Madras High Court
The Project Director vs T.Rajeswari on 1 August, 2024
Author: V.Bhavani Subbaroyan
Bench: V.Bhavani Subbaroyan
C.M.A(MD).No.751 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Dated: 01.08.2024
CORAM:
THE HON'BLE Mrs. JUSTICE V.BHAVANI SUBBAROYAN
AND
THE HON'BLE Mr. JUSTICE K.K.RAMAKRISHNAN
C.M.A(MD). No.751 of 2022
and
C.M.P(MD).No.6600 of 2022
The Project Director,
National Highways -45B,
National Highways Authority of India,
New No.6, Old No.44, 1st Floor,
3rd Main Road,
Ponnagar, Trichy-620001. ... Appellant
Vs.
1. T.Rajeswari
2. The District Revenue Officer/Competent Authority,
Land Acquisition, (National Highways -45B),
Collectorate Buildings,
Madurai-625 020. ... Respondents
Prayer : Civil Miscellaneous Appeal filed under Section 37 (1) (2) of the
Arbitration and Conciliation Act 1996, praying to set aside the order of
compensation awarded by the learned Principal District Judge, Madurai in
Arbitration O.P.No.22 of 2015 dated 15.07.2019 and allow this appeal.
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For Appellant : Dr.R.Rajagobal
For Respondents : Mr.R.Govindaraj for R1
: Mr.A.K.Manikkam,
Special Government Pleader for R2
JUDGMENT
[Judgment of the Court was made by K.K. RAMAKRISHNAN .J.]
The appeal in C.M.A.(MD).No.751 of 2022 has been filed by the
National Highways Authority, challenging the Arbitration award passed in
A.R.O.P.No.22/2015 dated 15.07.2019 filed by the land owner to set aside
the arbitration award by the Collector/Arbitrator dated 14.01.2015.
2. The first respondent owned lands along Madurai-Trichy National
Highways Road in the Survey No.30/8C, situated at “Elanthaikulam
Village”, Madurai District. The Ministry of Shipping, Road Transport and
Highways (Department of Road, Transport and Highways) issued the
notification dated 08.07.2004, for acquisition of an extent of 3600 sq.metre
or 88.954 cents of dry land belonging to the respondents’ under Section
3(A) of the National Highways Act, 1956 (herein after called as “NHAI
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C.M.A(MD).No.751 of 2022
Act”) for expanding and laying four way track (National Highways road
from Madurai- Trichy (NH45B) under “the Golden Quadrilateral Scheme”.
The National Highways Authority of India, (herein after called “NHAI”) is
the implementing authority. The land owners submitted their objection to
the acquisition and the same was not considered by the Project Director
under the NHAI Act. The competent authority under the “NHAI Act”,
namely, the “District Revenue Officer (herein after called as CA/DRO)”
considering that the land was situated in the vital area informed the land
owners about the appropriate compensation that would be determined and
paid and issued the 3D notice and directed the land owners to participate in
the award enquiry, after taking possession. The land owners participated
and produced the documents and claimed higher price and sought to
determine fair and just compensation along with solatium and interest. The
competent authority/District Revenue Officer, fixed the value of the land,
market value of Rs.17.17 per sq.mtr., or a sum of Rs.695/-per cent, and the
compensation was determined for the respondent at Rs.67,993/-. But,
CA/DRO has not considered the documents produced by the landowners.
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2.1. Aggrieved over the same, the land owners have approached the
District Collector, Madurai/Arbitrator (herein after called as
“Arbitrator/Collector”) under the NHAI Act, by submitting the application
under the Arbitration and Conciliation Act, 1996 as prescribed Under
Section 3-G.(5) of NHAI Act. They submitted the relevant documents and
also showed the topography of the acquired land to show the potentiality of
land and sought enhancement of the compensation along with the payment
of the compensation under Section 23(1)(A) and Solatium and interest as
per the Land Acquisition Act 1894 (herein after called as “Act 1894”). The
Arbitrator simply dismissed the claim of the land holders and hence, each
land holder has preferred the arbitration original petition before the learned
Principal District Judge, Madurai under Section 34 of the Arbitration and
Conciliation Act, 1996. The learned Principal District Judge, by impugned
orders partly accepted the plea of the land owners and set aside the award
passed by the District Collector and passed the award determining the
compensation on the basis of the documents produced by both sides and
granted solatium, Additional amount and corresponding interest. The
Tribunal also granted solatium additional amount under 23(1)(a) of Land
Acquisition Act1894 (herein called old act 1894), considering the
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development of law ie., that the National Highways Act section 3J was
struck down by the Hon’ble Supreme Court reported in 2019 (9) SCC 304
(herein after called “Tarsem Singh case”).
