Gujarat High Court
Project Director, National ... vs Jogendar Parsottam Shetiya on 28 October, 2021
Bench: J.B.Pardiwala
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1605 of 2021
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2021
In R/FIRST APPEAL NO. 1605 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
==========================================================
1 Whether Reporters of Local Papers may be allowed to YES
see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy of NO
the judgment ?
4 Whether this case involves a substantial question of NO
law as to the interpretation of the Constitution of India
or any order made thereunder ?
CIRCULATE THIS JUDGEMENT IN THE SUBORDINATE
JUDICIARY.
==========================================================
PROJECT DIRECTOR, NATIONAL HIGHWAYS AUTHORITY OF INDIA
SHRI KRISHNA PAL SINH CHAUHAN
Versus
JOGENDAR PARSOTTAM SHETIYA & 2 other(s)
==========================================================
Appearance:
MR MAULIK NANAVATI ADVOCATE FOR NANAVATI & CO.(7105) for the
MR MEHUL SHARAD SHAH(773) for the Defendant(s) No. 1
RULE SERVED(64) for the Defendant(s) No. 2,3
==========================================================
CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
Date : 28/10/2021
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE NIRAL R. MEHTA)
1 This appeal under Section 37(3) of the Arbitration and
Conciliation Act, 1996 (for short, "the Act, 1996") is at the instance of
the National Highways Authority of India (original defendant No.2) and
is directed against the judgement and order passed by the 10 th
Additional District Judge, Kachchh - Bhuj dated 22 nd February 2021 in
the Civil Miscellaneous Application No.103 of 2018 filed by the
respondent No.1 herein (original applicant) under Section 34 of the Act,
1996, whereby the Court below partly allowed the application enhancing
the compensation in favour of the original applicant.
2 We need not delve much into the facts giving rise to this litigation
as the order passed by a Coordinate Bench of this Court, to which one of
us (J. B. Pardiwala, J.) was a party, would make the picture clear. We
quote the order as under:
"1. We have heard Mr. Maulik Nanavaty, the learned counsel appearing
for the appellant - National Highway Authority of India and Mr. Mehul
Sharad Shah, the learned counsel appearing for the claimant (original
applicant).
2. This appeal under Section 37 (3) of the Arbitration and Conciliation
Act, 1996 (for short "the Act, 1996") is at the instance of the National
Highway Authority of India and is directed against the judgment and
order passed by the 10 th Additional District Judge, Kachchh at Bhuj
dated 22.02.2021 in the Civil Miscellaneous Application No.103 of
2018 filed by the claimant under Section 34 of the Act, 1996. The
impugned final order (operative order) reads as under:-
"The application is partially allowed.
The Award & Order dated 12/07/2011 passed by Sub-Divisional
Magistrate, Anjar and Award & Order dated 10/07/2018 passed in
NH Award/Lavad Case No.89/2013, by the Arbitrator (Collector,
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
Kachchh), are hereby quashed and set aside.
The petitioner is entitled to get compensation for the
acquired land admeasuring 2375 Sqaure Meters of Survey No.1183/2 of
Mouje & Taluka : Bhachau, District: Kachchh, at the rate of Rs.1,100/-
(Rupees One thousand one hundred only) per Square Meters.
The amount already paid at the rate of Rs.150/- per Square Meters
(i.e. total Rs.3,56,250/-) to the petitioner, shall be deducted from
the above awarded amount.
The Respondent No.1 & 2 are ordered & directed to pay the amount
of compensation as ordered above, within the period of one month,
from the date of this Order. If the Respondent No.1 & 2 fails to pay
within the time granted, then the said amount shall be paid with
simple interest @ 9% per annum from the date of this Order till its
actual revitalization to the Petitioner.
Yadi and alongwith copy of this Order be sent to Respondents for its
immediate compliance.
The Record and Proceedings of NH Award/Lavad Case No.89/2013,
be sent to the Arbitrator (Collector, Kachchh).
The parties shall bear their own costs.
3. The principal argument of Mr. Nanavaty, the learned counsel
appearing for the appellant is that the court below in exercise of power
under section 34 of the Act,1996 could not have modified the award
passed by the Arbitral Tribunal.
4. The plain reading of the impugned final order would indicate that
the application filed by the original claimant under section 34 of the
Act,1966 came to be partly allowed. The award passed by the Sub
Divisional Magistrate, Anjar and the award passed by the Arbitrator
(Collector, Kachchh) were ordered to be quashed and set aside. The
Court below passed an order declaring that the claimant is entitled to
receive compensation for the acquired land in question at the rate of
1,100 (Rs. One thousand one hundred only) per square meter.
5. The principal argument as canvassed on behalf of the appellant is
based on a recent pronouncement of the Supreme Court in the case of
The Project Director, National Highways No.45 E and 220 national
Highways Authority of India V/s. M. Hakeem & Anr. reported in 2021
SCC online SC 473.
6. Mr. Nanavaty, the learned counsel appearing for the appellant first
invited the attention of this Court to paragraph no.14 of the judgment
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
which reads thus:-
"14. What is important to note is that, far from Section 34 being
in the nature of an appellate provision, it provides only for
setting aside awards on very limited grounds, such grounds
being contained in sub-sections (2) and (3) of Section 34.
Secondly, as the marginal note of Section 34 indicates,
"recourse" to a court against an arbitral award may be made
only by an application for setting aside such award in accordance
with sub-sections (2) and (3). "Recourse" is defined by P
Ramanatha Aiyar's Advanced Law Lexicon (3rd Edition) as the
enforcement or method of enforcing a right. Where the right is
itself truncated, enforcement of such truncated right can also be
only limited in nature. What is clear from a reading of the said
provisions is that, given the limited grounds of challenge under
sub-sections (2) and (3), an application can only be made to set
aside an award. This becomes even clearer when we see
subsection (4) under which, on receipt of an application under
sub- section (1) of Section 34, the court may adjourn the Section
34 proceedings and give the arbitral tribunal an opportunity to
resume the arbitral proceedings or take such action as will
eliminate the grounds for setting aside the arbitral award. Here
again, it is important to note that it is the opinion of the arbitral
tribunal which counts in order to eliminate the grounds for
setting aside the award, which may be indicated by the court
hearing the Section 34 application."
