Madhya Pradesh High Court
The National Highways Authority Of ... vs Dinesh Singh on 7 May, 2025
Author: Milind Ramesh Phadke
Bench: Milind Ramesh Phadke
1
IN THE HIGH COURT OF MADHYA PRADESH
AT G WA L I O R
BEFORE
HON'BLE SHRI JUSTICE MILIND RAMESH PHADKE
ARBITRATION APPEAL NO. 99 of 2021
THE NATIONAL HIGHWAYS AUTHORITY OF INDIA
(MINISTRY OF ROAD TRANSPORT AND HIGHWAYS) GOVT.
OF INDIA
Versus
DINESH SINGH
ARBITRATION APPEAL NO. 100 of 2021
THE NATIONAL HIGHWAYS AUTHORITY OF INDIA
(MINISTRY OF ROAD TRANSPORT AND HIGHWAYS) GOVT.
OF INDIA
Versus
GEETA BAI
&
ARBITRATION APPEAL NO. 101 of 2021
THE NATIONAL HIGHWAYS AUTHORITY OF INDIA
(MINISTRY OF ROAD TRANSPORT AND HIGHWAYS) GOVT.
OF INDIA
Versus
SHIVRAJ SINGH
ARBITRATION APPEAL NO. 103 of 2021
THE NATIONAL HIGHWAYS AUTHORITY OF INDIA
(MINISTRY OF ROAD TRANSPORT AND HIGHWAYS) GOVT.
OF INDIA
Versus
VIRENDRA SINGH
ARBITRATION APPEAL NO. 105 of 2021
Signature Not Verified
Signed by: YOGENDRA
OJHA
Signing time: 5/9/2025
10:53:30 AM
2
THE NATIONAL HIGHWAYS AUTHORITY OF INDIA
(MINISTRY OF ROAD TRANSPORT AND HIGHWAYS) GOVT.
OF INDIA
Versus
DILIP KUMAR NAGAR
ARBITRATION APPEAL NO. 106 of 2021
THE NATIONAL HIGHWAYS AUTHORITY OF INDIA
(MINISTRY OF ROAD TRANSPORT AND HIGHWAYS) GOVT.
OF INDIA
Versus
SIRNAM SINGH
ARBITRATION APPEAL NO. 107 of 2021
THE NATIONAL HIGHWAYS AUTHORITY OF INDIA
(MINISTRY OF ROAD TRANSPORT AND HIGHWAYS) GOVT.
OF INDIA
Versus
BRIJENDRA
Appearance:
Shri Ashish Saraswat - learned counsel for the appellants in
all appeals.
Shri Deependra Singh Raghuvanshi - learned counsel for the
respondents.
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Reserved on : 01.05.2025
Delivered on : 07.05.2025
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ORDER
1. Looking to the similitude of the controversy involved, with
the consent of the parties, these Arbitration Appeals are being heard
and decided by this common order.
2. For convenience the facts of Arbitration Appeal
No.99/2021 are being referred here to.
3. Invoking the appellate jurisdiction of this Court under
Section 37(1)(C) of the Arbitration and Conciliation Act, 1996
(hereinafter called as "Act of 1996"), the appellant herein i.e.
National Highways Authority of India (Ministry of Road Transport
and Highways) has preferred this appeal questioning the order
passed by 4th Additional District Judge, Shivpuri in MJC No.
AV21/2018 dated 13.09.2021, by which application filed by the
respondents under Section 34 of the Act of 1996 has been allowed
and the Award passed by the Arbitrator dated 05.12.2016 has been
set-aside.
4. Short facts confining to arbitration appeal no.99/2021 are
that on 15.10.2011 as per section 3 (A) of the National Highways
Act, 1956, a Gazette Notification: Extra ordinary was published by
the Ministry of Road Transport and Highways for widening
/construction of the National Highway No. 3 (Shivpuri - Dewas
Section) from Km. 269.250 to Km. 294.190 and for that lands
adjacent to National Highway No. 3 of Village - Lukwasa were
proposed to be acquired as per the schedule annexed.