2.2. Challenging the determination of the amount by the learned
Principal District Judge, Madurai under Section 34(2) of the Arbitration and
Conciliation Act, 1996, the National Highways Authority filed the above
Civil Miscellaneous Appeal, on the grounds mentioned in the Memorandum
of grounds of appeal.
3. Submission of the learned counsel appearing for NHAI, namely,
Thiru.D.Rajagopal:
3.1. The learned counsel for the National Highways Authority
confined their arguments to the following two grounds:
3.2. The Arbitration Tribunal, namely, the learned Principal District
Judge, has no jurisdiction to determine the compensation under sec.34(2) of
the Arbitration and Conciliation Act, 1996 (herein after called “A & C Act
1996”) and modify the award. According to the learned counsel, if the
arbitrator has not passed the award as per the A & C Act, 1996, it is the duty
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remand the matter back for the arbitrator to determine compensation. But,
the learned Tribunal Judge himself has taken up the role of the arbitrator
and determined the compensation and the same is beyond the jurisdiction as
per sec.34 (4) of the Arbitration Act. Therefore they sought to set aside the
same, considering the jurisdictional error and direct the arbitrator to
determine compensation. To substantiate the same, he relied the following
judgments of the Hon’ble Supreme Court :-
1) 2021 (9) SCC 1 (Hakeem Case),
2) 2022 (15) SCC 1
3) 2023 SCC Online SC 982,
4) 2024 SCC Online SC 19
3.3. The learned counsel for the National Highways Authority further
submitted that as per the clarification issued by the Hon’ble Supreme Court
reported in “Tarsemcase- 2”, reported in 2021 SCC Online SC 3175. The
original paragraph No.41 of the “Tarsemcase- 1” reported in 2019 (9) SCC
304 is deleted. Therefore the landowners are not entitled for any amount
under section 23(1)(A) of the Land Acquisition Act and In the said
circumstances, in all the cases, the learned District judge, passed the award
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C.M.A(MD).No.751 of 2022with the amount under Section 23(1)(a) of the Act, Which is not legally
maintainable.
4. Submission of the learned counsel appearing for the claimant:
4.1.Per contra the learned counsel for the claimant namely landowner
submitted that the judgment relied by the learned counsel for the National
Highways Authority, namely in the case of “Hakeem” the Hon’ble Supreme
Court after declaring the law that the tribunal has no power to modify the
award, but, confirmed the award passed by the learned Tribunal Judge. They
placed reliance on Paragraph Nos.49, 52, 59, 60 of “Hakeem Case”. They,
further submitted that even after the decision of “Hakeem Case”, Larsen
Case, “Samueran Case”, the power of Arbitration Tribunal under 34 of the
A & C Act 1996 is not settled and hence, on 20.02.2024 reference was made
by the Hon’ble Three Member Bench in SLP(C)Nos.15336, 15337 of 2021
“Gayathri Vs. Balasamy” Further, in view of the long pending dispute,
relating to the powers of the Arbitration Tribunal under section 34, award
also was passed. In the said circumstances, the court has no jurisdiction to
set aside the same under section 37 of Arbitration and Conciliation Act
1996.
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4.2. The learned Advocate for the landowner also submitted that
similar question raised by NHAI was declined in number of earlier cases
and requested to consider these case on merits taking into consideration the
constitutional right of land losers to receive fair compensation which was
not considered by the arbitrator, who, without even referring the relevant
guiding factor mentioned under Section 3-G.(7) of the NHAI Act, to
determine the compensation, simply dismissed the original petitions. Hence,
there is a patent illegality in dismissing the arbitration original petition and
the land owners are deprived of their constitution right of entitlement of fair
and just compensation for the land, acquired under the National Highway
Act to expand the road.
