Legal Analysis: Project Director, National Highways Authority of India vs. Alfa Remidis Ltd. and Others

Citation: 2026 INSC 480
Court: Supreme Court of India
Bench: Justice Sanjay Kumar (Division Bench)
Date of Decision: May 12, 2026
Nature of Judgment: Civil Appeal under Article 136 of the Constitution of India against the judgment of the High Court of Judicature at Bombay, Nagpur Bench, in Arbitration Appeal No. 39 of 2023.

Synopsis of the Judgment

The National Highways Authority of India (NHAI) appealed against the enhancement of compensation awarded to a landowner for land acquired for four‑laning of National Highway No. 547‑E. The competent authority initially classified the land as agricultural and awarded compensation at ₹161.63 per square metre. On arbitration under Section 3G(5) of the National Highways Act, 1956, the Arbitrator (Additional Commissioner) held that the land was being used for industrial purposes (manufacturing paracetamol) and relied on a single sale deed of a residential plot in a nearby village to enhance compensation to ₹3,588 per square metre. The District Judge set aside the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996, holding that the Arbitrator had violated Section 26 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The High Court, in appeal under Section 37, restored the arbitral award. The Supreme Court set aside the High Court’s judgment and the arbitral award, holding that the Arbitrator had committed a patent illegality by (i) relying on a sale deed of a dissimilar type of land (residential) when the acquired land was industrial, and (ii) using a single sale exemplar instead of determining the average sale price from multiple sale deeds as mandated by Section 26(1)(b) read with Explanations 1 to 4. The Court directed that compensation be determined under Section 26(1)(a) using the ready reckoner rate of ₹2,020 per square metre.

1. Basic Information of the Judgment

• Case Title: Project Director, National Highways Authority of India vs. Alfa Remidis Ltd. and others

• Civil Appeal No.: Arising out of Special Leave Petition (C) No. 33773 of 2025

• Bench: Justice Sanjay Kumar (Division Bench)

• Date of Decision: May 12, 2026

• Citation: 2026 INSC 480

• Appeal From: Judgment dated 05.06.2025 of the High Court of Judicature at Bombay, Nagpur Bench, in Arbitration Appeal No. 39 of 2023

2. Legal Framework

Laws and Provisions Involved

• National Highways Act, 1956 (NH Act): Section 3A(1) (acquisition notification), Section 3G(1) (determination of compensation by competent authority), Section 3G(5) (appeal/arbitration)

• Right to Fair Compensatio

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