5. Admittedly, the lands of present respondents were included
in acquisition on 18.09.2012 as per Section 3 (D) of the National
Highways Act, 1956. The Gazette Notification: Extra ordinary was
published and the scheduled land, thereafter, vested in the Central
Government free from all encumbrances. On 15.01.2013 an award
was passed by SDO-cum-Competent Authority Land Acquisition,
National Highway No.3, Tehsil Kolaras District Shivpuri as
provided under Section 3(G)(1) of the National Highways Act, 1956.
6. Aggrieved by the aforesaid award, an application under
section 3 (G) (5) of the National Highways Act, 1956 was preferred
by present respondents before the Arbitrator-Cum-Divisional
Commissioner, Division Gwalior on 07.05.2014 for enhancement of
compensation amount.
7. A reply was filed by present appellant to the said
application. On 05.12.2016, Arbitrator-Cum-Divisional
Commissioner, Division Gwalior passed an award whereby
application preferred by the respondents was dismissed.
8. Aggrieved by the said dismissal, on 22.07.2017, an
application under Section 34 of the Act of 1996 was preferred by the
respondents before the learned District Judge, Shivpuri which was,
thereafter, transferred to 4th Additional District Judge, Shivpuri and
was registered as MJC No.AV21/2018.
9. On 13.09.2021, an order was passed by learned 4 th
Additional District Judge, Shivpuri, whereby delay in preferring the
application was condoned and the application preferred by
respondents was allowed and the award dated 05.12.2016 passed by
Arbitrator-Cum-Divisional Commissioner, Gwalior Division was
set-aside. Being aggrieved by the aforesaid order, the present
appeals have been filed.
10. Learned counsel for the appellant while referring to the
order passed by Coordinate Bench of this Court in M.P. No.
1537/2021 (Madhya Pradesh Road Development Corporation
Vs. Baisakhu @ Sadhu) dated 05.05.2021 also reported in AIR
2021 MP 125 has argued that the order dated 13.09.2021 passed by
learned 4th Additional District Judge, Shivpuri was without
jurisdiction since as per the notification of Central Government,
Commissioner Gwalior Division was notified to be an Arbitrator and
both parties had participated in the arbitration proceedings before
the Commissioner, Gwalior Division, the seat as well as venue of
arbitration proceedings, thus, can be said to be at Gwalior, therefore,
application for setting aside the award under Section 34 of the
Arbitration and Conciliation Act, 1996 would lie before principal
seat of original jurisdiction at Gwalior and not at Shivpuri where the
lands were situated.
11. Learned counsel for the appellant while referring to
Section 2(i)(e) of the Arbitration and Conciliation Act, 1996 has
argued that Court in the case of an arbitration would be the principal
Civil Court of original jurisdiction in district and would include the
High Court in exercise of its ordinary original civil jurisdiction
having jurisdiction to decide the question forming the subject matter
of the arbitration if the same had been the subject matter of the suit
and as the seat of arbitration was at Gwalior, the Principal Civil
Court of original jurisdiction at Gwalior would only have
jurisdiction to hear any objections. To bolster his submission,
learned counsel has further placed reliance on the decision rendered
in the case of NHAI Vs. Aneeta Mahajan in M.P. No.1939/2021
dated 12th October, 2022 and other connected matters.
12. Learned counsel for the appellant has further placed
reliance in the matter of Ram Chandra Singh Vs. Savitri Bai
reported in 2003 (8) SCC 319 and had argued that the issue to
territorial jurisdiction is a pure question of law and the same can be
raised at any point of time and also the order passed by the Court
being without jurisdiction since is is nullity, any order or action
taken pursuant thereto or in furtherance thereof would also be
nullity. Thus, when the Courts at Shivpuri lacked jurisdiction, the
objections heard and allowed by the Court at Shivpuri being per se
illegal deserves to be quashed and at the most, respondents can be
directed to file objections before the Courts at Gwalior.
