Narasimha Murthy vs The Indian National Highway ...
2021 Latest Caselaw 5711 Kant

                                  M.F.A.NO.5916/2012

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     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 8TH DAY OF DECEMBER 2021

                       BEFORE

        THE HON'BLE MRS JUSTICE K.S.MUDAGAL

 MISCELLANEOUS FIRST APPEAL NO.5916/2012(AA)

BETWEEN:

NARASIMHA MURTHY
S/O KUMBAIAH
AGED ABOUT 56 YEARS
NOW RESIDING AT MARULENAHALLI
KASABA HOBLI
TUMKUR TALUK AND DISTRICT          ... APPELLANT

(BY SRI.T.GOVINDA RAJA, ADV.)

AND:

1.     THE INDIAN NATIONAL HIGHWAY
       AUTHORITY BY IT SPECIAL
       LAND ACQUISITION OFFICER AND
       THE COMPETENT AUTHORITY
       NATIONAL HIGH WAY-4
       TUMKUR - HARIHARA ROAD
       DAVANAGERE
       NOW HAVING THE NEW ESTABLISHMENT
       AT CHITRADURGA

2.     THE DEPUTY COMMISSIONER
       AND ARBITRATOR, NATIONAL HIGHWAY
       AUTHORITY OF INDIA
       TUMKUR TALUK AND DISTRICT    ... RESPONDENTS

(BY SRI.SHILPA SHAH, ADVOCATE FOR
    SINGHANIA AND PARTNERS FOR R1;
    SRI.BHOJEGOUDA T KOLLER, AGA FOR R2)

     THIS MFA IS FILED UNDER SECTION 37(1) (b) OF THE
ARBITRATION AND CONCILIATION ACT, AGAINST THE
                                          M.F.A.NO.5916/2012

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JUDGMENT AND ORDER DATED 03.04.2012 PASSED IN
ARBITRATION CASE NO.3/2006 ON THE FILE OF THE
PRINCIPAL DISTRICT AND SESSIONS JUDGE, TUMKUR,
DISMISSING THE PETITION FILED UNDER SECTION 34 OF
ARBITRATION AND CONCILIATION ACT.

     THIS MFA COMING ON FOR DICTATION THIS DAY, THE
COURT DELIVERED THE FOLLOWING:

                    JUDGMENT

Aggrieved by dismissal of his petition in

Arbitration Case No.3/2006 by the Prl. District Court,

Tumkur, the appellant has preferred the above appeal.

2. The first respondent acquired 2½ guntas of

land out of Sy.No.82/3P of Oorukere village belonging to

the appellant for the purpose of expansion of National

Highway No.4 between Tumkur to Harihar Section from

75 kms to 282 kms. Along with the land of the

appellant, several contiguous lands were acquired. The

notification for acquisition was issued on 11.09.2001

under Section 3D(1)(2) of National Highway Authority of

India Act, 1958 ('NHIA Act' for short).

3. On 11.09.2001 respondent No.1-Land

Acquisition Officer and competent authority representing

the National Highway of India awarded compensation of M.F.A.NO.5916/2012

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Rs.1,26,438/- per acre for dry lands. Dissatisfied with

that award, the appellant and 13 others filed application

under Section 3G(5) of NHAI Act before the second

respondent i.e., Central Government Nominated

Arbitrator. He took up the matter in arbitration case

No.ARB/LAQ/CR/NH/OORUKERE and passed the award

on 04.04.2005 enhancing the compensation for dry

lands from 1,26,438/- to 1,72,500/- per acre.

4. In the proceedings before the second

respondent the appellant was the third petitioner. On

service of notice, the appellant appeared before the

Arbitrator. Neither he filed the written statement nor

produced any document to support his claim. Despite

that, considering the written statements of the other

claimants and the documents produced by them, based

on his personal inspection of the site, sale statistics and

guidance value of the registration department and other

legal factors, the second respondent enhanced the

compensation as aforesaid.

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5. The appellant filed Arbitration Case

No.3/2006 before the Principal District Judge, Tumkur

invoking Section 34 of the Arbitration and Conciliation

Act, 1996 ('Arbitration Act' for short) with a prayer for

enhancement of the compensation amount awarded by

the second respondent in his award.

