ABARAO EKNATH BELEVERSUSTHE PROJECT DIRECTOR AND OTHERS v. Mr. S. P. Urgunde

1 Arba46.2025+IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABAD8 ARBITRATION APPEAL NO. 46 OF 2025ABARAO EKNATH BELEVERSUSTHE PROJECT DIRECTOR AND OTHERS...Advocate for Appellant : Mr. Shashikiran N Patil a/w. Mr. N. S. BirajdarAdvocate for Respondent No.1 : Mr. S. P. UrgundeAdvocate for Respondent No.2 : Mr. R. D. Sanap…AND…9 ARBITRATION APPEAL NO. 57 OF 2025NAGNATH GANGARAM MASKEVERSUSTHE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OFINDIA, AND OTHERS...Advocate for Appellant : Mr. Shashikiran N Patil a/w. Mr. N. S. BirajdarAdvocate for Respondent No.1 : Mr. Urgunde Suhas P.Advocate for Respondent No.2: Mr. Bangar Ravi Raosaheb…AND…10 ARBITRATION APPEAL NO. 58 OF 2025DEVRAO JYOTI GUNDVERSUSTHE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OFINDIA, AND OTHERS...Advocate for Appellant : Mr. Shashikiran N Patil a/w. Mr. N. S. BirajdarAdvocate for Respondent No.1 : Mr. Urgunde Suhas P.Advocate for Respondent No.2: Mr. R. B. Bagul…AND…11 ARBITRATION APPEAL NO. 59 OF 2025 2 Arba46.2025+JIJABAI RAVSAHEB GUNDVERSUSTHE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OFINDIA, AND OTHERS...Advocate for Appellant : Mr. Shashikiran N Patil a/w. Mr. N. S. BirajdarAdvocate for Respondent No.1 : Mr. Urgunde Suhas P.Advocate for Respondent No.2: Mr. R. B. Bagul…AND…12 ARBITRATION APPEAL NO. 60 OF 2025MAINABAI MAHADEV GUNDVERSUSTHE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OFINDIA, AND OTHERS...Advocate for Appellant : Mr. Shashikiran N Patil a/w. Mr. N. S. BirajdarAdvocate for Respondent No.1 : Mr. Urgunde Suhas P.Advocate for Respondent No.2: Mr. U. B. Bondar…AND…13 ARBITRATION APPEAL NO. 61 OF 2025SANDIP SUBHASH KADAMVERSUSTHE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OFINDIA, AND OTHERS...Advocate for Appellant : Mr. Shashikiran N Patil a/w. Mr. N. S. BirajdarAdvocate for Respondent No.1 : Mr. Urgunde Suhas P.Advocate for Respondent No.2: Mr. U. B. Bondar…AND…14 ARBITRATION APPEAL NO. 62 OF 2025MAINABAI MAHADEV GUNDVERSUSTHE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OFINDIA, AND OTHERS 3 Arba46.2025+...Advocate for Appellant : Mr. Shashikiran N Patil a/w. Mr. N. S. BirajdarAdvocate for Respondent No.1 : Mr. Urgunde Suhas P.Advocate for Respondent No.2: Mr. S. W. Munde…AND…15 ARBITRATION APPEAL NO. 63 OF 2025LAXMAN MASAJI MASKEVERSUSTHE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OFINDIA, AND OTHERS...Advocate for Appellant : Mr. Shashikiran N Patil a/w. Mr. N. S. BirajdarAdvocate for Respondent No.1 : Mr. Urgunde Suhas P.Advocate for Respondent No.2: Mr. R. D. Sanap…AND…16 ARBITRATION APPEAL NO. 64 OF 2025PRATAP DADARAO ROCKHARIVERSUSTHE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OFINDIA, AND OTHERS...Advocate for Appellant : Mr. Shashikiran N Patil a/w. Mr. N. S. BirajdarAdvocate for Respondent No.1 : Mr. Urgunde Suhas P.Advocate for Respondent No.2: Mr. N. T. Bhagat…AND…17 ARBITRATION APPEAL NO. 65 OF 2025ARUN JYOTI GUNDVERSUSTHE PROJECT DIRECTION, NATIONAL HIGHWAY AUTHORRITY OFINDIA, AND OTHERS...Advocate for Appellant : Mr. Shashikiran N Patil a/w. Mr. N. S. BirajdarAdvocate for Respondent No.1 : Mr. Urgunde Suhas P. 4 Arba46.2025+Advocate for Respondent No.2: Mr. N. T. Tribhuwan...CORAM:ARUN R. PEDNEKER, J.DATE:23.03.2026PER COURT:1.Heard.2.The appellants challenge the impugned Awards passedby the Arbitrator, so also, the impugned Orders passed by thePrincipal District Judge, Osmanabad dismissing the Applicationsunder Section 34 of the Arbitration and Conciliation Act, 1996.3.Brief facts giving rise to the present appeals are thatthe appellants are the owners of the acquired lands for extension ofthe National Highway No.361. Notification dated 24.09.2016 wasissued for acquisition of the lands abutting the National HighwayNo.361 by the Ministry of Road Transport and Highways underSection 3A of the National Highways Act, 1956. Final notificationunder Section 3D(1) of the National Highways Act, 1956 waspublished on 17.11.2016, acquiring various lands of the differentappellants herein situated at village Tadavala, Taluka Tuljapur,District Osmanabad for widening of National Highway No.361.4.The above noted facts are not disputed before thiscourt. It appears that the Competent Authority for Land 5 Arba46.2025+Acquisition (CALA) awarded compensation in three categoriesdetermining the compensation in Group 1 category at the rate ofRs.40 per Sq. Mtr., in Group 2 category there