Ramashankar Yadav And Another … v. Union Of India And 3 Others on 15 Oct 2025 — Arbitration Petition No. 07 of 2020

Judgment

1. Heard Mrs. Vatsala, learned counsel for the petitioners, Sri Pranjal Mehrotra, learned counsel for the respondent no. 2- National Highways Authority of India1, and Sri Fuzail Ahmad Ansari, learned Standing Counsel for the State respondents. A. PRAYER: 1 NHAI 2 WRIT - C No. - 26529 of 2025

2. This writ petition has been filed, inter alia, praying for the following relief: “a). Issue a writ, order or direction in the nature of Certiorari quashing the order dated 03.07.2025 passed by the Respondent No.3 under Section 3G(5) of the Act, 1956 (marked as Annexure No.I to this writ petition). b). Issue a writ, order or direction in the nature of Mandamus directing the respondent no.3 to decide the claim of the petitioners as per the circle rate defined in Phase-III of the letter dated 26.06.2025.” B. FACTS OF THE CASE:-

3. The petitioners are permanent residents of Village Gausganj, Tehsil Sikandrarau, District Hathras. They became lawful owners of the disputed land during 2007–2008 through two registered sale deeds. The land in question consists of two separate parcels, both bearing Gata No.267, admeasuring approximately 0.2300 hectare each, situated at Mauza Iqbalpur, Tehsil Sikandrarau, District Hathras. These parcels were purchased by the petitioners from the original tenure-holders Manju Devi and Rohan Lal via two separate transactions, i.e. one dated

14.11.2007 and the other dated 29.05.2008.

3.1. After purchasing the land, the petitioners applied under Section 143 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 19502 for conversion of the land from agricultural use to non-agricultural (abadi) use. Their application was registered as Case No.10 before the Court of Sub Divisional Magistrate/Additional Collector-I, Sikandrarau. The said application was allowed vide order dated 31.01.2008, and consequently, the nature of the land was officially recorded as non- agricultural. Thereafter, the petitioners constructed a living room and boundary wall over the said property.

3.2. In 2018, Respondent No.1 – Union of India, initiated land acquisition proceedings for expansion of National Highway No.91 (Aligarh–Kanpur section from kilometer 165.600 to kilometer 186.000). A notification under Section 3A of the National Highways Act, 19563 UPZA & LR Act 2 3 The Act, 1956 3 WRIT - C No. - 26529 of 2025 was published in the Official Gazette on 09.03.2018. The same was also published in daily newspapers, namely Amar Ujala and The Times of India, on 16.03.2018. Subsequently, on 05.07.2018, a declaration under Section 3D of the Act, 1956 was issued, which too was widely published on 25.07.2018 in the said newspapers. Through these notifications, objections were invited from all interested persons whose land was affected by the acquisition. The petitioners’ land, being Gata No.267, also fell within the acquisition.

3.3. The petitioners submitted their objections on 11.07.2018 before Respondent No.4 [The Competent Authority Land Acquisition, Additional District Magistrate (Finance and Revenue)], praying that the compensation be determined at the rate applicable to abadi land, as their land had already been converted from agricultural use to non-agricultural use by virtue of the order dated 31.01.2008. However, vide order dated

13.12.2018, Respondent No.4, determined the compensation treating the land as agricultural.

3.4. Being aggrieved, the petitioners preferred an arbitration petition under Section 3G(5) of the Act, 1956 before Respondent No.3 – the District Magistrate (Arbitrator). Their claim was registered as Arbitration Petition No.07 of 2020. Respondent No.3, vide order dated 12.06.2020,

rejected their claim and affirmed the award dated 13.12.2018.

3.5. The petitioners challenged the said arbitral award by filing Arbitration Petition No.102 of 2020 before the Court of Special Judge, SC/ST (Prevention of Atrocities) Act, Hathras, under Section 34 of the Arbitration and Conciliation Act, 19964. After hearing the parties, the learned appellate court, vide judgment dated 13.05.2022, allowed the petitioners’ application, set aside the arbitral award dated 12.06.2020, and directed Respondent No.3/ Arbitrator to decide the matter afresh.

3.6. Pursuant to this direction, Respondent No.3/ Arbitrator reconsidered the matter and passed a fresh order dated 21.07.2022. By this order, the computation report of Respondent No.4 was rejected to the extent it 4 The Arbitration Act, 1996 4 WRIT - C No. - 26529 of 2025 related to the petitioners’ land, i.e. Gata No.267, and it was held that the compensation had been wrongly calculated as per agricultural rates, whereas the land had already been declared non-agricultural in 2008.

