Rajasthan High Court – Jaipur
National Highway Authority vs Smt. Nirmala W/O Shree Umesh Kumar on 18 July, 2025
Author: Ganesh Ram Meena
Bench: Ganesh Ram Meena
[2025:RJ-JP:25245]
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Civil Miscellaneous Appeal No. 4085/2024
National Highway Authority, through its Project Director, NHAI
Unit, Kota.
----Appellant/Non-Applicant
Versus
1. Smt. Nirmala W/o Shree Umesh Kumar, R/o Village
Phitapura Mauja, Sathur Tehsil, Hindauli Dist.- Bundi.
.....Respondent/Applicant
2. Competent Authority, (Land Acquisition) And Additional
District Collector (Siling), Bundi, Rajasthan.
3. District Collector, Bundi (Rajasthan) Arbitrator, Bundi
Rajasthan.
—-Proforma Respondents/Non-Applicant
For Appellant(s) : Mr. Deepak Sharma
For Respondent(s) : Ms. Sumati Bishnoi
HON’BLE MR. JUSTICE GANESH RAM MEENA
Judgment
Reserved on ::: July 08, 2025
Pronounced on ::: July 18, 2025
1. Instant civil misc. appeal has been filed by the
appellant/non-applicant under Section 37(1) of Arbitration
and Conciliation Act, 1996 (hereinafter is to be referred to as
‘the Act of 1996’) against the judgment and order dated
09.07.2024 passed by the Court of learned District Judge,
Bundi (Rajasthan) (in short ‘the Court below’) in Civil Misc.
(Reference) No.25/2015 (C.I.S. No.04/2015) titled as Nirmala
Vs. NHAI & Ors., whereby the application filed by the
respondent/applicant under Section 34 of the Act of 1996 was
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allowed and the judgment dated 09.12.2014 passed by the
Court of Collector (Arbitrator), Bundi (Raj.) (in short ‘the
learned Arbitrator’) in case No.102/Application/2012, by
which the arbitration application was dismissed, was set
aside.
2. The facts borne out from the pleadings are that
National Highway 12 was converted into four lane for which
one agricultural land Khasra No.160 0.1100 Hectare situated
at village Shola Ki Jhopdiyan was acquired by publishing the
same under 3A National Highway Act gazette notification
dated 30.10.2009 and 3D National Highway Act gazette
notification dated 20.05.2010. An Award dated 09.05.2011
was passed in favour of respondent/applicant/land owner of
Rs.63,77,222/- which was received by the
respondent/applicant. The land was considered to be the
commercial land and accordingly the compensation amount
was computed. The appellant/non-applicant believing that the
said land is agricultural one in nature and the award has been
received by the respondent/applicant by deceiving the Land
Acquisition Officer (in short ‘LAO’). The appellant/non-
applicant submitted an application to the LAO to reconsider
the award to which notice was issued to respondent/applicant
and after giving opportunity of hearing to both the parties,
the LAO allowed the application of the appellant/non-
applicant and passed the order dated 23.12.2011 by
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reviewing the award and passed the fresh award of
Rs.3,33,082/- after considering the above stated land to be
the agricultural land. The LAO also initiated the recovery
proceedings against the respondent/applicant/land owner to
refund the amount of Rs.59,80,368/-, which was given in
excess.
The respondent/applicant/land owner challenged
the order dated 23.12.2011 before the High Court in S.B.
Civil Writ Petition No.3474/2012, whereby the High Court
vide its order dated 24.07.2012 upheld the order dated
23.12.2011 and ordered criminal prosecution i.e. lodging of
the F.I.R. against the respondent/petitioner /land owner for
doing fraud with the LAO. After registration of F.I.R., the
respondent/applicant refunded the excess amount and
challenged the order of Single Bench before the Division
Bench by filing D.B. Special Appeal (Writ) No.1095/2012,
which was disposed of vide order dated 23.08.2012 allowing
the respondent/applicant to withdraw the writ petition and set
aside the order dated 24.07.2012 passed by the Single Bench
by granting the liberty to the respondent / applicant to
approach the concerned Collector by availing the alternative
remedy under Section 3G-5 of the National Highways Act,
1956 (hereinafter is to be referred to as ‘the Act of 1956’).
