Ramashankar Yadav and Another v. Union of India and Others
Writ - C No. - 26529 of 2025
Mahesh Chandra Tripathi and Anish Kumar Gupta, JJ.
Introduction
The petitioners, Ramashankar Yadav and another, moved the Allahabad High Court under Article 226 of the Constitution against the order dated 03.07.2025 issued by the District Magistrate (Arbitrator) under Section 3G(5) of the National Highways Act, 1956. They asked for quashing of this order and prayed for an order to re-survey compensation for their acquired land according to the Phase-III circle rate of the Deputy Registrar (Stamp), dated 26.06.2025, showing rates of Rs. 14,500/- and Rs. 12,000/- per sq. meter.
The complaint arose due to the Arbitrator's order of Rs. 4,000/- per sq. meter, which, in the petitioners' view, was against earlier judicial instructions and grossly underestimated.
Background of the case
The petitioners were permanent residents of Tehsil Sikandrarau, Village Gausganj, District Hathras. They had two pieces of land acquired by way of registered sale deeds in 2007-08. They had converted the land from agricultural to abadi use (non-agricultural) under Section 143 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, by an order dated 31.01.2008. Later, they constructed a boundary wall and a dwelling structure.
In 2018, the Union of India had initiated acquisition proceedings for widening National Highway No. 91 (Aligarh–Kanpur section). Notifications under Sections 3A and 3D of the National Highways Act, 1956, were properly published, and the land of the petitioners was included in the area of acquisition. Notwithstanding their protest that the land was abadi, the Competent Authority (Land Acquisition) has considered it as agricultural land and determined the compensation accordingly by an award dated 13.12.2018.
Arbitration proceedings
In the initial Arbitration, the petitioners objected to the compensation before the District Magistrate (Arbitrator) under Section 3G(5) of the Act. The order dated 12.06.2020 rejected their claim and maintained the agricultural classification.
Challenge under Section 34, Arbitration Act: The petitioners presented an Arbitration Petition before the Special Judge, SC/ST Act, Hathras, under Section 34 of the Arbitration and Conciliation Act, 1996, which was granted on 13.05.2022. The arbitral award was revoked and the case remanded for fresh adjudication.
In a new Arbitration, the District Magistrate (Arbitrator) revisited the matter and, on 21.07.2022, agreed that the land was non-agricultural and ordered compensation on that account. NHAI contested the NHAI filed Misc. Application No. 97 of 2022 under Section 34, which the District Judge, Hathras, finalized on 10.09.2024. The Judge partially set aside the order and remitted the case once more, instructing the Arbitrator to reevaluate the compensation, considering the property as abadi land and according to the circle rates relevant thereto.
Impugned Order: As per compliance, the Arbitrator reevaluated the value and determined compensation at Rs. 4,000/- per sq. meter, giving rise to the current writ petition before the High Court.
Contention of the parties
Counsel contended that the Arbitrator had acted against judicial discipline by ignoring the directions of the District Judge dated 10.09.2024, which directed reassessment based on Phase-III circle rates. The Deputy Registrar (Stamp), Sikandrarau, in his letter dated 26.06.2025, had certified relevant rates as Rs. 14,500/- and Rs. 12,000/- per sq. meter, but the Arbitrator had arbitrarily fixed the rate of Rs. 4,000/-.
She argued that the Arbitrator overlooked significant considerations under Section 26 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, such as market value, possible use, and locational factors.
Moreover, it was contended that the petitioners had been deprived of just compensation even after seeking legal recourse for more than seven years, and the behavior of the Arbitrator justified interference by the Court under Article 226, as this was not a matter of mere discontentment with valuation but of contravention of binding judicial orders and statutory requirements.
Reliance was put on the Division Bench ruling in Dr. Rajeev Sinna v. Union of India (2024), in which the Court had invoked writ jurisdiction in analogous situations relating to the Arbitrator's refusal to comply with higher court instructions.
Counsel Sri Fuzail Ahmad Ansari, for the State, and Sri Pranjal Mehrotra for NHAI, objected to the writ petition's maintainability, contending that an efficacious statutory remedy was available under Section 34 of the Arbitration Act, 1996.
The respondents argued that the Arbitrator had obeyed the direction of the District Judge by declaring the land as abadi and increasing compensation appropriately. The complaint about the rate was a matter of fact and evidence, not calling for interference under Article 226.
They also went on to add that circle rates for stamp duty are representative and cannot be applied mechanically for compensation since valuation entails a host of variables such as market comparables, development potential, and locational characteristics.
The Bench found that the grievance of the petitioners was actually with regard to the quantum of compensation, which entails factual ascertainment and expert appraisal. The statutory scheme under Section 3G of the National Highways Act, 1956, read in conjunction with the Arbitration Act, 1996, has a comprehensive mechanism for such disputes.
Observation by the court
The Court observed that judicial review under Article 226 is restricted and cannot be resorted to to re-evaluate evidence or re-appraise findings of valuation made by an Arbitrator in the exercise of his jurisdiction. The High Court should not interfere with arbitral awards unless there is a flagrant disregard of natural justice or a complete negation of binding judicial orders.
The Court distinguished the facts of Dr. Rajeev Sinha (supra), holding that in that case, the Arbitrator had passed a non-speaking order in defiance of a judicial mandate, while in the present case, the Arbitrator’s order was reasoned and in compliance with the District Judge’s directions, treating the land as abadi and enhancing compensation accordingly.
Conclusion
The Court held that since the petitioners' grievance was about the sufficiency of the compensation and not the validity of the acquisition, the correct approach was to seek remedies under the Arbitration Act and not under Article 226. The writ petition was thus rejected as not maintainable and upheld the rule that constitutional courts are not appellate forums in cases of arbitral compensation under the National Highways Act.
Case Reference: Ramashankar Yadav and Another Versus Union of India and Others (s). Writ - C No. - 26529 of 2025
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