[Cites 10, Cited by 0]
Bombay High Court
Ku. Laxmibai D/O Harbhagwan Popali vs Govt. Of India, Ministry Of Road ... on 12 December, 2025
2025:BHC-NAG:14098
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
ARBITRATION APPEAL NO. 26 OF 2025
Ku. Laxmibai D/o Harbhagwan Popali, Aged
about 49 years, Occ. Household, R/o Near
City Post Officer, Itwari, Nagpur
... Appellant
// VERSUS //
1. Government of India, Ministry of Road
Transport and Highways, Parliament House,
New Delhi
2. National Highways Authority of India,
Project Implementation Unit, Nagpur
through its Project Director, Plot No. 159,
Ambazari Hill Top, Ram Nagar, Nagpur 440
033
3. Land Acquisition Officer General and
Competent Authority for acquisition of land
for National Highway, Collector Office,
Nagpur
4. Additional Commissioner, Nagpur Division,
Nagpur and the Arbitrator under Section 3-
G(5) of the National Highways Act, 1956,
Commissioner Office, Nagpur
... Respondents
Shri S.S.Sitani, Advocate for the appellant.
Shri S.S.Hulke, AGP for the respondent no.1/State.
Shri A.A.Kathane, Advocate for the respondent no.2.
CORAM : NIVEDITA P. MEHTA, J.
Reserved on : 8th December, 2025
Pronounced on : 12th December, 2025
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JUDGMENT
Heard.
2. ADMIT.
3. The present appeal is preferred against the judgment and
order dated 17.01.2025 passed by the learned District and Sessions Judge,
Nagpur in Civil Misc. Application No. 885 of 2018, whereby the
application filed by the appellant under Section 34 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as "the Act, 1996") for
setting aside the award passed by the learned Additional Commissioner,
Nagpur under Section 3-G(5) of the National Highways Act, 1956 in
Arbitration Case No. 02/ARB/2015-16, Mouza Kapsi (Khurd), came to
be dismissed. Under the said arbitral award dated 18.08.2018, the
proceedings for enhancement of compensation in Land Acquisition Case
No. 11/A/65/2013-2014 (Mouza Kapsi (Khurd)) dated 29.12.2014 were
partly allowed.
4. The facts, in brief, are that the appellant is the owner of Plot
No. 53 admeasuring 5637.50 sq. ft. in a layout carved out by Gruh Laxmi
Housing Agency in Khasra No. 113 situated at Mouza Kapsi (Khurd),
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Tahsil and District Nagpur. The said plot was acquired by respondent No.
2 for the Four-Lane Project at Nagpur. After acquisition, an award was
passed in Land Acquisition Case No. 11/A-65/2013-14 dated 29.12.2014,
determining compensation payable to the appellant at Rs. 5,23,720/-.
Being aggrieved by the quantum of compensation, the appellant preferred
arbitration proceedings under Section 3-G(5) of the National Highways
Act, 1956 seeking enhancement. The learned Arbitrator partly allowed
the claim by award dated 18.08.2018. It is the appellant's grievance that
in the case of another landowner, namely Smt. Dhanlaxmi Kochar, whose
land was also acquired for the same project, the Arbitrator by award dated
12.10.2017 passed in Arbitration Case no. 05/ARB/ 2015-16, determined
compensation at Rs. 9,900/- per sq. meter, whereas the appellant has been
awarded only Rs. 3,900/- per sq. meter. On this premise, the appellant
filed an application under Section 34 of the Act, 1996, seeking parity of
rate.
5. Learned counsel for the appellant submits that the learned
Arbitrator erred in failing to consider that all landowners whose lands
were acquired for the same project are entitled to compensation at the
same rate. It is submitted that the learned Arbitrator ought to have
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granted the appellant the rate of Rs. 9,900/- per sq. meter as awarded to
Smt. Dhanalaxmi Kochar. The impugned arbitral award dated 18.08.2018
and the judgment dated 17.01.2025 affirming the same are, therefore,
liable to be set aside. It is further contended that the differential treatment
accorded to the appellant amounts to discrimination and is contrary to
the fundamental policy of Indian law. Reliance is placed on the judgment
of the Hon'ble Supreme Court in Tarsem Singh, wherein Section 3-J of
the National Highways Act was declared unconstitutional, and it was
observed that the benefits under the Land Acquisition Act should extend
to landowners. In support of his submissions, learned counsel for the
appellant has relied also on the following decisions:
i. Project Director, National Highway Authority of India &
Anr. vs. The Additional Commissioner, Nagpur & Ors. , Arbitration
Appeal No. 32 of 2019, decided on 12.04.2022;
ii. Inox Air Products Private Limited vs. Air Liquide North India
Private Limited, 2023 SCC OnLine Del 1778;
iii. Project Director, National Highways No. 45E & 220, National
Highways Authority of India vs. M. Hakeem & Anr., (2021) 9 SCC 1.
