Failure to lead evidence despite multiple opportunities precludes challenge to an arbitral award on grounds of natural justice.

The appellant, National Highways Authority of India (NHAI), acquired lands in village Deolai, Aurangabad, for widening National Highway-211 under the National Highways Act, 1956

The Competent Authority Land Acquisition (CALA) passed a first award on 15.07.2017, determining compensation at Rs. 7,966/- per sq. mtr for small plots, with diminishing slab rates for larger areas

CALA subsequently passed a second award on 28.07.2017 with lower rates, but this was set aside by the High Court as being without jurisdiction

NHAI thereafter invoked arbitration under Section 3-G (5) of the 1956 Act to challenge the first award. The Arbitrator dismissed NHAI’s applications on 19.01.2024

NHAI’s subsequent challenge under Section 34 of the Arbitration and Conciliation Act, 1996, was dismissed by the Principal District Judge, Aurangabad, on 15.11.2025

NHAI then filed these appeals under Section 37 of the 1996 Act.

1. Whether the Arbitrator failed to provide NHAI a fair opportunity to present evidence and documents, thereby violating the principles of natural justice.

2. Whether the arbitral award was vitiated by "patent illegality" or was in conflict with the "public policy of India" due to alleged fraud or arbitrary valuation.

3. Whether the court, in a Section 37 appeal, can re-appreciate the evidence regarding the market value of the acquired land.

Section 34 and Section 37 of the Arbitration and Conciliation Act, 1996, which circumscribe the court's power to interfere with arbitral awards only on grounds of patent illegality or violation of fundamental policy of Indian law

The Arbitrator is the "ultimate master of the quantity and quality of evidence" as established in Associate Builders v. Delhi Development Authority

Section 26 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, regarding the determination of market value based on average sale instances

PSA Sical Terminals Pvt. Ltd. v. Board of Trustees, holding that courts cannot act as appellate courts to re-appreciate evidence under Section 34 or 37

The court found that NHAI was granted several "last chances" by the Arbitrator over a two-year period to file evidence but failed to do so until after the award was declared on 19.01.2024; thus, the claim of denial of fair hearing was misleading

Regarding the valuation, the court noted that the rate of Rs. 7,966/- per sq. mtr was reasonable given that land in the adjacent village of Satara received significantly higher compensation (up to Rs. 21,397/- per sq. mtr), which NHAI had either accepted or compromised

The court observed that NHAI was "blowing hot and cold" by alleging fraud in the CALA’s valuation while simultaneously settling other cases based on even higher rates from the same acquisition project

The court held that since the view taken by the Arbitrator was a "possible view" based on the evidence of the claimants and the recommendation of the Town Planning Department, it did not shock the conscience of the court nor meet the threshold of patent illegality

The court held that NHAI failed to demonstrate any patent illegality or procedural unfairness that would warrant interference under Section 37

The valuation was found to be supported by material evidence from the claimants and comparable instances in adjacent localities

All pending civil applications were disposed of accordingly