National Highways Authority of India Vs Nikka Ram and Anr.

2026:HHC:21565

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Arb. Appeal No.9 of 2022 Reserved on: 14.05.2026 Decided on: 03.06.2026

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National Highway Authority of India ….Appellant
Versus
Nikka Ram and others ...Respondents
Coram
Hon’ble Mr. Justice Romesh Verma, Judge Whether approved for reporting?
For the appellant: Ms. Shreya Chauhan, Advocate.
For the respondent: Mr. Rakesh Gupta, Advocate with Mr.Rajesh Prakash, Advocate.

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Romesh Verma, Judge

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The present appeal arises out of judgment as passed by learned District Judge, Mandi, dated 20.11.2021 in Arbitration Petition No.10 of 2021, whereby the objections preferred by the present appellant/NHAI against the award as passed by Arbitrator-cum-Divisional Commissioner, Mandi Division, Mandi, dated 18.01.2020 exercising powers of Arbitrator under National Highways Act, 1956, have been dismissed and the findings as returned by the learned Arbitrator have been affirmed.

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The facts, which are necessary for the adjudication of the instant appeal, are that the Central Government issued

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notification through Ministry of Road, Transport and Highways vide notification No. SO 872(E) dated 21.04.2012 and SO 1890 (E) dated 17.08.2012. The Central Government through Ministry of Road, Transport Highways declared its intention to acquire the land of the respondents. Vide acquisition notifications dated 29.04.2015, 12.05.2015, 03.12.2025 & 16.03.2016 bearing No.SO 1111(E), under Section 3(A)(i) of the Act, the structures of the respondents were acquired.

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It is the case of the respondents that being senior citizens, they are running a Charitable Organization duly registered under Indian Society Registration Act, 25 of 2006 whose aim and essence is to promote education and development of education system in the State of Himachal Pradesh. They are joint owners of the land bearing Khasra No.346, measuring 00-10-10 bigha, situated in Muhal Kannaid/6, Tehsil Sunder Nagar, District Mandi, H.P.. The structures No.909 & 910 along with land, cowshed, Temple, porch, lawn and boundary wall were acquired under the National Highways Act, 1956 for four laning of National Highway NH-21 on the stretch of the land Bilaspur-Ner Chowk Section vide different notifications. The Central Government, after publication of notification in the Official Gazettee under Section 3D of NH Act, 1956 declared that

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the land scheduled under sub section (1) of Section 3A of NH Act, 1956, stands vested absolutely free from all encumbrances.

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The competent authority i.e. CALA passed its award on 27.11.2013 vide No.51 for acquiring land measuring 0-1-12 bighas in Khasra No.346/1 in Muhal Kannaid. Similarly, Award No.51/1 dated 27.08.2014 was passed by CALA for acquiring 0-314 bighas over Khasra No.345/1. The competent authority i.e. CALA vide its supplementary award dated 14.08.2017 passed an award for acquiring the additional land. On 02.03.2019, supplementary award No.37/4 was passed for structures No.909 and 910. The value assessed for structure No.909 was Rs.83,42,616/- and structure No.910 was Rs.24,51,370/- along with statutory benefits under Section 30(1) and 30(3) of Right to Fair Compensation & Transparency in Land Acquisition, Rehabilitation & Resettlement Act, 2013.

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Against the awards as passed by the competent Authority i.e. CALA, the present respondents preferred application under Section 3G(5) of the National Highways Act for the enhancement of compensation before the learned Arbitrator. 5. It was stated in the application that the procedure as adopted by the present appellant is erroneous, illegal and is not sustainable. Further, it was averred that the land of the

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respondents is situated abutting the National Highway along with structures No.909 and 910. It was stated in the objections that after coming to the knowledge and the intention of the objectors/respondents while widening of four lane road objections were raised by raising various contentions and various representations were made to the authorities. The grouse was made to the department, however, no heed was given to their requests despite issuance of various letters dated 22.09.2018, 10.10.2018, 10.12.2018, 31.01.2019, 06.02.2019, 25.02.2019, 14.05.2019 and 16.04.2019. It was stated that the land owners/respondents have only this source and the constructions as situated over the land is the only source of their livelihood and residence. They have no alternative house therein more so in view of the fact that the built up area is having all the basic amenities and facilities for their livelihood in the said building. It was specifically submitted that as per valuation which was got done by the respondents, the valuator, namely, Shri Shyam Lal Sharma has given the valuation of structures in question for sum of Rs.6,65,58,112/- only. The site development charges, as applicable for the sites primarily used for calculating compensation, have been ignored on notional basis without applying its mind by the authorities.

