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Karnataka High Court
National Highways Authority Of India vs Smt Atheejamma on 27 January, 2026
-1-
NC: 2026:KHC:4307
MFA No. 3522 of 2024
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF JANUARY, 2026
BEFORE
THE HON'BLE MS. JUSTICE JYOTI M
MISCELLANEOUS FIRST APPEAL NO. 3522 OF 2024 (AA)
BETWEEN:
NATIONAL HIGHWAYS AUTHORITY OF INDIA
(MINISTRY OF ROAD TRANSPORT
AND HIGHWAYS), PROJECT IMPLEMENT UNIT
MANGALORE, NH-75
ADDAHOLE-BANTWAL CROSS SECTION
OFFICE AT DOOR NO.3-29
BETHEL, THARETHOTA
NEAR PUMPWELL
MANGALORE-575 002
REPRESENTED BY
AUTHORIZED OFFICER
ABDULLA JAVED AZMI
WORKING AS THE DEPUTY
GENERAL MANAGER (TECH.,)
AND PROJECT DIRECTOR
...APPELLANT
Digitally signed by
PREMCHANDRA M R (BY SRI. NITHYANANDA M.K, ADVOCATE)
Location: HIGH
COURT OF
KARNATAKA AND:
1. SMT. ATHEEJAMMA
W/O ISUBU
AGED ABOUT 45 YERAS
RESIDING AT NEKKILADI VILLAGE
AND POST, PUTTUR TALUK-574 325
DKASHINA KANNADA DISTRICT
2. THE ARBITRATOR AND
DEPUTY COMMISSIONER
-2-
NC: 2026:KHC:4307
MFA No. 3522 of 2024
HC-KAR
DAKSHINA KANNADA DISTRICT
MANGALORE-575 001
...RESPONDENTS
(BY SMT. RASHMI RAO, HCGP FOR R2;
R1 SERVED AND UNREPRESENTED)
THIS MFA IS FILED UNDER SECTION 37(1)(c) OF THE
ARBITRATION AND CONCILIATION ACT, 1996.
THIS MISCELLANEOUS FIRST APPEAL IS LISTED FOR
FINAL HEARING , THIS DAY, THE JUDGMENT IS DELIVERED AS
UNDER:
ORAL ORDER
Sri.Nithyananda.M.K., counsel for the appellant and
Smt.Rashmi Rao., High Court Government Pleader for
respondent No.2 have appeared in person.
2. The Government of India, for development,
maintenance, management, upgradation and the widening of
National Highway No.75 (Old No. 48) amongst other lands,
acquired the lands bearing Survey No.59/3D2B measuring 122
square metres belonging to the first respondent situated at
Nekkiladi Village, Puttur Taluk. The land was acquired under the
provisions of the NH Act, and the same was published in the
Popular Daily newspaper.
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HC-KAR
The SLAO and CA passed the award on 21.10.2020, and
the reasonable compensation was determined. 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 Arbitrator
enhanced the compensation. Aggrieved by the arbitral award,
the National Highways 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 in 2020 and fixed the land
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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 compensation was finalized by the
Competent Authority in 2020, yet arbitration was not invoked
until 2022, representing an inordinate, unexplained delay of
two years. The Arbitrator failed to appreciate that the claim was
barred by laches and inordinate delay, as there was a two-year
hiatus between the compensation determination in 2020 and
the initiation of arbitration in 2022. Apart from the issue of
delay, the learned 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
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'
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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.
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 02.03.2024,
passed by the IV Additional District Judge and Commercial
Court Dakshina Kannada, Mangalore, in A.P.No.306/2023 and
the Award dated 13.06.2023 passed by the second respondent
are set aside. The compensation awarded by the competent
authority is confirmed.
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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.: 62