7. Thereafter, our attention was drawn to the observations made by the
Supreme Court in paragraph no. 29, which reads thus:-
29. Thus, there can be no doubt that given the law laid down by
this Court, Section 34 of the Arbitration Act, 1996 cannot be
held to include within it a power to modify an award. The sheet
anchor of the argument of the respondents is the judgment of
the learned Single Judge in Gayatri Balaswamy (supra). This
matter arose out of a claim for damages by an employee on
account of sexual harassment at the workplace. The learned
Single Judge referred to the power to modify or correct an
award under Section 15 of the Arbitration Act, 1940 in para 29
of the judgment. Thereafter, a number of judgments of this
Court were referred to in which awards were modified by this
Court, presumably under the powers of this Court under Article
142 of the Constitution of India. In para 34, the learned Single
Judge referred to para 52 in McDermott's case (supra) and then
concluded that since the observations made in the said para
were not given in answer to a pointed question as to whether the
court had the power under Section 34 to modify or vary an
award, this judgment cannot be said to have settled the answer
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
to the question raised finally.
8. Our attention was drawn to the observations made in the paragraph
no.40, which reads thus:-
40. It can therefore be said that this question has now been
settled finally by at least 3 decisions of this Court. Even
otherwise, to state that the judicial trend appears to favour an
interpretation that would read into Section 34 a power to
modify, revise or vary the award would be to ignore the previous
law contained in the 1940 Act; as also to ignore the fact that the
1996 Act was enacted based on the UNCITRAL Model Law on
International Commercial Arbitration, 1985 which, as has been
pointed out in Redfern and Hunter on International Arbitration,
makes it clear that, given the limited judicial interference on
extremely limited grounds not dealing with the merits of an
award, the 'limited remedy' under Section 34 is co- terminus
with the 'limited right', namely, either to set aside an award or
remand the matter under the circumstances mentioned in
Section 34 of the Arbitration Act, 1996.
9. In the last out attention was drawn to the observations made in the
paragraph no. 47, which reads thus:-
47. Quite obviously if one were to include the power to modify
an award in Section 34, one would be crossing the Lakshman
Rekha and doing what, according to the justice of a case, ought
to be done. In interpreting a statutory provision, a Judge must
put himself in the shoes of Parliament and then ask whether
Parliament intended this result. Parliament very clearly intended
that no power of modification of an award exists in Section 34 of
the Arbitration Act, 1996. It is only for Parliament to amend the
aforesaid provision in the light of the experience of the courts in
the working of the Arbitration Act, 1996, and bring it in line with
other legislations the world over.
10. We called upon Mr. Shah, the learned counsel appearing for the
claimant to meet with the principal argument canvassed on behalf of
the appellant and make us understand the ratio of the Supreme Court
decision referred to above.
11. Mr. Shah, the learned counsel has altogether a different argument
to canvass. Mr. Shah would fairly submit that there need not be any
debate on the dictum as laid in the above referred decision of the
Supreme Court, however, according to him, such dictum should not
come in the way of his client in the peculiar facts and circumstances of
the present case.
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
12. The endevour on the part of the Mr. Shah is to convince us that the
impugned judgment and order came to be passed by the court below,
upon some consensus arrived at between the parties. Mr. Shah first
invited the attention of this Court to paragraph no.7.4 of the impugned
order, which reads as under:-
"7.4 The issue is whether the acquired land admeasuring 2375
Square Meters was non-agricultural land or not. To support the
said contention, the petitioner has produced copy of sale deed
having Registration 356 dated 10/03/2000 at Mark-3/3, which
clearly shows that the petitioner had purchased the non-
agricultural land bearing R. Survey No. 1183/2 admeasuring
Hectare-1, Are-69 Square Meter-97. It is clearly stated in the said
sale deed that vide Order dated 19/01/2000, said land was
converted into the agricultural land for commercial purpose. If
we go through the Mutation Entry No. 6958 dated 24/01/200 at
Mark-3/6, then also it is clearly stated therein the land as non-
agricultural land, based on Order dated 19/01/2000 and the
same is also certified. The copy of non-agricultural Order
No.D.P.-Rev-NAA-13/1999-20 dated 19/01/2000 of District
Development Officer, Kachchh, in record/file of Arbitrator,
clearly reflects that total land admesuaring 16997 Square Meters
of Revenue Survey No.1183/2 of the petitioner was converted
into non-agricultural land for commercial purpose. Thus, the
record clearly shows that the acquired land admeasuring 2375
Square Meters of Survey No.1183/2 of Mouje & Taluka :
Bhachau, District : Kachchh, was non-agricultural land. Inspite of
that, the authorities have given compensation @ Rs.150/- per
Square Meters, considering acquired land as agricultural land.
Thus, the Arbitrator has committed error apparently."
13. Thereafter, he invited the attention of this Court to paragraph
no.7.5 of the impugned order, which reads thus:-
"7.5 if we go through Mark-3/2, then authorities had acquired
827 Square Meters of the same Survey number 1183/2 of the
petitioner itself, wherein the compensation of Rs.1,100/- per
Square Meters was granted. There is no evidence to show that
the rate of acquired land was about Rs.1350/- to Rs.1,400/- per
Square Meters. It is equally true that when the authorities had
given Rs.1,100/- per Square Meters of part acquired land from
the same land of the same petitioner, then the petitioner is
entitled to get the compensation @ Rs.1,100/- per Square Meter
and it is also declared by pursis at Exh.20 that they had given
compensation @ Rs. 1,100/- per Square Meter for part of land
acquired earlier from same survey number of same petitioner.