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The respondents prayed for enhancement of amount of compensation which was determined by the competent Authority i.e. CALA.

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Learned Arbitrator vide its award dated 18.01.2020, allowed the application filed by the respondent under Section 3G(5) of the National Highways Act, 1956 and the value of the structure No.909 was increased at the rate of Rs.1,48,63,808/-. Similarly, the learned Arbitrator enhanced the market value of structure No.910 at the rate of Rs.45,19,182/-. The dismantling charges of Rs.18,49,161/- were given on both the structures. To the similar extent, interest at the rate of 12% per annum was given under Section 23(1A) in respect of Award No.51 and 51/1 of 2013-14.

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The present appellant preferred objections under Section 34 of the Arbitration and Conciliation Act before the learned District Judge, Mandi on 21.10.2021. Learned District Judge vide its judgment dated 20.11.2021 dismissed the objections as filed by the present appellant and affirmed the findings/award as passed by the learned Arbitrator.

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Still feeling aggrieved, the appellant has approached this court by filing the present appeal by invoking the provisions of Section 37 of the Arbitration and Conciliation Act.

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It is contended by Ms. Shreya Chauhan, learned counsel for the appellant, that the judgment as passed by learned District Judge is erroneous and liable to be quashed and set aside. She submitted that the learned Arbitrator as well as learned District Judge have not appreciated the point in controversy and have misread and mis-appreciated the evidence placed on record. She has further submitted that the present respondents have failed to establish their case for enhancement of the amount of compensation and that the learned Arbitrator as well as learned District Judge have not gone into the depth of the point in controversy.

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Learned counsel for the appellant has argued the appeal mainly on two accounts. Firstly, that the learned District Judge and learned Arbitrator have wrongly relied upon the report of Shri Shyam Lal (PW-5). Secondly, the findings of the learned Arbitrator, which were affirmed by the learned District Judge, whereby the age of the building structure No.909 at the time of acquisition was reduced from 11 years to 8 years and the structure No.910 from 23 years to 12 years, are not sustainable. 12. She further submitted that the learned Arbitrator has granted the compensation i.e. 12% and solatium in terms of Section 23(1-A), 23(2) and Section 28 of the Land Acquisition Act,

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She submits that, in view of mandate as laid down by the Hon’ble Apex Court in National Highway Authority of India and another vs. Tehal Singh , the awarding of additional amount under Section 23(1-A) of the Land Acquisition Act is erroneous, illegal and liable to be quashed and set aside.

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On the other hand, Mr. Rakesh Gupta, learned counsel, duly assisted by Mr. Rajesh Prakash, Advocate, has defended the impugned judgment as passed by the learned District Judge and the award as passed by learned Arbitrator. It is contended by Mr. Gupta, learned counsel, that the findings as returned by the learned Arbitrator are based upon appreciation of oral as well as documentary evidence placed on record and the same cannot be disturbed in proceedings under Section 37 of the Arbitration and Conciliation Act. He further submitted that the learned District Judge rightly came to the conclusion that the findings of fact cannot be interfered with while invoking the provisions of Section 34 of the Arbitration and Conciliation Act. 14. I have heard learned counsel for the parties at length and scanned the case file carefully. 15. In order to substantiate their case, the respondents led oral as well as documentary evidence, which was thrashed out by learned Arbitrator in detail.

