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2022 Supreme(MP) 710

High Court of Madhya Pradesh
Sujoy Paul, Dwarka Dhish Bansal, JJ.
MADHYA PRADESH ROAD DEVELOPMENT CORPORATION, JABALPUR – APPELLANT
Versus
MOHD. SHAHBUDDIN & ORS. – RESPONDENTS
Arb. Appeal Nos. 8 of 2020, 46, 84 to 91, 97 of 2021 and 59 of 2019
Decided On : 13-04-2022

The main legal point established in the judgment is that the theory of deduction cannot be applied in cases governed by statutory guidelines, and the impugned order passed by the Court below did not warrant interference under section 34 of the Arbitration Act.

Headnote:

Compensation - National Highways Act - 3-G(5) of the National Highways Act, 1956 - Act Section 23, Act Section 26(1)(a) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - Summary: The court considered the determination of compensation for land acquisition under the National Highways Act, 1956 and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The court analyzed the legislative provisions and the Collector guidelines issued under the Indian Stamp Act, 1899, and held that the theory of deduction cannot be applied in cases governed by statutory guidelines. The court dismissed the appeals filed by the Corporation and allowed the appeal by the claimant, setting aside the impugned judgment and ordering the determination of compensation without any deduction as held in the Corporation's appeals.

Fact of the Case:

The respondent, owner of a piece of land acquired under the National Highways Act, 1956, filed a dispute regarding the determination of compensation. The appellant Corporation argued for the application of the theory of deduction, while the claimants supported the determination based on the Collector guidelines and the Act of 2013. The pivotal questions were whether the arbitrator was justified in determining the compensation solely on the basis of Collector guidelines without applying the theory of deduction and whether the Court below failed to exercise jurisdiction under section 34 of the Arbitration Act.

Finding of the Court:

The court held that the theory of deduction cannot be applied in cases governed by statutory guidelines and that the impugned order passed by the Court below did not warrant interference under section 34 of the Arbitration Act. The appeals filed by the Corporation were dismissed, and the appeal by the claimant was allowed, setting aside the impugned judgment and ordering the determination of compensation without any deduction as held in the Corporation's appeals.

Issues: The issues involved the application of the theory of deduction in determining compensation under the National Highways Act, 1956 and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and the validity of the impugned order passed by the Court below under section 34 of the Arbitration Act.

Ratio Decidendi: The court held that the theory of deduction cannot be applied in cases governed by statutory guidelines and that the impugned order passed by the Court below did not warrant interference under section 34 of the Arbitration Act.

Final Decision: The appeals filed by the Corporation were dismissed, and the appeal by the claimant was allowed, setting aside the impugned judgment and ordering the determination of compensation without any deduction as held in the Corporation's appeals.

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points summarized:

  1. The core legal principle established is that the theory of deduction cannot be applied in cases governed by statutory guidelines, particularly in land acquisition and compensation cases under the relevant statutes [judgement_subject].

  2. The court clarified that the impugned order was correctly not interfered with under section 34 of the Arbitration Act, as the order did not violate fundamental legal principles or public policy (!) .

  3. In land acquisition disputes, the determination of compensation should be based on the statutory provisions, specifically the market value as specified in the applicable land acquisition laws and guidelines issued by authorities (!) .

  4. The guidelines issued by the Collector, which incorporate procedures and factors for assessing land value, have statutory backing and must be followed for calculating compensation, especially for agricultural lands (!) (!) .

  5. The application of the theory of deduction, historically used under previous laws, is no longer applicable under the current statutory framework, which recognizes the market value as determined through statutory guidelines (!) (!) .

  6. The court emphasized that the language used in the newer legislation (Act of 2013) clearly mandates that compensation be determined based on the market value specified in the Stamp Act and related guidelines, giving statutory recognition to these valuation methods (!) (!) .

  7. The court rejected arguments suggesting that only a portion of the land (e.g., 50%) should be considered for compensation, affirming that no statutory provision mandates such a deduction, and compensation should be based on the full applicable market value as per the guidelines (!) (!) .

