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IN THE HIGH COURT OF ALLAHABAD
Shekhar B. Saraf, J.
National Highways Authority Of India - Appellant
Vs.
Musafir And Others - Respondent
Appeal Under Section 37 Of Arbitration And Conciliation Act 1996 No. - 41 of 2021
Decided On : 06-05-2024
ARBITRATION - LAND ACQUISITION - Arbitration and Conciliation Act, 1996 - Section 33, National Highways Act, 1956 - Section 3A(1), 3C(1), 3G(5) - The court discussed the powers of the arbitral tribunal under the Arbitration and Conciliation Act, particularly Section 33, which allows for correction and interpretation of awards but does not permit modification or recall of awards. The court emphasized the principle of functus officio, stating that once an award is rendered, the tribunal cannot revisit its decision unless specifically authorized by law. The court found that the arbitrator exceeded its authority in modifying previous awards, leading to the conclusion that such actions were void ab initio. This legal framework influenced the court's decision to set aside the lower court's order and the arbitrator's awards.
Fact of the Case:
A notification for land acquisition under the National Highways Act was issued, leading to an award by the Competent Authority. Objections were raised, and the Arbitrator set aside the initial award, remanding the matter for re-evaluation. Subsequent awards by the Arbitrator were contested by the NHAI, leading to a District Judge's rejection of the objections.
Finding of the Court:
The court found that the Arbitrator acted beyond its statutory authority by modifying its awards, which is not permitted under the Arbitration Act. The court emphasized the need for adherence to the legal framework governing arbitration.
Issues: Whether the Arbitrator had the authority to modify its previous awards and whether the District Judge's dismissal of the NHAI's objections was justified.
Ratio Decidendi: The court held that arbitral tribunals cannot modify or recall their awards once rendered, as per the principle of functus officio and the limitations set by the Arbitration Act. The court underscored the importance of judicial oversight in ensuring compliance with arbitration law.
Final Decision: The court set aside the District Judge's order and the Arbitrator's awards, directing the matter to be decided de novo by the Arbitrator within six months, considering the previous order of remand.
JUDGMENT :
1. Heard Sri Divakar Rai Sharma, counsel appearing on behalf of the appellant and Sri Ashish Kumar Singh, counsel appearing on behalf of the respondent Nos.1, 2, 3, 15, 16, 28, 32, 34 and 38 and Sri Dharamveer Singh, counsel appearing on behalf of the respondent No.53.
2. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Arbitration Act”) arises out of an order passed by the District Judge, Mau dated November 5, 2020.
3. The facts of the case are briefly provided below:
ii. The aforesaid notification was published in two daily newspapers on March 6, 2015 seeking objection from the persons interested in the land within a period of 21 days under Section 3C(1) of the Act. Thereafter, the Competent Authority passed an award on August 17, 2016.
iii. Being aggrieved by the award, the opposite parties filed their objections under Section 3G(5) of the Act before the Arbitrator.
iv. The Arbitrator, after considering the objections, vide its order dated March 15, 2018 set aside the award dated August 17, 2016 and remitted the matter to the Competent Authority directing to form a Joint Committee including the officers of the National Highways Authority of India (hereinafter referred to as “the NHAI”) to get the land re-valued by conducting a spot inspection and determine the compensation as per Act No.30 of 2013.
v. Pursuant to the order of remand dated March 15, 2018, the Competent Authority passed a fresh award on June 4, 2018.
vi. On November 15, 2018, before the Arbitrator, the NHAI agreed to make the payment in three slabs depending upon area at the rate of Rs.3600/-, Rs.1400/- & Rs.800/- per square metre.
vii. Later on, the Arbitrator passed another award on December 27, 2019 fixing the rate as per three slabs in terms of the order dated November 15, 2018.
viii. The Arbitrator passed another award dated May 19, 2020 recalling the earlier award dated December 27, 2019 and directed to make the payment in terms of the amended award dated March 25, 2018.
ix. The Arbitrator passed another award dated May 28, 2020 in the name of amended award and fixed only one slab, that is, at the rate of Rs.3600/- per square metre.
x. Being aggrieved, the NHAI preferred objection under Section 34 of the Arbitration Act by impleading 53 persons/land holders in one case.
xi. District Judge, Mau rejected aforesaid objection of the NHAI by holding that the objection is devoid of merit and the same deserves to be rejected.
4. It is to be noted that the award dated March 15, 2018 passed by the Arbitrator remanding the matter to the Competent Authority directing the land to get re-valued by conducting the spot inspection and determining the compensation as per Act No.30 of 2013 was never challenged by either of the parties. This order has, accordingly, attained finality.
5. Counsel appearing on behalf of the appellant and the counsel appearing on behalf of several respondents in this matter have fairly submitted that the Arbitrator may be directed to once again decide the matter de novo basing the same upon the spot inspection and re-valuation carried out by the Joint Committee including the officers of the NHAI as per the order dated March 15, 2018.
6. At this juncture, it is pertinent to refer to Section 33 of the Arbitration Act, which deals with Correction and interpretation of award, and making of an additional award:
(1) Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties—
(a) a party, with notice to the other party, may request the arbitral tribunal to correct any computation errors, any clerical or typographical erro
Arbitral tribunals lack the authority to modify or recall their awards post-rendering, adhering strictly to the provisions of the Arbitration and Conciliation Act, which limits their powers to correc....
The arbitrator's authority under the National Highways Act is limited to determining compensation, and parties waive their right to object to awards if they do not raise timely challenges.
The court ruled that an additional award under the Arbitration and Conciliation Act merges with the primary award, making partial challenges impermissible.
Courts under Section 34 cannot re-appreciate evidence or enhance arbitral awards; must set aside and remit if perverse.
Limited judicial interference under Sections 34/37 Arbitration Act in NHAI land compensation awards; no re-appreciation of evidence.
The court clarified that under Section 34 of the Arbitration Act, the scope of review is limited to setting aside awards for patent illegality or public policy violations, not for modification.
Section 3(G) of Act read as determination of amount payable as compensation.
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