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The respondents, in order to substantiate their case, examined PW-1, Mamta. She stated that she is the Secretary of Gram Panchayat and proved the copy of the Parwiar Registrar (Ext. PW-1/A) on record. The receipt (Ext. PW-1/B) and the information under the Right to Information Act (Ext. PW-1/C) were proved by the said witness.

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PW-2 is the statement of Shri Devi Ram, who has stated in his deposition that in 2018, he was working as an Executive Engineer. The valuation sheet/report of the structure No.909 was prepared by him and bears his signatures, which is exhibited as Ext. PW-2/A. The valuation sheet was prepared by M.N Associates and the said report was duly signed by the Junior Engineer and the Assistant Engineer of H.P.PWD. He stated that, as per the report, the valuation was prepared in consonance with the specifications, measurements and the construction. The valuation sheet has been placed on record by the said witness as Ext. PW-2/B. The said report pertains to structure No.910 and the same was prepared by the M/s M.N. Associates. PW-2/C has been proved by the said witness regarding the valuation of structures No.909 and 910 in Mohal Kannaid. He has also proved Ext. PW-2/D, Ext. PW-2/E on record.

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PW-3 is the statement of Shri Chaman Lal Kaushik,

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who has stated in his deposition that after dismantling the old structure over Khasra No.346 owned by the respondents, he constructed a RCC structure in the year 2003-2004. He stated that he had conducted the said work at a labour rate. He has deposed that the construction of work was done by him at labour rates with respect to Structure No.910. The affidavit of the said witness is Ext. PW-3/A.

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19.. Similarly, the respondents have examined PW-4, Shri Ruban Kumar, who has filed his affidavit PW-4/A. In his deposition, he stated that the residential house/shop which was constructed during the year 2006-07 and was completed by him during the year 2007-08. This building is an RCC framed structure and is surrounded by boundary wall from all the sides. That entire construction work was done by him at the labour rates with respect to structure No.909.

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PW-5 is the statement of Shri Shyam Lal, who has placed his affidavit Ext. PW-5/A on record. He stated that he served for 38 years as a Junior Engineer, Assistant Engineer and the Executive Engineer. He stated that he used to look-after rent assessment cases for various Departments, Government Departments, Semi-Government Departments. After his

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retirement from, H.P Public Works Department, he enrolled himself as an Architect and Civil Engineer. He stated that he had prepared the valuation report of the property belonging to the respondents. The Valuation Comparative Statement (Ext. PW5/B), Revised Valuation report (Ext. PW-5/C) were proved by this witness.

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Respondent Nikka Ram has deposed in support of his case by filing the affidavit Ext. PW-6/A and reiterated the averments with respect to the grant of compensation/enhancement of compensation.

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Learned Arbitrator after examining the each and every aspect of the matter and taking into consideration the oral as well as documentary evidence placed on record passed the award in the following manner:

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“40. Judged in the light of my findings on issues Nos. 1 to 8 above, the application of the applicants is hereby partly allowed against the respondents. The followings reliefs are granted to the applicants as against the respondents:-

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(A) The applicants are entitled for the compensation of structures no. 909 and 910 as determined below (as per the formulae applied by the M.N. associates) alongwith statutory benefits under Section 30(1) of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013:

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(1) Compensation for Structure no. 909: Age of building = 08 years Life of building (R.C.C structure) =70 years Plinth Area=657.66 Plinth area Rate= Rs. 17, 195/Cost of amenities already assessed by M.N. Associates Rs.10,57,873.97/Cost of left out item = Rs. 8,88,013/Plinth area x Plinth Area Rate 657.66 x Rs.17, 195 Rs. 1, 13,08,463.70/Estimated cost = Rs.1, 13,08,463.70/- + Rs. 1057873.97/-+Rs. 8,88,013 = Rs. 1, 32, 54,350.67/-. Water supply and sanitary installation (12.5% of estimated cost) = Rs. 16,56,793.83/Electric Installation (12.5% of estimated cost) = Rs. 16,56,793.83/Total estimated cost = Rs. 1,65,67,938.33/Less:- Depreciation and salvage (Estimated cost x 90% x age of building / total life of building) = Rs. 17,04,130.80/ Net Value = Rs. 1,48,63,807.53/After rounding off net value for which the applicants are entitled Rs. 1, 48,63808/(2) Compensation for Structure no. 910: Age of building = 12 years Life of building -60 years Plinth Area-218.58 square meters Plinth area Rate= Rs. 16,471/- per square meter Cost of amenities already assessed by M.N. Associates= Rs. 36,683.51/Cost of left out items Rs. 7,72,043/Plinth area x Plinth Area Rate

