Authority Determining Compensation Under NH Act Cannot Question Correctness Of Circle Rate Fixed By Collector: Uttarakhand High Court

The Uttarakhand High Court has held that the authority determining compensation under the National Highways Act cannot examine the correctness of the circle rate fixed by the Collector under the stamp law framework. The Court observed that once the applicable circle rate is available for the purpose of Section 26(1)(a) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, the authority cannot sit in appeal over the Collector's determination.Justice Ravindra Maithani was hearing cross-appeals arising from the acquisition of land in Udham Singh Nagar for the construction of NH-125 and related infrastructure. The appellants' land was acquired under the National Highways Act, 1956. The Special Land Acquisition Officer awarded compensation at the rate of ₹38 lakh per hectare. Aggrieved by the award, the landowners sought arbitration under Section 3G(5) of the National Highways Act. By an award dated 17 March 2017, the Arbitrator enhanced the compensation to ₹11,000 per square metre. Challenges filed by both the landowners and the National Highways Authority of India under Section 34 of the Arbitration and Conciliation Act were dismissed by the District Judge, leading to the present appeals under Section 37.Before the High Court, NHAI contended that the award suffered from patent illegality as the compensation had not been determined in accordance with Sections 26 and 28 of the 2013 Act. NHAI further questioned the applicability and correctness of the circle rate relied upon by the Arbitrator while determining compensation.The Court examined the methodology adopted by the Arbitrator under the various issues framed in the arbitral proceedings. It observed that compensation under the National Highways Act is required to be determined in accordance with Sections 26 and 28 of the 2013 Act. The Court found that the Arbitrator's reliance on compensation awarded in an earlier acquisition of 2008 and certain sale transactions was not strictly in consonance with the statutory scheme contained in Section 26.The Court, however, upheld the finding of the Arbitrator insofar as it was based on the circle rate. It observed that Section 26(1)(a) specifically refers to the market value specified for registration purposes under the Indian Stamp Act. Once such market value or circle rate is fixed by the Collector, the authority determining compensation cannot examine whether the Collector correctly fixed that rate. “… the officer or the authority determining the compensation under Section 3-G of the NH Act, 1956 cannot go beyond the fixation of circle rate by the Collector under the Stamp Act. The correctness of the rates fixed or determined by the Collector under the Stamp Act may not be questioned in a proceeding under Section 3-G of the NH Act, 1956 for determination of the compensation or in any further proceedings, including Section 34 or/and under Section 37 of the AC Act, 1996,” the Court observed. The Court observed that any challenge to the correctness of the circle rate has to be made before the appropriate forum under the relevant stamp law and not in proceedings relating to determination of compensation under the National Highways Act.The Court further observed that the scope of interference under Sections 34 and 37 of the Arbitration and Conciliation Act is limited and does not permit re-appreciation of evidence or substitution of one possible view with another. Finding no patent illegality in the award insofar as compensation was determined on the basis of the applicable circle rate, the Court declined to interfere with the arbitral award.Case Title: Gurbachan Singh & Anr. v. Ministry of Road Transport and National Highways & Anr. and connected matters [Appeal From Order No. 224 of 2023]Click Here To Read/Download Order

Authority Determining Compensation Under NH Act Cannot Question Correctness Of Circle Rate Fixed By Collector: Uttarakhand High Court

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Authority Determining Compensation Under NH Act Cannot Question Correctness Of Circle Rate Fixed By Collector: Uttarakhand High Court

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