Rajasthan High Court - Jodhpur
National Highway Authority Of India vs Dev Petroleum Point And Ors. ... on 14 January, 2026
[2026:RJ-JD:2196]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Misc. Appeal No. 1944/2017
National Highways Autority Of India Through Project Director,
Project Implementation Unit, Palanpur Gujarat Highways Unit-
Office Gandhidham Gujarat.
----Appellant
Versus
1. Dev Petroleum Point Through Its Proprietor- Deepak
Gopaliya S/o Shri Devi Sahai Gopaliya, B/c Kalal, Resident
Of Abu Road, District Sirohi Raj..
2. Competent Authority Land Acquisition And Sub Divisional
Officer, Mount Abu, District, Sirohi Raj..
3. Arbitration Officer Arbitrator, District Collector, Sirohi Raj..
----Respondents
For Appellant(s) : Mr. Ankur Mathur.
For Respondent(s) : Ms. Akshiti Singhvi.
HON'BLE MR. JUSTICE SANJEET PUROHIT
Order
14/01/2026
1. The present appeal has been preferred by the appellant -
National Highways Authority of India (NHAI) under Section 37 of
the Arbitration and Conciliation Act, 1996 ("Act of 1996"), being
aggrieved by the order dated 04.04.2017 passed by Learned
District and Sessions Judge, Sirohi. Learned court below, while
dismissing the application preferred by the appellant under section
34 of the Act of 1996, affirmed the Arbitral Award dated
08.11.2013 and the order of the Competent Authority Land
Acquisition ("CALA") dated 13.05.2012.
2. The genesis of the present dispute lies in the Central
Government's project to extend National Highway No. 14 along
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the stretch from 246.000 kms to 306.400 kms. For this public
purpose, a notification under Section 3A of the National Highways
Act, 1956 ("Act of 1956") was issued on 27.09.2004, identifying
various land parcels for acquisition, including Khasra No. 1240 in
the revenue village of Santpur, ad-measuring 0.1537 hectares.
2.1. Following the statutory procedure for hearing objections, the
Central Government issued a notification under Section 3D of the
Act of 1956 on 28.06.2005, whereby the acquisition of a portion of
Khasra No. 1240, specifically ad-measuring 0.0758 hectares
("land in question"), was finalized.
2.2. Under section 3G of the Act of 1956, which provides for
determination of amount payable as compensation to the owner
and any other user of land whose right is affected by the
acquisition, respondent no. 1/claimant submitted a claim petition
before CALA on 23.11.2005. Thereafter, CALA, in order to
determine the market value, sought the District Level Committee
(DLC) rates from the Sub-Registrar, Abu Road. The Sub-Registrar
reported that the commercial DLC rates applicable on the date of
the Section 3A notification (27.09.2004) was Rs. 264/- per sq. ft.
Consequently, CALA passed an award dated 24.07.2007, granting
total compensation of Rs. 20,26,671.39/- in favor of the claimant.
2.3. Being aggrieved by the award, the claimant moved an
application before the Arbitrator under Section 3G(5) of the Act of
1956. The Arbitrator vide order dated 25.03.2008 decided the
application of the claimant and remanded the matter back to CALA
with a direction to pass a speaking order. Upon remand, CALA re-
examined the matter and, vide its order dated 21.11.2011,
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maintained the originally awarded quantum of compensation
(calculated at the rate of Rs. 264/- per sq. ft.), while additionally
awarding Rs. 4,48,465/- for a boundary wall standing on the
acquired land.
2.4. The claimant challenged said order again before the Arbitrator
on the ground that even after remand, CALA proceeded in a pre-
determined manner and has passed the order dated 21.11.2011
without consideration of evidence available on record. Learned
arbitrator, vide its order dated 23.07.2012, remanded the matter
to CALA for fresh adjudication. CALA, after taking into account
evidence available on record, passed award dated 13.05.2013 and
enhanced the compensation by adopting market rate of Rs.
1,144/- per sq. ft., based on a certificate dated 25.09.2006, and
thus revised the award from Rs. 20,26,671.39/- to Rs.
1,23,05,468.56/-.
2.5. The appellant challenged the said award of enhanced
compensation before the arbitrator under section 3G(5) of the Act
of 1956. Learned Arbitrator, while dismissing the challenge,
upheld the award vide its order dated 08.11.2013.