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218.58xRs. 16, 471 Rs.36,00,231.18/-. Estimated cost= Rs.36,00,231.18+ Rs.36,683.51+ Rs. 7,72,043 Rs. 44,08,957.69

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Water supply and sanitary installation (12.5% of estimated cost = Rs. 5,51,119.71)

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Electric Installation (12.5% of estimated cost = Rs. 5,51,119.71/-) Total estimated cost = Rs. 55,11,197.11/Less:- Depreciation and salvage

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(Estimated cost x 90% x age of building / total life of building) Rs. 9,92,015.48/-. Net Value Rs.45,19,181.63/

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After rounding off net value for which applicants are entitled Rs. 45,19,182/-

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(B) The applicants are not entitled to any enhancement in compensation of land awarded by the Competent Authority under Award no. 51 & 51/1 of 2013-14, However they are held entitled to solatium in conformity with the ratio of law laid down by the Hon'ble Apex Court in Civil Appeal no. 7064 of 2019 titled as Union of India vs Tarsem Singh and Others.

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(C) The applicants are not entitled to any enhancement in compensation of land awarded by the Competent Authority under Award no 37/1 dated 14-08-2017 and award No. 37/4 dated 02-03-2019 of Revenue estate Kannaid/6.

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(D) The claim of applicants for loss of business and change of residence after consideration is rejected.

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(E) The claim of applicants for compensation for demolition and dismantling of structure no 909 and 910 is allowed to the tune of rupees 18,49,161/-.

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F) The Applicants are entitled for 12% per annum on the compensation amount of structure No.909 & 910 from the date of notification under Section 3A Le 1603-2016 till the date of award no 37/4 i.e 02-03-2019 or the date of taking possession of land whichever is earlier.

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(G) The Applicants are held entitled to interest on enhanced amount of compensation in conformity with the ratio of law laid down by the Hon'ble Apex Court in Civil Appeal no. 7064 of 2019 titled as Union of India vs Tarsem Singh and Others.

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(H) The claim of the Applicants for compensation for remaining land becoming unusable on account of acquisition is rejected.

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(G) The claim of the Applicants for compensation for site development is rejected.

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(1) The claim of the applicants for refund of administrative charges and levy charges is rejected. (J)The application presented before me is accordingly answered. Compliance of section 31(5) of Arbitration and Conciliation Act, 1996 be also made. The amount of compensation, if already paid, shall be adjusted towards the enhanced amount of compensation. Since the Order was reserved after arguments on 16-12-2019, the same be communicated to the parties. The miscellaneous pending applications, if any, shall also stand disposed of. File of this Authority be consigned to record room after completion.”

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The learned arbitrator has passed a reasoned and

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exhaustive award. The evidence has been appreciated by taking

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into consideration the material placed on record. This Court will not assess the evidence which was appreciated by the Courts below and will not act as a Court of appeal. The assessment of value with respect to Structures 909 and 910 has been done by the learned Arbitrator which stood affirmed by the learned first appellate Court. The learned counsel for the appellant has failed to show any perversity in the impugned award as well as the judgment passed by learned District Judge.

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The award as passed by the learned Arbitrator shows that he has taken into consideration the assessment report and age of the structures after analyzing the material evidence in conjunction with oral evidence placed on record. The said finding stands confirmed by District Judge. This Court while exercising the power under Section 37 of the Arbitration and Conciliation Act will not interfere in that finding.

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Even otherwise, scope of interference in an appeal under Section 37 of the Arbitration and Conciliation Act is very limited and narrow. The Hon’ble Apex Court has laid down the exposition of law, whereby the scope of interference in an appeal under Section 37 of the Arbitration and Conciliation Act has been discussed.

