ARB APPEAL/103/2026 of The DGM (T) and Project director Vs The District Collector and Sole Arbitrator (LA) on 23 September 2026

COMMON JUDGMENT

(Judgment of the Court was made by P.Velmurugan J.) The present arbitration appeals, at the instance of the National Highways Authority of India under Section 37 of the Arbitration and Conciliation Act

1996, are directed against the common order dated 24.11.2023 passed by the learned Principal District Judge, Tiruppur in Arbitration O.P.Nos.272 of 2022, 197 of 2022, 190 of 2022, 27 of 2023 respectively, granting 12% additional value as per Section 23(1-A) of the Land Acquisition Act, 1894 to each of the 3rd respondent/land owner, in the arbitration original petitions filed by the NHAI under Section 34 of the Arbitration and Conciliation Act assailing the award passed by the District Collector/Sole Arbitrator, Tiruppur granting solatium, interest to the lands acquired under the National Highways Act.

2. The appellant/National Highways Authority of India (for short, ‘the NHAI’), with a view to develop road infrastructure so as to curtail fatal accidents and to maintain the National Highways in the country, through its Project Director, Project Implementation Unit, Coimbatore, acquired vast extent of lands covering various villages under the provisions of the National Highways Act, 1956 (for short, ‘the Act’) towards formation of six laning of National Highways No.47 (Chengapalli to Walayar Section KM 102/035 to 183/060) in Tiruppur District including the land of each of the 3rd respondent herein. In this regard, notification under Section 3A(1) of the Act was published on 26.03.2010 and the substance of the notification was also published in the local dailies (Tamil and English) under Section 3A(3) of the Act calling for objections on 17.04.2010. After complying with the mandatory requirements,

Section 3D(1) notification was approved and the public notice under Section 3G(3) was published in two local dailies (Tamil and English) on 04.09.2010. On completion of enquiry with the land owners, the Competent Authority/Special District Revenue Officer (LA) fixed the value for the agricultural land at Rs.675 / Rs.700 / Rs.700 / Rs.593 per square metre, respectively. Aggrieved over the fixation of compensation, the land owners approached the District Collector and Sole Arbitrator, Tiruppur seeking for enhancement. The sole Arbitrator, after hearing the land owners and the NHAI, while rejecting the enhancement claim, passed an award for payment of 30% solatium together with interest, relying upon the judgment of the Hon’ble Supreme Court in the case of Union of India v. Tarsem Singh, (2019) 9 SCC 304, to the owners in respect of the acquired lands. Aggrieved by the award, the NHAI preferred the arbitration original petitions under Section 34 of the Arbitration and Conciliation Act before the learned Principal District Judge, Tiruppur. The learned Principal District Judge, Tiruppur, after hearing both sides, though confirmed the award passed by the District Collector and Sole Arbitrator granting solatium and interest, however, granted 12% additional value as per Section 23(1-A) of the Land Acquisition Act, 1894 to each of the 3rd respondent/land owner. Aggrieved thereby, the NHAI has preferred the present appeals under Section 37 of the Arbitration and Conciliation Act before this Court.

3. The learned counsel appearing for the appellant/NHAI would submit that the learned Principal District Judge, while exercising jurisdiction under Section 34 of the Arbitration and Conciliation Act, has erroneously granted the benefit of 12% additional value as per Section 23(1-A) of Land Acquisition Act, even though no such prayer was made before the Arbitrator nor the Arbitrator had granted such a benefit in the award. He would further submit that it is settled law that a litigant cannot be put in a situation worse than what he was prior to approaching the Court and that under Section 34(2) of the Act, the Court has no power to modify the arbitral award. He would further contend that in the case of Project Director, NHAI v. Hakeem and others, (2021) 9 SCC 1, the Hon'ble Supreme Court has categorically ruled that the Courts have no power to modify the arbitral award while exercising its jurisdiction under Section 34(2) of the Act and hence, prayed for setting aside the impugned order.

