Madras High Court
Sarada Sekar (Died) vs The District Collector Cum ... on 5 October, 2021
C.M.A.No.1964 of 2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 05.10.2021
CORAM
THE HONOURABLE MR.JUSTICE ABDUL QUDDHOSE
C.M.A.No.1964 of 2016
Sarada Sekar (Died)
2.M.G.Sekhar
3.Vetrikodi
4.Tamilkodi
5.Rajeshwari
6.Vengateswaran ... Appellants
(Appellants 2 to 6 brought on
record as LRs of the deceased
Appellant vide order of this Court
dated 20.09.2021 made in
CMP.No.15278, 15281 & 15282
of 2021 in CMA.No.1964 of
2016)
Vs
1.The District Collector cum Arbitrator, (LA-NH7),
Dharmapuri – 5.
2.The Competent Authority cum
Special District Revenue Officer,
Land Acquisition N.H.7,
Dharmapuri – 5.
1/16
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C.M.A.No.1964 of 2016
3.The Special Tahsildar,
(LA) Unit I & II,
N.H.7, Dharmapuri – 5. ... Respondents
PRAYER: Civil Miscellaneous Appeal filed under Section 37(1) of the
Arbitration and Conciliation Act, against the order and decreetal order
passed by the learned Principal District Judge, Dharmapuri in Arbitration
O.P.No.17 of 2013 dated 18.04.2016.
For Appellants : Mr.R.Prabhudoss
For Respondents : Dr.S.Suriya,
Government Advocate
JUDGMENT
This appeal has been filed under section 37 of the Arbitration and
Conciliation Act, challenging the order dated 18.04.2016 passed by the
learned Principal District Judge, Dharmapuri in A.O.P.No.17 of 2013 under
section 34 of the Arbitration and Conciliation Act, wherein the said
application was dismissed.
2. An arbitral award dated 17.08.2012 came to be passed by the first
respondent in favour of the first Appellant under the National Highways
Act, under which, the first respondent confirmed the proceedings of the
District Revenue Officer, Dhramapuri dated 10.07.2007. The District
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C.M.A.No.1964 of 2016
Revenue Officer, Dharmapuri, the competent authority under the National
Highways Act determined the compensation payable for the Appellant's
lands which were acquired under the National Highways Act by its
proceedings dated 10.07.2007. Under the said proceedings, the land
acquisition officer has determined the compensation at Rs.1,97,600/- per
hectare.
3. Aggrieved by the same, the first Appellant initiated arbitration as
per the provisions of the National Highways Act and the first respondent,
District Collector by order dated 17.08.2012 confirmed the order of the
District Revenue Officer dated 10.07.2007 and did not grant any
enhancement of compensation as sought for by the first Appellant.
4. Aggrieved by the arbitral award passed by the first respondent,
District Collector, the first Appellant filed an application under section 34
of the Arbitration and Conciliation Act before the learned Principal District
Judge, Dharmapuri in A.O.P.No.17 of 2013. The learned Principal District
Judge, Dharmapuri dismissed the application filed by the first Appellant by
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C.M.A.No.1964 of 2016
its order dated 18.04.2016. Aggrieved by the same, this appeal has been
filed under section 37 of the Arbitration and Conciliation Act.
5. Heard Mr.R.Prabudoss, learned counsel for the Appellants and
Dr.S.Suriya, learned Government Advocate for the respondents.
6. In the application filed by the first Appellant in A.O.P.No.17 of
2013 before the learned Principal District Judge, Dharmapuri, under section
34 of the Arbitration and Conciliation Act, the first Appellant has sought for
enhancement of compensation from the one determined by the first
respondent, District Collector under the National Highways Act.
7. It is now well settled as per the recent decision of the Hon'ble
Supreme Court in the case of Project Director, National Highways vs.
M.Hakeem and another reported in 2021 SCC Online SC 473 that an
arbitral award cannot be modified by a court exercising power under section
34 of the Arbitration and Conciliation Act. The relevant paragraphs of the
said decision are extracted hereunder:
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C.M.A.No.1964 of 2016
"39. As has been pointed out by us
hereinabove, McDermott (supra) has been followed
by this Court in Kinnari Mullick (supra). Also, in
Dakshin Haryana Bijli Vitran Nigam Ltd.
v.Navigant Technologies Pvt. Ltd., 2021 SCC
Online SC 157, a recent judgment of this Court also
followed McDermott (supra) stating that there is no
power to modify an arbitral award under Section 34
as follows:—
(f) In law, where the Court sets aside
the award passed by the majority
members of the tribunal, the underlying
disputes would require to be decided
afresh in an appropriate proceeding.
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.
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,
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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.
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
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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
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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.
43. Col.Balasubramanian, however referred
to a passage in Jaishri Laxmanrao Patil v. Chief
Minister, 2021 SCC OnLine SC 362 (at paras 412
to 415). He argued that ‘purposive construction’
referred to by Bennion in his classic on Statutory
Interpretation must be applied by us on the facts of
this case as in legislations dealing with land
acquisition, a pragmatic view is required to be
taken and the law must be interpreted purposefully
and realistically so that the benefit reaches the
masses. We may only add that the judgment cited by
Col. Balasubramanian is a judgment dealing with a
constitutional provision - Article 342A of the
Constitution. We must never forget the famous
statement of Chief Justice Marshall in M'Culloch v.
State of Maryland, 17 US 316 (1819) that “it is a
constitution we are expounding” - and the
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C.M.A.No.1964 of 2016
Constitution is a living document governing the
lives of millions of people, which is required to be
interpreted in a flexible evolutionary manner to
provide for the demands and compulsions of
changing times and needs.
