Market value determination based on Jantri rates is a factual inquiry beyond the scope of Section 34 and 37 scrutiny.

The National Highways Authority of India (NHAI) challenged an arbitral award passed under Section 3G(5) of the National Highways Act, 1956

The Arbitrator (District Collector) had re-determined the market value of the acquired land by taking the highest "jantri" (government-fixed guideline) value of the village and adding a 5% annual enhancement

NHAI filed an application under Section 34 of the Arbitration and Conciliation Act, 1996, before the Commercial Court (6th Additional District Judge, Ahmedabad), arguing the award was unreasoned, arbitrary, and ignored evidence

The Commercial Court dismissed the challenge on 31.12.2025

NHAI subsequently filed this First Appeal under Section 37 of the Arbitration Act

Whether the Arbitrator committed a patent illegality by adopting the highest jantri rate and a 5% annual enhancement to determine market value

Whether the arbitral award was liable to be set aside under Section 34/37 of the Arbitration Act 1996 for being unreasoned or in violation of natural justice

Section 3G(7) of the National Highways Act, 1956, and Section 26 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which prescribes criteria for determining market value, including government-fixed jantri rates

The court relied on the precedent NHAI v. Nagraju [(2022) 15 SCC 1], establishing that Section 26 principles apply to NHAI acquisitions

The court applied the restrictive standards for judicial interference under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, which prohibit re-appreciation of evidence or merits unless the award is against the fundamental policy of Indian law or suffers from patent illegality

The High Court affirmed the Commercial Court’s findings that the Arbitrator acted within the statutory framework of Section 26 of the 2013 Act by relying on jantri rates, which ensures transparency and uniformity

The Court reasoned that the Arbitrator's factual inquiry into market value cannot be re-examined through a re-appreciation of evidence, as the scope of Sections 34 and 37 is strictly limited and does not allow the court to act as an appellate authority

It rejected the argument that the award was "unreasoned," noting that the quantification methodology—even if disputed—falls within the exclusive domain of the Arbitrator and does not shock the conscience of the court or violate public policy

The High Court dismissed the appeal, holding that there were no grounds to interfere with the Commercial Court’s judgment or the arbitral award. The First Appeal and connected Civil Application for stay were dismissed with no order as to costs