The Ld. Advocate Mr. C.V. Kansara had admitted that the
acquired land was converted into non-agricultural land vide
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
Order dated 19.01.2000 and they had given Rs.1,100/- per
Square Meters to the petitioner for the same Survey number for
the land admeasuring 827 Square Meters."
14. In paragraph no.7.5 referred to above, we find reference of Exh. 20.
This Exh. 20 appears to be a purshis passed in the Court below by the
learned counsel appearing for the appellant. Prima facie, it appears that
by way of the purshis Exh.20, it was declared by the learned counsel
appearing for the Highways Authority that some part of the land of the
very same survey number was acquired and the amount towards
compensation was paid at the rate of 1,100/- per square meter.
15 .Thus, prima facie, it appears that the Court below considered the
entire revenue survey no.1183/2 admeasuring 2375 square meters as
non agriculture land.
16. At this stage, we once again looked into what has been now pointed
out by Mr. Nanavaty. Mr. Nanavaty pointed that there is no dispute as
regards the fact that in the first round of acquisition when 827 sqaure
meter of the land was acquired, the same was non-agricultural land. So
far as the balance 2375 square meter is concerned, which has given rise
to the present appeal, all throughout the acquisition records indicated
the same to be agricultural land. This again has been disputed by Mr.
Shah. According to Mr. Nanavaty, at no point of time, it was clarified or
pointed out by the claimant that the remaining 50% is also non-
agricultural land.
17. In such circumstances, according to Mr. Nanvarty, it is too late in
the day now to assert that the land in question being agricultural land
though it might be in fact a non-agricultural land, the compensation
ought to have been determined accordingly.
18. Before, we take any final call in this appeal and proceed to apply
the dictum of law as laid by the Supreme Court in the above referred
decision, we would like to ascertain the following from the record of
the case.
(a) What necessitated the passing of the purshis Exh.20 in the
court below?
(b) The order, if any, on record, converting the entire survey
no.1183/2 as non-agricultural land?
(c) Whether at any point of time, the claimant had pointed out
to the authorities that the subject portion of land is non
agricultural land?
19. We want the response of both the learned counsel on the aforesaid
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
questions.
20. Registry to call for the records and proceedings from the Court
below so as to reach before this Court on or before 11.10.2021.
21. Post this matter for final disposal on 11.10.2021.
22. We permit both the learned counsel appearing for the parties to
have inspection of the records and proceedings which the Registry may
receive from the Court below to enable them to assist this Court on the
aforesaid questions."
3 For the sake of convenience, Mr. Mehul Sharad Shah, the learned
counsel appearing for the respondent No.1 - original applicant has
placed on record the list of dates and events as under:
Date Events
19.01.2000 Land bearing survey No.1183/2 admeasuring 16997 sq. meters
is converted into Non-agricultural land.
24.01.2000 Entry No.6958 concerning conversion to Non-agricultural land
mutated in the revenue record.
10.03.2000 Registered sale deed executed in favour of present respondent
and therefore it was incumbent upon the Mamlatdar to mutate
name of respondent without any report being filed by
respondent.
Details concerning award passed on 12.07.2011 for land admeasuring 2375
sq. meters of survey No.1183/2 of Bhachau @ Rs.150/-
Date Events
23.08.2010 Notification u/s. 3A of N.H. Act came to be issued wherein
intention to acquire respondent's land has been declared and as
per Section 3C of N.H. Act if any person has objection as to 'use
of the land for the purpose', the same has to be raised within 15
days.
07.02.2011 Notification u/s. 3D of N.H. Act came to be issued.
12.07.2011 Award came to be passed competent authority @ Rs.150/- per
sq. meter treating land as Agricultural land.
24.01.2012 Letter was issued to Appellant inter alia informing that the land
has been converted into N.A. land on 10.01.2000 and further
requisite evidences were also produced.
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
22.05.2012 Appellant wrote letter stating that considering the request of
treating land as N.A. land, appellant assured that they will pass
supplementary award.
18.03.2013 Award compensation @ Rs.150/- was accepted by respondent
under protest but surprisingly no supplementary award was
passed by the appellant thought assured.
12.09.2013 Application for enhancement and revaluation of compensation
came to be made u/s. 3G(5) of N.H. Act before Collector which
was treated as Lavad Case No.89/2013 wherein evidences are
produced.
It is pertinent to note that Collector is appointed by Central
Government as 'Arbitrator'.
10.07.2018 Award passed by the Arbitrator in Lavad Case No.89/2013
without considering that the land was non-agricultural and
therefore compensation, as awarded in other portion of land @
1100/- was payable.
Land admeasuring 827 sq. mtrs. was acquired by appellant
where compensation has been paid treating the land as N.A.
land at the rate of Rs.1100/-. The said evidence was also
produced before Collector / Arbitrator. Evidence of Survey
No.1183/2 admeasuring 16997 sq. mtrs. is converted in N.A.
land is there on record, however, Collector states that no
evidence is produced that from the same land acquisition was
made. Therefore order passed by the Arbitrator / Collector is
ex-facie illegal and against evidence on record.
It is pertinent to note that as per Section 31(5) of the
Arbitration and Conciliation Act, 1996, award ought to have
been signed as 'Arbitrator' but in the present case the award has
been signed by the chitnish to Collector and not by the
Arbitrator and therfor same is patently defective.
Respondent herein preferred Civil Misc. Application
No.103/2018 u/s. 34 of Arbitration and Conciliation Act, 1996.
Purshis at Exh. 20 was produced admitting the fact that land
was non-agricultural land and for other portion compensation
@ Rs.1100/- is paid. Further advocate of appellant admitted
that in other portion compensation @ Rs.1100/- has been
granted considering the land as N.A. land. Therefore, order is
passed with the consensus of the parties.
