IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR
&
THE HONOURABLE MR. JUSTICE K.HARIPAL
THURSDAY, THE 07TH DAY OF JANUARY 2021 / 17TH POUSHA, 1942
Arb.A.No.20 OF 2016
AGAINST THE ORDER IN AOP 51/2012 OF DISTRICT COURT, PALAKKAD
APPELLANT/PETITIONER:
ELIYAMMA
W/O. AVARACHAN, AGED 54 YEARS,CHEERAMPOTTA VEEDU,
PANTHALAMPADAM,PANNIYANKARA, VADAKKANCHERRY,
PALAKKAD DISTRICT.
BY ADV. SRI.JACOB SEBASTIAN
RESPONDENTS/RESPONDENTS:
1 THE DEPUTY COLLECTOR
AND SPECIAL ACQUISITION OFFICER,L.A.N.H,
PALAKKAD-678001.
2 THE NATIONAL HIGHWAY AUTHORITY OF INDIA
NEW DELHI REP. BY THE PROJECT DIRECTOR,N.H.A.I,
PALAKKAD-678001.
R1 SRI.RENIL ANTO KANDAMKULATHY, GOVT. PLEADER
R2 BY SRI.THOMAS ANTONY, SC, NHAI
THIS ARBITRATION APPEALS HAVING COME UP FOR ADMISSION ON
06/07/2020 ALONG WITH Arb.A.21/2016, THE COURT ON 07/01/2021
DELIVERED THE FOLLOWING:
Arb.A.Nos.20 & 21 of 2016 :2:
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR
&
THE HONOURABLE MR. JUSTICE K.HARIPAL
THURSDAY, THE 07TH DAY OF JANUARY 2021 / 17TH POUSHA, 1942
Arb.A.No.21 OF 2016
AGAINST THE ORDER IN AOP 305/2012 OF DISTRICT COURT, PALAKKAD
APPELLANT/PETITIONER:
O.P.GEORGE
S/O.POULOSE,AGED 65 YEARS,ORAVANMARIVEL,
CHAVITTUPADAM,PANNIYANKARA,PALAKKAD DISTRICT.
BY ADV. SRI.JACOB SEBASTIAN
RESPONDENTS/RESPONDENTS:
1 THE DEPUTY COLLECTOR
AND SPECIAL LAND ACQUISITION
OFFICER,L.A.N.H.,PALAKKAD,PIN-678001.
2 THE NATIONAL HIGHWAY AUTHORITY OF INDIA
NEW DELHI,REPRESENTED BY THE PROJECT DIRECTOR,
N.H.A.I,PALAKKAD,PIN-678001.
R1 BY SRI.RENIL ANTO KANDAMKULATHY, GOVT. PLEADER
R2 BY SRI.THOMAS ANTONY, SC, NHAI
THIS ARBITRATION APPEALS HAVING COME UP FOR ADMISSION ON
06/07/2020 ALONG WITH Arb.A.20/2016, THE COURT ON 07/01/2021
DELIVERED THE FOLLOWING:
Arb.A.Nos.20 & 21 of 2016 :3:
C.R.
JUDGMENT
Haripal, J.
These are appeals preferred under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996, challenging the correctness of the orders of the learned District Judge, Palakkad in Arbitration O.P.No.51/2012 dated 23/12/2015 and O.P. No.305/2012 dated 17/12/2015, respectively. As the properties of both the appellants were acquired by the National Highway Authority for the purpose of widening the Valayar-Vadakkanchery sector of NH 47 under a common notification, and since common grounds were urged, both these appeals were heard together and are being disposed of by this common judgment.
2. 0.0245 hectare of land in Survey No.211/4 in Block No.36 of Kannambra-I village in Alathur taluk belonged to the appellant in Arbitration Appeal No.20/2016 was acquired by the respondents for the above purpose and compensation was awarded by the Special Land Acquisition Officer. The amount was received Arb.A.Nos.20 & 21 of 2016 :4: by her under protest and on the basis of the requisition made by her, Arbitration Application No.98/2010 in LAC No.109/2009 was preferred under the National Highways Act, 1956, which was considered by the sole Arbitrator, the District Collector, Palakkad, and by order dated 20/08/2011 an enhanced compensation was granted to the appellant. The Special Land Acquisition Officer had granted her compensation at the rate of Rs.60,000/- per Are and a total compensation of Rs.2,65,252/- was allowed basing on comparable sales method, relying on the consideration shown in Sale Deed No.4720/2004 dated 20/12/2004. The Arbitrator enhanced the land value at the rate of Rs.90,000/- per Are and also granted 25% enhancement for the residential building and 20% increase for the value of the remaining structures. Thus, an additional compensation of Rs.1,04,449/- was granted as enhancement, besides 9% interest on the enhanced amount from the date of dispossession. Aggrieved by the same, the claimant moved the District Court under Section 34 of the Arbitration and Conciliation Act. By the impugned order, the learned District Arb.A.Nos.20 & 21 of 2016 :5: Judge declined to interfere and the original petition was dismissed.
