NHAI PIU AURANGABAD THROUGH NATIONAL HIGHWAYS AUTHORITY OF INDIA, PROJECT IMPLEMENTATION UNIT, DHUL v. KERMAN SAM AMROLIWALA AND ANOTHER
Scope of Judicial Interference under Section 37 of the Arbitration Act and Entitlement to Solatium for Land Acquisition under the National Highways Act.
Court: Bombay High Court
Citation: 2026:BHC-AUG:11160
Decision Date: 16-03-2026
List of Laws
The Arbitration and Conciliation Act, 1996; The National Highways Act, 1956; The Constitution of India; Law of Eminent Domain and Compensation
- Facts: The National Highways Authority of India (NHAI) acquired 2542 Sq. Mtrs. of land from the claimant's property for highway expansion. The claimant operated a petrol pump on the adjacent land. The Competent Authority (CALA) initially awarded compensation at Rs. 595/- per Sq. Mtr., along with 10% for loss of earnings and 10% for easementary rights. Aggrieved, the claimant sought arbitration under Section 3G(5) of the National Highways Act. The Arbitrator enhanced the land rate to Rs. 1190/- per Sq. Mtr., reasoning that the land possessed commercial value rather than just "Non-Agricultural potential". Consequently, the 10% components for loss of earnings and easementary rights were also proportionally increased. Both the NHAI and the claimant challenged this award under Section 34 of the Arbitration and Conciliation Act, 1996, but the District Court dismissed both applications, leading to these cross-appeals under Section 37.
- Procedural Posture: These are two Arbitration Appeals filed under Section 37 of the Arbitration and Conciliation Act, 1996, challenging the common judgment of the Principal District Judge, Jalgaon, which had upheld the arbitral award by dismissing the respective Section 34 applications of both the NHAI and the land owner.
- Issue: 1. Whether the Arbitrator's enhancement of compensation and the 10% grants for loss of business and easementary rights were perverse or patently illegal under the scope of Section 34. 2. Whether the claimant is entitled to additional statutory benefits like solatium as per the precedent in Union of India vs. Tarsem Singh.
- Holding: 1. No, the Arbitrator’s findings were reasonable and based on record; thus, they do not warrant interference under Section 37. 2. Yes, the claimant is entitled to statutory benefits (solatium) in line with the Supreme Court's ruling in Tarsem Singh.
- Reasoning: The Court reasoned that under Section 37, it cannot travel beyond the restrictions of Section 34 or conduct an independent merit assessment. The Arbitrator's decision to treat the land as commercial was based on its actual use (petrol pump), making the enhancement logical. Regarding easementary rights, while usually subsumed in ownership, the Court found that since the claimant remained an adjacent landholder whose business was affected by the loss of frontal space, the 10% grant was justifiable. Following "Union of India vs. Tarsem Singh", the Court held that the exclusion of solatium in National Highways Act acquisitions is unconstitutional. Consequently, the NHAI’s appeal was dismissed, and the claimant’s appeal was partly allowed by remanding the matter to the Arbitrator solely to calculate statutory benefits like solatium.
🔒 For Members Only