22.02.2021 Impugned order passed by Ld. District Court considering all the
facts and more particularly consent on the part of appellant
herein and awarded compensation @ Rs.1100/-. Therefore,
appeal u/s. 37 of the Arbitration and Conciliation Act, 1996 is
not maintainable as impugned order was passed on consensus.
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
4 We have heard Mr. Maulik Nanavati, the learned counsel
appearing for the appellant and Mr. Mehul Sharad Shah, the learned
counsel appearing for the respondent No.1 - original applicant.
5 The entire controversy revolves around the question whether the
land admeasuring 2,375 sq. mtrs. acquired by the appellant is a non-
agricultural or not.
6 In the aforesaid context, we may refer to the findings recorded by
the Court below:
"(7.4) The issue is whether the acquired land admeasuring 2375
Square Meters was non-agricultural land or not. To support the said
contention, the petitioner has produced copy of sale deed having
Registration 356 dated 10/03/2000 at Mark-3/3, which clearly shows
that the petitioner had purchased the non-agricultural land bearing R.
Survey No. 1183/2 admeasuring Hectare-1, Are-69 Square Meter-97. It
is clearly stated in the said sale deed that vide Order dated
19/01/2000, said land was converted into the agricultural land for
commercial purpose. If we go through the Mutation Entry No. 6958
dated 24/01/200 at Mark-3/6, then also it is clearly stated therein the
land as non-agricultural land, based on Order dated 19/01/2000 and
the same is also certified. The copy of non-agricultural Order No.D.P.-
Rev-NAA-13/1999-20 dated 19/01/2000 of District Development
Office, Kachchh, in record/file of Arbitrator, clearly reflects that total
land admeasuring 16997 square meters of Revenue Survey No.1183/2
of the petitioner was converted into non-agricultural land for
commercial purpose. Thus, the record clearly shows that the acquired
land admeasuring 2375 Square Meters of Survey No. 1183 2 of Mouje
& Taluka : Bhachau, District Kachchh, was non-agricultural land.
Inspite of that, the authorities have given compensation @ Rs. 150/-
per Square Meters, considering acquired land as agricultural land.
Thus, the Arbitrator has committed error apparently.
(7.5) If we go through Mark-3/2, then authorities had acquired 827
Square Meters of the same Survey number 1183/2 of the petitioner
itself, wherein the compensation of Rs. 1,100/- per Square Meters was
granted. There is no evidence to show that the rate of acquired land
was about Rs. 1,350/- to Rs. 1,400 /- per Square Meters. It is equally
true that when the authorities had given Rs. 1,100/- per Square Meters
of part acquired land from the same land of the same petitioner, then
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
the petitioner is entitled to get the compensation @ Rs. 1,100/- per
Square Meter and it is also declared by pursis at Exh.-20 that they had
given compensation @ Rs. 1,100/- per Square Meter for part of land
acquired earlier from same survey number of same petitioner. The Id.
Advocate Mr. C. V. Kansara had admitted that the acquired land was
converted into non-agricultural land vide Order dated 19 01 2000 and
they had given Rs. 1,100 /- per Square Meters to the petitioner for the
same Survey number for the land admeasuring 827 Square Meters.
(7.6) In light of such facts, the petitioner is entitled to get atleast
Rs.1,100/- per Square Meters, which he was given earlier by the
authorities and therefore, the Award & Order dated 12/07/2011 passed
by Sub Divisional Magistrate, Anjar and Award & Order dated
10/07/2018 passed in NH Award Lavad Case No.89/2013, by the
Arbitrator (Collector, Kachchh), are required to be quashed and set
aside and the pet toner is entitled to get the compensation accordingly,
as discussed earlier.
(7.7) In view of the reasons stated here-in-above and settled principle
of Jaw, the Petitioner has established the fact that the acquired land
having R.Survey No. 1183 2, admeasuring 2375 Square Meters, is non-
agricultural land and he is entitled to get compensation at the rate of
Rs, 1,100/- per Square Meter, subject to deduction of payment made of
Rs. 150/- per Square Meter and therefore, J answer the POINT No.1
PARTIALLY - in AFFIRMATIVE.
POINT NO. 2 & 3 :
(7.8) In view of the reasons stated here-in-above and settled principle
of law & finding arrived of point No.1, it is established that the Award
& Order dated 12/07/2011 passed by Sub-Divisional Magistrate, Anjar
and Award & Order dated 10/07/2018 passed in NH Award/Lavad
Case No. 89/2013, by the Arbitrator (Collector, Kachchh), are
erroneous, illegal, perverse and with material irregularity, which
requires interference by this Court to meet with end of justice and the
said Award & Order deserves to be quashed and set aside. Accordingly,
I answer the POINT No.2 in AFFIRMATIVE and answer the POINT No. 3
by passing following FINAL ORDER :"
7 The final order passed by the Court below reads thus:
"FINAL ORDER
The application is partially allowed.
The Award & Order dated 12/07/2011 passed by Sub-Divisional
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
Magistrate, Anjar and Award & Order dated 10/07/2018 passed in NH
Award/Lavad Case No.89/2013, by the Arbitrator (Collector, Kachchh),
are hereby quashed & set aside.
The petitioner is entitled to get compensation for the acquired land
admeasuring 2375 square meters of Survey No.1183/2 of Mouje &
Taluka : Bhachau, district : Kachchh, at the rate of Rs.1,100/- (Rupees
One thousand One hundred ony) per square meters.
The amount already paid at the rate of Rs.150/- per square meters (i.e.
total Rs.3,65,250/-) to the petitioner, shall be deducted from the above
awarded amount.
