J U D G M E N T

(The case has been heard through video conference)

This appeal has been filed under Section 37 of the Arbitration and Conciliation Act, 1996 challenging the order dated 30.06.2011, passed by the learned Principal District Judge, Puducherry in A.O.P.No.63 of 2006 on an application filed by the respondents under Section 34 of the Arbitration and Conciliation Act challenging the Arbitral Award dated 25.09.2006, passed by the Arbitrator under Section 3G of the National Highways Act, 1956.

2. The lands of the respondents were acquired under the National Highways Act and claim was made by the respondents before the Arbitrator under Section 3G of the National Highways Act, seeking for enhanced compensation. Under the Award dated 25.09.2006, compensation was determined by the Arbitrator under Section 3G of the National Highways Act. Aggrieved by the quantum of compensation determined by the Arbitrator, the respondents/claimants filed an application under Section 34 of the Arbitration and Conciliation Act before the learned Principal District Judge, Puducherry in A.O.P.No.63 of 2006 for re-fixation of compensation. By an order dated 30.06.2011, the learned Principal District Judge, Puducherry modified the arbitral award dated 25.09.2006 by granting the following additional reliefs to the respondents:

(a) The respondents were awarded additional compensation of 25% on escalation charges i.e. Rs.4,54,417/- and were also awarded interest @ 12% p.a. from 26.11.2000, till the date of payment.

(b) The learned Principal District Judge, Puducherry also awarded in favour of the respondents interest @ 12% p.a. on Rs.1,79,785/-, the security deposit, from the date of commencement of arbitral proceedings till 23.03.2006.

(c) The learned Principal District Judge, Puducherry also awarded interest @ 12% p.a. on Rs.1,21,750/-, quantum of additional expenses, awarded from 26.11.2000, till the date of payment.

(d) The learned Principal District Judge, Puducherry also awarded compensation by directing refund of the amount spent by the respondents towards Court fees and Advocate fees amounting to Rs.1,65,875/-.

Aggrieved by the same, this appeal has been filed by the appellants under Section 37 of the Arbitration and Conciliation Act.

3. Heard Ms.V.Usha, learned Additional Government Pleader (Pondy)

appearing for the appellants and Mr.Virumandi, learned counsel appearing for the respondents.

4. At the outset, the learned Additional Government Pleader appearing for the appellants would submit that the learned Principal District Judge, Puducherry under the impugned order dated 30.06.2011, ought not to have modified the arbitral award, as he does not have the power under Section 34 of the Arbitration and Conciliation Act to do so. In support of her submissions, she relied upon a latest decision of the Hon'ble Supreme Court in Project Director, National Highways Vs. M.Hakeem and another reported in 2021 SCC Online SC 473 and would submit that the learned District Judge exercising power under Section 34 of the Arbitration and Conciliation Act does not have power to modify the arbitral award. Further she would submit that even on merits, as seen from the arbitral award, there is no scope for any modification of compensation amount in favour of the respondents than what was passed by the Arbitrator under Section 3G of the National Highways Act.

5. However, the learned counsel appearing for the respondents would submit that the learned District Judge under the impugned order has rightly modified the arbitral award by granting enhancement of compensation in favour of the respondents based on the documentary evidence placed before the Arbitrator by the respondents.

6. As rightly submitted by the learned Additional Government Pleader appearing for the appellants, the arbitral award cannot be modified under Section 34 of the Arbitration and Conciliation Act. The law on this issue has been made clear that even in respect of land acquisition matters under the Natio