National Highway Authority Of India vs Tulsiya

Headnote AI-drafted · Reviewed and approved

The appellant, National Highway Authority of India (NHAI), challenged the judgment dated 04.12.2021 of the District Judge, Mandi, which dismissed NHAI's objections under Section 34 of the Arbitration & Conciliation Act, 1996 and upheld the Award dated 28.11.2017 passed by the Arbitrator under Section 3G(5) of the National Highways Act, 1956. The Award had enhanced the market value of acquired land in Revenue Estate Chamukha, Tehsil Sundernagar, District Mandi (H.P.) from Rs.50,00,000/- per bigha (as assessed by CALA) to Rs.68,16,513/- per bigha, in connection with the four-laning of NH-21 (Bilaspur-Ner Chowk Section).

NHAI raised five principal contentions: (i) that the Arbitrator had become functus officio as the Award was not passed within 12 months under Section 29A of the Act; (ii) that the sale deed relied upon pertained to a small parcel of land and could not be the basis for valuing large tracts; (iii) that the Arbitrator wrongly relied upon an inspection report of a retired State Administrative Service officer as Local Commissioner; (iv) that no deduction of 60–70% was applied to the market value; and (v) that the Arbitrator failed to follow the procedure under Section 3G(7) of the National Highways Act.

The High Court held that Section 29A of the Arbitration & Conciliation Act, inserted by the Amendment Act of 2015, was not applicable to arbitration proceedings commenced before the Amendment came into force on 23.10.2015, as the present proceedings had commenced on 06.02.2015. The Court further found that NHAI's own counsel had admitted before the Arbitrator that lands of Mohal Thala and Muhal Chamukha were of the same nature and potentiality, justifying the Arbitrator's approach of treating them as a single unit. The appeal was accordingly dismissed.

Catchwords: National Highways Act · land acquisition · arbitration award · market value enhancement · Section 29A Arbitration and Conciliation Act · functus officio · Section 3G(5) National Highways Act · Section 34 objections · Section 37 appeal · deduction · sale deed · local commissioner report · four-laning · NH-21