Karnataka High Court
Mrs Dayavathi vs The Special Land Acquisition Officer ... on 1 September, 2025
-1-
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MFA No. 5962 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1ST DAY OF SEPTEMBER, 2025
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE C M JOSHI
MISCELLANEOUS FIRST APPEAL NO. 5962 OF 2025 (AA)
BETWEEN:
1. MRS. DAYAVATHI
D/O MR. MONAPPA KUNDER @
MONAPPA KORAGA MADIVALA
AGED ABOUT 62 YEARS
R/AT NO.16-57
NEAR MANGALA PETROL PUMP
MUKKA, MANGALURU - 574 146
2. MRS. SUMITHRA
W/O MR. SHRINIVASA MADIVALA AND
D/O MR. MONAPPA KUNDER @
Digitally MONAPPA KORAGA MADIVALA
signed by AGED ABOUT 58 YEARS
AMBIKA H B R/AT NO.1-10, LINGA SADANA NILAYA
Location: PEJAMANGOOR, KOKKARNE
High Court UDUPI - 576 234
of Karnataka
3. MR. SHEKARA SALIAN
S/O MR. MONAPPA KUNDER @
MONAPPA KORAGA MADIVALA
AGED ABOUT 58 YEARS
R/AT 16-57, NEAR MANGALA PETROL PUMP
MUKKA, MANGALURU - 574 146
4. MR. DHANANJAYA SALLIAN
S/O MR. MONAPPA KUNDER @
MONAPPA KORAGA MADIVALA
-2-
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MFA No. 5962 of 2025
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AGED ABOUT 54 YEARS
R/AT NO.16-57
NEAR MANGALA PETROL PUMP
MUKKA, MANGALURU - 574 146
5. MRS. HARINAKSHI
W/O MR. HARISH SHRIYAN
D/O MR. MONAPPA KUNDER @
MONAPPA KORAGA MADIVALA
AGED ABOUT 52 YEARS
R/AT NO.2-137/1, GURUNAGAR
NEAR NARAYANA GURU MANDIRA
MARYHILL, KONCHADY
MANGALURU - 575 008
6. MRS. VISHALAKSHMI S PUTHRAN
W/O MR. SURESH PUTHRAN AND
D/O MR. MONAPPA KUNDER @
MONAPPA KORAGA MADIVALA
AGED ABOUT 46 YEARS
R/AT NO.401, SAI DEEP CHS
ANAND NAGAR, OPP. RK INN HOTEL
MIRA ROAD, THANE
MAHARASHTRA - 401 107
APPELLANTS No.1, 2, 4 TO 6
REPRESENTED BY GPA HOLDER
APPELLANT NO.3
...APPELLANTS
(BY SRI. SACHIN B S, ADVOCATE)
AND:
1. THE SPECIAL LAND ACQUISITION OFFICER
AND COMPETENT AUTHORITY
NATIONAL HIGHWAYS
KUNDAPUR-SURATHKAL SECTION
NEAR MINI VIDHANA SOUDHA
OPP. TOWN HALL
HAMPANKATTA
MANGALORE - 575 001
2. NATIONAL HIGHWAYS AUTHORITY OF INDIA
PROJECT IMPLEMENTATION UNIT
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MFA No. 5962 of 2025
HC-KAR
THARETHOTA
MANGALORE - 575 002
REPRESENTED BY ITS
PROJECT DIRECTOR
3. THE ARBITRATOR AND
DEPUTY COMMISSIONER
DAKSHINA KANNADA DISTRICT
NEAR HAMILTON CIRCLE
MANGALORE - 575 001
...RESPONDENTS
THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER
SECTION 37(1)(C) OF THE ARBITRATION AND CONCILIATION ACT,
AGAINST THE ORDER DATED 20.01.2025 PASSED IN
A.P.NO.190/2022 ON THE FILE OF THE I ADDITIONAL DISTRICT AND
SESSIONS JUDGE, MANGALURU, DECREEING THE PETITION
FILED UNDER SECTION 34 OF ARBITRATION AND CONCILIATION
ACT.