3.7. Being dissatisfied with the order dated 21.07.2022, the Respondent No.2/ The Project Director (Project Implementation Unit), NHAI,, filed Miscellaneous Application No.97 of 2022 before the Court of District Judge, Hathras. The case was registered as Misc. Application No.5C under Section 34 of the Arbitration Act, 1996. After hearing the parties, the Learned District Judge passed an order dated 10.09.2024 whereby the order dated 21.07.2022 was partially set aside. The award dated

13.12.2018 was restored, but at the same time, the matter was remanded back to Respondent No.3/ Arbitrator with a specific direction to reassess the claim of the petitioners as per the circle rate applicable to abadi land, and not the agricultural land.

3.8. Thereafter, in compliance with the directions of the District Judge dated 10.09.2024, Respondent No.3/ District Magistrate (Arbitrator) once again undertook proceedings and issued notices to all parties. Ultimately, Respondent No.3 passed the impugned order dated

03.07.2025 under Section 3G(5) of the Act, 1956 in Case No.148 of 2025 (Computerized Case No.D202518340000148). By this order, the claim of the petitioners was allowed to the limited extent of enhancing the compensation to Rs.4,000/- per square meter, treating the land as abadi land situated at a distance of six meters from the main road. Aggrieved with the impugned order dated 03.07.2025, the petitioners have preferred the instant writ petition. C. SUBMISSIONS ON BEHALF OF PETITIONERS:

4. Mrs. Vatsala, learned counsel for the petitioners, submitted that the District Judge, Hathras, vide order dated 10.09.2024, categorically directed Respondent No. 3/Arbitrator to reassess the compensation on the basis of circle rates applicable to abadi land. However, the impugned order dated 03.07.2025 has arbitrarily fixed compensation at only Rs. 5 WRIT - C No. - 26529 of 2025 4,000/- per square meter, in utter disregard of the binding directions of the superior court, amounting to judicial indiscipline.

4.1. She submitted that the Deputy Registrar (Stamp), Sikandrarau, through letter dated 26.06.2025, confirmed that the petitioners’ land falls under Phase-III, where the notified rates are Rs. 14,500/- and Rs.12,000/- per square meter. The Arbitrator, ignoring this official document, has arbitrarily applied a rate of Rs. 4,000/- per square meter, which is perverse and contrary to record.

4.2. Learned counsel further submitted that the compensation must be determined with reference to the nature, status, and potential use of the land at the time of notification. The petitioners’ land was converted to non-agricultural use on 31.01.2008 and also duly recorded in revenue records as such from that date onward, the land ceased to be used for agricultural purposes, yet it was wrongly treated as agricultural land earlier and undervalued even as abadi land now. Factors under Section 26 of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 20135 including market value, location, and displacement damages, were completely overlooked.

4.3. She vehemently argued that despite pursuing remedies for over seven years, the petitioners have been denied just compensation, resulting in continued financial hardship and violation of their statutory rights.

4.4. On the issue of maintainability of the writ petition, she submitted that although statutory remedies exist, the present case falls within the exceptions justifying interference under Article 226, as the Arbitrator has acted contrary to law, ignored judicial directions, and violated natural justice.

4.5. In support of her submissions, she placed reliance on the Division Bench judgment dated 05.02.2024 in Dr. Rajeev Sinha v. Union of 5 The Act, 2013 6 WRIT - C No. - 26529 of 2025 India6, and the letter dated 26.06.2025 of the Deputy Registrar (Stamp), Sikandrarau, addressed to the Assistant Inspector General (Stamp), Hathras, confirming the notified rates of Rs. 14,500/- and Rs. 12,000/- per square meter for Phase-III land.

4.6. She lastly prayed that this Hon’ble Court may quash the impugned order dated 03.07.2025 and direct the Respondent No. 3/Arbitrator to reassess compensation strictly in accordance with the notified circle rates of Phase-III as on 26.06.2025, and till such reassessment, restrain the respondents from utilizing the petitioners’ land. SUBMISSIONS ON BEHALF OF THE STATE RESPONDENTS AND NHAI:-

5. Sri Fuzail Ahmad Ansari, learned Standing Counsel for the State respondents, at the outset, raised a preliminary objection to the maintainability of this writ petition. He contended that the petitioners had approached this Court in direct circumvention of the statutory appellate mechanism provided under Section 34 of the Arbitration Act,

1996. According to him, when Parliament has consciously enacted a self-contained code for challenging arbitral awards through a designated forum with prescribed timelines and grounds, the extraordinary jurisdiction under Article 226 ought not to be invoked merely because a party is dissatisfied with the outcome. He placed strong reliance upon the judgment of the Hon'ble Supreme Court in Commissioner of Income Tax v. Chhabil Dass Agarwal,7 wherein it has been held that writ jurisdiction should not be exercised when an effective alternate remedy exists.