13. It was further argued that the respondents had never raised
the issue about the compensation being not calculated in the light of
the Right to Fair Compensation and Transparency in Land
Acquisition and Rehabilitation and Resettlement Act, 2013 in the
application preferred under Section 3(G)(5) of the National
Highways Act, 1956 before the Arbitrator-Cum-Divisional
Commissioner, Gwalior Division (M.P.), therefore, the same was not
the part of statement of claim before the Arbitrator during pendency
of arbitration proceedings. Thus, when the issue of applicability of
the Right to Fair Compensation and Transparency in Land
Acquisition and Rehabilitation and Resettlement Act, 2013 was not
within the term of statement of claim before the Arbitrator, then
addressing the said issue and holding that non-consideration thereof
had rendered the award to be in violation of the public policy,
therefore, is required to be set-aside iss bad in law and can be said
that the 4th Additional District Judge, Shivpuri has travelled beyond
the terms of statement of claim and statement of defence and also
could be said that the said consideration was beyond the scope of
Section 34 of Arbitration and Conciliation Act, 1996.
14. Apart from the aforesaid grounds, no other grounds were
raised and it was prayed that the order passed by the Court below
while adjudicating the objections under Section 34 of the Arbitration
and Conciliation Act, 1996 being perverse and illegal, deserves to be
dismissed.
15. On the contrary, learned counsel for the respondents has
argued that when the provisions of Section 2(i)(e) r/w Section 42 of
the Arbitration and Conciliation Act, 1996 with respect to an
arbitration agreement are seen, in case any application under
Chapter I of the Arbitration and Conciliation Act, 1996 is made to a
Court, then that Court alone would have jurisdiction over the arbitral
proceedings and all the subsequent applications arising out of that
agreement and the arbitration proceedings shall be made in that
court alone and no other court will have jurisdiction but here-in case
the arbitration which took place between the parties was not an
arbitration arising out of a commercial contractual agreement but
was a statutory arbitration mandated by the provision of National
Highways Act, 1956 and the arbitrator was appointed by the Central
Government, thus, when there was no contractual agreement, no seat
of arbitration or venue of arbitration can be said to have been
decided with the express approval of both the parties, therefore,
mere appointment of Commissioner, Gwalior would not construe
that it is the seat of Arbitration. To buttress his submissions, learned
counsel has placed reliance on the decision of Hon'ble Apex Court
rendered in the case of BGS SGS Soma JV Vs. NHPC Limited
reported in (2020) 4 SCC 234 and while referring to Para 38, 57
and 59 had submitted that on conjoint reading of aforesaid
paragraphs, it would be evident that where the parties have selected
the seat of arbitration in their agreement, such selection would then
amount to an exclusive jurisdiction clause but herein case there is no
arbitration agreement existing between the parties, therefore, the
judgment cited by learned counsel for the appellant i.e. Madhya
Pradesh Road Development Corporation Vs. Baisakhu @ Sadhu
(supra) is highly misplaced.
16. Learned counsel on the basis of Paragraph 19 of the
aforesaid judgment, has further argued that where it is found on the
facts of a particular case that either no seat is designated by
agreement or so called seat is only a convenient venue, then there
may be several courts where a part of cause of action arises may
have jurisdiction. Hence, in a case where no arbitration agreement
exists and where the cause of action arose at various places, all such
places will have jurisdiction to hear the case under Section 34 of the
Arbitration and Conciliation Act, 1996 and as the lands in question
were situated at Shivpuri, the objections were rightly filed before the
Court at Shivpuri and therefore, were well within jurisdiction. To
substantiate the arguments further, learned counsel submitted that by
virtue of Section 42 r/w Section 2(i)(e) of the Arbitration and
Conciliation Act, 1996 where there are exist various places forming
part of cause of action, the territorial jurisdiction with regard to
challenge the arbitration proceedings would be a place where any
party had filed the application before the Court first.
