Balu Lingappa Chandanshive v. The Project Director Nh Authority Of India..Mr. S. N. Patil a/w Mr & Ors.

922 to 938.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABAD922 ARBITRATION APPEAL NO. 38 OF 2025Balu Lingappa ChandanshiveVERSUSThe Project Director Nh Authority Of India And Others...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for RespondentsAND923 ARBITRATION APPEAL NO. 47 OF 2025Bhaskar Gajendra SarakVERSUSThe Project Director, National Highway Authorrity Of India And Others...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No.1Mr. R. D. Sanap, Advocate for Respondent No. 2Mr. B. V. Virdhe, AGP for Respondent/StateAND924 ARBITRATION APPEAL NO. 48 OF 2025 Subhabai Navnath Sarak Died Lrs. Vaishali Sanjub Mane And AnotherVERSUSThe Project Director, National Highway Authorrity Of India And Others...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No.1Mr. R. R. Bangar, Advocate for Respondent No. 2Mr. P. M. Kulkarni, AGP for Respondent/StateAND925 ARBITRATION APPEAL NO. 49 OF 2025Sudhakar Gajendra SarakVERSUSThe Project Director, National Highway Authorrity Of India And Others...PAGE 1 OF 14 922 to 938.odtMr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No.1Mr. R. R. Bangar, Advocate for Respondent No. 2Mr. V. M. Lomte, AGP for Respondent/StateAND926 ARBITRATION APPEAL NO. 50 OF 2025Sudhakar Gajendra SarakVERSUSThe Project Director, National Highway Authorrity Of India And Others...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No.1Mr. N. S. Salunke, Advocate for Respondent No. 2Ms. J. P. Reddy, AGP for Respondent/StateAND927 ARBITRATION APPEAL NO. 51 OF 2025Vithal Ramchandra Bele Died Lrs. Kusum Vithal Bele And OtherVERSUSThe Project Director, National Highway Authorrity Of India And Others...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No.1Ms. K. S. Salunke, Advocate for Respondent No. 2Mr. V. M. Lomate, AGP for Respondent/StateAND928 ARBITRATION APPEAL NO. 52 OF 2025Balaji Vinayak Bele And OthersVERSUSThe Project Director, National Highway Authorrity Of India And Others...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No.1Mr. R. H. Mewara, Advocate for Respondent No. 2Ms. J. P. Reddy, AGP for Respondent/StateAND929 ARBITRATION APPEAL NO. 53 OF 2025PAGE 2 OF 14 922 to 938.odtBharat Jyoti Gund Died Through Lrs. Mainabai Bharat Gund AndOthersVERSUSThe Project Director, National Highway Authorrity Of India And Others...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No.1Mr. N. S. Salunke, Advocate for Respondent No. 2Ms. J. P. Reddy, AGP for Respondent/StateAND930 ARBITRATION APPEAL NO. 54 OF 2025Anant Alias Anand Eknath BeleVERSUSThe Project Director, National Highway Authorrity Of India And Others...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No. 1Mr. Rohit Sarvadnya, Advocate for Respondent No.2Mr. P. M. Kulkarni, AGP for Respondent No. 3/StateAND931 ARBITRATION APPEAL NO. 55 OF 2025Rama Masa MaskeVERSUSThe Project Director, National Highway Authorrity Of India And Others...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No. 1Mr. U. B. Bondar, Advocate for Respondent No.2Mr. V. M. Lomte, AGP for Respondent No. 3/StateAND932 ARBITRATION APPEAL NO. 56 OF 2025Sidram Vithoba Maske And OthersVERSUSThe Project Director, National Highway Authorrity Of India And Others...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantPAGE 3 OF 14 922 to 938.odtMr. S. P. Urgunde, Advocate for Respondent No. 1Mr. R. D. Sanap, Advocate for Respondent No.2Mrs. J. P. Reddy, AGP for Respondent No. 3/StateAND933 ARBITRATION APPEAL NO. 66 OF 2025Bhaskar Gajendra SarakVERSUSThe Project Direction, National Highway Authorrity Of India, AndOthers...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No. 1Mr. R. R. Bangar, Advocate for Respondent No.2AND934 ARBITRATION APPEAL NO. 67 OF 2025Ambadas Jyoti GundVERSUSThe Project Direction, National Highway Authorrity Of India, AndOthers...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No. 1Mr. R. R. Bangar, Advocate for Respondent No.2AND935 ARBITRATION APPEAL NO. 68 OF 2025Laxmi Babruvan RochkariVERSUSThe Project Direction, National Highway Authorrity Of India, AndOthers...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No. 1Mr. R. R. Bangar, Advocate for Respondent No.2AND936 ARBITRATION APPEAL NO. 69 OF 2025Shankar Ravsaheb GundPAGE 4 OF 14 922 to 938.odtVERSUSThe Project Direction, National Highway Authorrity Of India, AndOthers...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No. 1Mr. R. R. Bangar, Advocate for Respondent No.2AND937 ARBITRATION APPEAL NO. 70 OF 2025Sandip Subhash KadamVERSUSThe Project Direction, National Highway Authorrity Of India, AndOthers...