2.6. The appellant challenged the Arbitral Award dated
08.11.2013 before the District and Sessions Judge, Sirohi, under
Section 34 of the Act of 1996. Learned District Judge, vide order
dated 04.04.2017, dismissed the appellants's objections and
affirmed the Arbitrator's award, leading to the present appeal
before this Court.
3. Learned counsel for the appellant argued that the Arbitrator,
while acting under Section 3G(5) of the Act of 1956, acted beyond
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the scope of his statutory authority by remanding the matter back
to CALA. It is contended that the said section provides for a
specific reference to an Arbitrator for the purpose of re-
determination of the compensation amount and does not bestow
the Arbitrator with the appellate power to remit or remand the
matter back to CALA for fresh or amended award. To bolster the
contention, learned counsel for the appellant places reliance upon
the judgment of the Hon'ble High Court of Allahabad in Bhartiya
Rashtriya Rajmarg Pradhikaran v. Rajesh Kaushik (AIR
2021 All 33).
3.1. Learned counsel for the appellant further submits that even
CALA, after passing a final award, becomes functus officio and
that in absence of any express statutory provision under the Act of
1956, CALA lacks the power to modify, amend, or pass fresh
award.
3.2 Learned counsel for the appellant also challenged the
reliance placed on a certificate dated 25.09.2006, which provided
DLC rates as of 01.07.2005. Learned counsel submits that under
Section 3G(7) of the Act of 1956, the market value must be
determined strictly as on the date of Section 3A notification, which
in this case was 27.09.2004.
3.3. Learned counsel for the appellant also argued that the
respondent-claimants had originally accepted the compensation
determined in the first award dated 24.07.2007 and is thus
estopped from raising objections at a belated stage.
4. Per contra, learned counsel for the respondent-claimants
submits that the controversy involved in the present appeal is no
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longer res integra and is squarely covered by the judgment passed
by this Hon'ble Court in National Highway Authority of India
vs. Meena & Ors. (S.B. Civil Misc. Appeal No. 131/2022),
decided on 14.08.2024, which relates to the same acquisition as in
the present matter and is passed in an appeal also preferred by
the present appellant. It is submitted that in the said case, the
Court categorically observed that once the appellant participates
in the proceedings before CALA following a remand without raising
any protest, they are precluded from challenging the validity of
the remand at a later stage.
5. Heard learned counsels for the parties and have perused the
material available on record and the judgments cited at the bar.
6. The primary legal challenge raised by the appellant pertains
to the scope of Section 3G(5) of the Act of 1956. Learned counsel
for the appellant contends that the Arbitrator is not an appellate
authority and possesses no power to remand the matter back to
CALA for fresh determination. Consequently, learned cousnel for
the appellant submits, the order passed by learned arbitrator on
08.11.2013 is contrary to legal provisions. In support of his
contention, learned counsel relies upon the judgment of the
Hon'ble High Court of Allahabad in Bhartiya Rashtriya Rajmarg
Pradhikaran (Supra), the relevant paragraphs of which are
reproduced below: -
"11. Irrespective of the fate of the arbitration proceedings,
the order of the competent authority would not merge in
the award rather it would continue to exist, though its
enforceability (as to quantum of compensation payable),
may, in given facts be eclipsed by the arbitral award. It is
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so because, the terms of reference arise from the plain
language of Section 3-G (5) of the Highways Act. That
provision of law would ever limit the scope of arbitration
proceedings and command the arbitrator to himself
determine the just amount of compensation.
12. Thus, in no event, the arbitrator may set aside the
order passed by the competent authority and he may never
remit the matter to the original/competent authority to pass
a fresh order. Typically, that power is a power of a Court or
Tribunal sitting in appeal or revision that too, if specifically
granted by statute, and not implied. In absence of any such
power given to the arbitrator either under the Highways Act
or the Act, the direction issued by the arbitrator is a nullity
in law.
13. Perusal of the order passed by the arbitrator again does
not leave any manner of doubt that he has not determined
the amount of compensation to be paid, since, he has
neither mentioned the rate at which compensation may be
awarded for 2400 sq. mtrs of land nor he has quantified the
total compensation amount. In fact, he has specifically
remitted the matter to the competent authority for that
purpose. That direction clearly falls foul with Section 3-G
(5) of the Highways Act.
