APHC010362252025
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
(Special Original Jurisdiction)
MONDAY, THE EIGHTEENTH DAY OF AUGUST, TWO THOUSAND AND TWENTY-FIVE
PRESENT
THE HONOURABLE SRI JUSTICE R. RAGHUNANDAN RAO
AND
THE HONOURABLE SRI JUSTICE T.C.D. SEKHAR
CIVIL MISCELLANEOUS APPEAL No. 513 of 2025
Between:
The Project Director, National Highways Authority of India (NHAI), Project Implementation Unit, Kancheepuram.
... Appellant / Petitioner
And
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The District Collector-cum-Arbitrator, for NH Cases, Chittoor District.
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The Joint Collector-cum-Competent Authority (Land Acquisition), Chittoor.
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C. Subramanyam, S/o. C. Krishnayya Naidu.
... Respondents
Counsel for the Appellant: Sri Padma Rao Lakkaraju (Standing Counsel for NHAI)
Counsel for Respondent No.3: Smt. C. Jhansi Rani
HEADNOTES
Arbitration and Conciliation Act, 1996 — Section 37 — Appeal against arbitral award under National Highways Act, 1956 — Scope of interference — Patent illegality — Public policy.
Where the Arbitrator enhanced market value of acquired land from ₹98.84 per sq.m. to ₹148.26 per sq.m., and the Principal District Judge, Chittoor dismissed the challenge under Section 34, Held, appellate court’s interference under Section 37 is limited. No patent illegality or perversity found — Appeal dismissed.
National Highways Act, 1956 — Section 3G(7) — Determination of compensation — Guidelines — Application.
The Arbitrator may consider surrounding factors such as comparative valuation of horticultural components (mango and coconut trees) when no proximate sales in same village are available. Reference to higher fruit-tree valuations in neighbouring States not illegal if used only for comparative guidance.
SUMMARY OF FACTS
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Land belonging to the 3rd respondent was acquired under the National Highways Act, 1956 for the purpose of a National Highway.
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The Competent Authority, by Award dated 24.07.2017, fixed the market value at ₹98.84 per sq.m. and awarded compensation accordingly.
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The landowner filed an application under Section 3G(5) before the District Collector-cum-Arbitrator, Chittoor, seeking enhancement.
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The Arbitrator, after considering materials and relevant records, enhanced the market value to ₹148.26 per sq.m..
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The Project Director, NHAI, challenged this award before the Principal District Judge, Chittoor, by filing Arbitration O.P. No. 294 of 2023, which was dismissed on 20.03.2025.
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Aggrieved, the present Civil Miscellaneous Appeal No. 513 of 2025 was filed under Section 37 of the Arbitration and Conciliation Act, 1996.
CONTENTIONS
For Appellant (NHAI):
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The Arbitrator acted arbitrarily in enhancing market value by 50% without basis or comparable sales.
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Relied upon outdated neighbouring-village sale deeds and extrapolated increase without data.
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Considered tree valuations from Tamil Nadu and Karnataka, which was irrelevant for Andhra Pradesh.
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Award violated Section 3G(7) of the NH Act.
For Respondent No.3 (Landowner):
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Arbitrator properly considered all relevant factors, including market disparity and horticultural value, when same-village sale exemplars were unavailable.
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Enhancement is justified and within discretion.
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No patent illegality exists; trial court rightly refused to interfere.
COURT’S REASONING
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Scope of appeal under Section 37:
The Division Bench held that the appellate jurisdiction under Section 37 of the Arbitration Act is co-extensive with Section 34, confined to cases of patent illegality or contravention of public policy. The Court cannot reappreciate evidence as if hearing a regular first appeal. -
Examination of record:
It was noted that the Competent Authority itself had fixed value based on sale deeds of neighbouring village over three years old, applying a notional uplift from ₹2.98 lakhs to ₹4.00 lakhs per acre. The Arbitrator, on detailed consideration, further enhanced value by 50%, factoring the number and productivity of fruit-bearing trees (mango and coconut), and disparities in valuation practices among States. -
No violation of Section 3G(7):
Section 3G(7) sets out parameters like market value, severance, injurious affection, and displacement costs. The Arbitrator’s reliance on broader comparative references to support enhancement was within those guidelines and not perverse or contrary to law. -
No patent illegality:
The Court found that the Arbitrator’s approach did not suffer from non-application of mind or arbitrariness, and thus no ground for interference was made out. The Principal District Judge’s refusal to interfere was correct.
JUDGMENT / CONCLUSION
“We do not find any patent illegality on the face of the Award or any violation of public policy. The Arbitrator has considered the relevant material and given adequate reasons for enhancement of market value. There is no justification to interfere with the concurrent findings.”
Accordingly, the Civil Miscellaneous Appeal is dismissed. The appellant (NHAI) is granted six (6) weeks time to pay the differential compensation to the 3rd respondent-landowner arising out of the award.
No order as to costs.
Pending miscellaneous petitions, if any, shall stand closed.
— R. Raghunandan Rao, J.
— T.C.D. Sekhar, J.
Date: 18.08.2025
ANALYSIS AND COMMENTARY
This decision reaffirms the narrow revisional scope of judicial interference in highway acquisition arbitration awards under Sections 3G and 37. The Bench carefully distinguishes between an erroneous valuation and an illegal or perverse award, holding that the latter alone invites intervention.
By recognizing the Arbitrator’s pragmatic reliance on comparative horticultural valuation data, the Court underscores that strict uniformity in valuation methodology is neither required nor feasible in the context of fragmented agricultural lands.
The judgment reflects the Court’s consistent line — that enhancement of compensation, even if partly based on equitable considerations, will not be disturbed unless it offends statutory limits or reasoned discretion.
FINAL DISPOSITION
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Civil Miscellaneous Appeal No. 513 of 2025 — Dismissed.
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Award upheld.
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Appellant to pay differential compensation within six weeks.
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No order as to costs.
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All pending applications closed.