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The Hon’ble Apex Court has repeatedly held that under Sections 34 and 37 of the Arbitration and Conciliation Act, the scope of interference under Section 37 is narrower than under Section 34. It has been held that the Courts must respect the finality of arbitral awards and the autonomy of parties to opt for arbitration as an alternative dispute resolution mechanism. The reappraisal of evidence or alternate interpretation of contractual clauses is not permissible under Section 37. The arbitral awards cannot be interfered with on grounds of mere illegality or unreasonableness unless the findings are patently illegal or manifestly arbitrary. Award upheld by the Courts below should not be disturbed unless they contravene the provisions of Section 34 of the Act. It is now well settled that the scope of appellate Court in exercising power under the Act to review the finding of an award is narrow/limited, especially when award is upheld or substantially upheld under Section 34 of the Act. The Hon’ble Supreme Court in Civil Appeal No.3798 of 2023, titled Larsen Air Conditioning and Refrigeration Company vs. Union of

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India has held that Section 34 of the Act permits the court to interfere with an award, sans the grounds of patent illegality to the root of the matter and cannot be of a trivial nature. The relevant paras of the aforesaid judgment reads under:

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“15. The limited and extremely circumscribed jurisdiction of the court under Section 34 of the Act, permits the court to interfere with an award, sans the grounds of patent illegality, i.e., that “illegality must go to the root of the matter and cannot be of a trivial nature”; and that the tribunal “must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground” [ref: Associate Builders (supra)]. The other ground would be denial of natural justice. In appeal, Section 37 of the Act grants narrower scope to the appellate court to review the findings in an award, if it has been upheld, or substantially upheld under Section 34. It is important to notice that the old Act contained a provision14 which enabled the court to modify an award. However, that power has been consciously omitted by Parliament, while enacting the Act of 1996. This means that the Parliamentary intent was to exclude power to modify an award, in any manner, to the court. This position has been iterated decisively by this court in Project Director, National Highways No. 45E and 220 National Highways Authority of India v M. Hakeem15:

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“42. It can therefore be said that this question has now been settled finally by at least 3 decisions [McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181] , [Kinnari Mullick v. Ghanshyam Das Damani, (2018) 11 SCC 328 : (2018) 5 SCC (Civ) 106] , [Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies (P) Ltd.,

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(2021) 7 SCC 657] of this Court. Even otherwise, to state that the judicial trend appears to favour an interpretation that would read into Section 34 a power to modify, revise or vary the award would be to ignore the previous law contained in the 1940 Act; as also to ignore the fact that the 1996 Act was enacted based on the Uncitral Model Law on International Commercial Arbitration, 1985 which, as has been pointed out in Redfern and Hunter on International Arbitration, makes it clear that, given the limited judicial interference on extremely limited grounds not dealing with the merits of an award, the “limited remedy” under Section 34 is coterminous with the “limited right”, namely, either to set aside an award or remand the matter under the circumstances mentioned in Section 34 of the Arbitration Act, 1996.”

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The Hon’ble Apex Court in Konkan Railway Corporation Ltd. vs. Chenab Bridge Project Undertaking,

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(2023) 9 SCC 85 , has held that the jurisdiction of the Court under Section 37 of the Act is akin to that under Section 34 of the Act. As such, the Courts ought not to interfere with arbitral award in a casual and cavalier manner. Most importantly, the Hon’ble Apex Court has held that mere possibility of an alternative view on facts or interpretation of contract does not entitle Courts to reverse findings of Arbitral Tribunal. The relevant para reads as follows:

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“19. Therefore, the scope of jurisdiction under Section 34 and Section 37 of the Act is not akin to

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normal appellate jurisdiction.9 It is well-settled that courts ought not to interfere with the arbitral award in a casual and cavalier manner. The mere possibility of an alternative view on facts or interpretation of the contract does not entitle courts to reverse the findings of the Arbitral Tribunal, this Court held:

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“24. There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated. 25. Moreover, umpteen number of judgments of this Court have categorically held that the courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award

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is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act.”