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No. 1Mr. R. R. Bangar, Advocate for Respondent No.2AND938 ARBITRATION APPEAL NO. 71 OF 2025Balu Lingappa ChandnshivVERSUSThe Project Direction, National Highway Authorrity Of India, AndOthers...Mr. S. N. Patil a/w Mr. N. S. Birajdar, Advocate for AppellantMr. S. P. Urgunde, Advocate for Respondent No. 1Mr. R. R. Bangar, Advocate for Respondent No.2***CORAM:ARUN R. PEDNEKER, JDATE:MARCH 24, 2026PC : 1.Heard.2.The appellants challenge the impugned Awards passed byPAGE 5 OF 14 922 to 938.odtthe Arbitrator, so also, the impugned Orders passed by the PrincipalDistrict Judge, Osmanabad dismissing the Applications under Section34 of the Arbitration and Conciliation Act, 1996.3.Brief facts giving rise to the present appeals are that theappellants are the owners of the acquired lands for extension of theNational Highway No.361. Notification dated 26.10.2015 was issued foracquisition of the lands abutting the National Highway No.361 by theMinistry of Road Transport and Highways under Section 3A of theNational Highways Act, 1956. Final notification under Section 3D(1) ofthe National Highways Act, 1956 was published on 18.11.2015,acquiring various lands of the different appellants herein situated atvillage Tadavala, Taluka Tuljapur, District Osmanabad for widening ofNational Highway No.361.4.The above noted facts are not disputed before this court. Itappears that the Competent Authority for Land Acquisition (CALA)awarded compensation in three categories determining thecompensation in Group 1 category at the rate of Rs.40 per Sq. Mtr., inGroup 2 category there are further three subcategories in which there iscompensation granted at the rate of Rs.680/-, Rs.40 and Rs.79 per Sq.Mtr. and, in Group 3 category at the rate of Rs.44 per Sq. Mtr. Thereafter, the appellants filed the Applications underPAGE 6 OF 14 922 to 938.odtSection 3G(5) for referring the matters to the Arbitrator. The Arbitratormaintained the compensation at the rate of Rs.680/- per Sq.Mtr. for thelands abutting the highway and in respect of all other lands grantedcompensation at the rate of Rs.399/- per Sq. Mtr.The appellants, who are granted compensation at the rateof Rs.399/- per Sq. Mtr. challenged the Awards under Section 34 of theArbitration and Conciliation Act, 1996. The proceedings are dismissed.Challenging the Awards of the Arbitrator and the order ofthe learned Principal District Judge, Osmanabad dismissing the Section34 applications in the present appeals, the learned counsel for theappellants relies upon the Judgment of the Madhya Pradesh RoadDevelopment Corporation Vs. Vincent Daniel and others, (2025) 7 SCC798. He submits that Section 26 of the Right to Fair Compensation andTransparency in Land Acquisition, Rehabilitation and Resettlement Act,2013 (for brevity “2013 Act”) is made applicable for determination of thecompensation under the National Highways Act. He further submitsthat Section 105 of the 2013 Act, notifications are be issued by theCentral Government applying Sections 26 to 30 of the 2013 Act fordetermination of the compensation for the lands acquired under theNational Highways Act.5.The learned counsel for the appellants submits that, whilePAGE 7 OF 14 922 to 938.odtapplying Section 26 of the 2013 Act the highest sale deed has to betaken into consideration. He also submits that the similarly placedlands has to be granted similar compensation. He relies uponparagraphs no.24 and 42 of the above referred Judgment and submitsthat while passing the awards the arbitrator has not applied theprinciples while determining the compensation and, thus, the Awardsare patently illegal and perverse have to be set aside.6.Per contra, the learned counsel appearing for theRespondents / National Highway Authority submits that the arbitratorhas rightly determined the compensation for 2 different categories,some lands which are abutting highway are granted Rs.680/- per Sq.Mtr., whereas the lands little away from the highway are grantedcompensation at the rate of Rs.399/- per Sq. Mtr. He submits that underSection 34 of the Arbitration and Conciliation Act, 1996, the power ofthe court is extremely restricted and only in cases of patent illegalitythe award can be interfered. He also submits that the arbitrator wasjustified in bifurcating the lands in 2 different categories and he has hasalso taken into consideration NA potential of the lands and has allowedenhancement of compensation which is granted by CALA