Arbitration
and Conciliation Act, 1996 - Section 34 (1) - National Highways Act, 1956 - Section
3G(5) & 3J - What is the remedy of the appellant to redress his grievance
regarding inadequate compensation granted for the land acquired - The court
cannot correct errors of the arbitrators - It can only quash the award leaving
the parties free to begin the arbitration again if it is desired. [Paras 15 –
18]
Arbitration
and Conciliation Act, 1996 - The court has no power, while exercising
jurisdiction under Section 34(1) of the Act, to remand or remit the arbitration
matter to the arbitral tribunal. [Para 8]
National
Highways Act, 1956 - Section 3G(5) & 3J - the provisions of the Land
Acquisition Act, 1894 cannot be invoked to enhance the compensation for land. [Para 10]
National Highways
Act, 1956 - Section 3G (7) - the market value of the land on the date of publication
of the notification under Section 3A has to be taken into consideration by the
arbitrator while determining the amount of compensation for land.
In
the instant case, the arbitrator has simply endorsed the value of the land
fixed by the Land Acquisition Officer by accepting the report given by the
National Highway Authority of India to the effect that the compensation granted
by the Land Acquisition Officer is fair and reasonable and does not deserve any
enhancement. No attempt was made by the arbitrator to make an independent
assessment of the market value of the land on the date of the notification. The
award is patently illegal for this reason and therefore, it is in conflict with
public policy. The award is liable to be set aside under Section 34(2)(b)(ii)of
the Act. [Para 14]
V.
CHITAMBARESH & R. NARAYANA PISHARADI, JJ.
Arb.A.
No.68 of 2015
Dated
this the 21st day of January, 2019
AGAINST
THE IMPUGNED ORDER IN OPARB 11/2010 of ADDL.DISTRICT COURT, NORTH PARAVUR
APPELLANT/PETITIONER:
UDAYAKUMAR
BY
ADV. K.S.RAJEEV
RESPONDENTS:
1
PROJECT DIRECTOR NHAI, THUSHARABINDU NO. 337, CHANDRANAGAR EXTENSION, NARIKODE,
PALAKKAD - 670 339.
2
SPECIAL DEPUTY COLLECTOR S.L.A.O AND COMPETENT AUTHORITY, NHDP, THRISSUR - 680
001.
BY
ADV. SRI.THOMAS ANTONY
J U
D G M E N T
R.
Narayana Pisharadi, J.
Land
having an extent of 59 square metres, owned by the appellant in Aluva West
Village, with a portion of the building therein, was acquired for the purpose
of widening of National Highway from Mannuthy to Aluva. Acquisition of land was
made under the National Highways Act, 1956.
2. The
Special Land Acquisition Officer, who is the competent authority under the
National Highways Act, fixed the value of the land at Rs.5,88,100/- per Are and
granted compensation for land at that rate. The Special Land Acquisition Officer
also granted Rs.3,38,666/- as compensation for the structure in the acquired
property.
3. Dissatisfied
with the compensation granted by the competent authority, the appellant filed
application under Section 3G(5) of the National Highways Act before the
District Collector, Ernakulam (the arbitrator appointed by the Central
Government under that Act) for initiating arbitral proceedings. The arbitrator found
that the compensation granted by the Special Land Acquisition Officer is fair
and reasonable and that the appellant is not entitled to get enhancement of
compensation.
4. Aggrieved
by the award passed by the arbitrator, the appellant filed application under
Section 34(1) of the Arbitration and Conciliation Act, 1996 (hereinafter
referred to as 'the Act') in the District Court. The learned Additional
District Judge dismissed the application. The order passed by the learned
Additional District Judge is challenged in this appeal.
5. We
have heard the learned counsel for the appellant and the learned Government
Pleader and the learned counsel for the first respondent. We have also perused
the records.
6. Admittedly,
the appellant had not produced any document before the arbitrator in support of
his claim for enhancement of compensation for land. Admittedly, no evidence was
adduced by the appellant before the arbitrator.
7. Learned
counsel for the appellant has prayed that the award may be set aside and the
arbitration case may be remanded to the arbitrator for enabling the appellant
to adduce evidence. The prayer in the application filed by the appellant under
Section 34(1) of the Act is also to set aside and remit the case to the
arbitrator.
8. The
court has no power, while exercising jurisdiction under Section 34(1) of the
Act, to remand or remit the arbitration matter to the arbitral tribunal. The
decision of the Apex Court in Kinnari
Mullick v. Ghanshyam Das Damani : AIR 2017 SC 2785 is an authority for this proposition.
9. Therefore,
the prayer made by the appellant for setting aside the award and to remit the
matter to the arbitral tribunal cannot be allowed.