3. Turning to Arbitration Appeal No.21/2016, which was also the subject matter of the same notification issued for the purpose of widening the Valayar-Vadakkanchery sector of NH 47, 0.0445 hectare of land in Survey No.1/1 in Block No.43 of Vadakkanchery-I village in Alathur taluk was acquired and the claimant was given a compensation of Rs.3,37,337/-. Here also the Special Land Acquisition Officer had based upon the very same document, i.e., Document No.4720/2004, while adopting comparable sales method. He also invoked the arbitration clause and moved the Arbitrator, the District Collector, in Arbitration Application No.238/2010 in LAC No.01/2009, who considered the claim. By order dated 25/07/2011, the Arbitrator granted an enhancement of Rs.1,67,215/-, which includes enhanced land value of Rs.1,51,705/-, enhanced value of structure of Rs.309/- and Rs.15,201/- as 10% user's right. He was also entitled to claim 9% interest on the additional compensation. Aggrieved by the order of Arb.A.Nos.20 & 21 of 2016 :6: the Arbitrator, the claimant moved the District Court with Arbitration O.P.No.305/2012 and, by the impugned order dated 17/12/2015, that claim was also dismissed by the learned District Judge.
4. Common questions have been raised in both these appeals. We heard the learned counsel for the appellants and also the learned Government Pleader for the respondents. In the nature of the order we propose to pass, it is not necessary to call for the trial records.
5. The learned counsel for the appellants has raised mainly two arguments. Firstly, according to him, the claims made under Section 3G(7) of the National Highways Act were not considered by the Special Land Acquisition Officer or the Arbitrator, and, therefore, in order to prove the prevailing market value of the land and for quantifying the other damage suffered by the appellants, they may be afforded one more opportunity and the matters may be remanded, enabling them to adduce further Arb.A.Nos.20 & 21 of 2016 :7: evidence. If that is not possible, he canvassed for setting aside both the awards, so that matters will be taken afresh. In support of his argument, the counsel relied on the decision of this Court in Udayakumar v. Project Director and Another [2019 (1) KHC 740]. Secondly, he argued that he has not been granted solatium and interest on solatium, which he is entitled as per the decision of this Court in Paul Mani and others v. Special Deputy Collector and Competent Authority (SLAO) and Another [2019 (4) KHC 465].
6. We shall deal with the initial contention first. After going through the awards passed by the Arbitrator, it is quite certain that the argument of the learned counsel that he could not bring in evidence to buttress the claim of enhanced compensation is factually incorrect.
7. Section 3G(6) of the National Highways Act provides that, subject to the provisions of the Act, the provisions of the Arbitration and Conciliation Act, 1996 shall apply to every Arb.A.Nos.20 & 21 of 2016 :8: arbitration under the Act. Section 3G(7) reads, thus:
"(7) The competent authority or the arbitrator while determining the amount under sub-section (1) or sub- section (5), as the case may be, shall take into consideration-
(a) the market value of the land on the date of publication of the notification under section 3-A;
(b) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the severing of such land from other land;
(c) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the acquisition injuriously affecting his other immovable property in any manner, or his earnings;
(d) if, in consequences of the acquisition of the land, the person interested is compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change."
It is quite necessary that the competent authority or the Arbitrator for determining the compensation under sub-section (5) of Section 3G has to take into consideration the market value of the land on the date of notification issued under Section 3A, damage, if any, sustained by the person interested in the property, etc. But from the orders passed by the Arbitrator, it is obvious that even after affording opportunity, the claimants did not produce any document or evidence to prove the market value of the land prevailed on the Arb.A.Nos.20 & 21 of 2016 :9: date of issue of the notification. It is true that both of them had made claim statements. The appellant in Arbitration Appeal No.20/2016 had claimed Rs.1,20,000/- per Are as land value whereas the appellant in Arbitration Appeal No.21/2016 had claimed Rs.10,00,000/- as compensation.
8. Even though both the appellants wanted to make the competent authority believe that their properties would have fetched higher market value, they remained dormant at the time of taking evidence. It has come out from the impugned orders that the Special Land Acquisition Officer had awarded land value basing on the consideration shown in Sale Deed No.4720/04 dated 20/12/2004, which was executed about ten months prior to the date of the notification. Comparable sales method, an acceptable mode of fixing land value in land acquisition cases was adopted by the Special Land Acquisition Officer. Later, when the matters were referred for arbitration, the Arbitrator had issued notice to the appellants and afforded opportunity to prove their claims that the Arb.A.Nos.20 & 21 of 2016 :10: property would have fetched still higher value, they did not adduce any evidence nor any document was produced for apprising the Arbitrator that the property had a still higher value. In spite of the same, taking into consideration the trends in the real estate market, the Arbitrator took into account post-notification developments and granted enhancement. He had granted enhancement under the heads like land value, value of improvements and user's right besides interest on additional compensation awarded by him.