5.The learned counsel for landowner further submitted that under the
National Highways Act, the land is acquired for expansion and the land
after expansion, would be generating income through the collection of “toll”
and hence, they are entitled to higher compensation. Therefore, through the
expansion of road “NHAI” would generate income including interest for
the amount invested in the scheme and hence the land loser is entitled to
receive higher and proportionate compensation equal to income likely to be
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generated.
6.The learned counsel submitted that the usual principle applicable to
the arbitration proceedings, relating to the other arbitration, which have
emanated out of an arbitration agreement is not applicable to the present
case for the reason that here there is a statutory reference to the arbitrator
for “determination of the market value of the land and fair compensation”.
Hence, the learned counsel stated that under Section 34 of the Act, when
there is an apparent illegality and when the award was passed against public
policy and also when there is perversity in the decision of the arbitrator
dismissing the arbitration petition by confirming the order of CA/DRO”, the
Arbitration Tribunal has power to set aside the same under 34 of the Act.
According to the learned counsel for the land owners, “there is no
prohibition under the present section 34 of the Act”, to determine the
compensation in a statutory reference and to determine the compensation by
setting aside the award in the interest of justice, equity and good conscience.
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6.1. Further, the learned counsel for the landowners submitted that
this Court in the W.P.No. 15699 of 2020 namely T.Chakkrabani v. Union of
India has held that the landowners are entitled under Section 23(1)(a) of
the Act also. In the said circumstances, the clarification issued to the
Punjab case in 2021 SCC Online SC 3175 is not applicable to the present
case. Hence, they seek to confirm the award.
7. We have considered the rival submissions made by the learned
counsel appearing on either side and also perused the precedents relied by
the both parties and also impugned judgment under the relevant records and
the relevant provision of the Arbitration Act and the National Highways
Act.
8. Points for consideration:
From the submission of both the learned counsel, the following point
arises for the consideration in this appeal:
8.(i). Whether the learned judge, Arbitration tribunal is correct in
determining the market value of land and fair compensation on the
application filed by Land owner under section 34 of the arbitration act?
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8.(ii). Whether the impugned award of tribunal suffers any legal
infirmities to invoke jurisdiction under section 37 of the Arbitration Act
by this court ?
8.(iii). Whether the landowner is entitled to the compensation under
section 23(1)(a) of the Land Acquisition Act?
9.Discussion on the question Nos.1 and 2:
9.1.The counsel appearing for the NHAI have made their primordial
submission that the Learned Principal District and Sessions Judge, presiding
the arbitration tribunal, has committed error in determining the market
value, fair compensation by modifying the arbitration award passed by the
arbitrator in utter violation of the section 34 of the Arbitration and
Conciliation Act 1996. According to them, the power of the court under
Section 34 to set aside the award does not include power to modify such an
award. They mainly contented on the basis of the decision of the Hon’ble
Supreme Court in the case Project Director, NHAI v. M.Hakeem and
another reported in 2021 (9) SCC 1 and submitted that power of the
modification is not available under section 34 of the Arbitration Act, 1996.
In the above all cases, the learned District Judge, presiding over the
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Arbitration Tribunal under NHAI Act “without remitting the matter to the
arbitrator” determined the compensation and passed the impugned order.
Therefore according to the counsel, there is error in the impugned order.
Therefore, on the basis of the technical plea, the counsel appearing for the
NHAI, seek to set aside the award passed by the Learned Principal District
Judge by invoking the powers under section 37 of the Arbitration and
Conciliation Act.
9.2.As per Section 34 of Arbitration Act, 1996, if the arbitral Tribunal
had formed opinion that the award would have to be set aside on the ground
of its patent illegalities in arriving at conclusions and calculation of
amounts awarded, arrival of perverse finding by ignoring or excluding
relevant materials or taking into consideration irrelevant materials, an award
is against justice when its shocks the conscience of the Court, lack of
judicial approach in arriving fair, reasonable and objective decisions, award
with finding against the fundamental policy of Indian Law in violation of
statutory provisions, the Tribunal on the request of the parties, under
Section 34(4) of Arbitration Act, 1996, has to place the matter before the
Arbitrator to eliminate the grounds for setting aside the arbitration award.