The respondent no.1 & 2 are ordered & directed to pay the amount of
compensation as ordered above, within the period of one month, from
the date of this order. If the respondent No.1 & 2 fails to pay within the
time granted, then the said amount shall be paid with simple interest
@9% per annum from the date of this order till its actual revitalization
to the petitioner.
Yadi and alongwith copy of this order be sent to respondents for its
immediate compliance.
The record & proceeding of NH Award/Lavad Case No.89/2013, be sent
to the Arbitrator (collector, Kachchh).
The parties shall bear their own costs."
8 The entire order referred to above appears to be based on Exhibit :
20 in the form of a pursis tendered by the learned counsel appearing for
the appellant before the Court below. The same reads thus:
"In reply to the above application dated 04-01-2021 of the applicant,
P.D. PIU Palanpur, National Highway authority submits as under
1. That as per the record of this case , received from Project Director the
PIU Gandhidham NHAI and Competent Authority and S.D.M. office
Anjar the land admeasuring 2375 Sq. Mt. was acquired for construction
of National Highways from Samakhiyali to Gandhidham.
2. That as per the record the land in question was converted into Non-
Agriculture Use by order No. D.P. - Rev.N.A.A.13-1999-2000 dated
1901-2000. This order was given effect in revenue record vide hakk
patrak entry No. 6958 dated 24-01-2000.
3. That the fact may be noted that as per declaration of the applicant,
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
the applicant is awarded compensation for land admeasuring 827 Sq.
Mt., a part and parcel of this same survey No. 1183/2 at rate of Rs.
1100/- per Sq. Mt.. It is further noted that it is not case of applicant
that he has challenged this order before any Competent Authority,
Arbitrator or Court. And hence the applicant is not entitled to receive
compensation at rate of Rs. 1350/- per sq. mt. as alleged by him in his
application."
9 Unlike the Arbitration Act of 1940, the jurisdiction of the Court to
interfere with an Arbitral Award is now statutorily restricted by certain
well defined parameters stipulated in Section 34. Under Section 30 of
the 1940 Act, an Award can be set aside when (i) an Arbitrator or
umpire misconducted himself or misconducted the arbitration
proceedings; (ii) an Award was made after a Court had superseded the
arbitration or after the arbitration proceedings had become invalid; and
(iii) an award had been improperly procured or otherwise invalid. With
so many expressions such as "misconducted", "improperly procured" and
"invalid", Section 30 of the 1940 Act, allowed the imagination of Courts
to run riot, while dealing with a petition to set aside an Award.
10 But under the 1996 Act, an arbitration Award can be set aside in
terms of Section 34(2)(a), if the party approaching the Court, furnishes
proof that any one of the 5 contingencies stipulated in Clauses (i) to (v)
therein existed. Alternatively, the Award could be set aside in terms of
Section 34(2)(b), if the Court finds (i) that the subject matter of dispute
is not capable of settlement by arbitration under the law for the time
being in force; or (ii) that the arbitral Award is in conflict with the Public
Policy of India.
11 In ONGC vs. Saw Pipes [2003 (5) SCC 705], the Supreme Court,
after highlighting the narrower meaning assigned to the expression
"public policy" in Renusagar Power Co.Ltd vs. General Electric Co. [1994
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
Supp.(1) SCC 644], pointed out that an Arbitral Award could be set
aside, if it is contrary to (i) the fundamental policy of Indian Law; or (ii)
the interests of India; or (iii) justice or morality; or (iv) if it is patently
illegal. But, the Court cautioned that the illegality must go to the root of
the matter. If the illegality is of trivial nature, the Arbitral Award cannot
be taken to be against public policy. The Court further observed that the
Award could be set aside if it is so unfair and unreasonable that it
shocked the conscience of the Court.
12 Following ONGC, a Division Bench of the Delhi High Court held in
NTPC Ltd vs. Marathon Electric Motors India Ltd [194 (2012) DLT 404
(DB)], that an Award is not open to challenge on the ground that the
arbitral Tribunal had reached a wrong conclusion or had failed to
appreciate the facts. The appreciation of evidence by the Arbitral
Tribunal, the Delhi High Court pointed out, is never a matter, which the
Court considers in the proceedings under Section 34. In a proceeding
under Section 34, this Court does not sit on appeal over the adjudication
made by the Arbitrator.
13 In Steel Authority of India Ltd vs. Gupta Brother Steel Tubes Ltd
[JT 2009 (12) SC 135], the Supreme Court summarised the position in
paragraph 26 as follows:-
"26. It is not necessary to multiply the references. Suffice it to say that
the legal position that emerges from the decisions of this Court can be
summarised thus:
(i) In a case where an arbitrator travels beyond the contract, the award
would be without jurisdiction and would amount to legal misconduct
and because of which the award would become amenable for being set
aside by a Court.
(ii) An error relatable to interpretation of the contract by an arbitrator
is an error within his jurisdiction and such error is not amenable to
correction by Courts as such error is not an error on the face of the
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award.
(iii) If a specific question of law is submitted to the arbitrator and he
answers it, the fact that the answer involves an erroneous decision in
point of law does not make the award bad on its face.
(iv) An award contrary to substantive provision of law or against the
terms of contract would be patently illegal.
(v) Where the parties have deliberately specified the amount of
compensation in express terms, the party who has suffered by such
breach can only claim the sum specified in the contract and not in
excess thereof. In other words, no award of compensation in case of
breach of contract, if named or specified in the contract, could be
awarded in excess thereof.
(vi) If the conclusion of the arbitrator is based on a possible view of the
matter, the court should not interfere with the award.
(vii) It is not permissible to a court to examine the correctness of the
findings of the arbitrator, as if it were sitting in appeal over his
findings."
