National Highway Land Arbitration Revisited: Supreme Court’s Section 26 Roadmap for Fair Compensation

1. Introduction: Why This Judgment Matters

The Supreme Court’s decision in Project Director, NHAI v. Alfa Remidis Ltd. (2026 INSC 480) is a must-read for anyone handling land acquisition compensation under the National Highways Act, 1956 — whether as Arbitrator under Section 3G(5), as District Judge under Section 34, or as appellate court under Section 37. The ruling transforms what often becomes a battle of sale exemplars into a disciplined, statute-driven exercise anchored in Sections 26–28 of the 2013 Land Acquisition Act.

At a practical level, the judgment answers questions that frequently arise in NH acquisitions:

• Can a residential sale deed be used to value industrial land?

• Is a single sale deed enough for Section 26(1)(b)?

• When does the Ready Reckoner rate take the lead?

• When does a flawed valuation become “patent illegality” under Section 34?

2. Facts in Brief: How Valuation Went Astray

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Supreme Court Tightens the Screws: National Highway Land Arbitration and the Limits of Compensation

 Applying the rigours of Section 26(1) of the 2013 LA Act to the case on hand, we find that the Arbitrator demonstrably erred in relying upon the sale deed dated 29.03.2017 relating to residential land in an adjoining village to determine the market value of Respondent No. 1's land, which was being used for an industrial purpose. Clearly, the two lands were not of a 'similar type' for the purposes of Section 26(1)(b) of the 2013 LA Act and the price in the said sale deed could not have been adopted. Further, the methodology for working out the 'average sale price' Under Section 26(1)(b), as set out in Explanations 1 to 4 thereunder, does not permit placing reliance on a single sale deed for that purpose. Reference may be made to Madhya Pradesh Road Development Corporation v. Vincent Daniel and Ors.   MANU/SC/0399/2025 : 2025:INSC:408 : (2025) 7 SCC 798, wherein this Court considered the scheme of Section 26(1) of the 2013 LA Act and observed that the language used therein implied that there should be multiple deeds available for reference, as singular deals may not supply adequate and reliable data. {Para 11}

12. Though the High Court laboured over various decisions of this Court, the position obtaining under the statutory provision and the legal principles laid down in the above referred judgments were neither noted nor given effect to. Section 34(2A) of the Arbitration Act provides for setting aside an arbitral award if it is found to be vitiated by patent illegality appearing on the face of it. Though the proviso thereto stipulates that an arbitral award should not be set aside merely on the ground of erroneous application of law or by reappreciation of evidence, we are of the opinion that the cloak of protection afforded by the proviso cannot be extended to the present arbitral award. The Arbitrator completely ignored the directives of Section 26(1)(b) of the 2013 LA Act and the Explanations thereunder, by adopting a sale exemplar of a totally dissimilar type of land and, at that, a single sale exemplar, which was contrary to the statutory mandate. Respondent No. 1 had itself cited the Government rate available in the Ready Reckoner, i.e, ` 2,020/- per square meter, being the rate applicable for lands on the highway in Zone 4. Mauza Pardi (Rithi) finds mention amongst the villages named in Zone 4. That being so, the statutory provision that should have been applied for determination of the market value of Respondent No. 1's land was Section 26(1)(a) of the 2013 LA Act.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. ... of 2026 (Arising out of Special Leave Petition (C) No. 33773 of 2025)

Decided On: 12.05.2026

Project Director, National Highways Authority of India Vs. Alfa Remidis Ltd. and Ors.

Hon'ble Judges/Coram:

P.V. Sanjay Kumar and K. Vinod Chandran, JJ.

Author: P.V. Sanjay Kumar, J.

Citation: 2026 INSC 480,MANU/SC/0469/2026

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Good Article on Valuation Under Land Acquisition Act 2013.

Submitted by :A. M. Ibrahim. B.Arch., FIE (I), FIV, FICA.

Kadayanallur – Tamil Nadu

9486500294

 https://drive.google.com/file/d/1cLMpgmkYhq1bauXq6oTUd86lT5lKr-Mg/view?usp=sharing

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Under which circumstances land acquisition will not lapse even if compensation is not paid or possession of acquired land is not taken?

 366. In view of the aforesaid discussion, we answer the questions as under:

366.1. Under the provisions of Section 24(1)(a) in case the award is not made as on 1-1-2014, the date of commencement of the 2013 Act, there is no lapse of proceedings. Compensation has to be determined under the provisions of the 2013 Act.