14. Hence the award was open to challenge in terms of
Section 34(2)(a)(iv) of the Act being beyond the scope of
reference to arbitration and also under Section 34(2)(b)(ii)
of the Act, being contrary to be public policy of India."
7. Conversely, learned advocate for the respondents argued
that the appellant did not challenge the Arbitrator's previous
remand orders and continuously participated in the subsequent re-
determination proceedings before CALA. Learned counsel
submitted that if the appellant was aggrieved by the remand, they
should have challenged it in a higher legal forum instead of
participating in the re-determination process, therefore, they have
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no right to now argue that the order dated 08.11.2013 is against
the provisions of law.
8. This Court finds that the appellant is precluded from raising
this objection at this stage due to their own conduct during the
proceedings. The Equitable Doctrine of Acquiescence operates as
an estoppel by conduct. It dictates that if a party, having full
knowledge of their rights, stands by and allows another to alter
their position or allows a proceeding to continue without objection,
they are presumed to have given their silent assent. The Hon'ble
Supreme Court in The Chairman, State Bank of India and
Anr. v. M.J. James [(2022) 2 SCC 301] explained the doctrine
thus: -
"29...Doctrine of acquiescence is an equitable doctrine
which applies when a party having a right stands by
and sees another dealing in a manner inconsistent with
that right, while the act is in progress and after
violation is completed, which conduct reflects his
assent or accord. He cannot afterwards complain. In
literal sense, the term acquiescence means silent
assent, tacit consent, concurrence, or acceptance,
which denotes conduct that is evidence of an intention
of a party to abandon an equitable right and also to
denote conduct from which another party will be
justified in inferring such an intention..."
9. As explained by the Hon'ble Supreme Court in the
aforementioned judgment, acquiescence is not mere delay, but
conduct that reflects accord and effectively destroys the right of
the person to complain later. The record shows that Learned
Arbitrator passed remand orders on 25.03.2008 and 23.07.2012.
The record also reflects that the appellant chose not to assail
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these orders before any competent legal forum at that time and
instead consistently participated in the re-determination
proceedings initiated by CALA pursuant to the said remands. If the
appellant was of the view that the remand orders were beyond the
powers of the Arbitrator, the appropriate recourse would have
been to seek a remedy before a higher forum and obtain a stay on
the re-determination process. Having failed to do so, and having
voluntarily submitted to the jurisdiction of CALA in the subsequent
adjudications, the appellant is now estopped from challenging the
same.
10. This court also finds that the case relied upon by learned
counsel for the appellant in this respect is clearly distinguishable
on facts. In the aforementioned matter, the challenge was a
challenge simpliciter, wherein the aggrieved party approached the
Court at the threshold, seeking to quash the remand directions
before any subsequent re-determination took place. In the matter
at hand, however, a perusal of the record clearly shows that the
appellant participated in the proceedings following the remand
orders, without raising any protest.
11. Parallel to the equitable doctrine of acquiesence, Section 4 of
the Act of 1996 mandates that a party who proceeds with an
arbitration despite a non-compliance with a provision from which
the parties may derogate, without stating an objection without
undue delay, is deemed to have waived their right to object. For
ready reference, section 4 is reproduced as under:
"4. Waiver of right to object: A party who knows that--
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(a) any provision of this Part from which the parties may
derogate, or
(b) any requirement under the arbitration agreement,
has not been complied with and yet proceeds with the
arbitration without stating his objection to such non-
compliance without undue delay or, if a time limit is
provided for stating that objection, within that period of
time, shall be deemed to have waived his right to so
object."
12. Reliance may appropriately be placed upon the judgment of
this Court in National Highway Authority of India v. Meena &
Ors. (Supra), wherein this Court has held: -
"16...Thus, in the light of Section 4 of the Act of 1996, which
clearly stipulates that, when a party who knows that any
provision of Part I of the Act of 1996 from which the parties
may derogate or any requirement under the arbitration
agreement has not been complied with and still proceeds
without stating his objection to such non-compliance
without undue delay, or in case a time limit has been
provided for stating the objection, then within such time
limit, shall be deemed to have waived his right to so object
and since the appellant has not objected to the said two
awards, the appellant has waived his right to object under
Section 4 of the Act of 1996..."
13. Thus, in view of the reasons mentioned and following the
ratio laid down by this Court in National Highway Authority of
India v. Meena & Ors. (Supra), this Court finds that the
appellant's active participation in the subsequent awards passed
by CALA constitutes a clear case of waiver. The appellant cannot
be permitted to challenge the procedure only after the final award
resulted in an enhancement that was not to its liking.
