Bhartiya Rashtriya Rajmarg ... vs Bhaiyaram And Another
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Allahabad High Court

Bhartiya Rashtriya Rajmarg ... vs Bhaiyaram And Another on 26 May, 2025

Author: Piyush Agrawal

Bench: Piyush Agrawal

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 


Neutral Citation No. - 2025:AHC:88697
 

 
Reserved On:13.05.2025
 
Delivered On:26.05.2025
 
Court No. - 10
 
Case :- APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 446 of 2022
 

 
Appellant :- Bhartiya Rashtriya Rajmarg Pradhikaran & Another
 
Respondent :- Bhaiyaram & Another
 
Counsel for Appellant :- Pranjal Mehrotra
 
Counsel for Respondent :- Manish Kumar Jain
 

 

 
HON'BLE PIYUSH AGRAWAL,J.

1. Heard Shri Pranjal Mehrotra, learned counsel for the appellants and Shri Manish Kumar Jain, learned counsel for the respondents.

2. The instant appeal has been preferred against the impugned judgement & order dated 27.05.2020 passed by the District Judge, Lalitpur in Misc. Arbitration Case No. 123 of 2015.

3. Learned counsel for the appellants submits that on 03.05.2005, notification under section 3-A of the National Highways Act, 1956 (hereinafter referred to as, 'the Act') following by declaration under 3-D of the said Act dated 27.04.2006 were issued in respect of the land in question. He further submits that thereafter, the competent authority declared the award dated 10.08.2007 determining the amount of compensation in respect of the land in question. Aggrieved by the award, the respondents filed a petition under section 3G(5) of the Act before the Arbitrator (District Magistrate, Lalitpur), in which an award dated 14.07.2015 was passed enhancing the rate of compensation. Aggrieved by the award dated 14.07.2015, the appellants filed a petition under section 34 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as, 'the Act of 1996'), which was numbered as Misc. (Arbitration) Case No. 123 of 2015. The said case has been dismissed vide impugned judgement & order dated 27.05.2020.

4. Learned counsel for the appellants further submits that at the time of notification under section 3-A of the Act, the land in question was recorded as agricultural land in the revenue records. The competent authority, therefore, rightly awarded the compensation treating the land to be agricultural land as no building was found standing over the acquired land at the time of publication of notification under section 3-A of the Act, but the Arbitrator has wrongly enhanced the compensation treating the land to be commercial/residential. He further submits that the respondents have not produced any evidence on record to prove their case, but still the compensation has been enhanced exorbitantly. He further submits that in absence of any proof being brought on record, the enhancement of compensation cannot be justified. He further submits that specific grounds were taken before the Arbitrator as well as in the application under section 34 of the Act of 1996, but without considering the same, the impugned order has been passed. He further submits that for determining the market value, the market value of the land on the date of publication of notification under section 3-A of the Act is to be taken and therefore, the enhancement of the compensation is not correct.

5. Per contra, learned counsel for the respondents supports the impugned order and submits that sufficient material was there on record on the basis of which, the orders have been passed. The land in question was not an agricultural land as residential and commercial activities were being undertaken and therefore, the impugned order has rightly been passed.

6. After hearing learned counsel for the parties, the Court has perused the record.

7. The record shows that in the notification under section 3-A of the Act, the land in question is plot no. 664/3, in which the type of land has been categorized as Private and Government and the nature of land has been categorized as Residential and Commercial.

8. The Apex Court in Punjab State Civil Supplies Corporation Limited & Another Vs. M/s Sanman Rice Mills & Others [2024 INSC 742] has held as under:-

"17. In paragraph 14 of MMTC Limited v. Vedanta Limited,6 it has been held as under:

"14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section 34 and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings.

18. Recently a three-Judge Bench in Konkan Railway Corporation Limited v. Chenab Bridge Project Undertaking7 referring to MMTC Limited (supra) held that the scope of jurisdiction under Section 34 and Section 37 of the Act is not like a normal appellate jurisdiction and the courts should not interfere with the arbitral award lightly in a casual and a cavalier manner. The mere possibility of an alternative view on facts or interpretation of the contract does not entitle the courts to reverse the findings of the arbitral tribunal.

19. In Bombay Slum Redevelopment Corporation Private Limited v. Samir Narain Bhojwani8, a Division Bench of this Court followed and reiterated the principle laid down in the case of MMTC Limited (supra) and UHL Power Company Limited v. State of Himachal Pradesh9. It quoted and highlighted paragraph 16 of the latter judgment which extensively relies upon MMTC Limited (supra). It reads as under:

"16. As it is, the jurisdiction conferred on courts under Section 34 of the Arbitration Act is fairly narrow, when it comes to the scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an appellate court in examining an order, setting aside or refusing to set aside an award, is all the more circumscribed. In MMTC Ltd. v. Vedanta Ltd. [MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163: (2019) 2 SCC (Civ) 293], the reasons for vesting such a limited jurisdiction on the High Court in exercise of powers under Section 34 of the Arbitration Act have been explained in the following words: (SCC pp. 166- 67, para 11)

"11. As far as Section 34 is concerned, the position is well- settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii) i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award.

Additionally, the concept of the "fundamental policy of Indian law" would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural justice, and Wednesbury [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., [1948] 1 ?.?. 223 (CA)] reasonableness. Furthermore, "patent illegality" itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract."

CONCLUSION:

20. In view of the above position in law on the subject, the scope of the intervention of the court in arbitral matters is virtually prohibited, if not absolutely barred and that the interference is confined only to the extent envisaged under Section 34 of the Act. The appellate power of Section 37 of the Act is limited within the domain of Section 34 of the Act. It is exercisable only to find out if the court, exercising power under Section 34 of the Act, has acted within its limits as prescribed thereunder or has exceeded or failed to exercise the power so conferred. The Appellate Court has no authority of law to consider the matter in dispute before the arbitral tribunal on merits so as to find out as to whether the decision of the arbitral tribunal is right or wrong upon reappraisal of evidence as if it is sitting in an ordinary court of appeal. It is only where the court exercising power under Section 34 has failed to exercise its jurisdiction vested in it by Section 34 or has travelled beyond its jurisdiction that the appellate court can step in and set aside the order passed under Section 34 of the Act. Its power is more akin to that superintendence as is vested in civil courts while exercising revisionary powers. The arbitral award is not liable to be interfered unless a case for interference as set out in the earlier part of the decision, is made out. It cannot be disturbed only for the reason that instead of the view taken by the arbitral tribunal, the other view which is also a possible view is a better view according to the appellate court.

21. It must also be remembered that proceedings under Section 34 of the Act are summary in nature and are not like a full-fledged regular civil suit. Therefore, the scope of Section 37 of the Act is much more summary in nature and not like an ordinary civil appeal. The award as such cannot be touched unless it is contrary to the substantive provision of law; any provision of the Act or the terms of the agreement."

9. Once the notification under section 3-A of the Act itself shows the land in question to be residential or commercial land and no positive material has been brought on record on behalf of the appellant to rebut the same and also the appellants have failed to prove that the award passed is patently illegal or is against the public policy, the impugned order cannot be said to be bad in the eyes of law.

10. In view of the aforesaid facts & circumstances of the case as well as the law laid down by the Apex Court in M/s Sanman Rice Mills (supra), no interference is called for in the impugned order.

11. The appeal fails and is hereby dismissed.

12. The Office shall return the lower court records.

Order Date:-26/05/2025

Amit Mishra