366.2. In case the award has been passed within the window period of five years excluding the period covered by an interim order of the court, then proceedings shall continue as provided Under Section 24(1)(b) of the 2013 Act under the 1894 Act as if it has not been repealed.

366.3. The word "or" used in Section 24(2) between possession and compensation has to be read as "nor" or as "and". The deemed lapse of land acquisition proceedings Under Section 24(2) of the 2013 Act takes place where due to inaction of authorities for five years or more prior to commencement of the said Act, the possession of land has not been taken nor compensation has been paid. In other words, in case possession has been taken, compensation has not been paid then there is no lapse. Similarly, if compensation has been paid, possession has not been taken then there is no lapse.

(emphasis supplied)

366.4. The expression "paid" in the main part of Section 24(2) of the 2013 Act does not include a deposit of compensation in court. The consequence of non-deposit is provided in the proviso to Section 24(2) in case it has not been deposited with respect to majority of landholdings then all beneficiaries (landowners) as on the date of notification for land acquisition Under Section 4 of the 1894 Act shall be entitled to compensation in accordance with the provisions of the 2013 Act. In case the obligation Under Section 31 of the Land Acquisition Act, 1894 has not been fulfilled, interest Under Section 34 of the said Act can be granted. Non-deposit of compensation (in court) does not result in the lapse of land acquisition proceedings. In case of non-deposit with respect to the majority of holdings for five years or more, compensation under the 2013 Act has to be paid to the "landowners" as on the date of notification for land acquisition Under Section 4 of the 1894 Act.

366.5. In case a person has been tendered the compensation as provided Under Section 31(1) of the 1894 Act, it is not open to him to claim that acquisition has lapsed Under Section 24(2) due to non-payment or non-deposit of compensation in court. The obligation to pay is complete by tendering the amount Under Section 31(1). The landowners who had refused to accept compensation or who sought reference for higher compensation, cannot claim that the acquisition proceedings had lapsed Under Section 24(2) of the 2013 Act.

366.6. The proviso to Section 24(2) of the 2013 Act is to be treated as part of Section 24(2), not part of Section 24(1)(b).

366.7. The mode of taking possession under the 1894 Act and as contemplated Under Section 24(2) is by drawing of inquest report/memorandum. Once award has been passed on taking possession Under Section 16 of the 1894 Act, the land vests in State there is no divesting provided Under Section 24(2) of the 2013 Act, as once possession has been taken there is no lapse Under Section 24(2).

366.8. The provisions of Section 24(2) providing for a deemed lapse of proceedings are applicable in case authorities have failed due to their inaction to take possession and pay compensation for five years or more before the 2013 Act came into force, in a proceeding for land acquisition pending with the authority concerned as on 1-1-2014. The period of subsistence of interim orders passed by court has to be excluded in the computation of five years.

366.9. Section 24(2) of the 2013 Act does not give rise to new cause of action to question the legality of concluded proceedings of land acquisition. Section 24 applies to a proceeding pending on the date of enforcement of the 2013 Act i.e. 1-1-2014. It does not revive stale and time-barred claims and does not reopen concluded proceedings nor allow landowners to question the legality of mode of taking possession to reopen proceedings or mode of deposit of compensation in the treasury instead of court to invalidate acquisition.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2749/2023 

Decided On: 11.04.2023

Land and Building Department through Secretary and Ors. Vs.

Attro Devi and Ors.

Hon'ble Judges/Coram:

Abhay Shreeniwas Oka and Rajesh Bindal, JJ.

Author: Rajesh Bindal, J

Citation: MANU/SC/0361/2023.

Read full Judgment here: Click here

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Bombay HC: Casual Absence Of Defendant On Insignificant Date Would Not Make Court Order Ex-Parte

  The term ‘ex-parte’ means in absence of party. Order IX of

the Code provides consequences of non-appearance of the party.

