Karnataka High Court

L Srinivasachar vs National Highways Authority Of ... on 5 January, 2022

Bench: S.Sujatha, P.Krishna Bhat

 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

     DATED THIS THE 5TH DAY OF JANUARY, 2022

                       PRESENT

         THE HON'BLE MRS.JUSTICE S.SUJATHA

                          AND

     THE HON'BLE MR. JUSTICE P.KRISHNA BHAT

               M.F.A.No.1431/2014 (AA)

BETWEEN :

L.SRINIVASACHAR
S/O LAXMINARAYANACHAR,
AGED ABOUT 46 YEARS,
R/AT KALLUKOTE VILLAGE,
SIRA TALUK,
TUMKUR DISTRICT -572137                     ...APPELLANT

                (BY SRI SUNDAR RAJ, ADV.)

AND :

1.      NATIONAL HIGHWAYS AUTHORITY OF INDIA
        # 2257, C/1, DEJA-3,
        1ST FLOOR, 2ND MAIN,
        NUTUN COLLEGE ROAD,
        VIDYANAGAR,
        DAVANAGERE-577005
        REP BY ITS PROJECT DIRECTOR

2.      THE COMPETENT AUTHORITY
        FOR LAND ACQUISITION
        TUMKUR-HARIHAR SECTION
        # 2257, 1ST FLOOR, 2ND MAIN,
        VIDYANAGAR, DAVANAGERE-577005

3.      ARBITRATOR AND DEPUTY
        COMMISSIONER
                             -2-

        TUMKUR DISTRICT,
        TUMKUR                                   ...RESPONDENTS

         (BY SMT.SHILPA SHAH, ADV. FOR R-1;
         SRI SHASHIKUMAR G.V., AGA FOR R-3;
 VIDE COURT ORDER DATED 21.06.2017 NOTICE TO R-2 IS
                  DISPENSED WITH.)

      THIS M.F.A. IS FILED UNDER SECTION 37(1)(a) OF
THE ARBITRATION AND CONCILIATION ACT, AGAINST THE
JUDGMENT AND DECREE DATED 21.11.2013 PASSED IN
A.S.NO.2/2011 ON THE FILE OF THE III ADDITIONAL
DISTRICT JUDGE, TUMKUR, SETTING ASIDE THE ORDER
DATED 28.07.2010 AWARD NO.LAQ.CR 206/06-07.

     THIS APPEAL COMING ON FOR HEARING,                       THIS
DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING:



                       JUDGMENT

This appeal is filed by the appellant - land loser

challenging the order dated 21.11.2013 passed in

AS.No.2/2011 on the file of the III Additional District

Judge, Tumakuru ('Trial Court' for short).

2. Respondent No.1 is the authority

constituted under the National Highways Authority of

India Act, 1988, being entrusted with the

development, maintenance and management of

National Highways and the matters connected or

incidental thereto. Respondent No.2 is the

competent authority for land acquisition, appointed

by the Central Government under Section 3(a) of the

National Highways Act, 1956 ('Act' for short).

3. The appellant is the owner of 23,958

sq.ft., of land in Sy.No.No.203, which is inclusive of

8,712 sq.ft., of land acquired under Section 3A of the

Act and 15,246 sq.ft., of land acquired vide consent

sale deed, situated at Kallukote village, Sira Taluk.

The said land was acquired/purchased for widening/

upgrading/expanding National Highway No.4.

Respondent No.2 vide award dated 29.5.2002 has

paid compensation to the appellant in a sum of

Rs.45/- per sq.ft., relating to land measuring 8,712

sq.ft. Sale deed was registered regarding 15,246 sq.ft.

of land for sale consideration of Rs.6,86,070/-. Being

aggrieved, the appellant has sought for enhancement

of compensation before respondent No.3 - Arbitrator,

who was appointed by the Government of India to

resolve the disputes relating to widening of National

Highway No.4. The learned Arbitrator enhanced the

compensation to Rs.67.50 per sq.ft., for the land

acquired and further ordered to pay interest on the

enhanced compensation as per the provisions of

Section 3(H)(5) of the Act. Being aggrieved by the

said order, respondent No.1 filed Arbitration Suit

No.2/2011 before the Trial Court, who by judgment

and decree dated 21.11.2013 was pleased to set

aside the award passed by respondent No.3, dated

28.7.2010. Hence, this appeal is filed by the

appellant under Section 37 of the Arbitration and

Conciliation Act, 1996.

4. Learned counsel appearing for the

appellant submitted that the learned Judge has set

aside the arbitral award merely on the ground that

no material evidence was placed on record to

establish the factum of scientific analysis inasmuch

as the determination of the market value of the

property including the status of the acquired land

i.e., the converted land (non agricultural land) which

obviously fetches higher market value. Having

considered the nature of the land, the learned

Arbitrator has enhanced the compensation by 50% in

respect of the lands in question.