17. Learned counsel for the appellant has further submitted
that an application under section 34 of the Arbitration and
Conciliation Act, 1996 would actually be an application in terms of
section 42 of the Arbitration and Conciliation Act, 1996 and
therefore, the filing of application before the Court at Shivpuri at the
first instance would give it a jurisdiction to hear the said application.
18. While referring to the judgment of Apex Court rendered in
the case of Punjab State Electricity Board Vs. Gurunanak Cold
Storage reported in (1996) 5 SCC 411, it was argued that statutory
arbitration consists of a deemed agreement between the two parties
and despite absence of an arbitration agreement, rest of the
provisions of Arbitration and Conciliation Act, 1996 would apply, as
if there was an arbitration agreement between the parties and the
dispute becomes arbitrable under the Arbitration and Conciliation
Act, 1996 as if there was arbitration agreement between the parties,
therefore, the provisions of Section 42 had a bearing for deciding the
issue of jurisdiction as there can be said to be a deemed agreement.
19. Learned counsel has also referred to the judgment passed
by the Hon'ble Apex Court in the case of State of West Bengal and
Others Vs. Associated Contractors reported in (2015) 1 SCC 32
and has argued that Section 42 of the Arbitration and Conciliation
Act, 1996 would apply to applications made after the arbitral proceedings
have come to an end provided they are made under Part-I and if the first
application is made to a court which is neither a Principal Court of original
jurisdiction in a district or a High Court exercising original jurisdiction in a
State, then such application would be outside the purview of section 42
since was not filed in a court as defined under Section 2(i) (e) and also an
application made to the Court without subject matter jurisdiction would be
outside Section 42.
20. Learned counsel has also pressed upon the judgment of Hon'ble
Apex Cout rendered in the case of State of Jharkhand Vs. Hindustan
Construction Co. Ltd. (2018) 2 SCC 602 wherein the judgment of
Associated Contractors (supra) was affirmed by the Constitutional
Bench of Hon'ble Apex Court.
22. It was further submitted that so far as the arguments
advanced by learned counsel for the appellant that the award passed
by the arbitrator was held to be beyond the scope of arbitration,
therefore, was bad in law is concerned, after the advent of
Arbitration and Conciliation (Amendment) Act, 2015, in the light of
judgment of Hon'ble Apex Court in the matter of Ssangyong Engg.
& Construction Co. Ltd. Vs. NHAI reported in (2019) 15 SCC 131
any award which has been passed either in contravention of principles of
natural justice or where the proceedings have been conducted behind the
back of either party or has been passed in contravention of the judgment of
superior courts which has a binding precedent, meaning thereby that an
award has been passed in contravention of the statute linked to the public
policy or public interest, is liable to be set-aside and as in the present case,
the compensation was not awarded as per the provisions of the Right to
Fair Compensation and Transparency in Land Acquisition and
Rehabilitation and Resettlement Act, 2013 despite it is deemed the
law of land under Article 141 of the Constitution of India, the
Arbitral Award was thus liable to be set-aside.
23. It was further argued that wrong proposition has been placed
before this Court that the Right to Fair Compensation and
Transparency in Land Acquisition and Rehabilitation and
Resettlement Act, 2013 would not be application to the proceedings
under the National Highways Act, 1956, as in the light of the
judgments of Hon'ble Apex Court rendered in the case of Sunita
Mehra & Another Vs. Union of India and Others reported in
(2019) 17 SCC 672 which has been reiterated in the case of Tarsem
Singh Vs. Union of India reported in (2019) 9 SCC 304 and has
been considered in the recent judgment of Hon'ble Apex Court
rendered in the case of National Highways Authority of India Vs.
P. Nagaraju alias Cheluvaiah & Anr. reported in (2022) 15 SCC
1, the said argument does not hold water as it had been made
applicable to NH Act. Moreover, once the Right to Fair
Compensation and Transparency in Land Acquisition and
Rehabilitation and Resettlement Act, 2013 has been made
applicable, the compensation ought to have been allowed under the
Act itself.