THIS APPEAL, COMING ON FOR ORDERS, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. VIBHU BAKHRU ,CHIEF JUSTICE
and
HON'BLE MR. JUSTICE C M JOSHI
ORAL JUDGMENT
(PER: HON'BLE MR. VIBHU BAKHRU,CHIEF JUSTICE)
1. The appellants have filed the present appeal under Section
37(1)(c) of the Arbitration and Conciliation Act, 1996 [the A&C Act]
impugning a judgment dated 20.01.2025 rendered in A.P
Nos.181/2022 and 190/2022 [impugned judgment] passed by the
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I Additional District and Sessions Judge, Mangaluru [Trial Court].
The appellants are aggrieved by the impugned judgment insofar as
it relates to A.P No.190/2022. The appellants had filed the said
application under Section 34 of the A&C Act impugning an arbitral
award dated 21.09.2022 [impugned award].
2. The grievance of the appellants is that the impugned award
has been set aside in its entirety and is not confined to the findings
which are against the appellants. In other words, the appellants
claim that any re-initiation of arbitral proceedings must necessarily
be confined only to the findings of the Arbitral Tribunal which were
against the appellants.
3. The dispute in the present appeal arises in the following
context:
The appellants are the owners of land measuring 485.50 sq.
mts. falling in Survey No.243/2B in Surathkal Village, Mangaluru
Taluk, Dakshina Kannada District [the subject land]. The subject
land was acquired under Section 3 of the National Highways Act,
1956 [the NH Act]. The compensation for the said land was fixed
at `1,168/- per sq. mt. treating the subject land as agriculture land.
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It was the appellants' case that the subject land was located by the
side of the National Highway within the limits of Mangaluru City
Corporation. The appellants claimed that the market value of the
said land is more than `21,000/- per sq. mtr. at the time of fixation
of compensation and the compensation as determined was
"arbitrary, baseless and improper". Accordingly, the appellants
raised disputes which were referred to arbitration under Section
3-G(5) of the NH Act.
4. The learned Arbitrator framed the following four points for
consideration:
"1. Has the 2nd Respondent acquired the land and
passed the compensation award by following due
procedures?
2. Is the compensation fixed by the 2nd
Respondent just and reasonable?
3. Whether the Applicant is entitled for
compensation at the rate of converted land?
4. If so, what order?"
5. In regard to the first issue, the Arbitral Tribunal found that the
compensation had been awarded by following due procedures.
However, insofar as the quantum of compensation is concerned,
the learned Arbitrator found that it is below the market value. The
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Arbitral Tribunal found merit in the appellants' contention that the
compensation fixed for the subject land was less than reasonable.
The Arbitral Tribunal also noted that the district of Dakshina
Kannada with Mangaluru city as its headquarters is densely
populated and is one of the fastest growing districts. Therefore, the
availability of land is scarce. Additionally, it was also observed that
the subject land had acquired good potential for future
development. Accordingly, the Arbitral Tribunal enhanced the
compensation to `3,13,600/- per cent. Dissatisfied with the said
fixation of compensation, the appellants had preferred the
application under Section 34 of the A&C Act to set aside the award.
6. The learned court found merit in the challenge and set aside
the impugned award, inter alia, on the ground that it contained no
reasons to support the conclusion. The learned Trial Court also
faulted the Arbitral Tribunal for not considering that the subject land
measured approximately 12 cents and was located in an urban
area. And, adverting to the guideline values issued by the Sub-
Registrar, Mukka.
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7. We find no merit in the contention that the learned Trial Court
ought to have remanded the matter to the Arbitrator limited only for
enhancement beyond the rate fixed by the Arbitrator in the
impugned award.
8. The learned court's finding is that the impugned award is not
supported by reasons. In view of the said finding, there is no
question of sustaining any part of the impugned award. It is well
settled that it is not permissible for the Trial Court to re-adjudicate
the disputes that are referred to arbitration. The scope under
Section 34 of the A&C Act is essentially limited to determining
whether the impugned award is required to be set aside on the
ground as set out in Section 34 of the A&C Act. In a recent
decision in Gayatri Balasamy v. ISG Novasoft Technologies
Limited: 2025 INSC 605, the Supreme Court has permitted
modification of the award to a limited extent. However, in the
present case, there is no scope for modification or partial setting
aside of the impugned award given the reason for which the same
has been set aside. Therefore, the learned court had rightly set
aside the same.
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9. The present appeal is unmerited and, accordingly,
dismissed.
10. Pending application also stands disposed of.
Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE
Sd/-
(C M JOSHI)
JUDGE
AHB
