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2022 Supreme(MP) 1284

IN THE HIGH COURT OF MADHYA PRADESH
Sushrut Arvind Dharmadhikari, J.
Jaidevi Verma – Appellant
Versus
National Highway Authority of India – Respondent
Arbitration Appeal No. 82 of 2021 with Arbitration Appeal No. 92 of 2021
Decided On : 13-09-2022

Advocates Appeared:
Shri Siddharth Sharma- Advocate., Shri Mohan Sausarkar- Advocate, for the Appellant; Shri Mohan Sausarkar- Advocate, Shri Siddharth Sharma- Advocate, for the Respondent

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 34 - National Highways Act, 1956 - Section 3-G(5) - Appeals regarding compensation determination after land acquisition - Appeals are against remand orders issued by the Court; one party challenges remand and the other argues that the Tribunal exceeded its jurisdiction - NHAI's failure to deposit awarded compensation is noted. (Paras 1, 27, 34)

Facts of the case:
The appellant is the owner of land acquired for highway construction. The NHAI admits the valuation report of Rs.64.24 Crores but awarded only Rs.39.51 lakhs for machinery relocation and Rs.18.01 Crores for factory relocation, causing appeals filed under the Arbitration Act. (Paras 3-7)

Findings of Court:
The NHAI is ordered to pay a total of Rs.43,69,10,598/- as compensation with specific interest, determining that the remand was unnecessary and unjustified after years of litigation. (Paras 34, 36)

Issues: Whether the remand was justified, the NHAI's inaction on compensation, the jurisdiction of the Arbitral Tribunal, and applicability of the Right to Fair Compensation and Transparency in Land Acquisition Act, 2013. (Paras 21-22)

Ratio Decidendi: The court concluded the remand order was an abuse of process, favoring expeditious resolution and adherence to established rights without permitting delays caused by repeated litigation. (Paras 27-32)

Result: Appeal No. 82/2021 allowed; Appeal No. 92/2021 dismissed. (Para 36)

Table of Content
1. acquisition of land and associated compensation issues. (Para 1 , 3 , 5 , 12)
2. determination of compensation under the highways act. (Para 4 , 14)
3. court's stance on arbitration and jurisdiction. (Para 7 , 19 , 22)
4. criteria for determining compensation under the act of 2013. (Para 21 , 24 , 27 , 28)
5. final order on compensation payment. (Para 31 , 32 , 35)

JUDGMENT

1. These two appeals have been filed under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter shall be referred to as 'The Arbitration Act'), whereby cross appeals have been filed by both the parties challenging the order dated 27.09.2021 passed in MJC No.49/2017 by the II Additional District Judge, District Betul (M.P.) on an application filed under Section 34 of the Arbitration Act. Arbitration Appeal No.82/2021 has been filed by the appellant -Smt. Jai Devi Verma being dissatisfied with the order of remand, whereas on the other hand the National Highways Authority of India (hereinafter shall be referred as to 'NHAI') has filed Arbitration Appeal No.92/2021 being aggrieved by the order of the Court below allowing the application filed by Smt. Jai Devi Verma observing that the learned Arbitral Tribunal has exceeded its jurisdiction as defined under Section 3-G(5) of the NATIONAL HIGHWAYS ACT , 1956 (hereinafter shall be referred to as 'the Highways Act') and also has remitted the matter back to the revenue authority (Sub Divisional Magistrate). Instead of deciding the issue of compensation, as defined under Section 3-G(5) of the Highways Act, the Commissioner-cum- Arbitrator has decided the irrelevant issues, which have rightly been set aside by the Court below while deciding the application under Section 34 of the Arbitration Act. Both the appeals are being heard analogously. The facts necessary for proper adjudication of these appeals are taken from Arbitration Appeal No.82/2021.

2. By the impugned order passed under Section 34 of the Arbitration Act, the matter stands remitted back in the following terms:

3. Brief facts of the case are that the appellant- Smt. Jai Devi Verma is the owner of land bearing Khasra Nos.356/1 and 356/2 situated at District Betul, which has been acquired by the NHAI vide notifications No.3-A dated 06.07.2010 and 3-D dated 12.05.2011 for the purpose of construction of four lane National Highway between Betul and Nagpur. At the request of the appellant, the Competent Authority for Land Acquisition (hereinafter shall be referred to as 'CALA') wrote a letter dated 05.01.2012 to NHAI requesting it to change the alignment of the road and to save the Automobile Tyre Manufacturing Factory owned by the appellant from its closure. In reply, the Project Director of NHAI issued a letter dated 18.01.2012 to CALA stating that as per the requirement of law, the road alignment cannot be changed and requested the CALA to pass the award including the compensation for relocation of the factory (machines and buildings etc.). The aforesaid letter is on record. Subsequently, the appellant submitted the valuation report of M/s. D.K. Jain & Co. to the Competent Authority for Land Acquisition (CALA) on 05.03.2012 in respect of the plant and machinery permanently installed on the acquired land. As per the aforesaid valuation report, the value of factory comes to Rs.64.24 Crores. The NHAI never disputed this valuation report since 05.03.2012 till date, meaning thereby the valuation is admitted by the NHAI.

4. Subsequently, the award was passed by the competent authority (CALA), Betul on 02.07.2012, in which an amount of Rs.39.51 lakhs was awarded in respect of the plant and machinery in place of Rs.64.24 Crores. In addition, the CALA awarded Rs.18.01 Crores for relocation of the tyre factory. The relevant portion of the award is being reproduced below:

5. Being dissatisfied with the award, both the parties applied for

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