Gujarat High Court

Arbitrator holds exclusive jurisdiction under Section 3G(5) of National Highways Act to redetermine factual compensation disputes.

ALLIED CORPORATION RUTESH KANUBHAI BHATT (HUF) THROUGH KARTA KAUSHAL RUTESH BHATT vs UNION OF INDIA

Gujarat High CourtJUDGMENT: May 08, 20262 MIN READSOURCE JUDGMENT
THE ORIGINAL LAWLENS SUMMARY
01

Facts

The petitioners claim to be owners of land in Village Isanpur, Ahmedabad, which was converted to Non-Agricultural (NA) use in 1969.

Source reference: p. 3

Commercial structures were allegedly built following a 1974 permission.

Source reference: p. 3

The land was later acquired for highway development under the National Highways Act, 1956.

Source reference: p. 3

On 31.01.2014, an award was passed under Section 3G of the Act; however, the petitioners allege the authority wrongly treated the land as agricultural and ignored the commercial structures.

Source reference: p. 4

Seeking a remedy, the petitioners filed an application for arbitration under Section 3G(5) on 18.02.2016, which they claim is still pending.

Source reference: p. 5

Despite the pending arbitration, the petitioners approached the High Court seeking a writ for a fresh survey and modification of the 2014 award.

Source reference: p. 1-2, 5
02

Issues

1. Whether a writ petition under Article 226 is maintainable for a fresh survey and modification of a compensation award when an arbitration process under Section 3G(5) of the National Highways Act, 1956 has already been invoked.

Source reference: p. 5-6 / para. 10-14

2. Whether the High Court can adjudicate factual disputes regarding the nature of land (agricultural vs. non-agricultural) in a writ jurisdiction.

Source reference: p. 6 / para. 13
03

Law Applied

The court applied Section 3G of the National Highways Act, 1956, specifically Sub-sections (5), (6), and (7).

Source reference: p. 6

Section 3G(5) provides that if the amount determined by the competent authority is not acceptable, the amount shall be determined by an Arbitrator appointed by the Central Government.

Source reference: p. 6

Section 3G(6) mandates that the Arbitration and Conciliation Act, 1996 applies to such proceedings.

Source reference: p. 6

Section 3G(7) outlines the factors (a) through (d) that the Arbitrator must consider when determining the market value and compensation.

Source reference: p. 6
04

Reasoning

The Court found the petition "wholly misconceived".

Source reference: p. 1

It reasoned that since the petitioners had already invoked the statutory remedy under Section 3G(5) of the Act in 2016, the Arbitrator is the legally designated authority to re-determine compensation.

Source reference: p. 6

The Arbitrator has the jurisdiction to consider all relevant factors, including those allegedly ignored by the original authority, such as the non-agricultural status of the land or the value of commercial structures.

Source reference: p. 6

The Court noted that the dispute is purely factual in nature—requiring a determination of the land's status at the time of the Section 3A notification—which is outside the scope of writ jurisdiction.

Source reference: p. 7

The High Court emphasized that the petitioners must proceed under the Arbitration and Conciliation Act, 1996 if they wish to pursue the arbitration to a logical end.

Source reference: p. 7-8
05

Holding

The Court held that the issues raised fall squarely within the jurisdiction of the Arbitrator under Section 3G(5) of the National Highways Act.

The Court dismissed the petition, refusing to grant any of the prayed reliefs and directed the petitioners to take necessary steps within the pending arbitration proceedings in accordance with the Arbitration and Conciliation Act, 1996.

Source reference: p. 7-8
Gujarat High Court

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ALLIED CORPORATION RUTESH KANUBHAI BHATT (HUF) THROUGH KARTA KAUSHAL RUTESH BHATTvsUNION OF INDIA

Gujarat High Court · May 08, 2026

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