at the rate ofRs.40, 79 and 44 to uniformly Rs.399/- per Sq. Mtr. and the same isrightly not interfered with by the District Court under Section 34 of thePAGE 8 OF 14 922 to 938.odtArbitration and Conciliation Act, 1996.7.Considered rival submissions.8.In the case of the Madhya Pradesh Road DevelopmentCorporation Vs. Vincent Daniel and others (supra), the Hon’bleSupreme Court has observed that the courts also needs to apply thegeneral parameters under Land Acquisition Act as laid down by theHon’ble Supreme Court and the High Court, while determining thecompensation under Section 26 of the 2013 Act. One of the principalcontention is that all acquired lands have NA potential lands and areabutting the highway and they cannot be granted separatecompensation. It is thus submitted that the arbitrator has committedpatent illegality and perversity in differentiating the similarly placedlands and, thus, the Awards need to be interfered with.9.This Court by order dated 18.03.2026 in Arbitration AppealNo.10 of 2026 with connected appeals, at paragraphs no.60, 61 and 62,considered the Judgments of the Hon’ble Supreme Court dealing withthe power of the court under Section 34 and 37 of the Arbitration andConciliation Act to interfere with the arbitral Award as under:“60....The Supreme Court in the case of PSA SicalTerminals Private Limited Vs. Board of Trustees of V.O.Chidambaranar Port Trust Tuticorn and Anr. reported in(2023) 15 SCC 781 has observed that it is a settled legalPAGE 9 OF 14 922 to 938.odtposition, that in an application under Section 34, the courtis not expected to act as an appellate court and reappreciatethe evidence. The scope of interference would be limited togrounds provided under Section 34 of the Arbitration Act.The interference would be so warranted when the award isin violation of "public policy of India", which has been heldto mean "the fundamental policy of Indian law". A judicialintervention on account of interfering on the merits of theaward would not be permissible. However, the principles ofnatural justice as contained in Section 18 and 34(2)(a)(iii) ofthe Arbitration Act would continue to be the grounds ofchallenge of an award. The ground for interference on thebasis that the award is in conflict with justice or morality isnow to be understood as a conflict with the "most basicnotions of morality or justice". It is only such arbitralawards that shock the conscience of the court, that can beset aside on the said ground. An award would be set aside onthe ground of patent illegality appearing on the face of theaward and as such, which goes to the roots of the matter.However, an illegality with regard to a mere erroneousapplication of law would not be a ground for interference.Equally, reappreciation of evidence would not be permissibleon the ground of patent illegality appearing on the face ofthe award.61.The Hon’ble Supreme Court in PSA Sical TerminalsPrivate Limited (supra) has further observed that a decisionwhich is perverse, though would not be a ground forchallenge under "public policy of India", would certainlyamount to a patent illegality appearing on the face of theaward. However, a finding based on no evidence at all or anaward which ignores vital evidence in arriving at itsdecision would be perverse and liable to be set aside on theground of patent illegality.62.To appreciate the test of perversity, the Hon’bleSupreme Court in PSA Sical Terminals Private Limited(supra) in para 42 has further held as under :-“42. To understand the test of perversity, it will also beappropriate to refer to paragraph 31 and 32 fromthe judgment of this Court in Associate Builders(supra), which read thus:31. The third juristic principle is that a decision whichPAGE 10 OF 14 922 to 938.odtis perverse or so irrational that no reasonable personwould have arrived at the same is important andrequires some degree of explanation. It is settled lawthat where:(i) a finding is based on no evidence, or(ii) an Arbitral Tribunal takes into accountsomething irrelevant to the decision which itarrives at; or(iii) ignores vital evidence in arriving at itsdecision,such decision would necessarily be perverse.32. A good working test of perversity is contained intwo judgments. In Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath & Sons [1992 Supp(2) SCC 312], it was held:"7. ... It is, no doubt, true that if a finding of factis arrived at by ignoring or excluding relevantmaterial or by taking into considerationirrelevant material or if the finding sooutrageously defies logic as to suffer from thevice