IMPORTANT POINT
Section 34 of the Arbitration and Conciliation Act, 1996 does not empower courts to modify arbitration awards, only to set them aside or remit them for reconsideration.

JUDGMENT :

(R. Subramanian, J.)

(Prayer : Civil Miscellaneous Appeal filed under Section 37(1) & (2) of Arbitration & Conciliation Act, 1996, against the order and executable order made in Arbitration O.P.No.1 of 2013 on the file of the Principal District Judge, Dharmapuri dated 05.03.2016.)

This Civil Miscellaneous Appeal has been filed by the National Highway Authority of India (NHAI) challenging the order passed by the Principal District Judge, Dharmapuri in an application under Section 34 of the Arbitration and Conciliation Act, 1996.

The facts that led to this appeal are as follows:-

2. The land measuring an extent of 5455 sq.m in S.No.246/1B and 246/3 of Baisuhalli Village in Dharmapuri District was acquired for extension of National Highways No.7. Since the land owners were not satisfied with the award of the land acquisition officer, who granted a princely sum of Rs.22.13 per sq.m., they sought for arbitration and the matter was referred to the District Collector, Dharmapuri for arbitration. The District Collector, Dharmapuri passed an order dismissing the claim. Treating the said cryptic order of the District Collector as an award under the Arbitration and Conciliation Act, 1996, the land owners moved the Principal District Judge, Dharmapuri under Section 34 of the Arbitration and Conciliation Act, 1996. The Principal District Judge, Dharmapuri conducted the proceedings as if it is appeal against the order fixing compensation, entertained evidence and re-fixed the value of the land at Rs.100/- per sq.ft. Aggrieved, the National Highways Authority of India is before us by way of this Civil Miscellaneous Appeal under Section 37 of the Arbitration and Conciliation Act, 1996.

3. We have heard Mr.Su.Srinivasan, learned counsel appearing for the National Highways Authority of India/appellant, Mr.K.Chandrasekaran, learned counsel appearing for the land owner/ 7th respondent, Mr.R.Siddharth, learned counsel appearing for the District Collector, Dharmapuri/Arbitrator, and Ms.Ranjani, learned counsel appearing for the respondents 4 to 6. The other respondents though served are not appearing either in person or through counsel.

4. Mr.SU.Srinivasan, learned counsel appearing for the National Highways Authority of India would submit that the modification of the award made by the District Court is beyond the jurisdiction of the District Court under Section 34 of the Arbitration and Conciliation Act, 1996. The learned counsel would heavily rely upon the judgment of the Hon'ble Supreme Court in Project Director, National Highways Authority Vs. Hakkim reported in 2021 (9) SCC 1, wherein, the Hon'ble Supreme Court had pointed out that a Court sitting under Section 34 of the Arbitration and Conciliation Act cannot modify the award, it can either set aside the award or can remit the matter to the Arbitrator, if the circumstances mentioned under sub-Sections 4 and 5 of Section 34 are available in the case on hand. The learned counsel would draw our attention to paragraph 48, where the Hon'ble Supreme Court pointed out that the parliament very clearly intended that no power of modification of an award exists under Section 34 of the Arbitration and Conciliation Act, 1996. We find that it will be useful to extract the said paragraph which reads as follows:-

48. 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 whether Parliament intended this result. Parliament 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.

5. In the light of what has been stated in Project Director, National Highways Authority Vs. Hak