4. The respective learned counsel appearing for each of the 3rd respondent/land owner would submit that as per the dictum of the Hon'ble Supreme Court in the case of Union of India v. Tarsem Singh, (2019) 9 SCC 304, the land owners are entitled for solatium and interest in respect of the lands acquired under the National Highways Act. However, they would fairly concede that the land owners are not entitled for the benefit of 12% additional value as provided under Section 23(1-A) of the Land Acquisition Act, 1894.

5. We have heard both sides and perused the materials available on record.

6. So far as the payment of solatium and interest to the land owners is concerned, the same is no longer res integra, as the Hon'ble Supreme Court in the case of Union of India v. Tarsem Singh, (2019) 9 SCC 304 has authoritatively held that when the lands are acquired by the NHAI for expansion of the National Highways, the land owners are entitled for the solatium and interest and on this aspect, we find that the order of the learned Principal District Judge, Tiruppur confirming the award requires no interference.

7. Now the only point to be decided in these appeals is whether the learned Principal District Judge, Tiruppur is justified in granting the benefit of 12% additional value to the land owners as per Section 23(1-A) of the Land Acquisition Act, 1894. It is to be noted that the original Section 3-J of the National Highways Act barred land owners from receiving any solatium or interest available under the Land Acquisition Act, 1894. However, in the landmark judgment in Union of India v. Tarsem Singh, (2019) 9 SCC 304, the Hon’ble Supreme Court struck down Section 3-J of National Highways Act as unconstitutional, especially because it denied land owners the right of solatium and interest [Section 23(2) & Section 28]. While solatium and interest were mandated to be paid in respect of the acquisitions made by NHAI, the subsequent clarifications affirmed that the benefit under Section 23(1-A) i.e., the 12% additional value for the period from the date of notification till the date of award, does not apply to acquisitions under the National Highways Act. To this extent, the impugned order awarding 12% additional value as per Section 23(1-A) to the land owners in respect of the acquisition proceedings by NHAI is unsustainable, as the Hon’ble Supreme Court in National Highways Authority of India and another v. Tehal Singh and others, 2021 SCC Online SC 3175 has clarified that the land loser is not entitled to the compensation under Section 23(1-A) of the Land Acquisition Act, 1894.

8. It is also equally well settled that while exercising jurisdiction under Section 34 of the Arbitration and Conciliation Act, the Court has got limited power to interfere with an arbitral award, unless it suffers from patent illegality. (See the decisions of the Hon’ble Supreme Court in NHAI v. M.Hakeem & another, (2021) 9 SCC 1 and in Delhi Airport Metro Express Pvt. Ltd. vs. Delhi Metro Rail Corporation Ltd., (2022) 1 SCC 131).

9. In the light of the above, the order passed by the learned Principal District Judge is required to be interfered with to this limited extent. Accordingly, the impugned order granting 12% additional value as per Section

23(1-A) of the Land Acquisition Act, 1894 to each of the 3rd respondent/land owner is set aside on the ground that the said portion of the order suffers from patent illegality under Section 34(2A) of the Arbitration and Conciliation Act and in all other respects, the order passed by the learned Principal District Judge confirming the award of the sole Arbitrator is upheld.

10. The appellant/NHAI is directed to disburse the entire compensation amount along with solatium and interest, less the amount already paid, if any, to each of the 3rd respondent/land owner herein, within a period of sixty days from the date of receipt of a copy of this judgment. The arbitration appeals stand allowed to the extent indicated above. Consequently, all the connected CMPs are closed. Considering the facts and circumstances, there shall be no order as to costs. (P.VELMURUGAN J.) (GK.MUTHUKUMAAR J.) 23-09-2026

Index:Yes/No Speaking/Non-speaking order Internet:Yes Neutral Citation:Yes/No ss

To

1. The Principal District Judge Tiruppur

2. The DGM (T) and Project Director National Highways Authority of India PIU-Coimbatore No.11/1 Kongu Nagar East Back side of Appasamy Apartments Ramanathapuram, Coimbatore 641 045

3. The District Collector and Sole Arbitrator (LA) Palladam Road, Tiruppur Tiruppur District

4. The Competent Authority and Special District Revenue Officer (LA) NH-47, Coimbatore

P.VELMURUGAN J. AND GK.MUTHUKUMAAR J. ss Arb Appeal Nos.103 of 2026 etc. 23-09-2026