[Cites 13, Cited by 0]
Madras High Court
R.Srinivasan vs The District Collector / Arbitrator on 16 April, 2026
Author: P.Velmurugan
Bench: P.Velmurugan
C.M.A.No.2257 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on 25.03.2026
Pronounced on 16.04.2026
CORAM
THE HONOURABLE MR.JUSTICE P.VELMURUGAN
and
THE HONOURABLE MRS. JUSTICE K. GOVINDARAJAN THILAKAVADI
C.M.A.No.2257 of 2021
R.Srinivasan ...Appellant
Vs.
1.The District Collector/Arbitrator
Villupuram District, Tamil Nadu,
2.The Competent Authority (Land Acquisition)
NH-45, Tindivanam Bye pass,
Villupuram Collectorate,
Villupuram District, Tamil Nadu.
3.National Highways Authority of India,
Rep., by its project Director,
In charge of NH 45 Tindivanam,
Villupuram District, Tamil Nadu. ...Respondents
Prayer: This Civil Miscellaneous Appeal is filed under Section 37 of the
Arbitration and Reconciliation Act, 1996 as amended, to set aside the order
1/14
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C.M.A.No.2257 of 2021
dated 10.03.2021 in Arb.OP.No.168 of 2013 passed by the Principal District
Judge at Villupuram..
For Appellant : M/s.David Tyagaraj
For Respondents: Mr.P.Gurunathan
Additional Government Pleader for R1 & R2
Mr.Su.Srinivasan, Standing Counsel for NHAI
for R3
JUDGMENT
K. GOVINDARAJAN THILAKAVADI,J.
This appeal is filed by the claimant/land owner against the fair and
decreetal order dated 10.03.2021 in Arb. OP.No.168 of 2023 passed by the
Principal District Judge at Villupuram.
2. The brief facts which are necessary for disposal of this appeal are as
follows:
The lands in survey Nos.11/1A & 11/2A in Tindivanam town,
Villupuram District measuring an extent of 121578 sq. ft or 2.55 acres belong to
the appellant/ land owner were acquired by the National HighWays Authority of
India. The land value was fixed by the Competent Authority (Land Acquisition)
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namely the 2nd respondent herein at Rs.112/- per sq. ft. and the same was
awarded by the 2nd respondent with a sum of Rs.1,36,01,908/- as compensation
in Na.Ka/020/2003/NH-45/TINDI dated 18.03.2006. Against the said order, an
application under Section 3G(6) of the National Highways Act, 1956 was filed
by the appellant/land owner and the same was dismissed on 07.12.2007.
Aggrieved by this, the appellant/land owner filed an application under Section
34 of Arbitration and Conciliation Act, 1996 (herein after referred as “the Act’’)
in Arb.OP.No.168/2013 before the Principal District Judge, Villupuram and the
same was dismissed on 10.03.2021. Aggrieved by this, the present appeal is
preferred.
3.The learned counsel for the appellant/land owner would submit that the
2nd respondent/Competent Authority in the order dated 18.03.2006 has stated
that the said lands are adjacent to National Highways NH-66 Tindivanam,
Marakkanam and the market value of the said lands is between Rs.48000/- to
70,000/- per cent. However, the 2nd respondent/competent authority had fixed
the compensation at Rs.48,832/- per cent or Rs.112/- per sq.ft. The 2 nd
respondent/Competent Authority ought to have fixed the value at Rs.500/- per
sq. ft. The learned counsel submits that the 1st respondent/District
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Collector/Arbitrator and the 2nd respondent/Competent Authority have failed to
consider the potentiality of the land which is abetting NH-66 Tindivanam,
Marakkanam. Wherein, in another award pertaining to the very same project for
adjacent survey numbers, the land value has been enhanced to 30 per cent by
the 1st respondent/District Collector/Arbitrator, i.e., from Rs.192/- per sq. ft to
249.60 per sq.ft., considering the potential value of the land and further the
lands are nearby to Tindivanam Town and various institutions. Whereas, in the
present case, the 1st respondent/Competent Authority failed to follow the said
yardstick. Hence, the award passed by the 1 st respondent/Competent Authority
is not in accordance with law. The 1st respondent/District Collector/Arbitrator
failed to consider the documents relied upon by the appellant/land owner for
ascertaining the correct market value for the acquired lands. Since the
Competent Authority and the District Collector have awarded lower value in a
mechanical manner without adverting to the requirements of law, direction may
be given to the arbitrator to follow the provisions of Section 3G (7) of the
National Highways Act, in determining the compensation by considering the
sale deeds produced by the appellant/land owner for fixing the correct market
value for the acquired lands. The Learned Principal District Judge, Villupuram
also failed to consider the contentions made by the appellant /land owner,
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erroneously dismissed the petition filed under Section 34 of the Act, warrants
interference by this Court. To support his contention, he has relied upon the
judgment of this Court in C.M.A(MD)No.1734 of 2013 in which this Court has
directed the Arbitrator to take into account the sale deed produced by the land
owner and the valuation reflected therein and decide the appropriate
compensation.
