGALORE - 575001
...RESPONDENTS
(BY SRI. MANJUNATHA RAYAPPA, AGA FOR R2;
R1 SERVED AND UNREPRESENTED)
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MFA No. 3910 of 2024
HC-KAR
THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER
SECTION 37(1)(c) OF THE ARBITRATION AND CONCILIANTION
ACT, 1996.
THIS MISCELLANEOUS FIRST APPEAL IS LISTED FOR
ADMISSION, THIS DAY, THE JUDGMENT IS DELIVERED AS
UNDER:
ORAL JUDGMENT
Sri.Sandeep Katti., counsel on behalf of
Sri.Nithyananda.M.K., for the appellant and Sri.Manjunatha
Rayappa., Additional Government Advocate for respondent
No.2 have appeared in person.
2. The National Highway Authority of India undertook
the construction work in respect of widening of National
Highway No.169 (Old NH 13), from K.M. 698.850 to K.M.
744.190 in Tenkamijaru Village, Moodabidare Taluk, Dakshina
Kannada District, in the State of Karnataka. For the said
purpose, the Central Government had acquired the lands in
these stretches, which include the land of the first respondent.
The Central Government issued a preliminary notification and a
final notification. The competent authority, after considering all
aspects in accordance with the provisions of the statute,
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HC-KAR
determined the market value of the acquired land in accordance
with the law. The competent authority relied upon the sale
transaction details provided by the Sub Registrar of
Moodabidre. It took into consideration the highest price for
which dry lands were sold in Tenkamijaru Village during the
relevant period, and based on the said sale statistics, the
average sale price was arrived at Rs.15,904/- per Cent or
Rs.393/- per square meter. The competent authority relied
upon the guidance value fixed by the Government of
Karnataka. Similarly, for arriving at the market value of the dry
land, sale statistics were considered, and the market value was
fixed at Rs.393/- per square meter. Award was passed by the
competent authority as per the provisions of 3G(1) of the
National Highway Act.
Not satisfied with the compensation awarded by the
competent authority, the first respondent preferred an
application for enhancement of compensation before the
Arbitrator and the Deputy Commissioner, Dakshina Kannada
Mangaluru. The Arbitrator enhanced the compensation.
Aggrieved by the arbitral award, the National Highways
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Authority of India filed a suit. The Court dismissed the suit.
Under these circumstances, the appellant has filed the appeal
on several grounds as set out in the memorandum of appeal.
3. Counsel for the respective parties presented several
contentions. Heard the arguments and perused the papers with
care.
4. The core issue requiring consideration is whether
the Arbitrator was justified in increasing the compensation
amount. To be precise, the central point for consideration is
whether the Arbitrator had cause to enhance the compensation
amount.
5. Suffice it to note that the competent authority
determined the compensation on 10.02.2021 and fixed the land
compensation. The compensation was fixed, placing proper
reliance on the material on record, and consequently, there
existed no sufficient cause for the Arbitrator to enhance the
awarded amount. The Arbitrator erred in enhancing the
compensation solely on the speculative grounds that Mangalore
is a densely populated and fast-growing district. This finding is
arbitrary, speculative, and constitutes an error of law apparent
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on the face of the record, as the valuation was not based on
cogent evidence of market value at the time of the preliminary
notification. In my view, the Arbitrator erred in law by
assuming that because the district is growing, the specific land
in question must be deemed 'scarce' and highly developable. I
have no hesitation in concluding that the Arbitrator departed
from the statutory mandate by adopting a 'guesswork'
approach to enhancement, rather than determining the
objective 'market value' at the date of notification. The
Arbitrator committed a jurisdictional error by enhancing
compensation based on vague, subjective assertions regarding
the development of Mangalore, rather than relying on
comparable sale instances or concrete evidence of market
value, making the award against the public policy of India. The
competent authority's compensation was correctly determined
from the record; the Arbitrator's enhancement lacked
justification. Consequently, the dismissal of the suit is also
incorrect.
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6. 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.
7. The judgment and decree dated 06.03.2024,
passed by the IV Additional District Judge and Commercial
Court, Dakshina Kannada, Mangalore, in A.P.No.348/2023 and
the Award dated 13.06.2023, passed by the second
respondent, are set aside, and the compensation awarded by
the Special Land Acquisition Officer is confirmed.
8. Resultantly, the Miscellaneous First Appeal is
allowed.
9. 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
CH
List No.: 1 Sl No.: 42
