Denial of compensation under specific heads constitutes "determination" and is maintainable for arbitration under Section 3G(5).

The petitioners’ lands were acquired for the Bharatmala Project Package 3.

During acquisition, a Tehsildar's report confirmed the existence of orchards (kinnu and date palm trees) on the land.

However, the Competent Authority for Land Acquisition (CALA), in its award dated 24.06.2022, denied compensation for the trees, alleging they were planted solely to claim higher compensation.

The petitioners challenged this denial before the Arbitrator-cum-District Collector under Section 3G(5) of the National Highways Act (NH Act), 1956.

The Arbitrator rejected the applications as non-maintainable via order dated 16.11.2023, reasoning that since no amount was "quantified" or "determined" by CALA for the trees, there was no "amount" to dispute or adjudicate under Section 3G(5).

The petitioners approached the High Court challenging this refusal.

1. Whether an application for arbitration under Section 3G(5) of the National Highways Act, 1956, is maintainable when compensation under a specific head (such as standing trees) has been entirely denied/refused by the Competent Authority.

The court applied Section 3(b) of the National Highways Act, 1956, which provides an inclusive definition of "land" that encompasses things attached to the earth, such as trees.

It relied on Section 3G(5) of the Act, which mandates that if the "amount determined" by the competent authority is not acceptable, it shall be determined by an arbitrator.

The court further adopted the principle from Sagar Dey vs. State of West Bengal (2018), which establishes that "land" includes structures and trees, and any dispute regarding compensation for such attachments—whether undervalued or denied—is amenable to arbitration under Section 3G(5).

The High Court rejected the Arbitrator's "narrow and hyper-technical" interpretation that only quantified numerical values could be challenged.

The Court reasoned that "determination" is a process of application of mind; therefore, a reasoned denial of compensation constitutes a "determination" of a "nil" amount.

Since Section 3(b) defines land to include trees, the CALA's decision to refuse payment for those trees is inherently a determination regarding the total compensation for the "land".

The Court emphasized that treating "undervalued" claims as arbitrable while treating "denied" claims as non-arbitrable would create an "anomalous situation" where a landowner would have to approach multiple forums for a single acquisition project, defeating the legislative intent of the NH Act as a self-contained code.

The High Court quashed the Arbitrator's orders dated 16.11.2023. The writ petitions were allowed, and the matters were remanded to the Arbitrator-cum-District Collector, Sriganganagar, with directions to restore the applications and decide them on merits within three months.