24. Lastly, it was argued by learned counsel that the order of
arbitrator has been set-aside but the matter has not been remanded
back which had left the present respondent remediless since
application under Section 11 of the Arbitration and Conciliation Act,
1996 has been excluded to the arbitration carried out in pursuant to
section 3(G)(5) of the National Highways Act, 1956 and therefore,
no application further can be moved by the present respondents to
appoint another arbitrator, therefore, in the factual scenario, remand
in only option to harmonize the law and provide remedy to the
respondents. While referring to the judgment of Hon'ble Apex Court
rendered in the case of Bombay Slum Redevelopment
Corporation Private Limited Vs. Samir Narain Bhojwani
reported in (2024) 7 SCC 218, it has been argued that in the
Arbitration Act, there is no statutory embargo on the power of the
Appellate Court under Section 37(1)(c) to pass an order of remand,
this Court can exercise the power of remand and remit the matter
back to the Arbitrator for deciding the arbitration afresh. To buttress
his submission, learned counsel has again placed reliance on Para 72
of the judgment of Hon'ble Apex Court in the matter of P. Nagaraju
(supra) wherein it is observed that though the award passed by an
Arbitrator cannot be modified but in appropriate cases, the award
can be set-aside and the matter can be remitted back to the Arbitrator
in terms of Section 34(4) of the Arbitration and Conciliation Act,
1996. Thus, prayed for remand of the matter to the Arbitrator.
25. Heard the counsel for the parties and perused the record.
26. With regard to ground of jurisdiction at Shivpuri to hear
the objections under Section 34 of the Arbitration and Conciliation
Act, 1996 as raised by the learned counsel for the appellant is
concerned, for answering the aforesaid proposition, certain
provisions of sections of the Arbitration and Conciliation Act, 1996
are required to be analyzed.
27. Section 2(i)(e) of the Arbitration and Conciliation Act,
1996 defines "Court" " which means --
(i) in the case of an arbitration other than international
commercial arbitration, the principal Civil Court of original
jurisdiction in a district, and includes the High Court in exercise
of its ordinary original civil jurisdiction, having jurisdiction to
decide the questions forming the subject-matter of the arbitration
if the same had been the subject-matter of a suit, but does not
include any Civil Court of a grade inferior to such principal Civil
Court, or any Court of Small Causes;
(ii) in the case of international commercial arbitration, the High
Court in exercise of its ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming the subject-matter of
the arbitration if the same had been the subject-matter of a suit,
and in other cases, a High Court having jurisdiction to hear
appeals from decrees of courts subordinate to that High Court;]
28. Section 42 of the Arbitration and Conciliation Act, 1996
deals with jurisdiction and is quoted herein-below:-
42. Jurisdiction.--Notwithstanding anything contained elsewhere
in this Part or in any other law for the time being in force, where
with respect to an arbitration agreement any application under this
Part has been made in a Court, that Court alone shall have
jurisdiction over the arbitral proceedings and all subsequent
applications arising out of that agreement and the arbitral
proceedings shall be made in that Court and in no other Court.
29. The Apex Court in the matter of BGS SGS Soma JV
(supra) in Para 59. has held as under:-
59. Equally incorrect is the finding in Antrix Corporation Ltd. (supra)
that Section 42 of the Arbitration Act, 1996 would be rendered ineffec-
tive and useless. Section 42 is meant to avoid conflicts in jurisdiction of
Courts by placing the supervisory jurisdiction over all arbitral pro-
ceedings in connection with the arbitration in one Court exclusively.
This is why the section begins with a non-obstante clause, and then
goes on to state "...where with respect to an arbitration agreement any
application under this Part has been made in a Court..." It is obvious
that the application made under this part to a Court must be a Court
which has jurisdiction to decide such application. The subsequent
holdings of this Court, that where a seat is designated in an agreement,
the Courts of the seat alone have jurisdiction, would require that all
applications under Part I be made only in the Court where the seat is
located, and that Court alone then has jurisdiction over the arbitral
proceedings and all subsequent applications arising out of the arbitral
agreement. So read, Section 42 is not rendered in- effective or useless.