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Therefore, according to the learned counsel for the NHAI, the Tribunal in
all fairness should remit the matter to the arbitrator for arriving at the proper
conclusion by eliminating the grounds. In the considered opinion of this
Court, the said submission cannot be accepted in this case for the following
reasons:
9.2.1.In this case the tribunal has determined compensation much
earlier to the decision of the Hakeem case dated 20.07.2021. During the
course of the hearing, the learned counsel appearing for the NHAI has never
raised the jurisdiction issue under section 34 of Arbitration and conciliation
Act, before the Tribunal. Further, the NHAI has also not made a request
under Section 34(4) of the Arbitration Act, 1996, before the Tribunal to
seek the correctness of the arbitration award passed impugned. Before this
court, they raise the issue of jurisdiction and pray to exercise the power
under section 37 of the Act.
9.3.To decide the power under Section 34 of the Arbitration Act,
1996, conferred upon the Tribunal to pass the reasonable award without
remitting the matter, this Court considers the law laid down by the Hon’ble
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C.M.A(MD).No.751 of 2022three judges Bench of the Supreme Court in the case of Kinnari Mullick v.
Ghanshyam Das Damani, reported in (2018) 11 SCC 328 at page 334
14. In this backdrop, the question which arises
is : whether the highlighted portion in the operative
part of the impugned judgment of the Division Bench
can be sustained in law? For that, we may advert to
Section 34(4) of the Act which is the repository of
power invested in the Court. The same reads thus:
“34. (4)On receipt of an application under sub-
section (1), the court may, where it is appropriate and
it is so requested by a party, adjourn the proceedings
for a period of time determined by it in order to give
the Arbitral Tribunal an opportunity to resume the
arbitral proceedings or to take such other action as in
the opinion of Arbitral Tribunal will eliminate the
grounds for setting aside the arbitral award.”
15.On a bare reading of this provision, it is
amply clear that the Court can defer the hearing of the
application filed under Section 34 for setting aside the
award on a written request made by a party to the
arbitration proceedings to facilitate the Arbitral
Tribunal by resuming the arbitral proceedings or to
take such other action as in the opinion of the Arbitral
Tribunal will eliminate the grounds for setting aside
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the arbitral award. The quintessence for exercising
power under this provision is that the arbitral award
has not been set aside. Further, the challenge to the
said award has been set up under Section 34 about the
deficiencies in the arbitral award which may be
curable by allowing the Arbitral Tribunal to take such
measures which can eliminate the grounds for setting
aside the arbitral award. “No power has been
invested by Parliament in the Court to remand the
matter to the Arbitral Tribunal except to adjourn the
proceedings for the limited purpose mentioned in
sub-section (4) of Section 34.”
9.4. From the above law laid down by the Hon’ble three judges bench
of the Supreme Court, it is clear that there is no absolute law laid down by
the Hon’ble Supreme Court with specific direction to the arbitration tribunal
to remit the matter to the arbitrator for passing the suitable award. There is
also no direction issued by the Hon’ble Supreme Court that the Tribunal has
no jurisdiction to modify the award even in the case where the award is
passed against the public policy and is patently illegal. Therefore, the
argument of the learned counsel for NHAI that the learned Tribunal Judge
would have to remand the matter to the arbitrator cannot be accepted.
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Before the decision of the Hakeem case, as per the law laid down by the
Hon’ble Supreme Court, the Tribunal Judge has power to set aside the award
on the above stated circumstance. Hence submission of the counsels
appearing for the NHAI without raising the said arguments before the
Tribunal, canvassing the plea before this court on the basis of the judgments
rendered in “Hakeem case” cannot be accepted on the principle that
applicability of law decided by the Hon’ble Supreme Court is not applicable
to the decision already taken.
