- 1 - HC-KAR NC: 2026:KHC:3341 MFA No. 6429 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF JANUARY, 2026 BEFORE THE HON'BLE MS. JUSTICE JYOTI M MISCELLANEOUS FIRST APPEAL NO. 6429 OF 2024 (AA) BETWEEN: NATIONAL HIGHWAY AUTHORITY OF INDIA PIU-MANGALORE, DOOR NO.3-29, BETHEL, THARETHOTA, NEAR PUMPWELL (NH-66), MANGALORE-575005. REPRESENTED BY ITS PROJECT DIRECTOR. …APPELLANT (BY SRI. SHOBHITH N SHETTY,ADVOCATE) AND: 1. SMT NAFEESA B SHEIK AHMED (SINCE DECEASED), W/O B. SHEIK AHMED, MOODUTHOTA HOUSE, BELLAIRU VILLAGE, HALEYANGADI POST, MANGALURU TALUK. SRI. BASHEER AHMED S/O. NAFEESA B. SHEIK AHMED, SHAMEEL COTTAGE, NEAR UCHILA BRIDGE, R/AT MUDUTHOTA HOUSE, BELLAIRU VILLAGE, POST HALEYANGADI. MANGALURU TALUK 2. THE COMPETENT AUTHORITY AND SPECIAL LAND ACQUISITION OFFICER, NATIONAL HIGHWAY 66 NGO BUILDING, Digitally signed by PREMCHANDRA M R Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:3341 MFA No. 6429 of 2024 NEAR CLOCK TOWER, MANGALURU, D.K.DISTRICT-575001 3. THE DEPUTY COMMISSIONER AND ARBITRATOR DAKSHINA KANNADA DISTRICT, MANGALURU - 575008. …RESPONDENTS (BY SRI. MANJUNATHA RAYAPPA, AGA FOR R2 AND R3; R1 SERVED AND UNREPRESENTED) THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION 37(1)(c) OF THE ARBITRATION AND CONCILIANTION ACT, 1996. THIS MISCELLANEOUS FIRST APPEAL IS LISTED FOR ADMISSION, THIS DAY, THE JUDGMENT IS DELIVERED AS UNDER: ORAL JUDGMENT Sri.Shobith N.Shetty., counsel for the appellant and Sri.Manjunatha Rayappa., Additional Government Advocate for respondent No.2 have appeared in person. 2. The Central Government acquired certain lands of several villages, including Bellairu Village of Mangaluru Taluk, for the widening of National Highway 66 from K.M.283.300 to K.M.358.080, Kundapura to Surathkal Section and K.M.375.300 To K.M.376.700 and K.M.3.700 to K.M.17.200 Nantoor Circle to Kerala Border Section in Dakshina Kannada District and - 3 - HC-KAR NC: 2026:KHC:3341 MFA No. 6429 of 2024 accordingly lands were acquired as per the provisions of the National Highway Act. The preliminary and the final notifications were issued. The land in Survey No.42/2B, measuring 273 square meters in Bellairu Village, which belongs to the first respondent, was acquired. The land losers were entitled to receive compensation on the value of the property as on the date of the publication of 3A(1) of the National Highways Act, 1956. The competent authority, while determining the compensation for the lands of Bellairu Village, including the land of the first respondent, adopted the highest guidance value rates, classifying the land as garden, dry, and wet, and adopted the fair market value of the land on the date of publication of the notification under Section 3A(1) of the Act. It fixed the land value at the rate of Rs.8,000 per Cent for Survey No.42/2B (guidance value for commercial purposes), which was justified under the law. The compensation was determined by the competent authority. Not satisfied with the compensation awarded, the first respondent preferred an arbitration application, and the - 4 - HC-KAR NC: 2026:KHC:3341 MFA No. 6429 of 2024 arbitrator enhanced the compensation. Aggrieved by the arbitral award, the National Highway preferred a suit. The Trial Court dismissed the suit. Under these circumstances, the appellant has filed the appeal on several grounds as set out in the memorandum of appeal. 3. Counsel for the respective parties presented several contentions. Heard the arguments and perused the papers with care. 4. The core issue requiring consideration is whether the Arbitrator was justified in increasing the compensation amount. To be precise, the central point for consideration is whether the Arbitrator had cause to enhance the compensation amount. 5. Suffice it to note that the competent authority determined the compensation for 2018 and fixed the land compensation. The compensation was fixed, placing proper reliance on the material on record, and consequently, there existed no sufficient cause for the Arbitrator to enhance the awarded amount. The Arbitrator erred in enhancing the - 5 - HC-KAR NC: 2026:KHC:3341 MFA No. 6429 of 2024 compensation solely on the ground that his predecessor had enhanced the compensation amount six times. This is untenable. The Arbitrator is required to apply their own mind to the evidence, not merely follow the footsteps of a predecessor. Relying solely on a previous award constitutes a failure to exercise independent jurisdiction. The Arbitrator must reach their own conclusion based on evidence placed before them, not act as an appellate authority over their predecessor or simply adopt their findings. I have no hesitation in concluding that the Arbitrator has committed a patent illegality by mechanically enhancing the compensation based solely on the predecessor's award, failing to act as an independent tribunal. An award based on such a tenuous ground conflicts with the "fundamental policy of Indian law". 6. The competent authority’s compensation was correctly determined from the record; the Arbitrator's enhancement lacked justification. Consequently, the dismissal of the suit is also incorrect. Counsel for the appellant submits that a memo has been filed stating that the appellant has made a deposit before the - 6 - HC-KAR NC: 2026:KHC:3341 MFA No. 6429 of 2024 Trial Court in 50% of the enhanced amount. Counsel therefore, submits that the memo may be placed on record and an appropriate order may be passed. The memo and the submission is placed on record. Counsel for the appellant is directed to make an appropriate application for release of the said amount. 7. For the foregoing reasons, the arbitral award and the judgment and decrees in the suit are liable to be set aside, and they are set aside. 8. The judgment and decree dated 22.06.2024, passed by the I Additional District and Sessions Judge Mangaluru, in A.P.No.58/2023 and the Award dated 13.12.2022 are set aside, and the compensation awarded by the Special Land Acquisition Officer is confirmed. 9. Resultantly, the Miscellaneous First Appeal is allowed. - 7 - HC-KAR NC: 2026:KHC:3341 MFA No. 6429 of 2024 10. Because of disposal of the appeal, interim order granted if any stands discharged and pending interlocutory applications if any are disposed of. SD/- (JYOTI M) JUDGE CH List No.: 1 Sl No.: 44