The respondent/applicant approached the Arbitrator
under Section 3G-5 of the Act of 1956 against the order
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dated 23.12.2011, whereby the learned Arbitrator vide its
order dated 09.12.2014 after hearing both the parties
dismissed the application filed by the respondent/applicant
and upheld the order dated 23.12.2011
The respondent/applicant challenged the order
dated 09.12.2014 passed by the learned Arbitrator by filing
application under Section 34 of the Act of 1996. The Court
vide its order dated 09.07.2024 allowed the application and
set aside the arbitral award dated 09.12.2014 and also
quashed the review order dated 23.12.2011 and upheld the
original award dated 09.05.2011 in favour of the
respondent/applicant and directed the appellant/non-
applicant to repay the amount of Rs.59,80,368/- with 12.5%
simple interest within three months.
3. Learned counsel for the appellant/non-applicant
submitted that the Court below has dealt with the reasons for
setting aside the award, including the ground of patent
illegality. The impugned order is against the facts available on
record. Learned counsel further submitted that an application
for setting aside the arbitral award can only be made in
accordance with the provisions of Section 34 of the Act of
1996 in respect of the scope of interference. He further
submitted that the Court below may interfere with the arbitral
award in terms of Section 34(2)(b)(ii) of the Act of 1996 but
such interference does not entail the merits of the dispute
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and it is limited to the situations where the findings of the
Arbitrator are arbitrary, capricious or perverse or when the
conscience of the Court is shocked or when the illegality is
not trivial but goes to the root of the matter. He also
submitted that the arbitral award may not be interfered with
if the view taken by the arbitrator is a possible view based on
the facts. He further submitted that after enactment of the
Arbitration and Conciliation (Amendment) Act, 2015, it is
envisaged in Explanation-1 that an award shall be considered
in conflict with public policy of India only if: (I) the making of
the award was induced or affected by the fraud or corruption
or was in violation of Section 75 or Section 81; or (II) it is in
contravention with the fundamental policy of Indian Law; or
(III) it is in conflict with the most basic notions of morality
and justice.
Explanation-2 for the avoidance of doubt, the test
as to whether there is a contravention with the fundamental
policy of Indian Law shall not entail a review on merits on the
dispute. (2-A) An arbitral award arising out of arbitration
other than international commercial arbitration, may also be
set aside by the Court, if the Court finds that the award is
vitiated by patent illegality on the facts of award provided
that an award shall not be set aside merely on the ground of
an erroneous application of law or by re-appreciation of
evidence.
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Learned counsel further submitted that the award
passed by the LAO initially was on the wrong facts presented
by the respondent/applicant/landowner. After passing the
award, actual facts i.e. the land is of agriculture in nature
instead of commercial came into consideration of LAO to
which initial award was recalled after affording reasonable
opportunity of hearing to both the parties. He further
submitted that the High Court in S.B. Civil Writ Petition
No.3474/2012 recorded this fact that the award assailed by
the respondent/applicant was by doing fraud with the LAO
and for this, the Court directed to register the F.I.R. against
the respondent/applicant/land owner. He further submitted
that the learned Court below cannot give the new findings to
the facts which were not the part of pleadings before the
learned Arbitrator and passing the compensation award by
the LAO is an administrative function and the same can be
reviewed if some new facts come into his/her consideration.
In support of the submissions, the counsel
appearing for the appellant/ applicant has placed reliance
upon the judgment delivered by the Hon’ble Apex Court in
the case of Project Director, National Highways No.45 E
and 220 National Highways Authority of India v. M.
Hakeem & Anr., reported in (2021) 9 SCC 1.
4. Learned counsel appearing for the
respondent/applicant controverted the submissions advanced
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by the learned counsel for the appellant/non-applicant and
supported the impugned judgment and award passed by the
learned Arbitrator.
In support of the submissions, the counsel
appearing for the appellant/ applicant has placed reliance
upon the order dated 23.08.20212 passed by the Division
Bench of this Court in D.B. Special Appeal (Writ)
No.1095/2012 in S.B. Civil Writ Petition No.
3474/2012, Smt. Nirmala v. Competent Authority
(Land Acquisition) & Addl. District Collector (Ceiling),
Bundi & Anr.
5. Considered the submissions made at bar and gone
through the pleadings, including the record of the case.
6. Counsel appearing for the appellant/non- applicant
submitted that in view of the provisions of section 34 of the
Act of 1996, the court below could only set aside the arbitral
award and has no jurisdiction to modify the award.
7. Counsel appearing for the respondent/ applicant
submitted that the court below has not modified the arbitral
award but has set aside the arbitral award and also the
review order dated 23.11.2011 passed by the Competent
Authority (Land Acquisition) & Addl. District Collector
(Ceiling), Bundi (Raj.).