14 The impugned order passed by the Court below on the face of it is
illegal and not sustainable in law. It is now well settled that under
Section 34 of the Arbitration Act, the Court may either dismiss the
objections filed and uphold the award or set aside the award if the
grounds contained in sub-Sections (2) and (2A) are made out. There is
no power to modify an arbitral award. What has been done in the case
on hand by the Court below is to modify the arbitral award by enhancing
the quantum of compensation. We may refer to and rely upon a recent
pronouncement of the Supreme Court in the case of The Project
Director, National Highways No.45 E and 220, National Highways
Authority of India vs. M. Hakeem and others [Civil Appeal No.2797 of
2021 and allied appeals decided on 20th July 2021], wherein the
Supreme Court observed as under:
"29. Thus, there can be no doubt that given the law laid down by this
Court, Section 34 of the Arbitration Act, 1996 cannot be held to include
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
within it a power to modify an award. The sheet anchor of the
argument of the respondents is the judgment of the learned Single
Judge in Gayatri Balaswamy (supra). This matter arose out of a claim
for damages by an employee on account of sexual harassment at the
workplace. The learned Single Judge referred to the power to modify or
correct an award under Section 15 of the Arbitration Act, 1940 in para
29 of the judgment. Thereafter, a number of judgments of this Court
were referred to in which awards were modified by this Court,
presumably under the powers of this Court under Article 142 of the
Constitution of India. In para 34, the learned Single Judge referred to
para 52 in McDermott's case (supra) and then concluded that since the
observations made in the said para were not given in answer to a
pointed question as to whether the court had the power under Section
34 to modify or vary an award, this judgment cannot be said to have
settled the answer to the question raised finally.
41. A look at the Arbitration Acts of England, the United States,
Canada, Australia and Singapore also lead to the same conclusion. In
each of those legislative measures, there are express provisions which
permit the varying of an award, unlike Section 34 of the present Act. In
para 51, the learned Single Judge then refers to recourse to a court
against an arbitral award, and argues that a statute cannot be
interpreted in such manner as to make the remedy worse than the
disease. As has been pointed out by us, the "disease" can only be cured
in very limited circumstances thus limiting the remedy as well. Also, to
assimilate the Section 34 jurisdiction with the revisional jurisdiction
under Section 115 of the Code of Civil Procedure, 1908 [the "CPC"], is
again fallacious. Section 115 of the CPC expressly sets out the three
grounds on which a revision may be entertained and then states that
the High Court may make 'such order as it thinks fit'. These latter words
are missing in Section 34, given the legislative scheme of the
Arbitration Act, 1996. For all the aforesaid reasons, with great respect
to the learned Single Judge, it is not correct in law and therefore stands
overruled.
42. Coming to the submission in support of the impugned judgment
that the fact that the Central Government appoints an arbitrator and
the arbitration would therefore not be consensual, resulting in a
government servant rubber stamping an award which then cannot be
challenged on its merits, cannot possibly lead to the conclusion that,
therefore, a challenge on merits must be provided driving a coach and
four through Section 34 of the Arbitration Act, 1996. The impugned
judgment is also incorrect on this score."
15 In McDermott International Inc. v. Burn Standard Co. Ltd.
reported in (2006) 11 SCC 181, the Supreme Court held as under :
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"52. The 1996 Act makes provision for the supervisory role of courts,
for the review of the arbitral award only to ensure fairness. Intervention
of the court is envisaged in few circumstances only, like, in case of
fraud or bias by the arbitrators, violation of natural justice, etc. The
court cannot correct errors of the arbitrators. It can only quash the
award leaving the parties free to begin the arbitration again if it is
desired. So, the scheme of the provision aims at keeping the supervisory
role of the court at minimum level and this can be justified as parties to
the agreement make a conscious decision to exclude the court's
jurisdiction by opting for arbitration as they prefer the expediency and
finality offered by it."
16 Thus, in view of the aforesaid, we are left with no other option,
but to quash and set aside the impugned judgement and order. Once
such order is set aside by the Court, the next step ordinarily in the
process would be leaving the parties free to begin the arbitration again if
it is desired. It is always open to the parties to invoke the arbitration
clause again and initiate the arbitration proceedings.
17 In the aforesaid judgement of the Supreme Court, it has not been
specified as to the manner in and the stage at which the parties are free
to begin the arbitration again. Having held that the parties are free to
begin arbitration again, there is nothing in the Act, the judgement or in
principle that warrants restricting the enforcement of this right to any
particular stage, point of time or proceeding.
18 There is one infirmity we have noticed in the arbitral award. The
arbitral award has not been signed by the Arbitrator. This fact is not in
dispute. The statute makes it obligatory for each of the members of the
Tribunal to sign the award so as to make it a valid award. The word
"shall" in Section 31 of the 1996 Act makes it a mandatory requirement.
19 In the aforesaid context, we may refer to and rely upon a recent
pronouncement of the Supreme Court in the case of Dakshin Haryana
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
Bijli Vitran Nigam Ltd. vs. M/s. Navigant Technologies Pvt. Ltd. [Civil
Appeal No.791 of 2021 (arising out of SLP(C) No.10372 / 2020)
decided on 2nd March 2021]. We quote the relevant observations as
under:
"Legal requirement of signing the award
The legal requirement of signing the arbitral award by a sole arbitrator,
or the members of a tribunal is found in Section 31 of the 1996 Act,
which provides the form and content of an arbitral award. Section 31
provides that :
"31. Form and contents of arbitral award.- (1) An arbitral award
shall be made in writing and shall be signed by the members of
the arbitral tribunal. (2) For the purposes of sub-section (1), in
arbitral proceedings with more than one arbitrator, the
signatures of the majority of all the members of the arbitral
tribunal shall be sufficient so long as the reason for any omitted
signature is stated.
....
(4) The arbitral award shall state its date and the place of
arbitration as determined in accordance with section 20 and the
award shall be deemed to have been made at that place.
(5) After the arbitral award is made, a signed copy shall be
delivered to each party.