of irrationality incurring the blame of beingperverse, then, the finding is rendered infirm inlaw."In Kuldeep Singh v. Commr. of Police (1999) 2 SCC 10, itwas held:"10. A broad distinction has, therefore, to be maintainedbetween the decisions which are perverse and those whichare not. If a decision is arrived at on no evidence or evidencewhich is thoroughly unreliable and no reasonable personwould act upon it, the order would beperverse. But if there is some evidence on record which isacceptable and which could be relied upon, howsoevercompendious it may be, the conclusions would not be treatedas perverse and the findings would not be interfered with.” 10.In the instant case, the Arbitrator having bifurcated thelands in different categories has committed patent illegality andperversity and uniformity ought to have been maintained. ThePAGE 11 OF 14 922 to 938.odtarbitrator ought not to have differentiated the lands. The little distanceof few feet makes no difference as all the acquired lands have NApotentiality and are near the highway. Section 26 of the 2013 Act alsoprovides for determination of the compensation based on average ofhighest sale deed, as such, the compensation granted to the landconsidering highest sale deed of Rs.680/- per Sq. Mtr. ought to have beenapplied to the present lands.11.The Supreme Court in case of The Project Director, NationalHighways Nos.45E and 220, National Highways Authority of India Vs.M. Hakeem and Ors, AIR 2021 SC 3471 has taken view that similarlands under different acquisition purpose cannot yield differentcompensation and has observed thus:53. It can be seen from the aforesaid provisions that thespeeding up of acquisition of land needed for nationalhighways has been achieved. The challenge process toan award passed will, of necessity, take its own time,both Under Section 3G of this Act as well as under theprovisions of the Land Acquisition Act. This being thecase, it is a little difficult to appreciate as to why thewholesome regime of appeals under the LandAcquisition Act has been replaced by a regime in whichan award passed by an Arbitrator, who is notconsensually appointed but appointed by the CentralGovernment, can only be challenged not on merits, buton the limited grounds contained in Section 34 of theArbitration Act, 1996.54. There can be no doubt that differentialPAGE 12 OF 14 922 to 938.odtcompensation cannot be awarded on the ground that adifferent public purpose is sought to be achieved. Also,the legislature cannot say that, however laudable thepublic purpose and however important it is to expeditethe process of land acquisition, differentialcompensation is to be paid depending upon the publicpurpose involved or the statute involved.55. Take the case of a single owner of land who has twoparcels of land adjacent to each other. One parcel ofland abuts the national highway, whereas the otherparcel of land is at some distance from the nationalhighway. Can it be said that the land which abuts thenational highway, and which is acquired under theNational Highways Act, will yield a compensation muchlesser than the adjacent land which is acquired underthe Land Acquisition Act only because in the formercase, an award is by a government servant whichcannot be challenged on merits, as opposed to an awardmade under Part III of the Land Acquisition Act by thereference Court with two appeals in which the merits ofthe award can be gone into? There can be no doubt thatdiscrimination would be writ large in such cases.12.Considering the above judgment of the Supreme Court, thisCourt finds that the Arbitrator has committed patent illegality ingranting different compensation to similarly placed lands. In this viewof the matter, the impugned Awards to the extent of the presentappellants, wherein compensation is granted at the rate of Rs.399/- perSq. Mtr. are quashed and set aside.13.Appointment of arbitrator under the National Highways Actis exclusive jurisdiction of the Central Government under Section 3G(5)PAGE 13 OF 14 922 to 938.odtof the National Highways Act. The impugned Arbitral Awards being setaside, have to be again referred to the arbitrator appointed by theCentral Government under Section 3G(5) of the National Highways Act.Considering this, I deem it appropriate to directly refer the mattersbefore arbitrator appointed by the Central Government. The mattersare remitted back to the Arbitrator to be determined within four (04)months. All contentions are left open. 14.The Arbitration Appeals stand disposed of accordingly. (ARUN R. PEDNEKER, J.) usmPAGE 14 OF 14