Particularly, Rule 6 to Order IX prescribes a procedure in the

contingency when only plaintiff appears. In case when summons was duly served but the defendant does not appear then the Court may make an order that the suit be heard ex-parte in terms of Sub-clause (a) of Clause (1) to Rule 6 of Order IX of the Code. Basically, when defendant fails to appear and consequently no evidence could be recorded on his behalf and defendant’s case is closed, then the Court is bound to proceed under Rule 2 of Order XVII of the Code. The basic requirement is the absence of defendant when the suit was called on for hearing resulting into deciding case without defendant’s presence. {Para 35}

36. The provisions of Order IX Rule 13 of the Code have beenintroduced to remedied the situation where the defendant is absent meaning thereby the cause was decided in his absence. It is for the reason that, there is no contest due to absence of defendant at the time of hearing. Even if written statement is filed but the defendant remains absent throughout till adjudication then certainly the decision can be termed as an ‘ex-parte’, however a casual absence of defendant on any intermediate date would not suffice to treat the decision ex-parte. The defendant cannot take disadvantage of his isolated absence on insignificant date to state that the order was ex-parte. In order to assume the character of ex-parte, there must be absence of defendantat the time of hearing, meaning thereby in his absence the Court has proceeded in passing the decree. In short, defendant’s voluntary act of not cross examining the party and not advancing arguments, is not capable enough to term the order as ‘ex-parte’.

37. In sum and substance, the order passed by the First

Authority after considering the rival contentions was purely on merit. The respondent was throughout present in the proceeding as well as participated till fag end. The First Authority has taken into account written statement of the respondent as well as his evidence affidavit was on record. The First Authority has heard submissions of the claimants in presence of the respondent and as per record also heard submissions of respondent too. It is not a case that on the date of hearing, the respondent was absent to claim the benefit. The factual position in all petitions is one and the same. The Second Authority fell in serious error in holding that the orders were ex-parte decision amenable to set aside in  terms of Order IX Rule 13 of the Code. In absence of the applicability of Order IX Rule 13 of the Code, the sameAuthority has no power to set aside its own order. Though submissionsare made on merits that the First Authority went wrong in assessingcompensation, however said challenge would squarely fall within thecompetence of the Appellate Forum and not to the same Authority. In short, the impugned orders passed in all petition are unsustainable in the eyes of law.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

NAGPUR BENCH, NAGPUR.

WRIT PETITION NO S . 1667 OF 20 22

Jyoti  Mahesh Agrawal Vs Deputy Chief EngineerConstruction) Central Railway

CORAM : VINAY JOSHI, J.

Dated : 19.12.20222.

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Article on Valuation under Land Acquisition Act 2013

Submitted by:

A. Mohammed Ibrahim. B.Arch, MIBC, FIV, FICA.

Kadayanallur-Tamil Nadu.

 https://drive.google.com/file/d/1NwbikGl5KaNYuBhUaIC0wF6ADOuT0iRs/view?usp=sharing

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How to calculate compensation under land acquisition Act 2013?

Submitted by:

A. Mohammed Ibrahim. B.Arch, FIV, FIE (I) FICA

Valuation for Land Acquisition

RFCT LARR ACT 2013 is restored. (Removal of Difficulty).

The LA Act 2013 Brief: Compensation package - The appropriate Government shall constitute multi-member land pricing commission or authority to finalize cost of land acquisition/compensation State-wise/area-wise as determined under Section 30(1) read with Schedule I to the Act. The Second Schedule lists eleven (11) elements of Rehabilitation and Resettlement entitlements in addition to those provided in the First Schedule. The Third Schedule enumerates twenty five (25) infrastructural amenities to be provided for resettlement to the affected families.

The Fourth Schedule lists thirteen (13) Central legislations, which are sought to be exempted from the provisions of the Act in the Principal Act 2013 and as per executive order dated 28^th  August 2015 these 13 (Thirteen) acts are within the scope of RFCTLARR ACT 2013. I.e. Compensation, Rehabilitation and resettlement entitlements are included. The LARR Act 2013 is restored by an Executive Order Dated 28^th August 2015.

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Court stay to be counted in land acquisition cases: HC

In a significant judgment benefitting landowners, the Punjab and Haryana High Court has held that the period of stay granted by the courts has to be counted while computing five-year period prescribed under the Rehabilitation and Resettlement Act of 2013 for release of land.

The ruling is important as the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, says proceedings shall deemed to have lapsed if the award is passed more than five years ago, but possession of the land has not been taken or compensation has not been paid.

It now means that the stay period will be taken into consideration. In case of inability of the state to take possession of land due to stay by the courts for five years or more, the proceedings shall be deemed to have lapsed. 

The matter was placed before the High Court Bench comprising Justices Hemant Gupta, GS Sandhawalia and Kuldeep Singh. Justices Hemant Gupta and GS Sandhawalia ruled: "We hold that irrespective of any interim orders

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