10. The
application under Section 34(1) of the Act was filed by the appellant
challenging the award on the ground that the arbitrator did not award
compensation for land in accordance with the provisions contained in the Land
Acquisition Act, 1894. Section 3J of the National Highways Act, 1956
specifically provides that nothing in the Land Acquisition Act, 1894 shall apply
to an acquisition under the aforesaid Act. Therefore, the learned Additional
District Judge has rightly held that the provisions of the Land Acquisition
Act, 1894 cannot be invoked to enhance the compensation for land granted to the
appellant.
11. The
Right to Fair Compensation And Transparency in Land Acquisition, Rehabilitation
and Resettlement Act, 2013 came into force with effect from 01.01.2014,
repealing the Land Acquisition Act, 1894. In the instant case, the acquisition
of land was made and arbitration proceedings were terminated long before that
date. Therefore, no question of determination of compensation as per the
provisions of the aforesaid Act also arises here.
12. Learned
counsel for the appellant has also made a prayer for remanding the case to the
District Court to enable the appellant to file an application under Section
34(4) of the Act. The prayer in this regard cannot also be allowed. The
appellant had not produced any document before the District Court. He has not
produced any document before this Court also to prove the market value of the
land as on the date of notification under Section 3A of the National Highways
Act. Therefore, no purpose would be served by remanding the case to the
District Court.
13. Learned
counsel for the appellant contended that the arbitrator has not considered
whether the market value of the land fixed by the Land Acquisition Officer is
correct or not. There is merit in this contention. The market value of the land
fixed by the Land Acquisition Officer is found to be reasonable by the arbitrator
by stating as follows:
"From
the award it is seen that the SLAO has taken into account the situation of the
land among other sectors while determining land value. Moreover the SLAO has
fixed land value based on comparable sale statistics of similar lands in the locality
on the date of 3A notification. The date of acquisition is 4.1.2005. The SLAO
has adopted a settled norm of adopting comparable sale statistics for
determination of market value. The land value fixed by the SLAO at Rs.5881 per
cent is reasonable."
The
arbitrator has not even mentioned in the award which document was adopted by
the Land Acquisition Officer as the basis for fixing the market value of land.
The arbitrator has also not considered whether there was any time gap between
the date of the transaction covered by the basic document adopted by the Land
Acquisition Officer and the date of notification under Section 3A of the
National Highways Act, 1956 and whether there was any hike in land value during
such period and whether the Land Acquisition Officer has taken into
consideration such increase in the land value, if any, while fixing the market
value of the land.
14. As
per sub-section (7) of Section 3G of the National Highways Act, 1956, the
market value of the land on the date of publication of the notification under
Section 3A has to be taken into consideration by the arbitrator while
determining the amount of compensation for land. In the instant case, the
arbitrator has simply endorsed the value of the land fixed by the Land Acquisition
Officer by accepting the report given by the National Highway Authority of
India to the effect that the compensation granted by the Land Acquisition
Officer is fair and reasonable and does not deserve any enhancement. No attempt
was made by the arbitrator to make an independent assessment of the market value
of the land on the date of the notification. The award is patently illegal for
this reason and therefore, it is in conflict with public policy. The award is
liable to be set aside under Section 34(2)(b)(ii)of the Act.
15. The
question then arises what is the remedy of the appellant to redress his
grievance regarding inadequate compensation granted for the land acquired. In McDermott International Inc. v. Burn Standard Co.Ltd : (2006) 11
SCC 181, the Hon'ble Supreme
Court has held as follows:
"52.
The 1996 Act makes provision for the supervisory role of courts, for the review
of the arbitral award only to ensure fairness. Intervention of the court is
envisaged in few circumstances only, like, in case of fraud or bias by the
arbitrators, violation of natural justice, etc. The court cannot correct errors
of the arbitrators. It can only quash the award leaving the parties free to
begin the arbitration again if it is desired. So, the scheme of the
provision aims at keeping the supervisory role of the court at minimum level
and this can be justified as parties to the agreement make a conscious decision
to exclude the court's jurisdiction by opting for arbitration as they prefer
the expediency and finality offered by it" (emphasis supplied).
16. After
taking note of the decision of the Apex Court referred to above, a learned
Single Judge of this Court has held in Rajamma
v. Project Director (2017(5) KHC 464 : 2017 (4) KLT 1047) as follows:
"The
party concerned is entitled to make a request to the statutory arbitrator to
begin the arbitration afresh and if such request is not considered, he/she is
entitled to approach this Court under Article 226 of the Constitution, as
otherwise, the statutory remedy provided to him/her for redressal of grievance
concerning the compensation determined by the competent authority under the Highways
Act would become otiose. It is all the more so since the right to property is a
constitutional right guaranteed under Article 300A and the constitutional
remedy under Article 226 is a remedy intended for advancing the cause of
justice and not for defeating the same."
17.
We are in agreement with the aforesaid view taken by the learned Single Judge and
we approve the same.
18. Accordingly,
the appeal is allowed. The impugned order passed by the learned Additional
District Judge and the award passed by the arbitral tribunal are set aside. The
appellant is at liberty to take appropriate steps for initiating fresh arbitration
proceedings. No costs in the appeal.