8. As per the facts on record, initially an award was
passed by the Competent Authority (Land Acquisition) & Addl.
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District Collector (Ceiling), Bundi (Raj.) on 09.05.2011 for an
amount of Rs.63,13,450/- for the acquired land of the
respondent. On an application filed by the appellant, the
award was modified vide order dated 23.11.2011. Aggrieved
by the order dated 23.11.2011 whereby the original award
was modified, the respondent preferred a writ petition before
the Single Bench of this Court bearing S.B. Civil Writ Petition
No.3474/2012 which was dismissed vide order dated
24.07.2012 holding that the petrol pump falls beyond 35
meters of the central line of the road in issue and the land
acquired was within 35 meters and consequently, the land
acquired was not converted for commercial user.
9. Aggrieved by the order of the learned Single Judge
passed on 24.07.2012, the respondent preferred D.B. Special
Appeal (Writ) No. 3474/2012 which was disposed of vide
order dated 23.08.2012. The respondent (appellant/writ
petitioner) sought permission to withdraw the writ petition
and the Hon’ble Division Bench allowed the respondent to
withdraw the writ petition and observed that the order passed
by the Single Bench, adjudicating the matter on merits, goes.
The respondent (writ petitioner) was further allowed to
approach the concerned Collector under the provisions of
Section 3G(5) of the Act of 1956 for seeking arbitration.
10. After having liberty from the Hon’ble Division
Bench, the Court of the Collector (Arbitrator), Bundi vide its
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order dated 09.12.2014 dismissed the application filed by the
respondent under section 3G(5) of the Act of 1956.
11. Against the order of the Collector (Arbitrator),
Bundi, the respondent preferred an application under section
34 of the Act of 1996 before the Court of learned District
Judge, Bundi, which was allowed vide order dated
09.07.2024, the operative part of which is quoted as under:-
^^ 35- vr% izkfFkZ;k Jherh fueZyk dh vksj ls vkfcZVªs”ku ,.M
dkWfUlfy,”ku ,DV] 1996 dh /kkjk&34 ds rgr izLrqr dh xbZ gLrxr
;kfpdk Lohdkj dh tkdj fo}ku ftyk dyDVj] cwUnh ds }kjk e/;LFk
ds ukrs ikfjr fd;s x;s [email protected]; fnukad 09-12-2014 ,oa fo}ku
Hkwfe vokfIr vf/kdkjh ¼vfrfjDr ftyk dyDVj] flfyax] cwUnh½ }kjk
ikfjr fjO;w vkns”k fnukad 23-12-2011 dks vikLr fd;k tkdj fo}ku
Hkwfe vokfIr vf/kdkjh ¼vfrfjDr ftyk dyDVj] flfyax] cwUnh½ }kjk
ikfjr ewy vokMZ fnukad 09-05-2011 dks cgky fd;k tkrk gSA
36- izkfFkZ;k ewy vokMZ fnukad 09-05-2011 ds rgr vnk dh
xbZ jkf”k :i;s 63]13]450@& vizkFkhZ la[;k&1 ls izkIr djus dh
vf/kdkfj.kh gSA
37- vizkFkhZx.k dh vksj ls izkfFkZ;k ls olwy dh xbZ jkf”k
:i;s 59]80]368@& izkfFkZ;k okil izkIr djus dh vf/kdkfj.kh gSA
38- izkfFkZ;k mDr jkf”k :i;s 59]80]368@& ij olwy fd;s
tkus dh fnukad ls okil izkIr djus dh fnukad rd dk 12-5 izfr”kr
lk/kkj.k okf’kZd dh nj ls C;kt Hkh izkIr djus dh vf/kdkfj.kh gSA
39- vizkFkhZ la[;k&01 }kjk vizkFkhZ la[;k&2 ds ek/;e ls
mijksDr jkf”k :i;s 59]80]368@& e; C;kt rhu ekg ds vUnj
izkfFkZ;k dks vnk dh tkosxh] vU;Fkk izkfFkZ;k btjk; ds tfj;s olwy
djus dh vf/kdkfj.kh gksxh ,oa rc izkfFkZ;k vkt fu.kZ; dh fnukad ls
rkolwyh 12-5 izfr”kr lk/kkj.k okf’kZd ds LFkku ij 15 izfr”kr lk/kkj.k
okf’kZd dh nj ls C;kt izkIr djus dh vf/kdkfj.kh gksxhA **(Downloaded on 01/08/2025 at 11:44:38 PM)
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12. The learned court below has set aside the arbitral
award dated 09.12.2014 passed by the Court of District
Collector (Arbitrator), Bundi and has further set aside the
modified award dated 23.11.2011. The aforesaid facts clearly
say that the learned court below has completely set aside the
award of the Arbitrator along-with the modified award and
restored the original award. In the facts and circumstances of
the case, as stated above, this Court can safely held that the
learned court below has set aside the arbitral award and it
cannot be said that it was modified. The court below was
quite competent to set aside the arbitral award so also the
modified award in view of the observations of the Court.
