The High Court of Andhra Pradesh, in a significant ruling, has held that any challenge to an arbitrator’s award concerning compensation for land acquired under the National Highways Act, 1956, must be pursued through the statutory remedy available under the Arbitration and Conciliation Act, 1996. A Division Bench, comprising Justice Ravi Nath Tilhari and Justice Maheswara Rao Kuncheam, dismissed a writ appeal, affirming a single judge’s decision to relegate the petitioners to the alternative remedy of filing an application under Section 34 of the Arbitration Act.
Case Background
The case originated from the acquisition of lands belonging to Devabhaktuni Rama Lingeswara Rao and seven others for the widening of National Highway No. 216 in Krishna District. Following a notification on January 13, 2016, under Section 3A of the National Highways (NH) Act, 1956, the competent authority passed an award on March 31, 2017, determining the compensation amount.
Dissatisfied with the compensation, which they claimed was too low as their lands were treated as agricultural instead of non-agricultural, the landowners invoked the arbitration mechanism under Section 3G(5) of the NH Act. The Arbitrator and District Collector of Krishna District, however, dismissed their petitions for enhancement of compensation through orders dated January 11, 2019, and November 30, 2020.
The landowners then challenged these orders by filing Writ Petition No. 10641 of 2022. A learned Single Judge dismissed the petition on May 9, 2025, on the grounds that it involved disputed questions of fact regarding land classification and that the petitioners had an efficacious statutory alternative remedy under the Arbitration and Conciliation Act, 1996. The present writ appeal was filed against this dismissal.
Arguments of the Parties
The appellants, represented by counsel Sri L.T. Chandrasekhara Rao, argued that the arbitrator had violated the principles of natural justice and their fundamental rights under Article 14 of the Constitution by not applying the correct principles for determining fair compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
A key contention was that the remedy under Section 34 of the Arbitration and Conciliation Act was not applicable. The appellants’ counsel submitted that the National Highways Act is a special law that should override the Arbitration and Conciliation Act, which he argued is a general law.
Representing the National Highway Authority of India (NHAI), Sri Akhil Krishnan argued that the writ petition was rightly dismissed by the Single Judge, as the appellants have a clear statutory remedy under Section 34 of the Arbitration Act, 1996.
Court’s Analysis and Findings
The Division Bench meticulously examined the appellants’ contentions and found them to be without merit. The court observed that the appellants could not substantiate their claim of a violation of the principles of natural justice. The judgment noted, “It has not been argued before us nor there is any pleading in the writ appeal that such arbitration award was without affording any opportunity of hearing or behind their back.”
On the argument of incorrect determination of compensation, the court stated that such a question could be “very well be addressed, if the petitioners approach the forum providing for the statutory alternative remedy under the Act, 1996.” The Bench also clarified that while the right to compensation for acquired land is a constitutional right, it is not a fundamental right, and a grievance regarding the quantum does not automatically imply arbitrariness violating Article 14.
The court squarely addressed the central legal question regarding the applicability of the Arbitration and Conciliation Act. Referring to Section 3G(6) of the National Highways Act, 1956, the Bench highlighted the explicit statutory provision that makes the Arbitration Act applicable. The judgment states: “Section 3G(6) clearly provides that ‘subject to the provisions of this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to every arbitration under this Act’.”
Rejecting the “special law versus general law” argument, the court held that the principle is irrelevant when the special law itself incorporates the provisions of the other act. The court concluded, “once the Arbitration and Conciliation Act, 1996 has been made applicable to the award of the arbitrator passed under the National Highways Act, 1956, by specific provision, the question of the ‘special’ excludes ‘general’ does not arise at all. The submission advanced to that effect is misconceived.”
Furthermore, the Bench concurred with the Single Judge’s view that the classification of the land as agricultural or non-agricultural is a disputed question of fact requiring evidence, which is ordinarily not adjudicated in the writ jurisdiction under Article 226 of the Constitution.
Final Decision
Finding no illegality in the judgment of the learned Single Judge, the Division Bench dismissed the writ appeal. The court upheld the decision that the appellants’ proper course of action is to challenge the arbitrator’s award by filing a petition under Section 34 of the Arbitration and Conciliation Act, 1996. No order as to costs was made.
