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2024 Supreme(Online)(ALL) 1451

HIGH COURT OF ALLAHABAD
Piyush Agrawal, J
Vivek Nayak – Appellant
Versus
Arbitrator / Collector Aligarh – Respondent
APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 17 of 2022 | APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 20 of 2022

Advocates:
For the Appellants/Petitioners: Badri Kant Shukla, Manu Saxena
For the Respondents: Prabha Shankar Mishra, Pranjal Mehrotra, Vinay Mishra

The jurisdiction of an appellate court under Section 37 of the Arbitration and Conciliation Act is highly circumscribed, limiting interference to the narrow grounds specified in Section 34. Courts cannot reappraise evidence or substitute their views for an arbitral tribunal’s factual findings unless the award is patently illegal or arbitrary.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 34 and 37 - Land acquisition - Determination of compensation - Judicial review by appellate court - Scope of interference.

(B) Appellate Jurisdiction - The scope of interference under Section 37 is restricted to the grounds enumerated in Section 34 - Courts cannot interfere with arbitral awards unless findings are perverse, arbitrary, or contrary to the fundamental policy of law - An arbitral award is not liable to be interfered with merely because an alternative view on facts or contract interpretation exists or because the award might appear erroneous in law upon reappraisal of evidence. (Paras 12, 14, 15)

(C) Compensation - Retrospective application - Claim for solatium and interest - Claims for enhanced compensation and additional interest based on subsequent judicial pronouncements cannot be applied to reopen arbitrations that concluded prior to such rulings, as this would undermine the principles of finality and legal certainty. (Paras 15, 16)

Facts of the case:
These appeals challenge the dismissal of petitions filed against arbitral awards concerning land acquisition compensation. Claimants contended that the statutory formula for market value and circle rates was not correctly applied and asserted entitlement to additional solatium and interest. The appellate court examined the contention regarding the adequacy of compensation and the scope of judicial interference under the governing arbitration legislation.

Findings of Court:
The court observed that the arbitral awards were based on materials available on record and that the findings of fact recorded by the lower forum did not suffer from patent illegality or perversity. The court reaffirmed that the power of the appellate forum does not extend to an independent assessment of the merits of the award or the reappraisal of evidence.

Issues: The main issues are the scope of appellate jurisdiction when reviewing arbitral awards regarding land compensation and whether subsequent legal interpretations concerning solatium and interest can be applied retroactively to reopen concluded arbitration cases.

Ratio Decidendi: The appellate court's power is limited to examining whether the challenge under the governing legislative framework falls within the permissible legal parameters; it cannot substitute its judgment for that of the arbitrator. Furthermore, completed arbitral proceedings are protected by the principle of finality, and new judicial developments regarding financial claims cannot be applied retroactively to cases already concluded.

Result: Appeals dismissed.

Table of Content
1. procedural history and factual summary of the arbitration land acquisition dispute. (Para 1 , 2 , 3 , 4)
2. appellant's contention regarding inadequate compensation, lack of judicial application, and omission of solatium/interest. (Para 5 , 6)
3. respondent's defense asserting statutory compliance and limited scope of judicial interference under section 34/37 of the arbitration act. (Para 7 , 8 , 9 , 10)
4. limited scope of judicial review under sections 34 and 37; courts cannot reappraise evidence or substitute findings. (Para 11 , 12 , 13 , 14)
5. non-retroactivity of supreme court judgments regarding solatium and interest on concluded arbitral awards. (Para 16 , 17)
6. formal dismissal of the appeals due to lack of merit. (Para 18 , 19 , 20)

RESERVED

1. Heard Shri Manu Saxena, along with Shri Badri Kant Shukla, learned counsel for the appellants, Shri Pranjal Mehrotra, learned counsel for respondent no. 2 and Shri Prabha Shankar Mishra, learned counsel for respondent nos. 3 & 4.

2. Since the issues involved in these appeals are similar, therefore, the same are being decided by the common order with the consent of the learned counsel for the parties. Appeal No. 17 of 2022 is taken as a leading case for deciding the controversy involved in these appeals.

Appeal No. 17 of 2022

3. The instant appeal has been filed against the impugned order dated 27.09.2013 passed by the Arbitrator/Collector, Aligarh as well as the judgement & decree dated 15.01.2022 & 21.01.2022 passed by the Additional District Judge, Court No. 3, Aligarh in Arbitration Case No. 80 of 2013.

4. Learned counsel for the appellants submits that vide notification dated 10.06.2012, objections were invited for acquisition of land near Ghaziabad – Aligarh section, pursuant to which the appellants filed objection. Subsequently, the award was passed by the Special Land Acquisition Officer determining the compensation. Aggrieved by the said award, an application was filed before the Arbitrator/Collector, Aligarh was filed by the appellants; wherein, six issues were framed. He further submits that the land in question was purchased by the appellants vide registered sale deed dated 13.07.2010 for commercial purpose; wherein, a factory under the name & style of M/s Om Pure Water Bottling Plant was constructed. On the application of the appellants, the Arbitrator, vide impugned order dated 29.09.2013, modified the award passed by the competent authority and determining the compensation. Aggrieved by the said order, the appellants preferred Arbitration Case No. 80/2013 before the Additional District Judge, Court No. 3, Aligarh, which has been dismissed vide impugned judgement dated 15.01.2022.

5. Learned counsel for the appellants submits that the competent authority/ Special Land Acquisition Officer has not considered the market value while determining the award as according to section 26 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as, 'the Act of 2013'), the compensation has to be determined on the market or circle rate, whichever is higher, based on the best exemplars of previous three years, but the courts below have not applied their legal and judicial mind while determining the compensation. He further submits that no exemplar has been taken into consideration before determining the market value of the land and even the nature of the land and development in the vicinity of the area were also not taken into consideration while passing the impugned orders. In support of his submissions, he has placed reliance on the judgements of Associate Builders Vs. Delhi Development Authority [(2015) 3 SCC 49], National Highways Authority of India Vs. P. Nagaraju @ Cheluvaiah & Another [(2022) 15 SCC 1] and Manoj Parihar & Others Vs. State of Jammu & Kashmir & Others [(2022) 14 SCC 72].

6. He further submits that the appellants have been deprived of legitimate claim of solatium

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2024 Supreme(Online)(ALL) 1451

HIGH COURT OF ALLAHABADPiyush Agrawal, JVivek Nayak – AppellantVersusArbitrator / Collector Aligarh – RespondentAPPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 17 of 2022 | APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 20 of 2022

Cases Referred (7)

HIGH COURT OF ALLAHABAD
Piyush Agrawal, J
Vivek Nayak – Appellant
Versus
Arbitrator / Collector Aligarh – Respondent
APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 17 of 2022 | APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 20 of 2022