9.5.Therefore this court declines to accept the arguments of the
learned counsels appearing for the NHAI that the tribunal committed error
in determining compensation without remitting back to the arbitrator to pass
proper award.
10. Under the NHAI Act, at the moment, when the acquisition
authority disallows the objection of the land owners, vesting of the land
automatically under section 3(D) without passing award takes place. The
extreme deviation from the Land Acquisition Act, is provided under the
NHAI Act, to implement the road project in an expeditious way. After
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vesting of the land only, process of the determination of the compensation
will commence. As per the scheme of NHAI, Firstly, the amount has to be
determined by the “competent authority”. The said determined amount if
not acceptable either by the land losers or the NHAI, shall, on an
application by either parties, be determined by “Arbitrator namely
collector”. The arbitrator award is not satisfied either by the NHAI or Land
Loser, they have to file application before the court, namely District Court
under section 34 of the Arbitration and Conciliation Act 1996. To redress
the further grievance, either party has a right to file appeal under section 37
of the Arbitration and conciliation Act 1996 before the High court.
Therefore, the competent authority has to determined the fair market value
of the land and compensation with more responsibility and “arbitrator” has
to determine with judicial approach as “reference court”.
10.1. The competent authority shall determine the compensation
following the guiding factors mentioned in Sub Section 3-G(7) of the NHAI
Act:
(7) The competent authority or the arbitrator while
determining the amount under sub-section (1) or
sub-section (5), as the case may be, shall take into17/56
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C.M.A(MD).No.751 of 2022consideration—
(a) the market value of the land on the date of
publication of the notification under Section 3-A;
…..
10.2.As per section 3(I) of the Act, the competent authority to
determine the market value can act as a Civil Court with all powers of Civil
Court. To determine the market value, no guideline is available either in the
form of Rules or notification.
10.3. Hence, the principle laid down by the Hon’ble Supreme Court
under the various acquisition Act, is the guiding factor to determine the
market value of the acquired land.
The market value is the price that a willing purchaser
would pay to a willing seller for the property having due regard
to its existing condition with all its existing advantages and its
potential possibilities when led out in most advantageous
manner excluding any advantage due to carrying out of the
scheme for which the property is compulsorily acquired.1 The
determination of market value is the prediction of an economic
event viz. a price outcome of hypothetical sale expressed in
terms of probabilities.2 It is well settled that market value of a
property has to be determined having due regard to its existing
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condition with all its existing advantages and its potential
possibility when led out in its most advantageous manner. The
question whether a land has potential value or not, is primarily
one of fact depending upon its condition, situation, user to which
it is put or is reasonably capable of being put and proximity to
residential, commercial or industrial areas or institutions. The
existing amenities like water, electricity, possibility of their
further extension, whether near about a town is developing or
has prospect of development have to be taken into consideration.
3
Value of the potentiality is to be determined on such materials
as are available and without indulgence in any fits of
imagination. Impracticability of determining the potential value
is writ large in almost all cases. There is bound to be some
amount of guesswork involved while determining the
potentiality.4 While determining the market value of the land
acquired, it has to be correctly determined and paid so that
there is neither unjust enrichment on the part of the acquirer nor
undue deprivation on the part of the owner.5When no sales of
comparable land were available where large chunks of land had
been sold, even land transactions in respect of smaller extent of
land could be taken note of as indicating the price that it may
fetch in respect of large tracts of land by making appropriate
deductions such as for development of the land by providing
enough space for roads, sewers, drains, expenses involved in
formation of a layout, lump sum payment as also the waiting
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period required for selling the sites that would be formed. 6 The
amount of compensation cannot be ascertained with
mathematical accuracy. A comparable instance has to be
identified having regard to the proximity from time angle as well
as proximity from situation angle. For determining the market
value of the land under acquisition, suitable adjustment has to
be made having regard to various positive and negative factors
vis-à-vis the land under acquisition by placing the two in
juxtaposition. The positive and negative factors are as under:
Positive factors Negative factors
(i) smallness of size (i) largeness of area
(ii) proximity to a road (ii) situation in the interior at a distance
from the road
(iii) frontage on a road (iii) narrow strip of land with very small
frontage compared to depth
(iv) nearness to developed (iv) lower level requiring the depressed
area portion to be filled up
(v) regular shape (v) remoteness from developed locality
(vi) level vis-à-vis land (vi) some special disadvantageous
under acquisition factors which would deter a
purchaser
(vii) special value for an
owner of an adjoining
property to whom it
may have some very
special advantage7
1
1 1977(1) SCC 684
2 2008(2)SCC568
3 2008(2)SCC568
4 2003 (12) SCC 334
5 1989 (2) SCC 329
6 1998 (2) SCC 385
7 2005 (4) SCC 789
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10.4. Applying the above principles, the competent authority shall
determine the market value and compensation by applying judicial mind. He
can also examine the witnesses, call for the documents from the revenue
side and make enquiry with revenue officials to determine fair market value
and fair compensation.