14. Upon a perusal of record, this Court also finds that the initial
award dated 24.07.2007 passed by CALA was nothing more than a
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calculation sheet and cannot be termed as an order. Even the
subsequent award dated 21.11.2011 simply upheld the initial
award passed by CALA. Section 3G(1) of the Act of 1956
mandates that compensation shall be "determined by an order".
An order by a quasi-judicial authority must necessarily be a
speaking order, reflecting the application of mind to the
documents and showing the basis of determination. The orders
dated 25.03.2008 and 23.07.2012 passed by learned arbitrator
remanding the matter back to CALA were mere directions to CALA
to pass speaking orders, in accordance with the provisions of law,
after granting proper opportunity of hearing to the parties and
taking all the documents and evidence on record. Thus, this Court
finds that learned district judge has rightly observed that CALA
simply passed a speaking order in accordance with the directions
given by learned arbitrator and in compliance with law.
15. Learned counsel for the appellant has further challenged the
award on the ground that CALA erroneously relied upon a
certificate dated 25.09.2006 to apply DLC rates from 01.07.2005,
whereas the notification under Section 3A was issued on
27.09.2004. It is on record that learned district judge found that
the claimant's land, despite being allotted by RIICO for the
commercial purpose of a petrol pump, was erroneously treated as
agricultural/rural land. The record reveals that other lands in the
same revenue village (Santpur) were being compensated at RIICO
industrial rates. By applying the DLC rate of ₹1144 per sq. ft., the
authority did not grant a windfall but merely ensured that just and
fair compensation is granted. This Court, therefore, concurs with
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the finding of learned district judge that the re-determined
compensation was based on concrete evidence and documents
and that CALA, by rectifying the administrative error in calculating
the appropriate rates, has acted according to principles of fairness
and parity.
16. It is needless to reiterate that when an arbitral award is
challenged under section 34 on the ground of public policy, what is
to be seen is whether it is patently illegal or shocks the conscience
of the court, as has been established by various authoritative
pronouncements of the Hon'ble Supreme Court. This Court agrees
with the finding of learned district judge that providing fair and
equal compensation for land acquired for public purposes is, in
fact, in accordance with public policy.
17. It is relevant to refer to Sections 34 and 37 of the Act of
1996 to understand the scope of interference by the Court. The
relevant part of Section 34 and 37 of the Act of 1996 reads as
under:
34. Application for setting aside arbitral award --
(1) Recourse to a Court against an arbitral award may be
made only by an application for setting aside such award in
accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if
--
(a) ....
(b) the Court finds that--
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
(Uploaded on 30/01/2026 at 03:33:44 PM) (Downloaded on 30/01/2026 at 03:32:04 PM) [2026:RJ-JD:2196] (12 of 17) [CMA-1944/2017] Explanation 1. - For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if -
(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2. - For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.
(3) ....
(4) ....
(5) ....
(6) ....
37. Appealable orders -- (1) Notwithstanding anything contained in any other law for the time being in force, an appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely: --
(a) ....
(b) ....
(c) setting aside or refusing to set aside an arbitral award under section 34.
(2) ....
(3) ..."
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18. A bare perusal of the said provisions shows that under Section 34 of the Act of 1996, an arbitral award can be modified only if limited grounds as enumerated under Section 34 of the Act of 1996 are made out. So far as Section 37 of the Act of 1996 is concerned, the same provides for an appeal against the order passed under Section 34 for setting aside or refusing to set aside an arbitral award; however, no separate ground for interference are enumerated under Section 37 of the Act of 1996. Thus, the interference under section 37 cannot be beyond the grounds as available under section 34 of the act.
19. This observation is supported by the judgment passed by the Hon'ble Apex Court in MMTC Limited vs. Vedanta Limited [(2019) 4 SCC 163]:
"14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the Court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the Court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the Court under Section 34 and by the Court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings."
