Statutory Market Value Criteria Under Section 26 of 2013 LA Act Mandate Multiple Comparable Sale Exemplars

The National Highways Authority of India (NHAI) acquired 1,394 square meters of land in Nagpur belonging to Alfa Remidis Ltd. for widening NH No. 547-E

The Competent Authority initially determined compensation at ₹161.63 per sq. mtr., treating the land as agricultural

On appeal, the Arbitrator enhanced the rate to ₹3,588 per sq. mtr. by relying on a single sale deed of a small residential plot in a nearby village, accepting the land's use as industrial

The District Court set aside this award under Section 34 of the Arbitration Act, finding it violated Section 26 of the 2013 LA Act

However, the High Court of Bombay (Nagpur Bench) restored the Arbitrator’s enhanced award

1. Whether the Arbitrator’s reliance on a single sale deed of a dissimilar type of land (residential vs. industrial) to determine market value violated the statutory mandate of Section 26 of the 2013 LA Act

2. Whether the arbitral award was vitiated by 'patent illegality' under Section 34(2A) of the Arbitration and Conciliation Act, 1996, warranting judicial interference

Section 26 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (2013 LA Act), which mandates determining market value based on the higher of: (a) stamp duty rates (Ready Reckoner), or (b) the average sale price of similar land in the vicinity

NHAI v. P. Nagaraju (2022) to affirm that Sections 26–28 of the 2013 LA Act apply to NH Act acquisitions

M.P. Road Development Corp. v. Vincent Daniel (2025) to establish that "average sale price" under Section 26(1)(b) requires multiple sale deeds, not a singular transaction

Section 34(2A) of the Arbitration and Conciliation Act, 1996, regarding patent illegality

The Supreme Court found the Arbitrator's methodology demonstrably erroneous and contrary to the statutory rigours of Section 26

The Arbitrator compared dissimilar lands by using a residential plot exampler for land used for industrial purposes, violating the "similar type of land" requirement in Section 26(1)(b)

The Court held that the statutory "average sale price" cannot be derived from a single sale deed as per the Explanations to Section 26

The Court determined that since the respondent had provided the "Ready Reckoner" (Government rate) of ₹2,020 per sq. mtr. for the specific zone, that figure—representing market value under Section 26(1)(a)—was the legally appropriate benchmark

The Court concluded that ignoring these mandatory statutory directives constituted "patent illegality," which stripped the award of the protection usually afforded to arbitral findings

It held that Alfa Remidis Ltd. is entitled to compensation at the rate of ₹2,020 per sq. mtr. (based on the Ready Reckoner) instead of ₹3,588 per sq. mtr.

The Court ordered the payment of all consequential statutory benefits under the 2013 LA Act, directing that the ₹50,00,000 already withdrawn by the respondent be adjusted against the final dues