13. The another issue raised by the counsel appearing
for the appellant is that the land which has been acquired is
an agricultural land and the award dated 09.05.2011 has
been received by the land owner/ respondent by deceiving
the Land Acquisition Officer. He further submitted that on the
date of issuance of the Notification of the land in question,
the land of the respondent was recorded as an agricultural
land and therefore, the original award passed by the Land
Acquisition Officer computing the compensation amount for
the acquired land treating it to be a commercial one, is
contrary to the facts on record. He further submitted that for
setting aside the arbitral award, the Court has to confine its
verdict given under section 34 of the Act of 1996. He further
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[2025:RJ-JP:25245] (11 of 13) [CMA-4085/2024]submitted that no ground as mentioned in section 34 of the
Act of 1996 exists for setting aside the arbitral award.
14. Counsel appearing for the respondent submitted
that the land in question of the respondent which has been
acquired by the appellant is situated in between the main
road and the petrol pump. She further submitted that the
land situated in between the main road and the petrol pump
can never be used for agriculture purposes but it can only be
used for commercial purposes i.e. for allied activities of the
petrol pump and in such circumstances the compensation for
the said land is supposed to be calculated treating it to be
commercial and thus, the Land Acquisition Officer has rightly
passed the original award dated 09.05.2011. Counsel also
submitted that it is the basic public policy that a land owner
whose land is being acquired must receive fair and just
compensation for the acquired land. Counsel further
submitted that the adjacent land behind the land in question
is a commercial land. The acquired land is of more value as it
is on the main road and the land on which the petrol pump is
installed is behind the land in question and therefore, under
the policy of just and fair compensation, the land owner/
respondent is entitled for the compensation treating the land
in question to be the commercial land.
15. After having gone through the record, the Court
finds that the acquired land is situated in between the main
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[2025:RJ-JP:25245] (12 of 13) [CMA-4085/2024]road and a petrol pump. The land of the petrol pump is
commercial one and the land in between the petrol pump and
the road, can only be used for commercial activities that may
be the allied activities of the petrol pump. It is the basic
policy of the Government that a land owner should be allowed
just and fair compensation. While computing the
compensation, it is obligatory upon the Land Acquisition
Officer to see that for what purpose the land which is being
acquired is being actually used or could be used. There is
nothing on the record that the land in question was being
used for agriculture purpose. The material available on the
record clearly speaks that the land which is being acquired is
meant for commercial activities only and therefore, the
findings of the learned court below in no manner can be said
to be perverse or contrary to the record.
16. Counsel appearing for the appellant has also
submitted that no ground as given in section 34 of the Act of
1996 subsists so as to set aside the arbitral award.
17. It is the basic Public Policy of the Government to
allow just and fair compensation to the land owner for his
acquired land.
18. Section 34 of the Act of 1996 clearly speaks that
the arbitral award can be set aside if it is in conflict with the
Public Policy of the India.
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19. The Public Policy of the India is that one should get
just and fair compensation for the acquired land and the Land
Acquisition Officer is under an obligation to keep in mind the
actual use of the land in question while computing the
compensation. The facts on record, as has been observed
above, clearly speak that the land in question is in between
the petrol pump and the main road and it is only for
commercial use. The learned court below has rightly held that
the modified award is in conflict with the Public Policy of India
and has rightly set aside the said award.
20. After making extensive scrutiny of the material
available on record and in view of the discussion made above,
this Court finds no perversity or illegality in the findings and
observations of the Court below and there exists no ground to
interfere with the order passed by the learned court below.
21. Accordingly, the misc. appeal filed by the appellant
is bereft of merit and accordingly stands dismissed.
22. Since the main appeal has been dismissed, the stay
application and pending application(s), if any, also stand
dismissed.
23. Record of the case be sent back to the court
concerned forthwith.
(GANESH RAM MEENA),J
Sharma NK/Dy. Registrar
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