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IN THE HIGH COURT OF ALLAHABAD
SHEKHAR B. SARAF, J.
National Highways Authority Of India – Appellant
Versus
Rampyari And Another – Respondent
Arbitration Appeal No. 394 of 2022
Decided on : 27-05-2024
ARBITRATION - LAND ACQUISITION COMPENSATION - Arbitration and Conciliation Act, 1996 - Section 37; National Highway Act, 1956 - Section 3G(5), 3G(7)(a); Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013 - Section 26 - The court discussed the provisions of the Arbitration and Conciliation Act, 1996, particularly Section 37, which governs appeals against arbitral awards, and Section 34, which allows for setting aside awards under specific circumstances. The National Highway Act, 1956, particularly Section 3G(5) and 3G(7)(a), was referenced regarding the determination of compensation based on market value at the time of notification. The court emphasized the importance of considering the potential value of land, as established in previous judgments, and upheld the arbitrator's decision to enhance compensation based on the land's commercial potential, rejecting the appellant's claims of patent illegality.
Fact of the Case:
The case involves the acquisition of a small piece of agricultural land for the widening of National Highway No. 26. The compensation awarded by the Competent Authority was challenged by the landowner, leading to an arbitration that significantly increased the compensation amount. The appellant, National Highways Authority of India, appealed against the arbitrator's award, which was upheld by the District Judge.
Finding of the Court:
The court found that the arbitrator's decision to enhance compensation was reasonable, considering the land's potential for commercial use due to its location on a main road. The court upheld the District Judge's ruling that the arbitrator's award was not patently illegal and aligned with principles of fair compensation.
Issues: Whether the arbitrator acted with patent illegality in enhancing the compensation for the acquired land and whether the compensation determined was justifiable based on the land's potential use.
Ratio Decidendi: The court held that the potentiality of the land must be considered in determining its market value, and the arbitrator's rationale for enhancing compensation was reasonable and not contrary to law. The court emphasized that an arbitral award should not be set aside unless it is vitiated by patent illegality.
Final Decision: The appeal was dismissed, affirming the District Judge's order that upheld the arbitrator's award of enhanced compensation.
JUDGMENT :
1. This is an appeal filed by the National Highways Authority of India (hereinafter referred to as ‘the appellant’) under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') challenging the order dated January 14, 2020 passed by District and Session Judge, Lalitpur under Section 34 of the Act.
FACTS
2. I have laid down the factual matrix leading to the instant appeal below:
(a) The present case involves the acquisition of land of Arazi No. 1004/4 measuring 0.020 hectare situated at village Lakhanpura, Tehsil and District Lalitpur for widening of National Highway No. 26 for commercial purposes.
(b) On November 2, 2013, Competent Authority/Special Land Acquisition Officer, Lalitpur granted the compensation in respect of the acquired land at the rate of Rs.9,88,000/- per hectare (Rs.98.8/- per square meter).
(c) The land in question belonged to Smt. Rampyari (respondent No. 1), who filed an application before District Magistrate/Arbitrator under Section 3G (5) of the National Highway Act, 1956 (hereinafter referred to as ‘the Act of 1956’) against the order of compensation passed by the Competent Authority/Special Land Acquisition Officer, Lalitpur on the ground that the awarded compensation was incorrect, one-sided and undervalued.
(d) On August 28, 2015, the Arbitrator passed the award in the matter and enhanced the amount of compensation from Rs.98.8/-per square meter to Rs.2500/- per square meter.
(e) Against the award passed by the Arbitrator, the appellant filed an application under Section 34 of the Act before the District and Session Judge, Lalitpur, who vide judgment and order dated January 14, 2020, rejected the application filed by the appellant and upheld the award passed by the Arbitrator.
(f) Being aggrieved by the judgment and order dated January 14, 2020 passed by the District and Session Judge, Lalitpur, the appellant has preferred the instant appeal before this Court.
CONTENTIONS OF THE APPELLANT
3. Sri Pranjal Mehrotra, learned counsel appearing on behalf of the appellant has made the following submissions:
a) Section 3G(7)(a) of the Act of 1956 provides that the Competent Authority, as well as, the Arbitrator shall take into consideration the market value of the land on the date of publication of the notification under Section 3A of the Act of 1956 while determining the compensation.
b) The acquired land was evidently recorded as Agricultural Land in the revenue records on the date of publication of the 3A Notification and the Competent Authority had correctly awarded the compensation on the agricultural rate of Rs.9,88,000/- per hectare.
c) The Arbitrator while passing the award dated August 28, 2015 had recorded a categorical finding that there is no error on the part of the Competent Authority in determining compensation on the basis of the market value of effective stamp rate on the date of publication of the 3A Notification, according to the stamp rate list the then agricultural rate had been determined as Rs.9,88,000/-per hectare. Further, the respondent No. 1 had not produced any evidence on record to prove that any commercial/residential activities were going on in the acquired land on the date of publication of the 3A Notification. Still, the Arbitrator acted with patent illegality enhancing the compensation @ Rs.2500/-per square meter only on the basis of some examples produced by the respondent No. 1 of some other institutions.
d) Once the Arbitrator had admitted in the Arbitral Award that the Competent Authority had correctly determined the compensation on the basis of the stamp rate on the date of publication of the 3A Notification, then there was no occasion for him to illegally enhance the compensation at the rate of Rs.2500/- per square meter.
e) There is no finding in the Arbitral Award dated 28.8.2015 as to how the Arbitrator arrived @ Rs.2500/-per square meter. The Arbitrator, only on the basis of his opinion, has enhanced the compensation @ Rs.2500/-
AI
Point of Law : Acquisition of Land – Compensation -None of them is applicable in the facts of the present case since those judgments have been referred under Indian Stamp Act whereas present case is ....
Narrow scope of judicial interference under Sections 34/37 Arbitration Act in NH Act awards; no re-appreciation of evidence or modification of compensation.
Narrow scope of judicial interference under S.34/37 Arbitration Act; courts cannot re-appreciate evidence or modify land compensation awards under NH Act.
Narrow scope of judicial interference under Sections 34/37 Arbitration Act in NHAI land awards; no re-appreciation of evidence or modification.
Point of Law : If arbitral award is found to be suffering from patent illegality it can surely be interfered with.
Section 3(G) of Act read as determination of amount payable as compensation.
The nature and status of the land on the date of notification must be considered in determining compensation for land acquired under the NHAI Act, 1956, and settled legal principles must be applied i....
Narrow scope under Sections 34/37 of Arbitration Act limits interference with NHAI arbitral awards to patent illegality, not re-appreciating evidence or enhancing compensation.
The court established that under statutory arbitration for land acquisition, the authority must ensure fair compensation based on proper assessment and documentation, highlighting a constitutional ob....
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