are further threesubcategories in which there is compensation granted at the rate ofRs.680/-, Rs.40 and Rs.79 per Sq. Mtr. and, in Group 3 category atthe rate of Rs.44 per Sq. Mtr. Thereafter, the appellants filed the Applications underSection 3G(5) for referring the matters to the Arbitrator. TheArbitrator maintained the compensation at the rate of Rs.680/- perSq.Mtr. for the lands abutting the highway and in respect of allother lands granted compensation at the rate of Rs.399/- per Sq.Mtr.The appellants, who are granted compensation at therate of Rs.399/- per Sq. Mtr. challenged the Awards under Section34 of the Arbitration and Conciliation Act, 1996. The proceedingsare dismissed.Challenging the Awards of the Arbitrator and the orderof the learned Principal District Judge, Osmanabad dismissing theSection 34 applications in the present appeals, the learned counselfor the appellants relies upon the Judgment of the Madhya PradeshRoad Development Corporation Vs. Vincent Daniel and others,(2025) 7 SCC 798. He submits that Section 26 of the Right to FairCompensation and Transparency in Land Acquisition, 6 Arba46.2025+Rehabilitation and Resettlement Act, 2013 (for brevity “2013 Act”)is made applicable for determination of the compensation underthe National Highways Act. He further submits that Section 105 ofthe 2013 Act, notifications are be issued by the CentralGovernment applying Sections 26 to 30 of the 2013 Act fordetermination of the compensation for the lands acquired underthe National Highways Act.5.The learned counsel for the appellants submits that,while applying Section 26 of the 2013 Act the highest sale deed hasto be taken into consideration. He also submits that the similarlyplaced lands has to be granted similar compensation. He reliesupon paragraphs no.24 and 42 of the above referred Judgment andsubmits that while passing the awards the arbitrator has notapplied the principles while determining the compensation and,thus, the Awards are patently illegal and perverse have to be setaside.6.Per contra, the learned counsel appearing for theRespondents / National Highway Authority submits that thearbitrator has rightly determined the compensation for 2 differentcategories, some lands which are abutting highway are grantedRs.680/- per Sq. Mtr., whereas the lands little away from thehighway are granted compensation at the rate of Rs.399/- per Sq. 7 Arba46.2025+Mtr. He submits that under Section 34 of the Arbitration andConciliation Act, 1996, the power of the court is extremelyrestricted and only in cases of patent illegality the award can beinterfered. He also submits that the arbitrator was justified inbifurcating the lands in 2 different categories and he has has alsotaken into consideration NA potential of the lands and has allowedenhancement of compensation which is granted by CALA at therate of Rs.40, 79 and 44 to uniformly Rs.399/- per Sq. Mtr. and thesame is rightly not interfered with by the District Court underSection 34 of the Arbitration 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 applythe general parameters under Land Acquisition Act as laid down bythe Hon’ble Supreme Court and the High Court, while determiningthe compensation under Section 26 of the 2013 Act. One of theprincipal contention is that all acquired lands have NA potentiallands and are abutting the highway and they cannot be grantedseparate compensation. It is thus submitted that the arbitrator hascommitted patent illegality and perversity in differentiating the 8 Arba46.2025+similarly placed lands and, thus, the Awards need to be interferedwith.9.This court by order dated 18.03.2026 in ArbitrationAppeal No.10 of 2026 with connected appeals, at paragraphsno.60, 61 and 62, considered the Judgments of the Hon’bleSupreme Court dealing with the power of the court under Section34 and 37 of the Arbitration and Conciliation Act to interfere withthe 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. reportedin (2023) 15 SCC 781 has observed that it is a settledlegal position, that in an application under Section 34,the court is not expected to act as an appellate courtand reappreciate the evidence. The scope ofinterference would be limited to grounds providedunder Section 34 of the Arbitration Act. Theinterference would be so warranted when the award isin violation of "public policy of India", which has beenheld to mean "the fundamental policy of Indian law". Ajudicial intervention on account of interfering on themerits of