The Project Director Vs the District Collector Cum Arbitrator

THE PROJECT DIRECTOR, NATIONAL HIGHWAY AUTHORITY OF INDIA, PROJECT IMPLEMENTATION UNIT - KANCHEEPURAM D.NO. 20, PALLAVAN NAGAR MAIN ROAD, MADURAVOYAL, CHENNAI - 500095.

¶11

...APPELLANT

¶12

AND

¶13

THE DISTRICT COLLECTOR CUM ARBITRATOR, FOR NH CASES. OFFICE OF DISTRICT COLLECTOR, CHITTOOR DISTRICT.

¶14

THE JOINT COLLECTORCUMCOMPETENT AUTHORITY LAND ACQUISITION, OFFICE AT GANGASAGARAM, VELLORE ROAD, CHITTOOR.

¶15

C SUBRAMANYAM, S/O C.KRISHNAYYA NAIDU, D.NO. 3-50, CHALICHEEMAPALLE VILLAGE, 197, RAMAPURAM POST, CHITTOOR DISTRICT.

¶16

...RESPONDENT(S):

¶17

Appeal Under Section_____against ordersmay kindly be pleased to allow the C.M.A. by setting aside the order of the Honble Principal District Judge, Chittoor in Arbitration OP 294 of 2023 dated 20.03.2025 and remit the case to the Arbitrator cum District Collector, Chittoor and pass such

¶18

2

¶19

RRR,J & TCDS,J C.M.A.No.513 of 2025

¶20

IA NO: 1 OF 2025

¶21

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased may be pleased to condone the delay of ( 28) days in presenting the appeal against the orders dated 20.03.2025 in .R.B. O.P. No. 294 of 2023 on the file of court of Principal District Judge, Chittoor in the interest of justice and pass such

¶22

IA NO: 2 OF 2025

¶23

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased may be pleased to dispense with the filing of certified copy of order dated 20.03.2025 passed in A.R.B. O.P. No. 294 of 2023 on the file of court of Principal District Judge, Chittoor in the interest of justice and pass such

¶24

IA NO: 3 OF 2025

¶25

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased may be pleased to direct the 2nd Respondent to recover the compensation amount paid to ineligible person (3rd Respondent ) pending disposal of the main C.M.A. and pass such

¶26

IA NO: 4 OF 2025

¶27

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased may be pleased to grant stay of all further proceedings ARB. O.P. No. 294 of 2023 on the file of the Principal District Judge, Chittoor, pending disposal of Main C.M.A. and pass such

¶28

Counsel for the Appellant:

¶29

1.PADMA RAO LAKKARAJU (SC FOR NHAI)

¶30

Counsel for the Respondent(S):

¶31

1.C JHANSI RANI

¶32

¶33

3

¶34

RRR,J & TCDS,J C.M.A.No.513 of 2025

¶35

The Court made the following Judgment:

¶36

(per Hon’ble Sri Justice R. Raghunandan Rao)

¶37

Heard Sri Padma Rao Lakkaraju, learned Standing Counsel for N.H.A.I., appearing for the appellant and Smt. C. Jhansi Rani, learned counsel appearing for the 3^rd respondent.

¶38

The land of the 3^rd respondent had been acquired under the provisions of the National Highways Act, 1956, for laying a National Highway. The Competent Authority, by an Award, dated 24.07.2017, had fixed the market value of the land at Rs.98.84 per sq.mtr. and awarded compensation to the 3^rd respondent.

¶39

Aggrieved by this Award, the 3^rd respondent has approached the learned Arbitrator, under Section 3G of the National Highways Act, 1956. The learned Arbitrator, after considering the submissions made on both sides as well as the award enquiry files and records, enhanced the market value of the land from Rs.98.84/- per sq.mtr. to Rs.148.26/- per sq.mtr..

¶40

The appellant namely the Project Director, National Highway Authority of India, approached the learned Principal District Judge, Chittoor, by way of Arbitration O.P. No.294 of 2023. This petition was dismissed, on 20.03.2025.

¶41

Aggrieved by the Order of Dismissal, dated 20.03.2025, in Arbitration O.P. No.294 of 2023, the appellant has approached this Court, by way of the present Civil Miscellaneous Appeal.

¶42

4

¶43

RRR,J & TCDS,J C.M.A.No.513 of 2025

¶44

Sri Padma Rao Lakkaraju, learned Standing Counsel for N.H.A.I., appearing for the appellant, would contend that, the award passed by the learned Arbitrator is unreasonable and patently illegal. He would submit that, the learned Principal District Judge, Chittoor, had erred in dismissing the Arbitration O.P. in as much as the grounds raised by the appellant have not been considered in a proper light.