20. The scope of interference under Section 37 of the Act of 1996 is even narrower as compared to that of Section 34 of the Act of 1996 and cannot be equated with the normal appellate jurisdiction of the court. The inspection ought to be limited to see as to whether the court under Section 34 has traveled beyond the (Uploaded on 30/01/2026 at 03:33:44 PM) (Downloaded on 30/01/2026 at 03:32:04 PM) [2026:RJ-JD:2196] (14 of 17) [CMA-1944/2017] limited grounds enshrined in Section 34. Hon'ble Supreme Court in UHL Power Co. Ltd. v. State of H.P., [(2022) 4 SCC 116] held as follows -
"16. As it is, the jurisdiction conferred on courts under Section 34 of the Arbitration Act is fairly narrow, when it comes to the scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an appellate court in examining an order, setting aside or refusing to set aside an award, is all the more circumscribed. In MMTC Ltd. v. Vedanta Ltd. [MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163 : (2019) 2 SCC (Civ) 293], the reasons for vesting such a limited jurisdiction on the High Court in exercise of powers under Section 34 of the Arbitration Act have been explained in the following words: (SCC pp. 166-67, para 11) "11. As far as Section 34 is concerned, the position is well-settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii) i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award. Additionally, the concept of the "fundamental policy of Indian law" would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural justice, and Wednesbury [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1948) 1 KB 223 (CA)] reasonableness. Furthermore, "patent illegality" itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract."
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21. The Hon'ble Supreme Court in Punjab State Civil Supplies Corporation Limited & Anr. vs. M/s Sanman Rice Mills & Ors. (2024) INSC 742 has held that while exercising the powers under Section 37 of the Act of 1996, the Court cannot sit in an appeal against the arbitral award and the reappraisal of the evidence is not permissible. The relevant extract is quoted below:
"20. In view of the above position in law on the subject, the scope of the intervention of the court in arbitral matters is virtually prohibited, if not absolutely barred and that the interference is confined only to the extent envisaged under Section 34 of the Act. The appellate power of Section 37 of the Act is limited within the domain of Section 34 of the Act. It is exercisable only to find out if the court, exercising power under Section 34 of the Act, has acted within its limits as prescribed thereunder or has exceeded or failed to exercise the power so conferred. The Appellate Court has no authority of law to consider the matter in dispute before the arbitral tribunal on merits so as to find out as to whether the decision of the arbitral tribunal is right or wrong upon reappraisal of evidence as if it is sitting in an ordinary court of appeal. It is only where the court exercising power under Section 34 has failed to exercise its jurisdiction vested in it by Section 34 or has travelled beyond its jurisdiction that the appellate court can step in and set aside the order passed under Section 34 of the Act. Its power is more akin to that superintendence as is vested in civil courts while exercising revisionary powers. The arbitral award is not liable to be interfered unless a case for interference as set out in the earlier part of the decision, is made out. It cannot be disturbed only for the reason that instead of the view taken by the arbitral tribunal, the other view which is also a possible view is a better view according to the appellate court."
22. Therefore, the settled position of law is that the scope of interference under Section 37 is narrower than that under (Uploaded on 30/01/2026 at 03:33:44 PM) (Downloaded on 30/01/2026 at 03:32:04 PM) [2026:RJ-JD:2196] (16 of 17) [CMA-1944/2017] Section 34. The Court cannot re-appreciate evidence or substitute its own opinion unless the award is patently illegal or shocks the conscience.
23. This Court observes that the appellant was an active participant at every stage of the re-determination process. Having chosen not to challenge the procedural remands at the earliest opportunity and having submitted to the jurisdiction of CALA for fresh adjudication, the appellant is now estopped from challenging the award simply because the final determination has gone against its interest. This Court is also of the view that since the amended compensation was granted to ensure just and fair compensation for property acquired, the award is in furtherance of the public policy of India. It is also pertinent to note that the decision of this Hon'ble Court in NHAI v. Meena (supra), which has attained finality, is a direct precedent on the matter. As that case involves the same acquisition, the same project, and the same parties, this Court finds no reason to depart from the settled position.
24. In light of the aforesaid observations, this Court finds that the Arbitral Award dated 08.11.2013 is a well-reasoned document based on concrete evidence and documents. It does not suffer from any error, nor does it contain any patent illegality. This Court finds no reason to interfere with the concurrent findings of the District Judge, Sirohi, which are based on a sound appreciation of the conduct of the parties and the limited grounds available under Section 34.
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25. Accordingly, the order of learned District Judge is upheld, and the challenge laid by the appellant is rejected. The instant appeal is dimissed.
26. Stay application as well as all other pending applications, if any, also hereby stand dismissed.
(SANJEET PUROHIT),J 205-sumer/-
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