the award would not be permissible. However,the principles of natural justice as contained in Section18 and 34(2)(a)(iii) of the Arbitration Act wouldcontinue to be the grounds of challenge of an award.The ground for interference on the basis that the awardis in conflict with justice or morality is now to beunderstood as a conflict with the "most basic notions ofmorality or justice". It is only such arbitral awards thatshock the conscience of the court, that can be set asideon the said ground. An award would be set aside on theground of patent illegality appearing on the face of theaward and as such, which goes to the roots of thematter. However, an illegality with regard to a mereerroneous application of law would not be a ground forinterference. Equally, reappreciation of evidence would 9 Arba46.2025+not be permissible on the ground of patent illegalityappearing on the face of the award.61.The Hon’ble Supreme Court in PSA SicalTerminals Private Limited (supra) has furtherobserved that a decision which is perverse, thoughwould not be a ground for challenge under "public policyof India", would certainly amount to a patent illegalityappearing on the face of the award. However, a findingbased on no evidence at all or an award which ignoresvital evidence in arriving at its decision would beperverse and liable to be set aside on the ground ofpatent 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 willalso be appropriate to refer to paragraph 31and 32 from the judgment of this Court inAssociate Builders (supra), which read thus:31. The third juristic principle is that a decisionwhich is perverse or so irrational that noreasonable person would have arrived at thesame is important and requires some degree ofexplanation. It is settled law that where:(i) a finding is based on no evidence, or(ii) an Arbitral Tribunal takes into accountsomething irrelevant to the decision whichit arrives at; or(iii) ignores vital evidence in arriving at itsdecision,such decision would necessarily be perverse.32. A good working test of perversity is containedin two 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 offact is arrived at by ignoring or excludingrelevant material or by taking intoconsideration irrelevant material or if thefinding so outrageously defies logic as tosuffer from the vice of irrationalityincurring the blame of being perverse, then,the finding is rendered infirm in law." 10 Arba46.2025+In Kuldeep Singh v. Commr. of Police (1999) 2 SCC 10,it was held:"10. A broad distinction has, therefore, to be maintainedbetween the decisions which are perverse and thosewhich are not. If a decision is arrived at on no evidenceor evidence which is thoroughly unreliable and noreasonable person would act upon it, the order would beperverse. But if there is some evidence on record whichis acceptable and which could be relied upon,howsoever compendious it may be, the conclusionswould not be treated as perverse and the findings wouldnot 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. Thearbitrator ought not to have differentiated the lands. The littledistance of few feet makes no difference as all the acquired landshave NA potentiality and are near the highway. Section 26 of the2013 Act also provides for determination of the compensationbased on average of highest sale deed, as such, the compensationgranted to the land considering highest sale deed of Rs.680/- perSq. Mtr. ought to have been applied to the present lands. 11.Considering the above, this court has find that theArbitrator has committed patent illegality in granting differentcompensation to similarly placed lands. In this view of the matter,the impugned Awards to the extent of the present appellants, 11 Arba46.2025+wherein compensation is granted at the rate of Rs.399/- per Sq.Mtr. are quashed and set aside.12.Appointment of arbitrator under the National HighwaysAct is exclusive jurisdiction of the Central Government underSection 3G(5) of the National Highways Act. The impugned ArbitralAwards being set aside, have to be again referred to the arbitratorappointed by the Central Government under Section 3G(5) of theNational Highways Act. Considering this, I deem it appropriate todirectly refer the matters before arbitrator appointed by theCentral Government. The matters are remitted back to theArbitrator to be determined within four (04) months. Allcontentions are left open. 13.The Arbitration Appeals stand disposed of accordingly. [ARUN R. PEDNEKER, J.] marathe