..... "
(emphasis supplied)
(viii) Section 31 (1) is couched in mandatory terms, and provides that
an arbitral award shall be made in writing and signed by all the
members of the arbitral tribunal. If the arbitral tribunal comprises of
more than one arbitrator, the award is made when the arbitrators
acting together finally express their decision in writing, and is
authenticated by their signatures6 An award takes legal effect only after
it is signed by the arbitrators, which gives it authentication. There can
be no finality of the award, except after it is signed, since signing of the
award gives legal effect and validity to it. The making and delivery of
the award are different stages of an arbitration proceeding. An award is
made when it is authenticated by the person who makes it.
The statute makes it obligatory for each of the members of the
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
tribunal to sign the award, to make it a valid award. The usage of the
term "shall" makes it a mandatory requirement. It is not merely a
ministerial act, or an empty formality which can be dispensed with.
(ix) Sub-section (1) of Section 31 read with sub-section (4) makes it
clear that the Act contemplates a single date on which the arbitral
award is passed i.e. the date on which the signed copy of the award is
delivered to the parties. Section 31 (5) enjoins upon the arbitrator /
tribunal to provide the signed copy of the arbitral award to the parties.
The receipt of a signed copy of the award is the date from which the
period of limitation for filing objections u/S. 34 would commence. This
would be evident from the language of sub-section (3) of Section 34(3)
which reads :
"34. Application for setting aside arbitral award.
... ... (3) An application for setting aside may not be made after
three months have elapsed from the date on which the party
making that application had received the arbitral award or, if a
request had been made under Section 33, from the date on
which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was
prevented by sufficient cause from making the application within
the said period of three months it may entertain the application
within a further period of thirty days, but not thereafter."
(x) In Union of India v. Tecco Trichy Engineers & Contractors (2005) 4
SCC 239, a three-judge bench of this Court held that the period of
limitation for filing an application u/S. 34 would commence only after
a valid delivery of the award takes place u/S. 31(5) of the Act. In para
8, it was held as under :
"8. The delivery of an arbitral award under sub-section (5) of
Section 31 is not a matter of mere formality. It is a matter of
substance. It is only after the stage under Section 31 has passed
that the stage of termination of arbitral proceedings within the
meaning of Section 32 of the Act arises. The delivery of arbitral
award to the party, to be effective, has to be 'received' by the
party. This delivery by the Arbitral Tribunal and receipt by the
party of the award sets in motion several periods of limitation
such as an application for correction and interpretation of an
award within 30 days under Section 33(1), an application for
making an additional award under Section 33(4) and an
application for setting aside an award under Section 34(3) and
so on. As this delivery of the copy of award has the effect of
conferring certain rights on the party as also bringing to an end
the right to exercise those rights on expiry of the prescribed
period of limitation which would be calculated from that date,
C/FA/1605/2021 CAV JUDGMENT DATED: 28/10/2021
the delivery of the copy of award by the Tribunal and the receipt
thereof by each party constitutes an important stage in the
arbitral proceedings." (emphasis supplied)
(xi) The judgment in Tecco Trichy Engineers (supra) was followed in
State of Maharashtra v. Ark Builders, (2011) 4 SCC 616 wherein this
Court held that Section 31(1) obliges the members of the arbitral
tribunal to make the award in writing and sign it. The legal
requirement under sub-section (5) of Section 31 is the delivery of a
copy of the award signed by the members of the arbitral tribunal /
arbitrator, and not any copy of the award. On a harmonious
construction of Section 31(5) read with Section 34(3), the period of
limitation prescribed for filing objections would commence only from
the date when the signed copy of the award is delivered to the party
making the application for setting aside the award. If the law prescribes
that a copy of the award is to be communicated, delivered, despatched,
forwarded, rendered, or sent to the parties concerned in a particular
way, and since the law sets a period of limitation for challenging the
award in question by the aggrieved party, then the period of limitation
can only commence from the date on which the award was received by
the concerned party in the manner prescribed by law.
The judgment in Tecco Trichy has been recently followed in
Anilkumar Jinabhai Patel v. Pravinchandra Jinabhai Patel (2018) 15
SCC 178.
(xii) In State of Himachal Pradesh v Himachal Techno Engineers,
(2010) 12 SCC 210 this Court held that if one of the parties to the
arbitration is Government, or a statutory body, which has notified
holidays, and if the award was delivered to a beldar or a watchman on
a holiday or non-working day, it cannot be considered to be "receipt of
the award" by the party concerned for the purposes of Section 31(5) of
the Act. When the award is delivered, or deposited, or left in the office
of a party on a non-working day, the date of physical delivery is not the
date of "receipt" of the award by that party. For the purposes of Section
31(5), the date of receipt will have to be the next working day.
(xiii) Section 32 provides that the arbitral proceedings shall be
terminated after the final award is passed. With the termination of the
arbitral proceedings, the mandate of the arbitral tribunal terminates,
and the tribunal becomes functus officio.
(xiv) In an arbitral tribunal comprising of a panel of three members, if
one of the members gives a dissenting opinion, it must be delivered
contemporaneously on the same date as the final award, and not on a
subsequent date, as the tribunal becomes functus officio upon the
passing of the final award. The period for rendering the award and
dissenting opinion must be within the period prescribed by Section 29A
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of the Act.
(xv) In the treatise on 'International Commercial Arbitration' authored
by Fouchard, Gaillard, Goldman, it has been opined that :
"1403.- A dissenting opinion can only be issued when the
majority has already made the decision which constitutes the
award. Until then, any document issued by the minority
arbitrator can only be treated as part of the deliberations.
However, once the majority decision has been reached, it is
preferable for the author of the dissenting opinion to
communicate a draft to the other arbitrators so as to enable
them to discuss the arguments put forward in it. The award
made by the majority could then be issued after the dissenting
opinion, or at least, after the draft of the dissenting opinion..."