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28. In Bombay Slum Redevelopment Corporation Pvt.

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Ltd. vs. Samir Barain Bhojwani, (2024) 7 SCC 218 , the Hon’ble Apex Court has reiterated that supervisory role of Courts is very restricted in dealing with appeals under Section 37 of the Act. Hon'ble Apex Court has held that scope of interference in a petition under Section 34 of the Act is very narrow and jurisdiction under Section 37 of the Act is very narrower. The Hon'ble Apex Court further held that since parties to the lis themselves chose to go before the Arbitral Tribunal instead of availing remedy before the traditional Civil Courts, Courts must be very conservative while dealing with arbitral awards and confine themselves to the grounds strictly available under Section 34 of the Act.

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In Reliance Infrastructure Ltd. vs. State of Goa, (2024) 1 SCC 479 , the Hon'ble Apex Court while interpreting expression of 'patent illegality' held that a mere illegality is not a patent illegality, rather to interfere patent illegality, illegality must be apparent on the face of the award and not the one which is culled out by way of a long drawn analysis of pleadings and evidence. The relevant paragraph of the aforesaid judgment reads as follows:

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“57. As noticed, arbitral award is not an ordinary adjudicatory order so as to be lightly interfered with by the Courts under Sections 34 or 37 of the Act of 1996 as if dealing with an appeal or revision against a decision of any subordinate Court. The expression “patent illegality” has been exposited by this Court in the cases referred hereinbefore. The significant aspect to be reiterated is that it is not a mere illegality which would call for interference, but it has to be “a patent illegality”, which obviously signifies that it ought to be apparent on the face of the award and not the one which is culled out by way of a longdrawn analysis of the pleadings and evidence.”

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The Hon’ble Apex Court in MMTC Ltd. vs Veanta

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Ltd., (2019) 4 SCC 163 has held as follows:

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“14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the Court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the Court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the Court under Section 34 and by the Court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings.”

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The Hon’ble Supreme Court in UHL Power

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Company Ltd. vs. State of Himachal Pradesh, (2022) 4 SCC

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116 in respect of Section 37 of the Act, has observed as under:

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“16. As it is, the jurisdiction conferred on Courts under Section 34 of the Arbitration Act is fairly narrow, when it comes to the scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an Appellate Court in examining an order, setting aside or refusing to set aside an award, is all the more circumscribed.

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20. It is quite apparent from the aforesaid exposition of law as laid down by the Hon’ble Apex Court that the scope of interfere by this Court while exercising power under Section 37 of the Act is very limited. The court should not interfere with an award because an alternative view on facts and interpretation of contract exists, rather courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Act.”

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The Hon’ble Apex Court in Civil Appeal No.10889 of 2024, titled Punjab State Civil Supplied Corporation Limited

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& another vs. M/s Sanman Rice Mills & others , has held as follows:

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“20. In view of the above position in law on the subject, the scope of the intervention of the court in

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arbitral matters is virtually prohibited, if not absolutely barred and that the interference is confined only to the extent envisaged under Section 34 of the Act. The appellate power of Section 37 of the Act is limited within the domain of Section 34 of the Act. It is exercisable only to find out if the court, exercising power under Section 34 of the Act, has acted within its limits as prescribed thereunder or has exceeded or failed to exercise the power so conferred. The Appellate Court has no authority of law to consider the matter in dispute before the arbitral tribunal on merits so as to find out as to whether the decision of the arbitral tribunal is right or wrong upon reappraisal of evidence as if it is sitting in an ordinary court of appeal. It is only where the court exercising power under Section 34 has failed to exercise its jurisdiction vested in it by Section 34 or has travelled beyond its jurisdiction that the appellate court can step in and set aside the order passed under Section 34 of the Act. Its power is more akin to that superintendence as is vested in civil courts while exercising revisionary powers. The arbitral award is not liable to be interfered unless a case for interference as set out in the earlier part of the decision, is made out. It cannot be disturbed only for the reason that instead of the view taken by the arbitral tribunal, the other view which is also a possible view is a better view according to the appellate court.