9. That means, the Arbitrator did not place explicit reliance on the valuation made by the Special Land Acquisition Officer, but had taken into consideration increase in value of the land subsequent to the date of notification and thus enhancement was given to both the appellants. In other words, even in the absence of the claimants producing supporting documents or proof, the Arbitrator had taken into consideration post-notification developments as well, while granting enhancement in land value as well as value of structures.
Arb.A.Nos.20 & 21 of 2016 :11:
10. There is no inviolable rule that post-notification developments shall not be considered while fixing the land value. In the absence of better materials or documents, it is always open to the Land Acquisition Officer or the competent authority to take into reckoning post-notification developments as well, for granting reasonable and fair compensation to the owners of land whose properties were acquired for a public purpose. As mentioned earlier, the Arbitrator has granted enhancement in compensation under all possible heads, making good the loss sustained by the appellants.
11. When the appellants/claimants before the Arbitrator contended that their properties would have fetched still higher value, it is for them to prove the same. They have not adduced any evidence. The evidential burden was on them. Thus, applying 'who will fail' theory, it can be concluded that the appellants could not establish that their properties would have fetched much higher value or they would have been entitled to get value of Arb.A.Nos.20 & 21 of 2016 :12: improvements at a still higher rate than what was estimated by the Arbitrator.
12. As adverted to earlier, the learned counsel also canvassed for remanding the matter to the Arbitrator, facilitating to adduce evidence and produce documents in support of their arguments. The date of notification for acquisition was on 21/10/2005. The matter was considered by the Special Land Acquisition Officer and the Arbitrator during 2010-2011. Now more than fifteen years have elapsed and thus, in our view, it is idle to remit the matters to re do the exercise, which is against the interest of justice.
13. Secondly, it is the settled proposition of law that matters cannot be remanded back to the authority below in order to decide any question of fact which was not properly pleaded and no evidence was let in by the parties in support of the claim. It is the consistent stand of the Apex Court that an order of remand cannot be passed in a routine or lighthearted manner facilitating a party to Arb.A.Nos.20 & 21 of 2016 :13: fill up the lacuna or for production of fresh evidence, which opportunity they had failed to utilise. Remand is permissible only when the Appellate Court arrives at the finding that the judgment of the trial court is erroneous and is liable to be reversed or set aside; it is a condition precedent for passing an order under Rule 23/23A of Order 41 of the Code of Civil Procedure. Moreover, in ordinary parlance, the party seeking remand must show that any material evidence was either ignored, misread or misconstrued or any other illegality was construed by the authority below. Here, the appellants have no such case. Hence the prayer for putting the clock back for production of fresh evidence regarding market value of the land for enhancement of compensation at this distance of time cannot be accepted.
14. Still worse is the scope for such a prayer for remand in a proceedings under the Arbitration and Conciliation Act. It is the settled proposition of law, having regard to the scope and ambit of Section 34 of the Arbitration Act, that its powers are merely Arb.A.Nos.20 & 21 of 2016 :14: supervisory in nature and the Court cannot act as though exercising the appellate jurisdiction. The Court cannot correct the errors from the order of Arbitrator, but can only quash the order leaving the parties free to begin the arbitration afresh, if they so desire. Arbitrator is considered to be the sole Judge of the quality as well as quantity of evidence. The Arbitration Act aims at keeping supervisory role of the court at minimum level and this is justified as the parties to the agreement make a conscious decision to exclude the jurisdiction of the Courts by opting for arbitration, which is an alternate dispute resolution mechanism as they prefer expediency and finality offered by it.
15. From a bare reading of Section 34 it is clear that the arbitral award can be set aside only if one of the major five grounds contained in sub-section 2(a) of Section 34 of the Act or any one of the two grounds contained in sub-section (2)(b) exists. After the amendment of the Act on 23/10/2015, sub-section (2-A) also has been incorporated which provides that an arbitral award arising out Arb.A.Nos.20 & 21 of 2016 :15: of arbitrations other than international commercial arbitrations also can 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. Besides these grounds the award can also be set aside if it is in contravention to the provisions made under in Section 31(3) of the Arbitration Act. In the absence of an agreement between the parties it is mandatory for the Arbitrator to give reasons for the award. The question of the award being contrary to the public policy of India has to be invoked and substantiated. It is also settled by law that the scope for setting aside the award is limited to the grounds available under the Arbitration Act, which have been well-defined by numerous authorities on the subject.
