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2025 Supreme(SC) 1441
SUPREME COURT OF INDIA
PAMIDIGHANTAM SRI NARASIMHA AND MANOJ MISRA, JJ.
S. Jayalakshmi - Appellant
Versus
The Special District Revenue Officer And Others - Respondent
Civil Appeal No.192 of 2025 (Arising out of SLP (C) No. 23342 of 2022) with Civil Appeal No.193 of 2025 (@ SLP(C) No. 23355 of 2022)
Decided on : 07-01-2025
Advocate Appeared:
For the Appellant :Mr. Senthil Jagadeesan, Sr. Advocate, Mr. K. S. Mahadevan, Advocate, Ms. Swati Bansal, Advocate, Mr. R. Rangarajan, Advocate, Mr. Aravind Gopinathan, Advocate, Mr. Punit Manoj Agarwwal, Advocate, Ms. Kirti Leela Ratnam, Advocate, Mr. Rajesh Kumar, Advocate
For the Respondent:Mr. K Radhakrishnan, Sr. Advocate, Mr. D.kumanan, Advocate, Ms. Deepa S, Advocate, Mr. Sheikh F Kalia, Advocate, Mr. Veshal Tyagi, Advocate, Mr. Chinmay Anand Panigrahi, Advocate, Mr. Sandeep S. Ladda, Advocate, Mr. Apoorv Shukla, Advocate, Mr. Prabhleen A. Shukla, Advocate
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 34 and 37 - National Highways Act, 1956 - Land acquisition - Modification of arbitral award - High Court allowed appeals under Section 37, setting aside District Judge's order under Section 34, which enhanced compensation - Supreme Court affirms that courts cannot modify arbitral awards but exercise discretion under Article 136 based on fairness - Supreme Court decrees compensation should match that of similarly situated claimants in a related case. (Paras 5, 8, 10, 11)
(B) Jurisdiction of courts under Sections 34 and 37 - Courts have no authority to alter an arbitral award, but discretion may be exercised on facts of specific cases. (Paras 5, 8)
Facts of the case:
The appellant's land was acquired under the Highways Act, leading to an award that granted compensation of Rs. 355.21 per sq.mtr, which was enhanced to Rs. 4500 per sq.mtr by the District Judge, opposed by the respondent; the appeals arose from the modification of this award.
Findings of Court:
The Supreme Court allows appeals, restoring compensation as per the District Judge's award while following the law established in M. Hakeem's case regarding the non-modification of arbitral awards.
Issues: The principal issue was whether the High Court correctly followed the Supreme Court's ruling in M. Hakeem's case concerning the modification of arbitral awards.
Ratio Decidendi: The court maintained that while modifying arbitral awards is impermissible, it may grant equivalent compensation to maintain equity among similarly situated claimants.
Result: Appeals allowed and compensation restored to the amount determined by the Principal District Judge.
Certainly. Based on the provided legal document, here are the key points:
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The Supreme Court clarified that courts do not have the authority to modify arbitral awards under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996. However, discretion may be exercised under Article 136 of the Constitution to ensure fairness in specific cases (!) (!) .
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In the case at hand, the appellant's land was acquired under the Highways Act, and an award was initially granted. This award was subsequently enhanced by the District Judge, leading to appeals concerning the modification of the compensation amount (!) (!) .
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The Court emphasized that the jurisdiction of courts under Sections 34 and 37 is limited to not modifying arbitral awards, but they can exercise discretion based on the facts of the case to ensure equitable outcomes (!) (!) .
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The Court upheld the principle that arbitral awards should not be altered but recognized that, in certain circumstances, equitable considerations might warrant granting compensation comparable to that awarded in similar cases (!) (!) .
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The Supreme Court exercised its power under Article 142 of the Constitution to direct that the appellant be granted the same compensation as awarded to similarly situated claimants in a related case, thereby ensuring parity and fairness (!) (!) .
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The appeals were allowed, and the order of the High Court was modified to grant the appellant the compensation determined by the Principal District Judge, along with all consequential benefits (!) .
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Pending applications were disposed of accordingly (!) .
These points encapsulate the Court's reasoning, the scope of judicial authority regarding arbitral awards, and the final order issued in this case.
| Table of Content |
|---|
| 1. overview of the appeals and land acquisition (Para 2 , 3 , 4) |
| 2. jurisdiction under sections 34 and 37 clarified (Para 5 , 6 , 7) |
| 3. application of article 136 and discretion in compensation (Para 8 , 9 , 10) |
| 4. final order granting compensation to appellant (Para 11 , 12) |
ORDER :
1. Leave granted.
2. These appeals are against the judgment of the High Court of Judicature at Madras in C.M.A Nos. 2267 and 2266 of 2019 dated 28.09.2021, by which the High Court allowed the Section 37 appeal(s) under the Arbitration and Conciliation Act 1996[Hereinafter referred to as the 'Act'.] arising out of the order of the Principal District Judge, Vellore under Section 34 of the Act, modifying the arbitral award dated 19.11.2009 under the NATIONAL HIGHWAYS ACT , 1956[Hereinafter referred to as the 'Highways Act'.].
3. The short facts, to the extent that they are relevant for disposing these appeals are that the Appellant's lands were acquired under the Highways Act under a notification issued under Section 3A(1) of the Act on 05.04.2022. The acquisition proceedings led to passing of an award dated 06.06.2005 as per which compensation at the rate of Rs. 355.21 per sq.mtr was granted. In the proceedings initiated by the appellant under Section 3G(5) of the Highways Act, the arbitrator enhanced the compensation and granted an amount of Rs. 495 per sq.mtr by award dated 19.11.2009. The Appellant challenged the award by filing an application under Section 34 of the Act which came to be allowed by modifying the award and enhancing the compensation to Rs. 4500 per sq.mtr, along with interest at the rate of 9% p.a.
4. Questioning the order passed by the District Judge under Section 34 , the Special District Revenue Officer, the competent authority filed an appeal under Section 37 of the Act before the High Court.
5. During the pendency of the appeal on 20.07.2021, this Court delivered its judgment in the case of "Project Director, National Highways No. 45 E and 220, National Highways Authority of India vs. M. Hakeem & Another" , (2021) 9 SCC 1 holding that the jurisdiction of the Courts under Sections 34 and 37 will not extend to modifying an arbitral award.
6. By the order impugned before us, following the judgment of the Supreme Court in the above referred M. Hakeem's case (supra), High Court allowed the Section 37 appeal and set aside the order passed by the Principal District Judge, Vellore under Section 34 .
7. This is how the appellant(s) are before us.
8. It is true that this Court in M. Hakeem's case (supra) has held that while exercising jurisdiction under Section 34 and 37, courts cannot modify an arbitral award. However, while allowing the appeal, in the following paragraphs, this court exercised its discretion under Article 136 of the Constitution in not interfering with the grant of compensation in favour of the Respondents. The relevant portion of the order passed by this Court is as under;
"59. Given the fact that the NH Laws (Amendment) Act, 1997 has not been challenged before us, we refrain from saying anything more. Suffice it is say that, as has been held in "Taherakhatoon v. Salambin Mohammad" (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.
60. Given the fact that in several similar cases, the NHAI has allowed similarly situated persons to receive compensation at a much higher rate than awarded, and given the law laid down in Nagpur Improvement Trust, we decline to exercise our jurisdiction under Article 136 in favour of the appellants on the facts of these cases. Also, given the fact that most of the awards in these cases were made 7-10 years ago, it would not, at this distance in time, be fair to send back these cases for a de novo start before the very arbitrator or some other arbitrator not consensually appointed, but appoi
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