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6. Learned counsel for respondent No. 2 supports the judgment
and order dated 17.01.2025 passed by the learned District Judge, Nagpur
under Section 34(1) of the Act, 1996, dismissing the appellant's
application and upholding the arbitral award dated 18.08.2018. It is
submitted that no interference is warranted in the present appeal.
7. It is contended that although the appellant now seeks
compensation at the rate of Rs. 9,900/- per sq. meter, he had never
pleaded such a claim in his statement of claim before the Arbitrator. On
the contrary, the appellant's claim under Section 3-G(5) of the National
Highways Act was for determination of compensation at Rs. 2,700/- per
sq. meter, and the Arbitrator enhanced it to Rs. 3,900/- per sq. meter. It is
further submitted that though the appellant filed a pursis before the
Arbitrator on 16.03.2018 relying upon the award in Arbitration Case No.
5/ARB/2015-16, the appellant neither amended his claim nor properly
placed material on record to support parity with the rate granted therein.
The said earlier award pertained to land situated between two highways, a
factor noted by the Arbitrator, and cannot automatically be applied to the
appellant's case.
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8. Learned counsel for the respondent no.2 further submits that
in view of section 23 of the Act 1996, the party has a right to amend his
claim and also rely on additional documents. The purport of section 23 is
such that the opposite party gets and opportunity to counter the amended
claim. Thus, section 23 mandates procedure which is not followed by the
appellant.
9. Learned counsel for respondent No. 2 further submits that
the learned District Judge has rightly exercised the limited jurisdiction
available under Section 34 of the Act, 1996. Relying on the decision of
the Hon'ble Supreme Court in Project Director, NHAI vs. M. Hakeem,
(2021) 9 SCC 1, it is urged that a Court exercising powers under Section
34 cannot modify an arbitral award nor remand the matter. It is
contended that nothing in Section 34 warrants grant of the reliefs sought
by the appellant. Reliance is also placed on the decision of the Hon'ble
Supreme Court in Gayatri Balasamy vs. ISG Novasoft Technologies Ltd. ,
Civil Appeal Nos. ___ of 2025, 2025 INSC 605 (arising out of SLP (C)
Nos. 15336-15337 of 2021).
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10. The learned Assistant Government Pleader appearing for
respondent no.1 adopted the arguments advanced by the learned counsel
for respondent no.2.
11. Upon hearing the learned counsel for the parties and upon
perusal of the record, the following points arise for determination in this
appeal:
(i) Whether the appellant is entitled to claim parity of
compensation at the rate of Rs. 9,900/- per sq. meter, as allegedly granted
to another landowner, despite not having pleaded such a claim before the
learned Arbitrator ?
(ii) Whether the arbitral award suffers from patent illegality or
violates the fundamental policy of Indian law on account of alleged award
of a lower rate of compensation to the appellant?
(iii) Whether the learned District Judge, Nagpur, failed to exercise
jurisdiction vested under Section 34 of the Arbitration and Conciliation
Act, 1996 in refusing to interfere with the award?
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(iv) Whether the impugned arbitral award dated 18.08.2018
warrants interference on any of the grounds available under Section 34(2)
of the Act, 1996?
12. With respect to Point No. (i), it is evident from the record
that the appellant, in his statement of claim before the learned Arbitrator,
had specifically sought determination of compensation at the rate of
Rs. 2,700/- per sq. meter. At no stage did the appellant amend his
pleadings or adduce evidence seeking parity with the compensation
allegedly granted to Smt. Dhanlaxmi Kochar at the rate of Rs. 9,900/- per
sq. meter. A mere filing of a pursis referring to another award cannot
substitute pleadings nor can it compel the Arbitrator to determine
compensation beyond the scope of the claim, more specifically when
mandate of section 23 of the Act of 1996, is not followed. Under well-
settled principles of arbitration, the Tribunal is bound by the pleadings,
and a claim not pleaded cannot be granted. Therefore, the appellant
cannot raise, for the first time in appellate proceedings, a claim that was
neither pleaded nor proved before the arbitrator.