44. The distinction between constitutional
and statutory interpretation was felicitously put by
Justice Aharon Barak, President of the Supreme
Court of Israel thus:
“The task of expounding a Constitution
is crucially different from that of
construing a statute. A statute defines
present rights and obligations. It is
easily enacted and as easily repealed.
A Constitution, by contrast, is drafted
with an eye to the future. Its function is
to provide a continuing framework for
the legitimate exercise of governmental
power and, when joined by a Bill or
Charter of Rights, for the unremitting
protection of individual rights and
liberties. Once enacted, its provisions
cannot easily be repealed or amended.
It must, therefore, be capable of growth
and development over time to meet new
social, political and historical realities
often unimagined by its framers. The
judiciary is the guardian of the
Constitution and must, in interpreting
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its provisions, bear these
considerations in mind.”
45. This quote has been cited in Rameshwar
Prasad (VI) v. Union of India, (2006) 2 SCC 1 (at
pages 91, 92).
46. “Purposive construction” of statutes,
relevant in the present context, is referred to in a
recent concurring judgment by Nariman, J. in Eera
v. State (NCT of Delhi),(2017) 15 SCC 133, as the
theory of “creative interpretation”. However, even
“creative interpretation” has its limits, which have
been laid down in the aforesaid judgment as
follows:
"139. A reading of the Act as a
whole in the light of the Statement of
Objects and Reasons thus makes it
clear that the intention of the legislator
was to focus on children, as commonly
understood i.e. persons who are
physically under the age of 18 years.
The golden rule in determining whether
the judiciary has crossed the Lakshman
Rekha in the guise of interpreting a
statute is really whether a Judge has
only ironed out the creases that he
found in a statute in the light of its
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object, or whether he has altered the
material of which the Act is woven. In
short, the difference is the well-known
philosophical difference between “is”
and “ought”. Does the Judge put
himself in the place of the legislator
and ask himself whether the legislator
intended a certain result, or does he
state that this must have been the intent
of the legislator and infuse what he
thinks should have been done had he
been the legislator. If the latter, it is
clear that the Judge then would add
something more than what there is in
the statute by way of a supposed
intention of the legislator and would go
beyond creative interpretation of
legislation to legislating itself. It is at
this point that the Judge crosses the
Lakshman Rekha and becomes a
legislator, stating what the law ought to
be instead of what the law is.
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
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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.
***
49. There is no doubt that, as argued by Col.
Balasubramanian, the arbitral award in these cases
is given by a government servant appointed by the
Central Government, the result being the rubber
stamping of compensation awarded on a completely
perverse basis. Given the fact that, in these petitions
at least, the constitutional validity of the NH
Amendment Act, 1997 has not been challenged, we
must proceed on the basis that grave injustice
would be done if we were to interfere on facts, set
aside the awards and remand the matter to the very
government servant who took into account
depressed land values which were relevant for
purposes of stamp duty only. It may be mentioned at
this juncture that a limited challenge was made to
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Section 3J of the National Highways Act when it
excluded the provisions of the Land Acquisition Act
in the context of solatium and interest not being
granted under the National Highways Act. Thus, in
Union of India v. Tarsem Singh, (2019) 9 SCC 304,
this Court dealt with a batch of appeals in which
the question was set out thus:—
1. … A batch of appeals before us by the
Union of India question the view of the
Punjab and Haryana High Court which is
that the non-grant of solatium and interest to
lands acquired under the National Highways
Act, which is available if lands are acquired
under the Land Acquisition Act, is bad in
law, and consequently that Section 3-J of the
National Highways Act, 1956 be struck down
as being violative of Article 14 of the
Constitution of India to this extent.
***
54. It can be seen from the aforesaid
provisions that the speeding up of acquisition of
land needed for national highways has been
achieved. The challenge process to an award
passed will, of necessity, take its own time, both
under Section 3G of this Act as well as under the
provisions of the Land Acquisition Act. This being
the case, it is a little difficult to appreciate as to
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why the wholesome regime of appeals under the
Land Acquisition Act has been replaced by a regime
in which an award passed by an Arbitrator, who is
not consensually appointed but appointed by the
Central Government, can only be challenged not on
merits, but on the limited grounds contained in
Section 34 of the Arbitration Act, 1996.
***
58. Given the fact that the NH Amendment
Act, 1997 has not been challenged before us, we
refrain from saying anything more. Suffice it to say
that, as has been held in Taherakhatoon v.
Salambin Mohammad, (1999) 2 SCC 635 (at para
20), even after we declare the law and set aside the
High Court judgment on law, we need not interfere
with the judgment on facts, if the justice of the case
does not require interference under Article 136 of
the Constitution of India..."
8. Since the arbitral award cannot be modified, even in cases
involving determination of compensation under the National Highways Act,
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C.M.A.No.1964 of 2016
this Court is of the considered view that there is no merit in this Appeal and
the learned Principal District Judge, Dharmapuri under the impugned order
dated 18.04.2016 passed in A.O.P.No.17 of 2013 under section 34 of the
Arbitration and Conciliation Act has rightly dismissed the said application.
9. In the result, there is no infirmity in the impugned order and the
Civil Miscellaneous Appeal is dismissed and No costs.
05.10.2021
nl
Index: Yes/ No
Internet: Yes/No
Speaking Order/Non-speaking Order
To
1. The Principal District Judge, Dharmapuri
2.The Section Officer, V.R.Section, High Court of Madras.
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C.M.A.No.1964 of 2016
ABDUL QUDDHOSE, J.
nl
C.M.A.No.1964 of 2016
05.10.2021
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