4.On the other hand, the learned counsel for the respondents would
submit that, the lands in question were taken over by the National Highways.
Thereafter, the Competent Authority (Land Acquisition), Tindivanam, passed
an award on 18.03.2006 granting a sum of Rs.112/- per sq. ft. in S.Nos.11/1A &
11/2A The competent authority has fixed the valuation of the land taking into
all factors that are enumerated under Sub Section 3G(7) of Section 3G of the
Act and the same was confirmed by the 1 st respondent/District
Collector/Arbitrator and by the learned District Judge in an application filed
under Section 34 of the Act. Hence, prayed for dismissal of the appeal.
5.Heard on both sides, records perused.
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6. The scope of interference under Section 34 and 37 of the Arbitration
Act, regarding NHAI land compensation is strictly narrow, limited to setting
aside awards for perversity, lack of jurisdiction or, violaiton of public policy.
Courts cannot re appreciate evidence or substitute their own views on valuation
as the arbitrator is the final authority on facts.
7.On perusal of records, it is seen that, the land owner, dissatisfied with
the award, sought for arbitration, under Section 3G(5) of the National Highways
Act. The District Collector, who was appointed as an Arbitrator, confirmed the
valuation made by the Competent Authority by its order dated 07.12.2007. This
award was sought to be set aside in an application under Section 34 of the
Arbitration and Conciliation Act, 1996, filed before the Principal District Judge,
Villupuram. The learned Principal District Judge, Villupuram, dismissed the
said application on 10.03.2021. It is this order of the learned Principal District
Judge passed under Section 34 of the Act, which is subject matter of the
challenge.
8.The learned counsel for the appellant/land owner contended that the
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lands acquired and the lands adjacent thereto possessed of similar potentialities.
It is not in dispute that the National Highways Authority of India, has acquired
lands of the appellant/land owner as per Section 3A(1) of the National
Highways Act, 1956 and the same was published in Government of India
Gazette Notification Extraordinary No.531 S O 685 (E) dated 14.06.2004 and
3A (3) notice was also published in Tamil and English daily on 07.07.2004. As
per Section 3 D (1) of National Highways Act, 1956(48/1956) as per
3D(1), notification was also published in Central Gazette Notification
Extraordinary NO.432 SO 610 (E) dated 04.05.2005 and also 3G (3)
notification was also published in Tamil and English daily paper on 20.07.2005.
On the basis of the notification the land owners were enquired and the
documents were perused by the 2nd Respondent and order was passed in
proceedings in Na.Ka.A/020/2003/NH-45/DINDI dated 18.03.2006.
9.According to the appellant/land owners the competent authority under
the NHA, had determined very low compensation for the land owners and that
the learned Principal District Judge inspite of allowing the petition for receiving
additional documents in I.A.No.110 of 2021 dated 05.03.2021 failed to consider
the said documents while pronouncing the judgment. It is settled law that when
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an arbitral award is challenged under Section 34 of the Arbitration Act, no
challenge can be made on the merits of the arbitral award. It is also well settled
that it is the duty of the claimant to produce relevant documents before the
competent authority and the District Collector for fixing the market value of the
acquired lands.
10.The 2nd respondent /Competent Authority (Land Acquisition) passed
the award on 18.12.2009 determining compensation for the lands acquired.
According to the respondents, for determining the quantum of compensation,
the 2nd respondent obtained sales statistics of the village for the period of one
year prior to the date of 3A(1) notification i.e. 28.08.2007 to 29.08.2008 from
the Sub Registrar, Tindivanam and the 2nd respondent had made a detailed
analysis of the same, determined the compensation at Rs.192/- per square feet
for the acquired lands, as per Section 3(G) of NH Act. It is not in dispute that
the lands were acquired for public purpose under the National High Ways Act,
1956 and not for any commercial purpose. To be noted, the competent authority
or the arbitrator while determining the amount under Sub Section (1) or Sub
Section (5) of Section 3(G) of the NH Act, as a case may be, shall take into
consideration :-
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(a) the market value of the land on the date of publication of the
notification under Section 3 A;
(b) the damage, if any, sustained by the person interested at the time of
taking possession of.
