The Compensation Rate Has To Be Evaluated Fairly Considering The Nature Of The Land, If Land Is Taken Under NHAI Act: High Court Of Allahabad

Title: Chandra Kishori v Union Of India

Citation: Appeal Under Section 37 Of Arbitration And Conciliation Act 1996 No. – 55 And 56 Of 2022

Coram: Hon’ble Jaspreet Singh,J.

Decided On: 16.10.2023


Here both the appeals involve a common question of law and fact, hence both the appeals have been heard together and are being decided by this common judgment. For the sake of convenience, the Court referred to the facts as they emerge from Appeal No. 55 of 2022, however, the relevant facts relating to the other appeal was also considered at the appropriate place.


The appellant, of the two appeals, are the land owners, whose land was acquired under the National Highway Authority of India Act, 1956 under Sections 3 A & 3 D of the NHAI Act, 1956. The land of appellants of both the appeals were made the subject matter of notification issued under Section 3-A of the NHAI Act, 1956 dated 28.05.2012 and notification under Section 3-D was made on 15.3.2013 for widening of Lucknow-Sultanpur Highway from km. 35.670 to 64.100. The competent authority passed its award in terms of Section 3-G of the NHAI Act, 1956 and awarded a sum of Rs. 6,98,923 to Chandra Kishori vide award dated 11.7.2016 and a sum of Rs. 6,18,051/- to Om Prakash vide award dated 31.07.2015.

Being aggrieved both Chandra Kishori and Om Prakash escalated the matter by invoking the provisions of Section 3-G (5) and (6) and referred the matter for arbitration. The Arbitrator in terms of his award dated 19.9.2019 passed in Case No. 1689 of 2017 relating to Chandra Kishori and in Case No. 1690 of 2017 relating to Om Prakash did not find favour with the contentions of the appellant, of the two appeals, for enhancement of compensation and consequently, rejected their claim.

The award passed was further challenged by filing a petition under Section 34 of the Arbitration & Conciliation Act, 1996 before the District Judge, Barabanki. Both the petitions under Section 34 of the Act of 1996 relating to both the appellant in the respective appeals, was rejected by the Additional District Judge.

The counsel for appellants in the two appeals has primarily raised two points for consideration. It is submitted that in the case of both the appellants the land in question had already been declared as non-agricultural in terms of Section 143 of the U.P. Zamindari Abolition and Land Reforms Act, 1950, however, the competent authority had given the compensation treating it to be agricultural land. It is urged that once the land was declared as non-agricultural, the appellants were entitled to get compensation on the rates as applicable to non-agricultural land.

learned counsel appearing for National Highway Authority of India through video conferencing has submitted that mere change in the land use from agricultural to non-agricultural is not going to confer any benefit to the appellants inasmuch as on the date of acquisition the nature of the land as it stood on the revenue records, has to be seen. It is further submitted that even though the appellants may have got the land declared for non-agricultural purposes yet there was no material on record to suggest that any non-agricultural activities were being done.

Court’s Analysis and Judgement:

In the present case the court decided that the Arbitrator committed an error in failing to consider this aspect of the matter relating to the nature and status of land on the date of notification including ignoring the order passed by the SDM under Section 143 of the U.P. Zamindari Abolition and Land Reforms Act, 1950, and it was the duty of the Arbitrator to have noticed the provisions and the manner in which the compensation is to be computed so that the land which has been taken away of the appellants, and they are directed to be appropriately compensated as per the provisions of law.

It was further found out that the Additional District Judge while considering the petition under Section 34 of the Arbitration & Conciliation Act, 1996 also erred in holding that it does not have the power to interfere with the award which requires re-calculation as it is apparent that the Additional District Judge did not apply the settled legal principles applicable and defining the realm of jurisdiction, the Court exercises, while adjudicating a petition under Section 34 of the Act of 1996.

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Written by: Sushant Kumar Sharma

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