Bombay High Court
Vishnu Raju Machhi And Ors. vs Dedicated Freight Corridor ... on 13 August, 2025
2025:BHC-AS:35206-DB
JPP 15. ARAL 395.2025.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
ARBITRATION APPEAL (L) NO. 395 OF 2025
Dedicated Freight Corridor Corporation
of India Ltd. through Chief General Manager ... Appellant
V/s.
Salim Alikhan Khoja and Ors. ... Respondents
WITH
INTERIM APPLICATION NO. 8222 OF 2025
IN
ARBITRATION APPEAL (L) NO. 395 OF 2025
Salim Alikhan Khoja and Ors. ... Applicants
V/s.
Dedicated Freight Corridor Corporation
of India Ltd. through Chief General Manager ... Respondents
WITH
INTERIM APPLICATION NO. 8221 OF 2025
IN
ARBITRATION APPEAL (L) NO. 395 OF 2025
Vishnu Raju Machhi and Ors. ... Applicants
V/s.
Dedicated Freight Corridor Corporation
of India Ltd. through Chief General Manager ... Respondents
_______________________________________
Ms. Pradnya Bansode for the Appellant In ARAL 395/2025
Mr. Nitin Gangal with Namita Mestry and Prapti Karkera for the Applicants in
IA 8221/2025 and IA 8222/2025
_______________________________________
CORAM : ALOK ARADHE, CJ. AND
SANDEEP V. MARNE, J.
DATE : 13 AUGUST 2025
JPP 15. ARAL 395.2025.doc
P.C. :
1. By this Appeal filed under provisions of Section 37 of the
Arbitration and Conciliation Act, 1996, the Appellant has challenged the
order dated 23 April 2024 passed by the District Court, Thane in exercise of
jurisdiction under Section 34 of the Act over Arbitral Award dated 28
February 2025.
2. At the very outset, Mr. Gangal, learned Counsel appearing for
the Respondents would place on record copy of order dated 13 June 2025,
passed by this Court in Arbitration Appeal No. 76 of 2024 (Dedicated Freight
Corridor Corporation of India Limited v/s. Virendra Shamji Patel and Ors. ).
Mr. Gangal would submit that the issue involved in the present Appeal is
squarely covered by the order dated 13 June 2025.
3. After attention of the learned Counsel for the Appellant is
invited to the order dated 13 June 2025, she fairly accepts the position that
the subject matter of dispute in Arbitration Appeal No.76 of 2024 is in
respect of acquisition of land in the same village for same project. In that
view of the matter, the issue involved in the present Appeal would be
squarely covered by order passed in Arbitration Appeal No. 76 of 2024. For
facility of reference, the order dated 13 June 2025 is extracted below :-
JPP 15. ARAL 395.2025.doc
"1. Heard learned counsel for the parties.
2. Rule. Rule is made returnable forthwith. With consent of
learned counsel for the parties, Heard finally.
3. This appeal under section 37 of the Arbitration and
Conciliation Act, 1996 has been directed against the judgment
dated 2nd March 2024, by which, the objection preferred by the
appellant under section 34 of the Arbitration and Conciliation
Act, 1996 has been rejected.
4. Facts giving rise to filing of this appeal, in nutshell, are that
the appellant, a Dedicated Freight Corridor Corporation of India
Ltd. is a Corporation established by the Union of India, Ministry
of Railways to undertake planning and development,
mobilization of financial resources and construction,
maintenance and operation of dedicated freight corridors
(special railway projects). The appellant is constructing a
dedicated freight corridor with route length of 1483 kms. from
JNPT (Maharashtra) to Dadri (Haryana) for which the appellant
has acquired land bearing Survey No. 9(P) admeasuring 0.37.17
hectares in village Saphale, Taluka and District Palghar
belonging to respondents 1 to 5 (hereinafter referred to as "the
subject land"). Thereupon, proceedings under section 20-A of
the Railways Act, as amended in the year 2008 were initiated
and preliminary notification was issued on 26th May 2015 qua
the subject land and final award dated 19th May 2017 was
passed, by which, compensation was fixed at the rate of
Rs.2,362/- per square meter.
5. Being dissatisfied with the quantum of compensation, the
respondents 1 to 5 invoked the provisions of section 20-F(6) of
the Railways Amendment Act, 2008. The Arbitral Tribunal,
thereupon, passed an award on 18th January 2021 in
Arbitration Petition No. 135 of 2018, by which, amount of
compensation was enhanced to Rs.6,300/- per square meter.
6. The appellant, thereupon, challenged the aforesaid award by
way of a petition under section 34 of the Arbitration and
Conciliation Act, 1996. The learned Judge of the Commercial
Court, by the impugned judgment dated 2nd March 2024,
dismissed the petition preferred by the appellant. In the
aforesaid facts and background, this appeal has been filed.
JPP 15. ARAL 395.2025.doc
7. Learned counsel for the appellant submits that the Arbitral
Tribunal as well as the learned Judge of the Commercial Court
grossly erred in fixing the market value at the rate of Rs.6,300/-
per square meter. It is submitted that while doing so, the Arbitral
Tribunal has taken into account the rates of land in
neighbouring villages. Therefore, the impugned award as well as
the judgment dated 2nd March 2024 passed by the learned
Judge of the Commercial Court are liable to be set aside.
8. We have considered the submissions made by learned counsel
for the appellant.