10.5.Aggrieved over the said determination, either the land loser or
the NHAI, may file an application before the arbitrator to be appointed by
the Central Government to determine the compensation. The arbitrator so
appointed shall determine the compensation as per the above stated guiding
factor mentioned in Section 3-G(7) of the NHAI Act. In the process of
determination, the arbitrator shall follow the provision of the A & C Act
1996 . As per the following Section of 3-G(5) and 3-G(6) of the NHAI Act,
which reads as follows:
(5) If the amount determined by the competent
authority under sub-section (1) or sub-section (2) is not
acceptable to either of the parties, the amount shall, on
an application by either of the parties, be determined by
the arbitrator to be appointed by the Central
Government.
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(6) Subject to the provisions of this Act, the
provisions of the Arbitration and Conciliation Act, 1996
(26 of 1996) shall apply to every arbitration under this
Act.
10.6.From the above, it is clear that the arbitrator shall determine the
compensation as per the guiding factor mentioned in Section 3-G(7) of the
NHAI Act, following the procedure stated in the Arbitration Act 1996.
Therefore, the substantive law is NHAI Act and the procedural law is the
Arbitration Act 1996. Therefore, under the NHAI Act, the Central
Government appointed the arbitrator to determine the compensation, by
following the substantive provision of NHAI Act, upon applying the
provision of the Arbitration Act 1996. The words “Be determined by
arbitrator” has its own significance. Here, arbitrator has not resolved the
dispute between the parties to the contract as per the terms of contract.
There is no question of breach of either terms of contract or agreement and
the resultant determination of the damages. As per the provision 3G(5) of
NHA Act, as held by the Hon’ble Supreme Court in 2020 (15) SCC 533
decision, the land owners have no right to seek appointment of arbitrator.
The appointment of arbitrator is an independent act of the Central
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Government. In the said process, there is no agreement between the NHAI
and land loser. Therefore, the duty cast upon the arbitrator to determine the
compensation, is different from the ordinary arbitration dispute arising in
the commercial contract matters. This type of Statutory Arbitration can not
be equated with the functions of the arbitrator discharging under the
agreement entered between the parties to the arbitration and the same was
fortified from the following object and reasons of the amendment to the
NHAI Act:
“statement of objects and reasons
One of the impediments in the speedy implementation of
highways projects has been inordinate delay in the
acquisition of land. In order to expedite the process of
land acquisition, it is proposed that once the Central
Government declares that the land is required for public
purposes for development of a highway, that land will
vest in the Government and only the amount by way of
compensation is to be paid and “any dispute relating to
compensation will be subject to adjudication through
the process of arbitration.”23/56
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C.M.A(MD).No.751 of 202210.7. From the reading of the object, it is clear that the arbitrator is
duty bound to adjudicate the dispute relating to the compensation and
determine fair compensation. During the course of the process of
adjudication and determination of the compensation, the procedure stated in
the Arbitration and Conciliation Act has to be applied. In the said
circumstances, the arbitrator acting as per the provision of the Arbitration
and Conciliation Act would adjudicate and determine the compensation. In
sum and substance, in the process of determination of the compensation, the
procedure of arbitration is thrust upon the land loser without any written
agreement to regulate the process of the arbitration and the terms of the
right and obligations. Therefore, the arbitration proceedings relating to the
determination of the compensation are not governed by the agreement to
regulate the process of arbitration. The said deviation is intended to
determine the compensation without driving the parties to the Court
proceedings, which is mulcted with procedural complication and to avoid
belated determination of the compensation. The said transformation of the
process of the determination of compensation is intended for the speedy
measures.