13. Point No. (ii), the grievance of the appellant alleging
discrimination is without substance. The learned Arbitrator has recorded
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a clear finding that the land owned by to Smt. Dhanlaxmi Kochar was
situated between two highways and was therefore commercially more
valuable. In contrast, the appellant failed to place any evidence to
establish that his land enjoyed similar locational advantages. The
Arbitrator, after evaluating the material placed before him, enhanced the
appellant's compensation from Rs. 2,700/- per sq. meter to Rs. 3,900/-
per sq. meter. The differentiation made by the Arbitrator is reasoned and
cannot be termed arbitrary or violative of the fundamental policy of
Indian law. No patent illegality is demonstrated.
14. Turning to Point No. (iii), the learned District Judge, while
exercising jurisdiction under Section 34 of the Act of 1996, has rightly
held that the scope of interference is extremely limited. As held by the
Hon'ble Supreme Court in Gayatri Balasamy and Project Director, NHAI
v. M. Hakeem, (supra), a court exercising power under Section 34 and
Courts' in appellate hierarchy do not have the power to modify an arbitral
award, nor can it re-appreciate evidence or act as an appellate forum. The
learned District Judge examined the award only for patent illegality,
jurisdictional error, and violation of natural justice, all of which were
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rightly held to be absent. The dismissal of the appellant's Section 34
application is therefore legally sustainable.
15. With respect to Point No. (iv), this Court finds that the
arbitral award does not suffer from any infirmity contemplated under
Section 34(2) of the Act, 1996. The award is speaking, reasoned, and
based on the evidence placed before the Arbitrator. There is no material
to show that the Arbitrator ignored relevant evidence, considered
irrelevant factors, or acted perversely. The appellant's attempt to rely on a
separate arbitral award, without placing proper pleadings or evidence,
cannot constitute a ground for setting aside the award under Section 34.
16. In the light of the findings recorded herein above, it becomes
apparent that the entire foundation of the appellant's grievance rests on a
claim for parity of compensation, which was never raised before the
learned Arbitrator. Arbitration proceedings are governed by the principle
that the Tribunal can adjudicate only upon the claims placed before it
under section 23 of the Act of 1996. The appellant sought compensation
at the rate of Rs. 2,700/- per sq. meter, and it was only after the learned
Arbitrator awarded Rs. 3,900/- per sq. meter that the appellant attempted
to rely upon compensation granted to another landowner. Such an
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approach cannot be countenanced in law, for it would not only enlarge
the scope of the original claim but would also defeat the discipline of
pleadings inherent in arbitration proceedings. Consequently, the
appellant's newly raised claim for compensation at Rs. 9,900/- per sq.
meter cannot be entertained.
17. It is further clear that the learned Arbitrator did not proceed
arbitrarily or unreasonably while determining compensation. The
distinction drawn between the land of the appellant and that of Smt.
Dhanalaxmi Kochar is founded upon a rational and evidence-based
assessment of the locational advantages available to the latter's land. The
differentiation is neither discriminatory nor violative of the fundamental
policy of Indian law. The Arbitrator's award demonstrates application of
mind, adequate reasoning, and reliance on material placed before him. No
perversity or patent illegality, as required under Section 34(2A) of the
Act, 1996, is made out.
18. Equally, the judgment and order dated 17.01.2025 passed by
the learned District Judge, Nagpur, does not suffer from any jurisdictional
infirmity. The Court below has correctly appreciated the limited and
narrow scope of interference available under Section 34. It is well settled
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through authoritative pronouncements, including Gayatri Balasamy &
Project Director, NHAI v. M. Hakeem, that a Court exercising powers
under Section 34 of the Act of 1996, cannot modify an award, cannot re-
evaluate evidence, and cannot act as if adjudicating an appeal. The
learned District Judge remained within the parameters prescribed by law
and rightly refused to supplant the Arbitrator's conclusions with his own.
19. Thus, when viewed from any perspective; whether on the
touchstone of pleadings, evidence, statutory limitations, or binding
precedent, the appellant has failed to establish any ground warranting
interference with the arbitral award. The attempt made in appeal is
essentially an endeavour to seek re-appreciation of evidence and to obtain
a higher quantum of compensation without having laid any foundational
claim for the same before the Arbitrator. Such an exercise falls squarely
outside the scope of appellate scrutiny in proceedings arising under
Section 34 or Section 37 of the Act, 1996.
20. For all the foregoing reasons, this Court finds no merit in the
appeal. The arbitral award dated 18.08.2018, as well as the judgment and
dated 17.01.2025 passed by the learned District and Sessions Judge,
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Nagpur, do not call for any interference. The Arbitration Appeal therefore
stands dismissed.
[NIVEDITA P. MEHTA, J.]
Signed by: Mr. S.K. NAIR
Designation: PS To Honourable
Sknair Judge
Date: 12/12/2025 13:24:55