11.Therefore, the market value of the land on the date of publication of
notification under Section 3A is the relevant date and no other relevant date can
be considered. The period of transactions considered by the Competent
Authority and the Arbitrator is from 28.08.2007 to 29.08.2008 i.e one year prior
to the date of 3A(1) notification. The appellant has solely relied on the sale deed
dated 05.08.2004 in which the sale value was Rs.184/- per square feet and he
has escalated at 10 % per annum for the period from 2004 to 2015 and claims
Rs.600/- per square feet. Where as, the relevant period for consideration of sale
data is one year prior to the date of issue of notification under Section 3A (1) of
NH Act, 1956 i.e., 28.08.2007 to 29.08.2008. Hence, the question of
considering the sale value of 2004 and escalating is not permissible. Further, the
relevant date is only 29.08.2008 i.e., the date of 3A(1) notification and the need
for escalating to 2015 is completely baffling. Moreover, the acquisition has
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taken place in Kidangal village where as the sale deed cited above has taken
place at Kaveripakkam village. The same compensation cannot be awarded for
the lands falling in two different villages and compensation in respect of the
land of one village in comparison to the compensation granted in adjoining
village, since there is difference in proximity, development, nature and
classification of land which plays a pivotal role in awarding compensation. It is
pertinent to note that, the appellant has not produced any documents to
substantiate his claim before the respondents. Only at the time of filing the
petition under Section 34 of the Arbitration Act, he had produced certain
documents which were rightly rejected by the learned District Judge.
Therefore, the argument of the learned counsel for the appellant / land owner
that, the learned District Judge failed to consider the sale deed submitted by the
land owner cannot be accepted.
12.As mentioned earlier, the scope of judicial interference under Section
34 (setting aside) and Section 37 (appeal) of the Arbitration and Conciliation
Act, 1996, any compensation awarded for land acquired by the National
Highway Authority of India is extremely narrow and circumscribed. The
Hon’ble Supreme Court has mandated that courts cannot re-appreciate evidence,
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correct errors or modify the award on its merits. But, can only set aside if it falls
under limited statutory grounds. The Arbitrator is the final court of facts.
Therefore, courts cannot re appreciate evidence to determine if land plots are
similar or if deduction rates are appropriate. Under Section 34, a Court cannot
modify, vary, or increase/decrease the compensation amount awarded by the
arbitrator. It can only set aside the award entirely or in part, leaving the parties
to initiate fresh arbitration. Interference is only permitted if the award is
patently illegal (going to the root of the matter), violates public policy of India
or suffers from fundamental procedural unfairness (natural justice violation).
The scope of the petitioner under Section 37 of the Act is narrower than
Section 34. The appellate court cannot undertake an independent assessment of
the merits and must only check if the Section 34 Court overstepped its
jurisdiction.
13.On perusal of the records, it is seen that the 3rd respondent has strictly
acted within the provisions of law and followed all the procedures in arriving at
the compensation amount. No infirmities found in the award of the 3 rd
respondent in fixing compensation to this appellant. Further, the respondents 1
& 2 have also passed a well considered order by following the mandatory
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provisions of law after affording a reasonable and adequate opportunity to the
appellant.
14. This Court is of the considered view that there is no merit in this
appeal and the learned Principal District Judge, Villupuram, under the
impugned order dated 10.03.2021 passed in Arb.OP.No.168 of 2013 under
Section 34 of the Arbitration and Conciliation Act has rightly dismissed the said
application. There is no infirmity in the impugned order and the civil
miscellaneous appeal is dismissed. No costs.
(P.V.J.,) (K.G.T.J.,)
16.04.2026
Index: Yes/No
Internet: Yes/No
Speaking/Non-Speaking order
vsn
To
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1.The District Collector/Arbitrator
Villupuram District, Tamil Nadu,
2.The Competent Authority (Land Acquisition)
NH-45, Tindivanam Bye pass,
Villupuram Collectorate,
Villupuram District, Tamil Nadu.
3.National Highways Authority of India,
Rep., by its project Director,
In charge of NH 45 Tindivanam,
Villupuram District, Tamil Nadu.
https://www.mhc.tn.gov.in/judis
P.VELMURUGAN,J.
and
K.GOVINDARAJAN THILAKAVADI,J.
vsn
Pre-delivery judgment made in
16.04.2026
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