1. Appeal under Section 37, Arbitration Act — Land acquisition compensation under National Highways Act — Challenge to arbitral award under Section 34. (Para 1 , 2 )
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2024 Supreme(Online)(MP) 4484
HIGH COURT OF MADHYA PRADESH
Vishal Dhagat, J
Manav Bhanot – Appellant
Versus
National Highway Authority of India – Respondent
ARBITRATION APPEAL No. 7 of 2017
Advocates:
For the Appellants/Petitioners: Manoj Sharma, Quazi Fakruddin, Lavanya Verma
For the Respondents: Mohan Sausarkar
For the Appellants/Petitioners: Manoj Sharma, Quazi Fakruddin, Lavanya Verma
For the Respondents: Mohan Sausarkar
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Removal of Difficulties) Order, 2015, operates prospectively from 01.09.2015; therefore, compensation awards passed under the National Highways Act, 1956, prior to this date cannot claim benefits under the RR Act, 2013.
Headnote:(A) Arbitration - Scope of Section 34 and 37 - Challenge to award on grounds of public policy - The court in an appeal under Section 37 must decide strictly within the ambit of grounds mentioned under Section 34 of the Arbitration and Conciliation Act, 1996, and shall not enter into the merits of evidence to check the adequacy of compensation. (Para 8)
(B) Land Acquisition - Applicability of RR Act, 2013 to National Highways Act, 1956 - Removal of Difficulties Order, 2015 - The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Removal of Difficulties) Order, 2015, which applies RR Act provisions to National Highways Act acquisitions, is prospective in nature from 01.09.2015 and cannot be applied to awards passed prior to its commencement. (Para 7, 8)
Issues: Whether the arbitral award passed under the National Highways Act, 1956, prior to 01.09.2015, is in conflict with the public policy of India due to the non-application of the RR Act, 2013.
Legal Category Hierarchy
- arbitration and conciliation
- land acquisition
Table of Contents
2. Compensation contrary to fundamental policy of Indian law; RR Act 2013 applicable — Award not passed against public policy or beyond jurisdiction. (Para 3 , 4 )
3. Removal of Difficulties Order effective from 01.09.2015; award passed on 11.07.2014, so Order not applicable to appellant. (Para 5 , 6 , 7 , 8 )
4. Ground under Section 34(2)(b)(ii) Arbitration Act not available when Removal of Difficulties Order applies prospectively from date after award. (Para 8 )
5. Appeal dismissed. (Para 9 )
6. Whether the Removal of Difficulties Order under the RR Act, 2013 applies to land acquisition awards passed before its effective date?
No. The Order, effective from 01.09.2015, applies prospectively; it does not apply to awards passed on 11.07.2014, before its commencement. (Para 6 , 7 , 8 )
7. Whether the arbitral award being contrary to fundamental policy of Indian law is a ground under Section 34(2)(b)(ii) of the Arbitration Act?
The court did not reach this issue because the RR Act 2013 and the Removal of Difficulties Order were not applicable to the award, so this ground was unavailable. (Para 3 , 8 )
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This appeal coming on for hearing this day, the court passed the following:
ORDER
Appellant has filed this appeal under Section 37 of Arbitration and Conciliation Act, 1996 challenging order dated 20.12.2016 passed by Third Additional District Judge, Jabalpur in M.J.C.A.V. No.10/2016.
2. Brief facts of the case is that an award was passed on 11.07.2014 in favour of farmers and land owners which was acquired under National Highways Act, 1956. By said award, appellant was awarded compensation of Rs.49.17 lacs. Appellant being aggrieved by award in respect of compensation awarded for acquisition of his lands made a reference for arbitration under Section 3 G(5) of National Highways Act, 1956. Matter was referred before Commissioner Jabalpur. Commissioner Jabalpur in arbitration enhanced the award by Rs.49,40,760/- along with interest @ 9% from date of land acquisition award i.e. on 11.07.2014 till his realization. Commissioner passed its order on 13.01.2016. Appellant being aggrieved by order passed by Commissioner filed its objection under Section 34 of Arbitration and Conciliation Act, 1996. It was submitted before the Court that compensation ought to have been decided under Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter Act is referred to as RR Act, 2013) and a solatium amount is also to be paid to appellant under Section 30 of said Act. Further prayer was made for 18% interest on the award. Reference Court placing reliance on judgment passed in case of Associate Builders Vs. Delhi Development Authority , reported in (2015) 3 SCC 49 and also on Swan Gold Mining Limited v. Hindustan Copper Limited , reported in (2015) 5 SCC 739 held that award which has been passed is not against any public policy nor same has been passed beyond jurisdiction. Award has been passed in accordance with established procedure and after taking all the documents into consideration. Therefore, there is no scope for interference under Section 34 of Arbitration and Conciliation Act and reference application was dismissed vide order dated 20.12.2016 in case No. M.J.C.A.V. 10/16 by Third Additional District Judge, Jabalpur.
3. Learned senior counsel appearing for appellant argued that Courts below has committed an error in dismissing his application under Section 34 of the Arbitration and Conciliation Act, 1996. Determination of compensation is contrary to fundamental policy of Indian law and therefore grounds enumerated for challenge to award under Section 34 (2) (b) (ii) was available to appellant and Court below has committed an error of law in overlooking the same and holding that no grounds which are enumerated in Section 34 is available to the appellant.
4. Counsel appearing for respondent submitted that competent authority of land acquisition has determined amount of compensation Rs.49.17 lacs. Prayer was made for modification of said order by filing application under Section 3 G (5) of National Highways Act, 1956. Learned Arbitrator on basis of material evidence and documents available on record has enhanced the compensation amount Rs.49,40,760/- Reference Court rejected the application after consideration records and arguments of the parties. It is submitted that compensation has rightly been awarded after giving due opportunity of hearing to appellant. Compensation was calculated applying Collector guidelines for year 2011 and 2012 as provided under Section 3 G (7)(a) of the National Highways Act, 1956. Market value of land was taken on date of publication of notification under Section 3(a) of National Highway Act. Learned Court rightly dismissed application under Section 34 not being outside the scope of grounds which are available under Section 34 for challenge. Appellant for the first time has raised new grounds in appeal that provisions of Right to Fair Compensation and Transparency in Land Acquisit