  8. The court also held that the impugned order by the Court below was within its jurisdiction and that the order did not violate principles of justice or legality, thus justifying its affirmation (!) .

  9. Finally, the court disposed of the appeals, dismissing those filed by the corporation and allowing the claimant’s appeal, with directions to determine compensation based on the Collector guidelines without deductions, and to complete the process within a specified timeframe (!) (!) .

Please let me know if you need further analysis or specific legal advice related to this case.


JUDGMENT SUJOY PAUL, J. : – This common judgment will dispose of these batch of appeals which were analogously heard on the joint request of the parties considering the similitude of the questions involved.

2. Facts are taken from A. A. No. 46/2021. Respondent/claimant is owner of Khasra No. 73 total area 0.110 hectare. Out of this land, small piece of land was acquired. On 31-8-2015, the competent authority determined the amount of Rs. 95,16,384/- as compensation by treating the land in question as ‘agricultural land’. Being aggrieved by said determination of compensation made by the competent authority on 31-8-2015, a dispute under section 3-G(5) of the National Highways Act, 1956 (in short ‘Highways Act’) was filed by respondent No. 1 before the Commissioner-cum-Arbitrator. Argument of Corporation :

3. The appellant entered appearance before the Arbitrator and filed a detailed reply stating that in case of raw land, necessary deduction would be applicable. Shri Atul Nema, learned counsel for the appellant placed reliance on para-16 (vii) and (xiv) of the reply and contended that specific objection/ pleadings raised by appellant were not considered by learned Arbitrator.

4. Arbitrator passed the award dated 10-8-2016 whereby amount of compensation was enhanced.

5. The appellant feeling aggrieved by such enhancement, preferred an application under section 34 of the Arbitration and Conciliation Act, 1996 (in short ‘Arbitration Act’) before the Court below. The Court below by order dated 22-3-2021, rejected the said application preferred by the present appellant.

6. Shri Atul Nema, learned counsel for the appellant Corporation fairly submits that in all these appeals filed by the Corporation, the lands acquired are admittedly undiverted and undeveloped agricultural lands. The size of lands is more than 1000 sq.m. The Collector has issued the guidelines on 3-3-2014. In the Collector guidelines, there is no mention that initial 1000 sq.m. should be determined by reducing the size of the land as per section 59 of Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973 (in short ‘Adhiniyam’). In other words, it is argued that initial 1000 sq.m. of lands in all the cases are undiverted agricultural lands. If lands are to be developed, as per the Adhiniyam, certain portion of the land must be left for the purpose of development in view of statutory mandate ingrained in the said Adhiniyam. Thus, only 50% of the land out of 1000 sq.m. of land would be left as developed land. The compensation for this portion of land is to be quantified accordingly. The compensation would be applicable for 50% of the land and not for the entire piece of land of 1000 sq.m.

7. The next limb of argument is that the Court below has erred in rejecting the application under section 34 of the Arbitration Act whereas a Coordinate Bench of Court below in MJC (AV) 165/2017, MPRDC vs. Damyanti Chouhan (Annexure A/2 in A. A. No. 8/2020) took a decision in consonance with the aforesaid argument of the appellant. Putting it differently, Shri Nema submits that the Coordinate Bench of Court below in Damyanti Chouhan (supra) opined that the 50% of initial 1000 sq.m. of acquired land alone deserves compensation. It was not proper for the Coordinate Bench of Court below to take a different view in the impugned order.

8. Shri Atul Nema, Advocate in support of his aforesaid submissions placed reliance on the judgment of Supreme Court passed in Civil Appeal No. 15448/2017, Union of India vs. Savitri Devi, and urged that the ‘circle rate’ mentioned in this judgment is nothing but the ‘Collector guideline’. The Apex Court clarified as to how Collector guidelines can be prepared and to what extent they can be pressed into service. The said requirements are not fulfilled in the instant case. Similarly, judgment of Supreme Court in Union of India vs. Dyagala Devamma and others

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