Facts: The National Highway Authority of India (NHAI) acquired lands in village Gandheli for widening National Highway No. 211. The Competent Authority for Land Acquisition (CALA) determined compensation based on various land classifications. Aggrieved, the landowners sought arbitration under Section 3G(5) of the National Highways Act, 1956. The Arbitrator enhanced the compensation, granting a uniform rate by applying the highest sale instances and a multiplier of 2.00. NHAI challenged these awards, primarily contending that the awards were passed nearly six years after the Arbitrator entered the reference, thereby violating the time limits prescribed under Section 29A of the Arbitration and Conciliation Act, 1996, and that the compensation determination suffered from patent illegality.
Procedural Posture: NHAI filed applications under Section 34 of the Arbitration and Conciliation Act, 1996, before the Principal District Judge, Aurangabad. The District Court dismissed the applications and upheld the arbitral awards. NHAI subsequently filed the present batch of appeals under Section 37 of the Arbitration and Conciliation Act, 1996, before the High Court of Bombay at Aurangabad.
Issue: 1. Does Section 29A of the Arbitration and Conciliation Act, 1996, apply to statutory arbitrations conducted under Section 3G(5) of the National Highways Act, 1956? 2. Did the Arbitrator commit patent illegality in determining compensation by applying the parameters of the 2013 Land Acquisition Act?
Holding: 1. No, Section 29A does not apply to arbitrations under the National Highways Act. 2. No, the Arbitrator’s determination of compensation was consistent with legal principles and did not warrant interference.
Reasoning: The Court reasoned that the National Highways Act is a "self-contained code" and a special legislation. While Section 3G(6) makes the Arbitration Act applicable, it is subject to the provisions of the National Highways Act. Under the NH Act, the Central Government has the exclusive power to appoint an "office" or "designated officer" as the Arbitrator. Applying Section 29A would allow a Civil Court to substitute such an officer or reduce fees (which are not paid in these statutory proceedings), creating an irresolvable conflict with the statutory scheme of the NH Act. Regarding the merits, the Court held that the Arbitrator rightly applied Section 26 of the 2013 Act. The CALA had arbitrarily discarded high-value sale deeds without reasons, whereas the Arbitrator followed the principle that the highest of the values determined under the different criteria should be treated as the market value. The Court emphasized that under Sections 34 and 37, it cannot act as a court of appeal to re-appreciate evidence unless the award is perverse or shocks the conscience.