Also, where it is found on the facts of a particular case that either no
"seat" is designated by agreement, or the so- called "seat" is only a
convenient "venue", then there may be several Courts where a part of
the cause of action arises that may have jurisdiction. Again, an
application under Section 9 of the Arbitration Act, 1996 may be
preferred before a court in which part of the cause of ac- tion arises in
a case where parties have not agreed on the "seat" of arbitration, and
before such "seat" may have been determined, on the facts of a
particular case, by the Arbitral Tribunal under Section 20(2) of the
Arbitration Act, 1996. In both these situations, the earliest appli- cation
having been made to a Court in which a part of the cause of action
arises would then be the exclusive Court under Section 42, which
would have control over the arbitral proceedings. For all these
reasons, the law stated by the Bombay and Delhi High Courts in this
regard is incorrect and is overruled.
30. In the aforesaid judgment, the Hon'ble Apex Court has
observed that where it is found on the facts of a particular case that
either no "seat" is designated by agreement, or the so- called "seat"
is only a convenient "venue", then there may be several Courts
where a part of the cause of action arises that may have jurisdiction
as in the arbitration proceedings relating to National Highways Act,
the parties are not governed by an agreement to regulate the process
of arbitration. It is noteworthy that under the National Highways
Act, 1956, the arbitration is not initiated based on an agreement entered
into between the contracting parties under a contract but it is under a
statutory provision which provides for such arbitration in lieu of 'reference'
under the regime for acquisition of land for public purpose. One of the
parties to such arbitration proceedings would also be a land loser
and the adjudication in the arbitration proceedings is not based on any
definite terms of the contract providing for mutual obligations determinable
under the contract but for determination of 'just compensation' in respect of
land which is compulsorily acquired for a public purpose.
31. As per Section 3G (5) of National Highways Act, 1956,
Central Government is authorized to appoint an Arbitrator in case,
the amount determined by the competent authority under sub-section
(1) or sub-section (2) is not acceptable to either of the parties and in
that context, the Central Government has appointed Commissioner,
Gwalior Division as an Arbitrator. Thus, the said appointment
cannot be said to be a seat of the Arbitrator rather would be a
convenient venue, therefore, in the light of the judgment of Hon'ble
Apex Court in the case of BGS SGS Soma JV (supra), the courts
where a part of cause of action had arisen will also have jurisdiction.
Thus, in the said situation the earliest application having been made
to the Court at Shivpuri where a part of cause of action had arisen
would then be the exclusive court under Section 42 which would
have controlled over the arbitration proceedings. Further in the
matter of BGS SGS Soma JV (supra) in Para 60 and 61, test for
determination of seat has been laid down. For reference Para 60 and
61 are quoted herein-below:-
60. The judgments of the English Courts have examined the
concept of the "juridical seat" of the arbitral proceedings,
and have laid down several important tests in order to
determine whether the "seat" of the arbitral proceedings has,
in fact, been indicated in the agreement be- tween the parties.
The judgment of Cooke, J., in Roger Shashoua (supra),
states:
"34. "London Arbitration is a well known phenomenon
which is often chosen by foreign nationals with a dif-
ferent law, such as the law of New York, governing the
substantive rights of the parties. This is because of the
legislative framework and supervisory powers of the
courts here which many parties are keen to adopt. When
therefore there is an express designa- tion of the
arbitration venue as London and no desig- nation of any
alternative place as the seat, combined with a
supranational body of rules governing the arbi- tration
and no other significant contrary indicia, the in- exorable
conclusion is, to my mind, that London is the juridical
seat and English law the curial law. In my judgment it is
clear that either London has been des- ignated by the
parties to the arbitration agreement as the seat of the
arbitration, or, having regard to the parties' agreement
and all the relevant circumstances, it is the seat to be
determined in accordance with the final fall back
provision of section 3 of the arbitration act."