9. The scope and ambit of Section 34 is well delineated by
decisions of Supreme Court. In SSANGYONG ENGINEERING &
CONSTRUCTION CO. LTD. VS. NATIONAL HIGHWAYS
AUTHORITY OF INDIA (NHAI) (SUPRA), while dealing with
powers of the Court deciding the application under Section 34 of
the 1996 Act, the Supreme Court took note of the amendments
brought about to Section 34 of the Act by Amendment Act 2015
and explained the ratio of the decision of the Supreme Court in
ONGC VS. WESTERN GECO INTERNATIONAL LTD.1, and laid
down the following principles which are mentioned in para 34
to 41 of the judgment which are extracted for the facility of
reference:
"(i) The interference by the court with an award on the
ground that arbitrator has not adopted a judicial
approach would tantamount to interference with merits
of the award which cannot be permitted, post
amendment of Section 34 of the Act.
(ii) The ground for interference insofar as it concerns
'interests of India' has been deleted, therefore, it is no
longer permissible to interfere with the award on the
said ground.
(iii) Similarly, the ground for interference in the award
on the basis that the same is in conflict with justice and
morality, has to be understood as conflict with 'most
basic notions of morality or justice.
(iv) The expression 'public policy of India' is now
restricted to mean that a domestic award is contrary to
JPP 15. ARAL 395.2025.doc
fundamental policy of Indian law and the ground for
interference that such an award is against basic notions
of justice or morality is done away with.
(v) The exercise of re-appreciation of evidence, which
the appellate court can undertake is not permitted on the
ground of patent illegality in the award.
(vi) Mere contravention of substantive law of India by it-
self is no longer a ground available to set aside an
arbitral award.
(vii) The change made in Section 28(3) by the
Amendment Act follows that construction of terms of a
contract is primarily for an arbitrator to decide unless the
arbitrator construes the contract in a manner that no fair
minded or reasonable person would, in short that
arbitrators' view is not even a possible view to take. If the
arbitrator wanders outside the contract and deals with
the matter not allotted to him he commits an error of
jurisdiction and this ground of challenge is covered
under Section 34(2-A) of the Act.
(viii) A decision of the arbitral tribunal, which is perverse
is though no longer a ground of challenge under public
policy of India', would certainly amount to a patent
illegality appearing on the face of the award.
(ix) Thus a finding recorded by an arbitrator which is
based on no evidence at all or an award which invokes
vital evidence in arriving at its decision would be
perverse and is liable to be set aside on the ground of
patent illegality."
10. An appeal is a continuation of an original proceeding. It is
equally well settled in law that in absence of any statutory
provision to the contrary, the power of appellate Court is co-
terminus with the power of a subordinate court. [See : JUTE
CORPN. OF INDIA LTD. VS. CIT2]. Thus, an appellate Court
exercising the power under Section 37 of the 1996 Act would
interfere only if a ground under Section 34 of the Act is made
out. [See : STATE OF CHHATISGARH AND ANOTHER VS. SAL
UDYOG PRIVATE LIMITED3].
JPP 15. ARAL 395.2025.doc
11. In ONGC LTD. VS. SAW PIPES4, the Supreme Court dealt
with the scope and ambit of expression 'public policy of India'. It
was held that if award is contrary to 'fundamental policy of
Indian law', or interest of justice or morality or patently illegal,
the same would be contrary to 'public policy of India'. A three
Judge Bench of Supreme Court in ONGC VS. WESTERN GECO
INTERNATIONAL LTD. (SUPRA) however, noted that the
expression 'fundamental policy of Indian law' was not elaborated
upon in ONGC LTD. VS. SAW PIPES (SUPRA). It was held that
the expression 'fundamental policy of Indian law' would include
three distinct and fundamental juristic principles which must be
understood as part and parcel of Indian law, which are as under:
(i) In every determination, a Court or other authority that
affects rights of a citizen or leads to any civil
consequences the Court or authority is bound to adopt a
judicial approach. The duty to adopt such an approach
arises from the very nature of power exercised by the
court and authority.
(ii) The Court or a quasi-judicial authority, while
determining the rights and obligation of the parties must
follow principles of natural justice.
(iii) A decision which is perverse or so irrational that no
reasonable person would have arrived at the same will not
be sustained in a court of law. It was further held that the
expression 'fundamental policy of law' cannot be put in
the straight jacket of a definition.
12. The Parliament, after the aforesaid decision of the Supreme
Court, amended Section 34 of the Arbitration and Conciliation
Act, 1996 by Amendment Act of 2015 w.e.f. 23 rd October 2015
and incorporated the clarification to ensure that the phrase
'fundamental policy of Indian law' is narrowly construed so as
not to entail a review on merits of a dispute.
13. In view of the aforesaid well settled legal position, we may
examine the controversy involved in the instant appeal.
14. It is not the case of the appellant that the award is affected
by fraud or corruption or is in contravention of the fundamental
JPP 15. ARAL 395.2025.doc
policy of Indian law. The only contention which has been urged
is that the Arbitral Tribunal erred in taking into account the rate
of land in neighbouring villages for ascertaining the market
value of the subject land. It is pertinent to note that this Court
cannot sit in appeal over the decision taken by the Arbitrator. It
is not the case of the appellant that the findings recorded by the
Arbitral Tribunal are perverse or have been reached by ignoring
the materials on record.
15. For the aforementioned reasons, in our considered opinion,
no ground for interference in this appeal, which has been
preferred under section 37 of the Arbitration and Conciliation
Act, 1996, is made out. In the result, the appeal fails. It is hereby
dismissed.
16. The interim application also stands disposed of accordingly."
4. For the reasons recorded for dismissing Arbitration Appeal No.
76 of 2024, the present Appeal is also dismissed.
5. With dismissal of the main Appeal, nothing would survive in the
Interim Applications and the same are also disposed of.
( SANDEEP V. MARNE, J. ) ( CHIEF JUSTICE )
