Comparable adjoining parcels acquired under the same notification warrant equal land-value compensation absent distinguishing factors.

The appellant owned 364 sq. m. of land in Survey No. 20/8, Uppinangady, acquired for highway widening.

The original award valued the land at Rs. 455 per sq. m.; the appellant disputed that valuation, relying on the property’s highway frontage, residential house and three shops, and the Rs. 5,424 per sq. m. rate reportedly awarded for adjoining land belonging to his brother in the same survey number and acquired under the same notification.

The statutory arbitrator partly enhanced compensation but did not treat the land as commercial or non-agricultural land. The District Court dismissed both parties’ Section 34 petitions and confirmed the arbitral award. The appellant appealed under Section 37 of the Arbitration and Conciliation Act, 1996.

1. Whether the appellant was entitled to compensation of at least Rs. 5,424 per sq. m., having regard to the rate awarded for his brother’s adjoining land acquired under the same notification.

2. Whether compensation for the appellant’s structures, trees, improvements, severance and related statutory benefits required separate determination.

Under Section 3G(5) of the National Highways Act, 1956, disputes over compensation for land acquired for a national highway may be referred to the appointed arbitrator; a challenge to the arbitral award proceeds under Section 34 of the Arbitration and Conciliation Act, 1996, with an appeal governed by Section 37.

Market value is assessed with regard to the land’s location, existing use and potentiality, and comparable lands may serve as exemplars where their relevant attributes are similar; differences between the acquired land and the exemplar may require adjustment.

The Court referred to Harinder Pal Singh v. Union of India, (2005) 12 SCC 564, on uniform valuation where the lands’ circumstances supported it; Kanwar Singh v. Union of India, (1998) 8 SCC 136, on the need to establish comparable situation and potentiality; and Madhya Pradesh Road Development Corporation v. Vincent Daniel, (2025) 7 SCC 798, on selecting comparable lands and accounting for their relative advantages and disadvantages.

The appellant also relied on Section 95(6-A) of the Karnataka Land Revenue Act, 1964, concerning deemed conversion, but the District Court found the required proof of the building’s existence before the relevant date lacking.

The Court considered the adjoining land’s award rate significant because both properties were in the same survey number, adjoining, and acquired under the same notification for the same purpose. The respondents had not shown any substantial disadvantage in the appellant’s land to justify the pronounced valuation difference.

It also held that the appellant’s structures, commercial use, highway frontage and surrounding development were relevant to market value and could not be disregarded solely because the revenue records classified the land as agricultural.

The Court therefore concluded that the appellant should receive the same land rate as his brother. Separately, it found that the award did not disclose proper consideration of the claimed structures, trees, improvements, severance and related losses, which required determination in accordance with law, subject to credit for sums already paid.

It further directed separate determination of compensation for structures, trees, improvements, severance and other statutory benefits, after crediting amounts already paid.

The formal concluding paragraph is internally inconsistent: paragraph 60 states that the District Court order is set aside while “confirming” the arbitrator’s award, although the preceding paragraphs direct a higher land rate and separate reassessment of other components. The operative order should therefore be verified against the certified judgment.