¶45

The main contention of the appellant is that, there were no sale deeds available, in relation to the Village in which the land of the 3^rd respondent falls and consequently, the Competent Authority had taken into account the sale deeds available in the neighbouring village for fixing the market value. The learned Standing Counsel would also point out that the Competent Authority having observed that, the sale deeds, available in the neighbouring village, were more than three (03) years before the date of notification of the acquisition process, had enhanced the market value of the land from Rs.2,98,000/- to Rs.4,00,000/- per acre, on the ground that, there would be increase in price over the years. However, the learned Arbitrator, without giving any reasons and without any application of mind had simply enhanced the market value by 50% and fixed the market value at Rs.148.26/- per sq.mtr.

¶46

The learned Standing Counsel would also contend that, the learned Arbitrator, could not have fixed the market value in such an arbitrary manner and without giving any reasons as to why such a market value was being fixed. He would also submit that, in such circumstances, the award is clearly

¶47

5

¶48

RRR,J & TCDS,J C.M.A.No.513 of 2025

¶49

not in line with Section 3G (7) of the National Highways Act and should be set aside. He would also submit that, consequently, the Order of the learned Principal District Judge, Chittoor, would also have to be set aside.

¶50

The learned Standing Counsel would further submit that, the valuation of the land, was changed by the learned Arbitrator, on the ground that, the mango & coconut trees were valued at higher market value at Tamil Nadu and Karnataka and mango & coconut trees were valued at earlier rate in Andhra Pradesh and increased the market value of the land on this basis. He would also submit that, the learned Arbitrator could not have taken into account the market value fixed for mango & coconut trees in neighbouring States when the market value in the State of Andhra Pradesh was fixed at a different rate.

¶51

10. Section 3G (7) of the National Highways Act reads as follows:

¶52

‘(7) The competent authority or the arbitrator while determining the amount under sub-section (1) or sub-section (5), as the case may be, shall take into consideration -

¶53

(a). the market value of the land on the date of publication of the notification under section 3A;

¶54

(b). the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the severing of such land from other land;

¶55

(c). the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the acquisition injuriously affecting his other immovable property in any manner, or his earnings;

¶56

(d). if, in consequences of the acquisition of the land, the person interested is compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change.]’

¶57

6

¶58

RRR,J & TCDS,J C.M.A.No.513 of 2025

¶59

This provision gives guidelines for fixation of market value and compensation. In the present case, the learned Arbitrator has fixed the market value for the land. We do not find any violation of this provision.

¶60

The main contention of the appellant is that, the learned Arbitrator has fixed an arbitrary market value without setting out any reasons. A perusal of the Award, would show that, the learned Arbitrator has gone into the question of the value of the mango & coconut trees that would be available on the land and had observed that, the standard market value of the mango & coconut trees in the neighbouring States is fixed at a far high rate, as opposed to the market value fixed in the State of Andhra Pradesh. The learned Arbitrator had also observed that, as a Rule of the Thumb, the compensation, for the land was being fixed in Tamil Nadu and Telangana by taking a standard figure of 70 mango & coconut trees per acre, whereas in Andhra Pradesh only 35 mango & coconut trees are being taken per acre for fixing the market value of the land.

¶61

Apart from this, the learned Arbitrator, also took the view that, the compensation fixed by the Competent Authority at Rs.98.84 per sq. mtr. was not reasonable. On the basis of these observations, the learned Arbitrator, had fixed the market value at Rs.148.26/- per sq.mtr.

¶62

The scope of an Appeal, against an Arbitral Award under Section 34 of the Arbitration and Conciliation Act, 1996, would be the principles that would guide consideration of an Appeal under the National Highways Act. The scope

¶63

7

¶64

RRR,J & TCDS,J C.M.A.No.513 of 2025

¶65

is quite restricted. The Court before which the application for setting aside the Arbitral Award is filed, would only look at whether the award suffers from a patent defect or illegality on the face of the award or on the ground that, the said award is opposed to public policy, as contained in Section 34 of the Arbitration and Conciliation Act, 1996. The scope of review of an Arbitral Award, would not extend to undertaking an exercise of considering the Award as if it was a Trial Court Judgment in a First Appeal.

¶66

As can be seen from the record, there is no comparable document available as a guideline for fixing market value for the land, which has been acquired. The Competent Authority, ended up fixing the market value, on the basis of sale deeds, in relation to lands in a neighbouring village, which were more than three (03) years of old. The Competent Authority, keeping in view the market value of the land, in these sale deeds being Rs.2,98,000/- per acre has fixed an arbitrary value of Rs.4,00,000/- as the valuation of land under acquisition. In such circumstances, further exercise of discretion by the learned Arbitrator, who had increased the market value of another 50% cannot be said to be an arbitrary exercise, which requires interference under Section 34 of the Arbitration and Conciliation Act, 1996.

¶67