5.1. He further submitted that the dispute raised in this writ petition is not regarding acquisition itself but relates only to valuation and determination of compensation. The Statutory Arbitrator, after considering the material on record, fixed the rate at Rs.4,000/- per square meter treating the land as abadi land, and also added the statutory 6 7 2024 (2) ADJ 594 (2014) 1 SCC 603 7 WRIT - C No. - 26529 of 2025 solatium. This exercise is an adjudicatory function under Section 3G of the Act, 1956, to which the machinery of the Arbitration Act applies. Thus, if the petitioners are dissatisfied with the valuation, their recourse lies only under Section 34 of the Arbitration Act, 1996. Writ jurisdiction cannot be converted into an appellate forum to re-appreciate evidence or re-determine compensation.

5.2. Shri Ansari further submitted that constitutional courts exercising writ jurisdiction do not function as courts of appeal to review the correctness of factual or evaluative determinations made by statutory tribunals or arbitrators. Questions such as the appropriate market value of land, the relevance of circle rates, the comparability of sale instances, and the impact of locational factors are all matters of evidence and expert assessment. The petitioners are essentially seeking a fresh adjudication on valuation by this Court, which would be contrary to settled principles of judicial restraint. He pointed out that the petitioners heavily relied on a letter dated 26.06.2025 from the Deputy Registrar (Stamp) indicating higher circle rates of Rs.14,500/- and Rs.12,000/- per square meter. However, he submitted that circle rates are indicative benchmarks for stamp duty purposes and do not automatically translate into compensation entitlements under land acquisition law, where multiple variables must be judicially evaluated.

5.3. Addressing the petitioners' contention that the Arbitrator failed to implement the directions contained in the order dated 10.09.2024 of the Learned District Judge, Hathras, Shri Ansari submitted that this allegation is factually incorrect. The District Judge had specifically remanded the matter with an instruction to reconsider compensation treating the property as abadi (non-agricultural) land instead of agricultural land. The Statutory Arbitrator, in the impugned order, has expressly recognized the converted status of the land and has determined compensation at Rs.4,000/- per square meter accordingly, departing from the earlier agricultural classification. Thus, according to him, the substantive direction has been followed. The fact that the petitioners 8 WRIT - C No. - 26529 of 2025 expected a higher monetary figure does not mean that the judicial mandate was disobeyed.

5.4. Shri Ansari, further submitted that the petitioners had placed reliance on Division Bench judgment in Dr. Rajeev Sinha (supra), to justify the maintainability of the writ petition, but the said case was decided in peculiar facts and circumstances wherein the Arbitrator had acted in complete defiance of binding directions of the District Judge, and had virtually passed a non-speaking order. The Division Bench carved out an exception in those extraordinary circumstances. However, in the present case, Respondent No.3/ Statutory Arbitrator has duly considered the nature of land, relevant material, and has passed a detailed reasoned order. Therefore, the ratio of Rajeev Sinha (supra) does not apply. On the contrary, the present case falls within the general rule that arbitral awards are to be challenged only under Section 34 of the Arbitration Act, 1996.

5.5. He further submitted that this Hon'ble Court has consistently declined to entertain writ petitions challenging compensation awards passed under Section 3G of the Act, 1956. Reference is made to Sri Navin Tyagi v. Union of India8, wherein this Court held that disputes pertaining to the adequacy or correctness of compensation cannot be agitated in writ jurisdiction when the Arbitration Act, 1996 provides a comprehensive mechanism for such challenges. The rationale underlying this principle is to preserve the integrity of the arbitration framework and to prevent parallel litigation.

5.6. Shri Ansari had drawn the Court's attention to the authoritative pronouncements of the Hon'ble Supreme Court in in McDermott International v. Burn Standard9 and ONGC v. Saw Pipes Ltd.10, which lay down the parameters of interference with arbitral awards. These judgments reiterate that even if an arbitral award contains errors of fact or law, judicial intervention is permissible only on the limited grounds