The court cannot modify an arbitral award under Section 34 by re-appreciating evidence; it must follow existing law and proceed with the hearing despite pending references.

ORDER :

SUNITA AGARWAL, C.J.

Mr. Jenil Shah, the learned advocate appearing for the respondents/land holders would submit that the questions as to whether the powers of the Court under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 will include the power to modify an arbitral award and further if the power to modify is available, whether such power can be exercised only when the award is severable and part thereof can be modified, are engaging attention of the Apex Court Apex Court in Special Leave to Appeal (C) No. 15336-15337 of 2021. It is submitted that two other questions as to whether the power to set aside the award under Section 34 of the Act, 1996, being a larger power, will include the power to modify the arbitral award and if so, to what extent and whether the power to modify the award can be read into the power to set aside the award under Section 34 of the Act, 1996, are also subject matter of considerations before the Apex Court.

2. The contention is that in view of the fact that the above noted questions have been referred to the Larger Bench vide judgment and order dated 20th February, 2024 passed by the three Judges’ Bench of the Apex Court, this Court may not proceed with the matters, inasmuch as, any statement of law on the issue by the Apex Court would be the law of the land and would be binding on the Courts in the country.

3. Testing this submission of the learned counsel for the respondents/land holders, we may record that the issue in the present appeal under section 37 of the Act, 1996 is about the scope of exercise of jurisdiction by the Court under Section 34 of the Act, 1996.

4. The contention of the learned counsel for the appellant is that the Court while exercising the jurisdiction under Section 34 of the Act, 1996 has proceeded to re-appreciate the evidence to substitute the findings of the Arbitrator in the matter of determination of market value of the lands-in-question so as to modify the compensation amount determined by the competent authority and the Arbitrator. The exercise of powers under Section 34 of the Act, 1996 does not permit the Civil Court to re-appreciate the evidence like a Court of First Appeal to draw an independent finding on the question of market value as a continuation of the proceedings in the matter of determination/re-determination of compensation under the National Highways Act, 1956.

5. Taking note of the issues involved in the present appeals, we do not agree with the contentions of the learned counsel for the respondents to postpone the matter on the premise that the questions which may have bearing in the present matters have been referred to a Larger Bench of the Apex Court. We may also take note of the decision of the Apex Court in Union Territory of Ladakh and Others vs. Jammu and Kashmir National Conference and Another [(2023) SCC OnLine SC 1140], wherein it is clarified that in case of conflicting decisions, the High Court cannot refuse deference to the judgments of the Apex Court on the score that a later Co-ordinate Bench has doubted its correctness. It was laid down that the High Court has to proceed to decide the matter on the basis of law as it stands. It is not open to await for an outcome of a reference or review petition, as the case may be, unless specifically a direction by the Apex Court to await an outcome of reference or review petition, as the case may be. It is not open to the High Court to refuse to follow the judgments by stating that it has been doubted by a later Co-ordinate Bench.

6. A judicial notice was taken by the Apex Court of the fact that High Courts were not deciding the cases on the ground that the leading judgment of the Apex Court on the subject was either referred to a Large Bench or a review petition relating thereto was pending.

7. Learned counsel for the respondents, however, has relied on the observations made in the judgment of the Apex Court in D.K. Trivedi and Sons vs. State of Gujarat [1986 (Supp.) 1 SCC 20] w