61. It will thus be seen that wherever there is an express
designation of a "venue", and no designation of any
alternative place as the "seat", combined with a
supranational body of rules governing the arbitration, and no
other significant contrary indicia, the inexorable conclusion
is that the stated venue is actually the juridical seat of the
arbitral proceeding.
32. From the aforesaid legal position, it can be said that
wherever there is an express designation of a "venue", the
inexorable conclusion would be that the stated venue is actually the
juridical seat of the arbitral proceeding, but here only the
Commissioner, Gwalior Division has been appointed as an
Arbitrator by the Central Government without there being any
express designation of the venue at Gwalior. Thus, it can very well
be said that Gwalior is chosen as a venue by the Commissioner,
Gwalior Division to conduct arbitration proceeding would not term
to be a juridical seat of the arbitration proceedings. Thus, the
contention of the appellant in that regard is misconceived and
accordingly it is held that the Courts at Shivpuri would also be
termed as Principal Civil Court of Original Jurisdiction where the
application under Section 34 would lie and as the application by
respondent on first occasion had been filed at Shivpuri, this Court
has no hesitation to hold that no jurisdiction error has been
committed by learned 4th Additional District Judge, Shivpuri in
entertaining the application under Section 34 of the Arbitration and
Conciliation Act, 1996.
33. So far as the contention raised by the appellant that the
court below had travelled beyond the scope of provisions of Section
34 of the Arbitration and Conciliation Act, 1996 is concerned, Para
43 of the judgment of Hon'ble Apex Court rendered in the case of P.
Nagaraju (supra) can be resorted to, for reference Para 43 of the
said judgment is quoted herein-below:-
43.Therefore, what is also to be kept in perspective while
noticing the validity or otherwise of an award regarding which
the non-furnishing of reasons is contended as patent illegality is
the reason assigned for determining just compensation in terms
thereof. The situation which may arise in cases when a lesser
compensation is determined in the arbitration proceedings and
the land loser is complaining of the award is also to be kept in
perspective since the requirement of reasons to be given by the
learned Arbitrator in cases for determination of market value
and compensation should indicate reasons since the same will
have to be arrived at on a comparative analysis for which the
reasons should be recorded and Section 26 to 28 of RFCTLARR
Act will be relevant. Neither the land loser nor the exchequer
should suffer in the matter of just and fair compensation. Hence
the reasons under Section 31(3) is to be expected in that
manner, the absence of which will call for interference
under Section 34 of Act, 1996.
34. Though this fact has been agitated by the appellant that
with regard to adjudication of the compensation reference was not
required to be taken by the Arbitrator of the provisions of Right to
Fair Compensation and Transparency in Land Acquisition and
Rehabilitation and Resettlement Act, 2013 and therefore, there is no
illegality in dismissing the claim by the Arbitrator and ignoring the
aforesaid fact, the Court below while analyzing the objections under
Section 34 has held that non-consideration and determination of the
claim in the light of Right to Fair Compensation and Transparency
in Land Acquisition and Rehabilitation and Resettlement Act, 2013
had made the award per se illegal, had amounted to travelling
beyond the terms of statement of claim which is not permissible
under section 34, in the light of the Para quoted above of the
judgment of P. Nagaraju (supra) is without any sum and substance.
As has been held by the Hon'ble Apex Court, the situation may arise
when a lesser compensation is determined in the arbitration
proceedings and the land loser is complaining of the Award, non-
furnishing of reasons for not determining the market value and the
compensation would be one of the perspective since the same will
have to be arrived at on a comparative analysis and for that Section
26 and 28 of the Right to Fair Compensation and Transparency in
Land Acquisition and Rehabilitation and Resettlement Act, 2013
would be relevant. Neither land loser nor the exchequer would
suffer in the matter of just and fair compensation, hence, the reasons
are to be expected in that matter, the absence of which will call for
interference under Section 34 of the Arbitration and Conciliation
Act, 1996 and as the said determination was not done by the
Arbitrator, keeping in view the provisions of Right to Fair
Compensation and Transparency in Land Acquisition and
Rehabilitation and Resettlement Act, 2013, learned court below had
rightly taken note of it which cannot be said that the Court has
travelled beyond the scope of Section 34 of the Arbitration and
Conciliation Act, 1996, thus, the aforesaid contention since also has
no force.