6. Before the District Judge, the appellant got

examined himself as PW.1 and one N.K.Rajkumar as

PW.2 and got marked Ex.P1 to P7. The respondents did

not lead any evidence. They relied on the arbitrator's

award and the documents produced by the appellant

himself.

7. The learned District Judge by the impugned

order dismissed the Arbitration Case No.3/2006 on the

ground that the material on record showed that

sufficient opportunity was given to the appellant.

Learned District Judge further held that the award can

be reversed only on the grounds prescribed under

Section 34(2) of the Arbitration Act and there is no

scope for appreciation and reappreciation of the M.F.A.NO.5916/2012

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evidence. The learned District Judge further held that

under Section 34 of the Arbitration Act, the Court can

either only set aside the award or confirm that and

there is no scope for modification of the order. The

appellant challenges the said order in this case.

8. The first ground urged in the appeal memo

is that the second respondent has not given sufficient

opportunity to the appellant and the District Judge failed

to appreciate that properly. The other contention is that

the property of the appellant consisted of residential

house, hotel, one tyre shop, STD Booth centre which

was fetching him lot of income, therefore the

compensation awarded was very low.

9. Reiterating the grounds of appeal, learned

counsel for the appellant submits that the arbitrator did

not consider the documents produced before him. He

further submits that the District Judge should have

remanded the matter to the arbitrator for

reconsideration on giving opportunity to the appellant.

He claims that the award of the arbitrator is unreasoned M.F.A.NO.5916/2012

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one, the building and the apartment were not surveyed

and there was arithmetical error in the award.

10. In support of his contentions, he relied on

the following judgments:

i) Oil and Natural Gas Corpn. Ltd., vs. SAW Pipes

Ltd1

ii) Gautam Constructions & Fisheries Ltd. vs.

National Bank for Agriculture and Rural

Development and another2

iii) Leela Hotels Ltd. vs. Housing & Urban

Development Corporation Ltd.3

iv) Dandasi Sahu vs. State of Orissa4

v) Smt.G.Jayashree vs. The Secretary, Ministry of

Surface Transport, New Delhi and others5

vi) M/s. Dyna Technologies Pvt. Ltd. vs. M/s

Crompton Greaves Ltd6

AIR 2003 SC 2629

AIR 2000 SC 3018

AIR 2012 SC 903

AIR 1990 SC 1128

2013(2) KCCR 1609

(2020)1 SCALE 121 M.F.A.NO.5916/2012

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11. Smt.Shilpa Shah, learned counsel for

respondent and HCGP submit as follows:

The respondents shall take into consideration the

market value of the land as on the date of publication of

the notification. The appellant himself admits that the

second respondent had served notice on him and he

appeared in the proceedings. However, he did not

choose to file his statement or adduce evidence.

Therefore, it does not lie in his mouth that no

opportunity was given.

Under Section 34 of the Arbitration Act, the scope

of interference is very limited. The only ground urged

by the appellant was that he was not given sufficient

opportunity. That was falsified by the evidence of the

appellant himself. Therefore the learned District Judge

rightly dismissed the petition. In a petition under

Section 34 of the Arbitration Act, the Court cannot

decide the quantum of compensation i.e., enhance or

reduce, the Court has to either accept the award or

quash the award as the Court has no power to remand

the matter.

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12. In support of their contentions, they rely on

the following judgments:

i) H.M.Shankarmurthy vs. National Highways

Authority of India and another7

ii) National Highways Authority of India vs.

Mahadevi and others8

3. Bhaskar Industrial Development Ltd. vs. South

Western Railway9

13. Having regard to the facts and

circumstances of the case, the question that arises for

consideration of this Court is, "whether the impugned

order of the learned District Judge is violative of Section

34 of the Arbitration and Conciliation Act, 1996 ?".

14. The appellant being the owner of 2½ guntas

of land in Sy.No.82/3P of Oorukere village and

acquisition of the same for the purpose of expansion of

NH4 are all not in dispute. It is also not disputed that

under the same notification, the lands of several other

ILR 2010 Kar 3711

2017(4) Kar.L.J.674

ILR 2016 Kar. 4136 M.F.A.NO.5916/2012

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persons of Oorukere village were acquired. It is also not

disputed that the first respondent in the award dated

31.03.2002 granted compensation of Rs.1,26,438/- per

acre for the dry lands.