(xvi) There is only one date recognised by law i.e. the date on which a
signed copy of the final award is received by the parties, from which the
period of limitation for filing objections would start ticking. There can
be no finality in the award, except after it is signed, because signing of
the award gives legal effect and finality to the award.
(xvii) The date on which the signed award is provided to the parties is a
crucial date in arbitration proceedings under the Indian Arbitration and
Conciliation Act, 1996. It is from this date that: (a) the period of 30
days' for filing an application under Section 33 for correction and
interpretation of the award, or additional award may be filed; (b) the
arbitral proceedings would terminate as provided by Section 32(1) of
the Act; (c) the period of limitation for filing objections to the award
under Section 34 commences.
(xviii) Section 34 provides recourse for judicial scrutiny of the award by
a Court, upon making an application under sub-sections (2) and (3) for
setting aside the award.
The period of limitation for filing the objections to the award
u/s. 34 commences from the date on which the party making the
application has "received" a signed copy of the arbitral award, as
required by Section 31(5) of the 1996 Act.
Section 34(3) provides a specific time limit of three months from
the date of "receipt" of the award, and a further period of thirty days, if
the Court is satisfied that the party was prevented by sufficient cause
from making the application within the said period, but not thereafter.
In Union of India v. Popular Construction, (2001) 8 SCC 470,
this Court held that Section 5 of the Limitation Act, 1963 would not
apply to applications filed under Section 34 of the Arbitration Act. It
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was held that :
"12. As far as the language of Section 34 of the 1996 Act is
concerned, the crucial words are "but not thereafter" used in the
proviso to sub-section (3). In our opinion, this phrase would
amount to an express exclusion within the meaning of Section
29(2) of the Limitation Act, and would therefore bar the
application of Section 5 of that Act. Parliament did not need to
go further. To hold that the court could entertain an application
to set aside the award beyond the extended period under the
proviso, would render the phrase "but not thereafter" wholly
otiose. No principle of interpretation would justify such a result."
In Simplex Infrastructure v. Union of India, (2019) 12 SCC 455,
this Court held that the phrase "but not thereafter" provided under
Section 34(3) of the Act makes it evident that the statutory period of
limitation for filing an application for setting aside is three months,
which is extendable by thirty days, if sufficient cause is made out. No
further period of time can be granted for the filing of an application
under Section 34.
(xix) If the objections are not filed within the period prescribed by
Section 34, the award holder is entitled to move for enforcement of the
arbitral award as a deemed decree of the Court u/S. 36 of the Act. This
Court in P. Radha Bai v. P. Ashok Kumar, (2019) 13 SCC 445 held
that :
"32.5. Once the time-limit or extended time-limit for challenging
the arbitral award expires, the period for enforcing the award
under Section 36 of the Arbitration Act commences. This is
evident from the phrase "where the time for making an
application to set aside the arbitral award under Section 34 has
expired". ["36. Enforcement.--Where the time for making an
application to set aside the arbitral award under Section 34 has
expired, or such application having been made, it has been
refused, the award shall be enforced under the Code of Civil
Procedure, 1908 (5 of 1908) in the same manner as if it were a
decree of the Court."(emphasis supplied)] There is an integral
nexus between the period prescribed under Section 34(3) to
challenge the award and the commencement of the enforcement
period under Section 36 to execute the award.
36.2. Second, extending Section 17 of the Limitation Act to
Section 34 would do violence to the scheme of the Arbitration
Act. As discussed above, Section 36 enables a party to apply for
enforcement of award when the period for challenging an award
under Section 34 has expired. However, if Section 17 were to be
extended to Section 34, the determination of "time for making
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an application to set aside the arbitral award" in Section 36 will
become uncertain and create confusion in the enforcement of
award. This runs counter to the scheme and object of the
Arbitration Act."
20 In the result, this appeal succeeds and is hereby allowed. The
impugned judgement and order passed by the Court below is hereby
quashed and set aside. Consequently, the connected Civil Application
stands disposed of.
21 At this stage, we make a note of a development that has taken
place in the form of an amicable settlement between the parties. It
appears that the appellant - National Highways Authority has agreed to
make payment to the respondent No.1 (original applicant) of the
principal amount towards compensation at the rate of Rs.1,100/- per sq.
mtrs. Such offer of the appellant - authority has been graciously
accepted by the respondent No.1 (original applicant) with a distinct
understanding that no interest shall be paid on the principal amount.
22 If the parties have thought fit to resolve the controversy in the
aforesaid terms, then we should not come in their way. We have
explained the position of law and have set right the illegality committed
by the Court below.
23 Mr. Maulik Nanavati, the learned counsel appearing for the
appellant - authority makes a statement that the requisite amount at the
rate of Rs.1,100/- per sq. mtrs. for land admeasuring 2,375 sq. mtrs. of
survey No.1183/2 situated at Mouje and Taluka : Bhachau, District :
Kachchh, shall be paid to the respondent No.1 - original applicant within
a period of eight weeks from today without fail. It goes without saying
that the amount already paid to the respondent No.1 - original applicant
at the rate of Rs.1,100/- per sq. mtrs. shall be adjusted from the requisite
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amount.
24 Mr. Maulik Nanavati, in the last, submitted that this judgement
may not be treated as a precedent, as, in the peculiar facts and
circumstances of the case, his client has taken an administrative decision
not to go for any further litigation. It is in the peculiar set of facts that
the Highways Authority has thought fit to resolve the dispute by paying
the principal amount at the rate of Rs.1,100/- per sq. mtrs.
25 We clarify that this judgement, except the position of law
explained on two neat questions of law, shall otherwise not be cited as a
precedent.
(J. B. PARDIWALA, J)
(NIRAL R. MEHTA,J)
CHANDRESH