35. So far as the contention of the appellant that Right to Fair
Compensation and Transparency in Land Acquisition and
Rehabilitation and Resettlement Act, 2013 is not applicable to the
proceedings of National Highways Act, in the light of the judgment
of Hon'ble Apex Court in the matter of Sunita Mehra & Another
(Supra), Tarsem Singh (surpa) and P. Nagaraju (surpra), the said
argument does not hold water.
36. The Central Government while exercising powers under
sub-section (1) of Section 113 of the Right to Fair Compensation
and Transparency in Land Acquisition and Rehabilitation and
Resettlement Act, 2013 had made following order to remove certain
difficulties, namely -
1. (1) This Order may be called the Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation
and Resettlement (Removal of Difficulties) Order, 2015.
(2) It shall come into force with effect from the 1st day of
September, 2015.
2. The provisions of the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement
Act, 2013, relating to the determination of compensation in
accordance with the First Schedule, rehabilitation and resettlement
in accordance with the Second Schedule and infrastructure amenities
in accordance with the Third Schedule shall apply to all cases of
land acquisition under the enactments specified in the Fourth
Schedule to the said Act.
37. Further in Para 42 of the judgment of P. Nagaraju
(supra), it has been held that in the arbitration proceedings relating
to the NH Act, the parties are not governed by an agreement to
regulate the process of arbitration. However, in the process of
determination of just and fair compensation, the provisions in
Section 26 to 28 of RFCTLARR Act, 2013 will be the guiding factor
and the requirement therein being adverted to, should be
demonstrated in the award to satisfy that Section 28(2) and 31(3) of
the Arbitration and Conciliation Act, 1996 is complied with. Thus,
this argument also does not have any force.
38. As no ground on merits has been raised by the appellant
with regard to perversity and illegality committed by the Court
below while deciding application under Section 34 of Arbitration
and Conciliation Act, 1996, this Court finds that no illegality and
perversity has been committed by learned court below in deciding
the said application and setting-aside the award passed by the
Arbitrator.
39. Another fact which comes for determination whether the
respondents could be left remediless even though the award passed
by the Arbitrator has been set-aside, since there are no powers of
remand to the Court hearing the objections under Section 34 of the
Arbitration and Conciliation Act, 1996 ?
40. True it is that that law in that regard is well settled that
while deciding an application Section 34 of Arbitration and
Conciliation Act, 1996, the Court can set aside or allow but cannot
remand the matter to the Arbitrator for fresh decision as has been
held by the Hon'ble Apex Court in the case of Radha Chemicals Vs
Union of India passed in Special Leave to Appeal (C)
No(s).2334/2018 dated 10.10.2018 and Kinnari Mullick and
Another Vs. Ghanshyam Das Damani, (2018) 11 SCC 328, but
the fact remains that a landowner whose land was acquired cannot
be left remediless, therefore, in the light of Para 72 of the judgment
of Hon'ble Apex Court rendered in the case of P. Nagaraju (supra),
in the fitness of things, this Court deems it appropriate to remit the
matter to the learned Arbitrator to decide it afresh.
41. So far as the judgment of coordinate Bench of this Court
rendered in the case of Madhya Pradesh Road Development
Corporation Vs. Baisakhu (M.P. No. 1532/2021) decided on
05.05.2021 and the decision rendered in a bunch of petitions
including M.P. No.1939/2021 on 12.10.2022, relied upon by learned
counsel for the appellant is concerned, the said judgment being in
the nature of per inqurium will not have binding effect and are
therefore, unenforceable.
42. With the aforesaid, these appeals stand disposed of.
(MILIND RAMESH PHADKE)
ojha JUDGE
