Post-notification sale deeds are admissible for determining market value if proximate in time, genuine, and bona fide.

The National Highways Authority of India (NHAI) initiated acquisition proceedings for widening National Highway No. 6.

A notification under Section 3A of the National Highways Act, 1956, was issued on 11/11/2011.

The Competent Authority for Land Acquisition (CALA) determined compensation at Rs. 340/- per square meter plus 10% for easementary rights.

The Arbitrator, relying on a sale deed dated 13/02/2012 (executed approximately three weeks after the Section 3A notification), enhanced the compensation to Rs. 2800/- per square meter and granted additional amounts for severance and loss of easementary rights.

NHAI challenged this award under Section 34 of the Arbitration and Conciliation Act, 1996, before the Principal District Judge, who dismissed the application.

NHAI subsequently filed the present appeals under Section 37.

1. Whether an Arbitrator can legally rely on a post-notification sale deed to determine market value under Section 3G(7)(a) of the National Highways Act.

2. Whether compensation for severance and loss of easementary rights can be awarded based on uncontroverted affidavits in the absence of specific documentary evidence like a panchanama.

3. What is the permissible scope of interference by a Court under Section 37 of the Arbitration and Conciliation Act regarding an arbitral award confirmed under Section 34?

Section 3G of the National Highways Act, 1956, which mandates the determination of market value as of the date of the Section 3A notification.

Supreme Court’s ruling in Chimanlal Hargovinddas v. Special Land Acquisition Officer, which permits consideration of post-notification sale instances if they are proximate in time, genuine, and not motivated by the acquisition.

The court applied the "patent illegality" and "public policy" tests established in Associate Builders v. DDA and PSA Sical Terminals Pvt. Ltd. v. Board of Trustees, which restrict courts from reappreciating evidence or acting as an appellate court under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996.

The Court rejected the appellant's contention that the post-notification sale deed was inadmissible.

It noted that the sale deed dated 13/02/2012 was executed only three weeks after the Section 3A notification, making it "proximate in point of time" as per the Chimanlal criteria.

Since NHAI failed to prove the transaction was fraudulent or the price was artificially inflated, the Arbitrator’s reliance on it was not a patent illegality.

Regarding severance and easementary rights, the Court observed that the claimants had filed affidavits which remained uncontroverted by NHAI, and the issue of severance was inherently linked to the partial acquisition of land for road widening.

The Court emphasized that under Section 37, it cannot undertake an independent merit assessment or disturb findings of fact unless the award shocks the conscience or ignores vital evidence.

Finding the Arbitrator’s assessment to be a plausible view based on available material, the Court declined to interfere.

The Court held that post-notification sale deeds are valid benchmarks if proximate and genuine, and that findings on severance based on uncontroverted evidence do not constitute patent illegality.

All civil applications for withdrawal of deposited amounts were allowed, subject to the claimants furnishing an undertaking to redeposit the funds should a higher court rule in favor of NHAI.