16. In this connection, it seems apposite to extract the following proposition of the law laid down by the Delhi High Court in Union of India v. Bharat Builders [2002 (2) RAJ 576 (Del.)] in the context of Section 34 of the Act:
"It is settled law that court does not sit in appeal nor is it required to Arb.A.Nos.20 & 21 of 2016 :16: re-appreciate or reassess or re-evaluate the documents/material placed before the arbitrator. Even if erroneous view has been taken by the arbitrator in respect of the finding of fact or interpretation of terms and clauses of the agreement, the court should be reluctant to interfere until and unless perversity or non-application of mind or error is writ large on the face of the award. Unless bias or partiality of the arbitrator is manifestly demonstrated, the award should not be set aside because the parties choose forum on their own and to assail the findings of facts based upon the material produced by the parties amounts to stultifying the statute and its object and purpose. The object of the Arbitration Act is to minimise the disputes between the parties and not to allow the parties to challenge the finding by way of appeal. Scrutiny or scanning of findings of facts of the arbitrator is neither permissible nor called for unless a party succeeds in establishing any of the ingredients of Section 34 of the Act. It is not entitled to subvert the award."
We are in agreement with the above proposition of law laid down by the Delhi High Court.
17. The jurisdiction of the court under Section 34 being supervisory, the scope and ambit of the jurisdiction of this Court under Section 37 also cannot be enlarged further. High Court while hearing an appeal under Section 37 cannot interfere with the award unless the findings and conclusions of the Arbitrator are totally Arb.A.Nos.20 & 21 of 2016 :17: perverse and illegal. In the decision in Kinnari Mullick and Another v. Ghansyam Das Damani [(2018) 11 SCC 328], the Apex Court has held, approving the decision in McDermott International Inc v. Burn Standard Co. Ltd. and Others [(2006) 10 SCC 181], that no power has been invested by the Parliament in the court to remand the matter to the arbitral tribunal except to adjourn the proceedings of the court to the limited purpose mentioned in sub-section (4) of Section 34. That means, the prayer for remanding the matter to the Arbitrator is to be rejected. Thus, the first contention of the learned counsel does not merit consideration.
18. The second argument raised by the learned counsel was that the appellants were not paid solatium and interest on solatium. In this connection he has placed reliance on the decision of this Court in Paul Mani's case (supra).
19. True that this contention has been raised by the appellants for the first time before this Court in appeal. But, having Arb.A.Nos.20 & 21 of 2016 :18: regard to the circumstances, we cannot deny the claim on the technical ground that such a contention was not urged either before the Arbitrator or the District Court. As pointed out by the learned counsel, in Paul Mani's case (supra), where one of us was party (Ravikumar, J), this Court had occasion to consider the claim and the same was granted approving the decision of the Punjab and Haryana High Court in M/s.Golden Iron and Steel Forging v. Union of India [2011 (4) RCR 375 (Civil)] (CWP No.11461 of 2005 dated 28/03/2008), where the court had held that Section 3J of the National Highways Act is violative of Article 14 of the Constitution of India. Approving the dictum this Court held that the appellants are entitled to claim solatium and interest thereon since the proceedings under consideration was pending on 28/03/2008, the date of pronouncement of the judgment by the Punjab and Haryana High Court.
20. Soon later, the Apex Court had occasion to consider the vires of the said order of the Punjab and Haryana High Court and Arb.A.Nos.20 & 21 of 2016 :19: by the decision reported in Union of India and Another v. Tarsem Singh and Others [2019 KHC 6936], the Apex Court has held, after making an elaborate survey of the rule position that the provisions of the Land Acquisition Act 1894, relating to solatium and interest contained in Section 23(1A) and (2) and interest payable in terms of the proviso to Section 28 will apply to acquisitions made under the National Highways Act; the Apex Court thus declared that the provision of Section 3J of the National Highways Act is, to this extent, violative of Article 14 of the Constitution of India and therefore declared unconstitutional.
21. That means, it has become the law of the land under Article 141 of the Constitution of India, that solatium and interest on solatium can be granted to all cases of the land acquisitions made under the National Highways Act which are live on the date of making the declaration. In that view of the matter, even in the absence of specific plea or proof, the appellants are entitled to claim solatium and interest on solatium on the lines under Section Arb.A.Nos.20 & 21 of 2016 :20: 23(1A) and (2) and interest in terms of the proviso to Section 28 of the Land Acquisition Act.
The appeals are allowed to the above extent. No costs. The respondents are directed to quantify the amounts under Section 23(1A) and (2) and proviso to Section 28 of the Land Acquisition Act and pay the same, at the earliest.
Sd/-
C.T.RAVIKUMAR JUDGE Sd/-
K. HARIPAL JUDGE okb/22/7/2020 //True copy// P.S. to Judge