5. Learned counsel appearing for respondent

No.1 would submit that despite providing reasonable

opportunity to the appellant to demonstrate that the

market value of the acquired land is higher than the

determined market value, no material evidence was

placed on record to establish the same. In the

absence of the material evidence, the learned

Arbitrator has enhanced the value from Rs.45/- per

sq.ft., to Rs.67.50 per sq.ft., with interest and the

same being not in conformity with the well settled

principles of law, the Trial Court was right in setting

aside the same. Any arbitral award passed without

assigning reasons is void ab initio and the same

cannot be sustainable. Hence, sought for dismissal

of the appeal.

6. We have bestowed our attention to the

arguments advanced by the learned counsel

appearing for the parties and perused the material on

record.

7. The chronological events as could be

noticed from the material on record are as under;

Notification under Section 3A of the Act was

issued on 3.11.2000 (preliminary notification) by the

Central Government of India declaring its intention to

acquire the land specified in the schedule annexed to

the said notification. Final Notification dated

11.9.2001 was issued under Section 3-D(1) and (2) of

the Act, declaring the land specified in the schedule

of the notification shall vest absolutely with the

Central Government from all encumbrances.

Respondent No.2 was appointed as the competent

authority by the Central Government for the

purposes amongst others for determining the

compensation in respect of the land acquired for the

said project i.e., for widening/maintenance/

management of NH-4 from Tumakuru to Harihar

Section. Respondent No.2 vide his award dated

29.5.2002 determined the market value for acquired

land at Rs.45/- per sq. ft. Out of 23,958 sq.ft., of

land acquired in Sy.No.No.203 situated at Kallukote

village, Sira Taluk, Kasba Hobli, which belong to the

appellant, Rs.3,92,040/- (Rupees Three Lakhs Ninety

Two Thousand Forty) was awarded as compensation

towards 8,712 sq.ft., of land and Rs.6,86,070/-

(Rupees Six Lakhs Eighty Six Thousand Seventy) was

paid as sale consideration under the registered sale

deed dated 22.9.2004. Being aggrieved by the

quantum of compensation awarded, the appellant

has approached the learned Arbitrator, who has

enhanced the compensation from Rs.45/- to

Rs.67.50/- per sq.ft., sans without assigning any

reasons.

8. The Hon'ble Apex Court in the case of

Dyna Technologies Pvt. Ltd. v. Crompton Greaves

Ltd. [(2019) 20 SCC 1], has held that any order

passed without assigning reasons is void ab initio, the

relevant paragraphs are extracted hereunder for

ready reference;

"34. The mandate under Section 31(3) of the Arbitration Act is to have reasoning which is intelligible and adequate and, which can in appropriate cases be even implied by the Courts from a fair reading of the award and documents referred to thereunder, if the need be. The aforesaid provision does not require an elaborate judgment to be passed by the arbitrators having regards to the speedy resolution of dispute.

36. When we consider the requirement of a reasoned order three characteristics of a reasoned order can be fathomed. They are: proper, intelligible and adequate. If the reasoning in the order are improper, they reveal a flaw in the decision-making process. If the challenge to an award is based on impropriety or perversity in the reasoning, then it can be challenged strictly on the grounds provided under Section 34 of the Arbitration Act. If the challenge to an award is based on the ground that the same is unintelligible, the same would be equivalent of providing no reasons at all. Coming to the last aspect concerning the challenge on adequacy of reasons, the Court while exercising jurisdiction under Section 34 has to adjudicate the validity of such an award based on the degree of particularity of reasoning required having regard to the nature of issues falling for consideration. The degree of particularity cannot be stated in a precise manner as the same would depend on the complexity of the issue. Even if the Court comes to a conclusion that there were gaps in the reasoning for the conclusions reached by the Tribunal, the Court needs to have regard to the documents

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submitted by the parties and the contentions raised before the Tribunal so that awards with inadequate reasons are not set aside in casual and cavalier manner. On the other hand, ordinarily unintelligible awards are to be set aside, subject to party autonomy to do away with the reasoned award. Therefore, the courts are required to be careful while distinguishing between inadequacy of reasons in an award and unintelligible awards."

In the light of this judgment, the arbitral award

under consideration would be construed as an

unintelligible award liable to be set aside on the

ground of 'no reasons'.

9. The learned Trial Judge has also recorded

that though the appellant alleged that the

compensation was not determined on any scientific

analysis, has failed to establish the same by

producing any material ie., either sale deed or any

enhanced compensation to similarly situated lands in

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the neighbourhood. The award passed by the