The court affirmed that under Section 34, a Civil Court lacks jurisdiction to reappraise evidence in arbitral awards and may only modify awards for clear errors, not on merits.

ORDER :

SUNITA AGARWAL, CJ.

1. These appeals under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, “the Act’ 1996”) are directed against the orders dated 08.04.2024 passed by the Court on the applications under Section 34 of the Act’ 1996, whereby while setting aside the arbitral award dated 09.07.2020 passed by the Arbitrator under Section 3G(5) enhanced amount of compensation for acquisition of the lands of the private respondents herein has been awarded. It was a statutory arbitration where the learned Arbitrator was appointed by the Central Government under Section 3G(5) of the National Highways Act for redetermination of the compensation payable for acquisition of lands under the provisions of the National Highways Act, where landholders have invoked arbitration under Section 3G(5).

2. It is demonstrated before us by the learned counsel for the appellant NHAI that the Civil Court has gone to the extent of reappreciation of evidence in returning a finding of fact on the evidence such as exemplar sale deeds submitted by the applicant / landholders before the arbitrator on the premise that they were ignored by the arbitrator in the proceedings under Section 3G(5). The market value of the lands in question, thus, has been redetermined by the Court in the proceedings under Section 34 of the Act’ 1996.

3. Reliance is placed on the decision of the Apex Court in the case of NHAI v. M. Hakeem, [(2021) 9 SCC 1] to submit that the Court exercising power under Section 34 of the Act’ 1996 cannot modify an arbitral award, by reappreciation of the evidence allegedly ignored by the arbitrator. The manner in which the proceedings under Section 34 have been conducted by the Civil Court, it is clear that it has dealt with the merits of the arbitral award to arrive at a different conclusion from that arrived at by the arbitrator. The Civil Court has, thus, committed a grave error of law in exceeding in its jurisdiction by embarking on a journey of assessment of the market value of the land and determining the total amount of compensation payable for the acquisition of the lands. The order of the Civil Court holding that the claimants are entitled for a higher rate of market value for the acquired land is wholly without jurisdiction or authority of law. Such a course is not open or permissible rather is expressly prohibited by law of arbitration.

4. Mr.Jenil M. Shah, the learned advocate appearing for the respondent would, however, submit that there were exemplar sale deeds brought on record by the landholders, which have been conveniently ignored by the statutory Arbitrator and the Civil Court could not be said to have erred in holding that the arbitral award was based on no evidence and then proceeded to look to the evidence which were already on record to arrive at the conclusion that just and adequate compensation should be awarded to the landholders, by computing the market value at the rate of 66.30 paise per sq.mts.

5. Considering the submissions, we have gone through the order of the Civil Court, it is more than evident that it had proceeded to take into consideration the documentary evidence brought on record to reach at the conclusion that the Arbitrator has erred in ignoring the claim of the landholders and, thus, worked out the market value of the land in question to the tune of Rs.66.30 paise per sq.mts. on appreciation of the material on record.

6. The Civil Court, thus, in the proceedings under Section 34, enhanced the market value of the land in question. There is no dispute about the fact that not only the documentary evidence on record of the arbitral proceedings were appreciated by the Court under Section 34, but certain new material was also admitted to reassess the market value and redetermine the compensation amount payable to the landholders.

7. This exercise conducted by the Court under Section 34 of the Act’ 1996 is completely beyond its jurisdiction. The question as to whether the Court under Section 34