15. The appellant and 13 other aggrieved

persons filed application under Section 3G(5) of NHIA

Act and the second respondent was the statutorily

nominated arbitrator. As already stated by the award

dated 04.04.2005 he enhanced the compensation for

the dry lands from Rs.1,26,438/- to 1,72,500/- per

acre.

16. The petition submitted in Arbitration Case

No.3/2006 shows that the challenge to the award was

on the ground that the appellant was not given

sufficient opportunity and that the residential house,

hotel standing on the land were not considered in

passing the awards. Section 34(2) of the Arbitration Act

enumerates the grounds on which the award can be set

aside. The same reads as follows:

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"34. Application for setting aside arbitral award. -- (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub- section (3).

(2) An arbitral award may be set aside by the Court only if--

(a) the party making the application [establishes on the basis of the record of the arbitral tribunal that] --

(i) a party was under some incapacity, or

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise

unable to present his case; or

(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or

(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from M.F.A.NO.5916/2012

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which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

(b) the Court finds that--

(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or

(ii) the arbitral award is in conflict with the public policy of India.

[Explanation 1. -- For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if, --

(i) the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81; or

(ii) it is in contravention with the fundamental policy of Indian law; of

(iii) it is in conflict with the most basic notions of morality or justice.]

[Explanation 2. -- For the avoidance of doubt,

the test as to whether there is a contravention with the

fundamental policy of India law shall not entail a review

on the merits of the dispute.]"

17. The challenge of the appellant was not on

the ground that the arbitration agreement was not valid

or he had any incapacity or the matter was not

arbitrable or the arbitral procedure was not in

accordance with the procedure of the agreement of the M.F.A.NO.5916/2012

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parties etc. The challenge was not on the ground of

violation of Section 34(2) (a) (i) to (v).

18. Learned counsel for the appellant claims

that no proper opportunity was given to the appellant.

Therefore, the award is contrary to the public policy of

India. In such case, the claim of the appellant falls

under Section 34(b)(ii). The award of the first

respondent was produced before the trial Court as well

as before this Court.

19. The records of AC No.3/2006 are secured in

this case which contained the deposition of the

appellant, his witness and other documents produced by

him. Ex.P4 produced by the appellant himself shows

that the second respondent has issued the notice of

hearing to the appellant. He even appeared before the

second respondent, but he did not choose to file any

documentary evidence or file any statement before the

arbitrator, though the other claimants filed their

statement and led evidence. The proceedings of the M.F.A.NO.5916/2012

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second respondent further show that he heard the

parties and passed the award.

20. The other contention was that the award is

unreasoned one. As rightly pointed out by the District

Court, the award states that while fixing the market

value, the second respondent took market value, the

guidance value of the registration department and other

local factors viz., the value of the malkies and

structures and thereafter the compensation was fixed

considering the trees, houses and buildings furnished by

the technical department.

21. The award also indicates that the second

respondent conducted the spot inspection of the

acquired lands and examined the fertility in the vicinity

and situation of the lands acquired. Despite the

appellant not producing any documents or filing any

statement or leading any evidence, the second

respondent on the material available before him and

taking into aforesaid circumstances, enhanced

compensation from Rs.1,26,438/- to 1,72,500/- per M.F.A.NO.5916/2012

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acre. Therefore there is no merit in the contention that

the order was unreasoned order or opposed the public

policy of India. The judgments relied on by the learned

counsel for the appellant on that ground are not

applicable.

22. As rightly held by the trial Court in the

proceedings under Section 34 of the Arbitration Act,

there is no scope for appreciation or reappreciation of

the evidence and there is no scope for enhancement of

the compensation or for modifying the award as prayed

by the appellant. This view finds support by the

judgment of this Court in Shankar Murthy and

Mahadevi's case referred to supra.

23. The Division Bench of this Court in Bhaskar

Industrial Development Corporation Ltd.'s referred

to supra was relied on to contend that under Section 34

of the Arbitration Act, the Court cannot remand the

matter to the arbitrator, but no such relief was sought

before the District Judge. Therefore that judgment

cannot be justifiably applied to the facts of the case.

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This Court does not find any error in the

impugned judgment of the District Court warranting

interference of this Court. Therefore the appeal is

dismissed.

Sd/-

JUDGE

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