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21. It must also be remembered that proceedings under Section 34 of the Act are summary in nature and are not like a full-fledged regular civil suit.

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Therefore, the scope of Section 37 of the Act is much more summary in nature and not like an ordinary civil appeal. The award as such cannot be touched unless it is contrary to the substantive provision of law; any provision of the Act or the terms of the agreement.”

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The Division Bench of this Court in Arb. Appeal No.1

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of 2019, dated 02.05.2019, titled State of H.P. and another vs.

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M/s Ajay Kumar Sood held as under:

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“11. By now it is well settled that the scope of interference by Court is very limited while considering the objections filed under Section 34 of the Act. The award passed by the learned Arbitrator can be interfered with in case of fraud or bias or violation of principles of natural justice. Interference, if any, on the ground of patent illegality is only permissible, if same goes to the root of the case. Violation should be so unfair and unreasonable so as to shock the conscious of the court. Reliance is placed on Hindustan Tea Company v. M/s K. Sashikant & Company and Anr. AIR 1987 SC 81, M/s Sudarsan Trading Company v. The Government of Kerala and Anr, AIR 1989 SC 890, McDermott International Inc. v. Burn Standard Company Limited and Ors., (2006) 11 SCC 181, P.R. Shah, Shares and Stock Broker (P) Ltd., v. M/s. B.H.H. Securities (P) Ltd., and others, (2012) 1 SCC 594, Swan Gold Mining Ltd. v. Hindustan Copper Ltd. in Civil Appeal No. 9048 of 2014, decided on 22.9.2014, Sutlej Construction v. Union Territory of Chandigarh, (2018) 1 SCC 718.

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12. Moreover, there cannot be any dispute as has been repeatedly held by the Hon'ble Supreme Court as well as this Court that court while deciding objection, if any, filed by the aggrieved party under Section 34 of the Act against the award passed by an Arbitrator, does not sit in appeal over the findings returned by the learned Arbitrator and there cannot be any reappraisal of evidence on the basis of which, learned Arbitrator has passed the award. Otherwise also, in terms of Section 34 of the Act, objections, if any, raised by the aggrieved party can be considered by the court if the award is in any manner against the public policy, which certainly has to be liberally interpreted in view of the facts of the case.”

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This Court in Arbitration Appeal No.471 of 2025 after relying upon the judgment of the Hon’ble Apex Court has taken a similar view by holding that the scope of the intervention of the court in arbitral matters is virtually prohibited and that the interference is confined only to the extent envisaged under Section 34 of the Act. The appellate power of Section 37 of the Act is limited within the domain of Section 34 of the Act. It is exercisable only to find out if the court, exercising power under Section 34 of the Act, has acted within its limits as prescribed thereunder or has exceeded or failed to exercise the power so conferred. The scope of Section 37 of the Act is much more summary in nature and not like an ordinary civil appeal. The award as such cannot be touched unless it is contrary to the

¶110

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substantive provision of law; any provision of the Act or the terms of the agreement.

¶112

In view of the exposition of law, as laid down by the Hon’ble Supreme Court, the scope of interference while exercising the power under Section 37 of Arbitration and Conciliation Act is very limited and restricted. The learned Arbitrator has dealt with each and every aspect of factual matrix and evidence as adduced by the parties. There is no illegality or perversity in the same and the learned District Judge has rightly dismissed the objection petition filed by the present appellants. 36. As regards last contention of Ms. Shreya Chauhan, whereby she has submitted that award of interest @ 12% per annum under Section 23(1-A) of the Land Acquisition Act by the learned District Judge could not have been granted, the Hon’ble Supreme Court in Union of India & Anr. Vs. Tarsem Singh & Ors., 2019 (9) SCC 304 had declared Section 3J of the Act of 1956 as unconstitutional. It was further held that the provisions of Land Acquisition Act, 1894, relating to the assessment of solatium and interest as contained in Section 23(1-A) and 23(2) as well as the interest payable in terms of proviso to Section 28 of the Act of 1956, would ipso facto apply to the acquisition made under Act of 1956.

