The court ruled that the Section 34 Court lacks jurisdiction to modify an arbitral award to grant a statutory entitlement, such as solatium, when it was not part of the original frame of reference.

JUDGMENT :

SOMASEKHAR SUNDARESAN, J.

Context and Factual Background:

1. This is a bunch of thirty Petitions filed under Section 37 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) that challenge a judgement dated May 4, 2023 (“Impugned Judgement”) passed by the Learned District Court, Nashik. This judgement would dispose of all these Petitions, each of which relates to land acquisition for the same National Highway project.

2. The land parcels acquired in these cases are situated in Mouje Wake and Saundane, Taluka Malegaon, District Nashik. They were notified for compulsory acquisition for purposes of four-laning the National Highway No.3. The compensation declared by the Competent Authority in 2008 (collectively, the “Original Award”) was in the range of Rs. 95 to Rs. 154 per square metre. Since there are multiple matters, to avoid any conflict of dates, no dates are being attributed to instruments prior to the common Impugned Judgement.

3. The Petitioners were aggrieved by the computation of compensation. They believed that the compensation as computed did not factor in the true value discernible from actual transactions that took place in the region and that it wrongly relied on the Ready Reckoner rates that were merely stipulations of benchmark for assessment of stamp duty. The dispute moved to arbitration under Section 3(g) (5) of the NATIONAL HIGHWAYS ACT , 1956 (“Highways Act”).

4. The Learned Arbitral Tribunal found fault with the Original Award on merits, assessed the evidence relating to the manner of computation of the compensation, reviewed commensurate land transactions, and adjudicated the compensation payable at significantly higher values per square metre (collectively “Arbitral Award”).

5. Neither the Original Award nor the Arbitral Award considered or granted the solatium referred to in Section 23(2) of the LAND ACQUISITION ACT , 1894 (“Acquisition Act”). The law as it stood at all times material to Original Award and the Arbitral Award was that pursuant to Section 3J of the Highways Act (introduced in 1997), nothing contained in the Acquisition Act would apply to the computation of the compensation.

Impugned Judgement:

6. The Arbitral Award was challenged under Section 34 of the Arbitration Act, and this led to the passing of the Impugned Judgement, repelling the challenge. By then (May 4, 2023), the Supreme Court had struck down Section 3J of the Highways Act as being unconstitutional in the case of Union of India & Anr. Vs Tarsem Singh & Ors. (2019) 9 SCC 304 (September 19, 2019). The Supreme Court explicitly held that acquisitions between 1997 and 2015 would be treated as if Section 3J of the Highways Act did not exist. In other words, for all land acquisitions for this period under the Highways Act, the provisions of the Acquisition Act would apply, in just the same way they did prior to 1997.

7. The challenge before the Learned District Court under Section 34 of the Arbitration Act was mounted on the premise that the Arbitral Award was erroneous and perverse in the assessment of evidence in computing the compensation amount. However, by the time the Section 34 Petition was heard, the contentions by the Appellants expanded to the premise that the solatium due under the Acquisition Act would now be payable and that the Arbitral Award must be further enhanced by the solatium amount.

8. The Impugned Judgement dismissed the challenge in its entire