¶113

26 2026:HHC:21565

¶114

However, subsequently, the appellant-NHAI sought a clarification in Miscellaneous Application Diary No. 2572/2020 in Civil Appeal No. 7086/2019, titled as National Highway Authority of India & Anr. Vs. Tehal Singh & Ors . decided on 30.07.2021 on the ground that benefit of Section 23(1-A) of the Land Acquisition Act had not been claimed before any authority or the Court in the facts of those cases. The said plea of appellant was accepted and vide order dated 30.07.2021, the decision in Tehal Singh & Ors. (supra) was modified by deleting the expression ‘(1-A)’.

¶115

While deciding miscellaneous application in Tarsem Singh & Ors., the Hon’ble Apex Court dismissed SLP(C) Diary No. 52538/2023, titled as Raj Kumar & Anr. Vs. Union of India & Ors. Raj Kumar had arisen from a decision rendered by the Punjab & Haryana High Court that was based upon LPA No. 4965/2018, titled as National Highway Authority of India Vs. Resham Singh decided a/w connected matters on 12.04.2023, whereby landowners’ claim for award of Additional market value was declined. The Hon’ble Apex Court has held that the challenge therein pertained to the High Court’s refusal to grant additional market value as another component of the compensation, even

¶116

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though solatium and interest had already been awarded. The relevant portion of the said decision reads as under: -

¶118

“3. Additionally, SLP (C) Diary No. 52538/2023 titled ‘Raj Kumar and another v. Union of India and others’, has been preferred by a private party whose lands were acquired by NHAI. In this instance, the Punjab and Haryana High Court has rejected their claim for the award of ‘Additional Market Value’ relying upon its decision in National Highway Authority of India v. Resham Singh29whereby the landowners were held entitled to ‘solatium’ and ‘interest’, but their claim for the grant of ‘Additional Market Value’ was declined. These benefits were granted / partly declined in terms of Sections 23(2) and 28 of the Land Acquisition Act, 1894 (1894 Act), which were read into the provisions of the National Highways Act, 1956 (NHAI Act).

¶119

25. In view of the foregoing analysis, we find no merit in the contentions raised by the Applicant, NHAI. We reaffirm the principles established in Tarsem Singh (supra) regarding the beneficial nature of granting ‘solatium’ and ‘interest’ while emphasising the need to avoid creating unjust classifications lacking intelligible differentia. Consequently, we deem it appropriate to dismiss the present Miscellaneous Application. 26. Leave is granted in the other connected matters, and all the appeals are disposed of with a direction to the Competent Authority to calculate the amount of ‘solatium’ and ‘interest’ in accordance with the directions issued in Tarsem Singh (supra). In this context, the appeal arising out of SLP (C) Diary No. 52538/2023 is dismissed, as the challenge therein pertains to the High Court’s refusal to award Additional Market Value as another component of the

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compensation, while ‘solatium’ and ‘interest’ have already been granted.”

¶122

Similar reiteration of law can be found in a judgment dated 8.10.2025, rendered by a coordinate Bench of this Court in bunch of matters, lead being Arb. Appeal No. 135/2024, wherein the submissions and contentions as have been raised in the present appeal have been dealt with in detail.

¶123

In view of the categorical findings recorded by the Hon’ble Supreme Court, the land owners are not entitled to market value under Section 23(1-A) of the Land Acquisition Act.

¶124

In the backdrop of the above discussion, award passed by the Arbitrator cannot be said to be suffering from perversity or illegality necessitating interference of the Court, however judgment passed by the learned District Judge is set aside to the extent it awards interest @ 12% per annum on the enhanced amount of the market value of the land.

¶125

The appeal is partly allowed in the aforesaid terms. Pending application(s), if any, also stands disposed of.

¶126

( Romesh Verma ) Judge

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3^rd June, 2026 (vt)

National Highways Authority of India v. Nikka Ram and Anr.

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National Highways Authority of India v. Nikka Ram and Anr.

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