“Arbitration” as per the legal definition generally means that:-
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C.M.A(MD).No.751 of 2022“Arbitration is a private form of dispute resolution,
however, the arbitral proceedings must meet the juristic
requirements of due process and procedural fairness and
reasonableness, to achieve a ‘judicially’ sound and objective
outcome or award”.
“The amount shall, on an application by either of the parties, be
determined by the arbitrator to be appointed by the Central Government.”
The above words in the said section itself has its own significance.
Therefore, the arbitrator is acting as a reference authority under the old
Land Acquisition Act, and he is duty bound to act as a judicial officer to
determine the compensation by following the powers of the Civil Court as
stated in the Section 3-I of the NHAI Act. Here, there is no reference to the
arbitrator to resolve the dispute, but statutory obligation has been created to
determine the compensation. Hence, there is a vast difference from the
ordinary arbitration dispute arising in the commercial contract matters and
this type of Statutory Arbitration to determine compensation. As a sequel, it
can not be equated with the function of arbitrator discharging his functions
under the agreement entered between the parties to the arbitration.
Therefore, the scheme of the statutory arbitration under this NHAI Act, is
different from the commercial arbitration mentioned in the Arbitration Act.
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11. The law requires determination of the amount payable as
compensation. The said duty cast upon both the competent authority and the
arbitrator, is to arrive at a fair and just compensation, in order to compensate
the land losers, for the reason that they had lost their livelihood. The value
of the land raises many fold and the deprivation amounts to violation of the
human right to hold property. The constitutional obligation rests upon both
the competent authority and arbitrator to determine the fair and just
compensation to restore the life of the land losers as per the theory of
restitution.
11.1.The NHAI Act itself prescribes procedure and the guidelines to
follow in the process of the determination of the compensation. Therefore,
only at the stage of Section 34 of the Arbitration Act, the land loser gets the
first opportunity to avail judicial application of mind in determining the
compensation. Therefore, the technical plea of the NHAI that the power
under Section 34 of the Act is very much limited and Tribunal has to
remand the matter without determining the compensation even after finding
that the arbitrator had acted against the public policy and his decision
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suffers from perversity and apparent illegality on the face of the award itself
on account of the lack of judicial application of mind in determining the
compensation, could not be accepted in this case, for the reason that the
same would not only amount to miscarriage of justice and would place the
land loser in the worst position to restart the litigation. Therefore, this Court
placed the reliance of the following paragraph of the Hon’ble Supreme
Court, in the case of ONGC Ltd. v. Saw Pipes Ltd., reported in
(2003) 5 SCC 705 at page 719:
14…. the settled principle of law that the
procedural law cannot fail to provide relief when
substantive law gives the right. The principle is —
there cannot be any wrong without a remedy. In M.V.
Elisabeth v. Harwan Investment & Trading (P)
Ltd. [1993 Supp (2) SCC 433] this Court observed
that where substantive law demands justice for the
party aggrieved and the statute has not provided the
remedy, it is the duty of the court to devise procedure
by drawing analogy from other systems of law and
practice. Similarly, in Dhannalal v. Kalawatibai
[(2002) 6 SCC 16] this Court observed that wrong
must not be left unredeemed and right not left
unenforced.
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11.2. Further, even after “Hakeem case”, there are divergent views
before the Hon’ble Supreme Court relating to Section 34 of the Act. The
Hon’ble three bench of the Supreme Court in the case of Vidya Drolia v.
Durga Trading Corpn., reported in 2021 (2) SCC 1 has held as follows:
…….Violation of public policy by the arbitrator
could well result in setting aside the award on the
ground of failure to follow the fundamental policy of
law in India…..
One of the view of the law Courts is that there can be no interference by
excising power under Section 34 of Arbitration Act 1996. The other view is
that certain circumstances warrant interference. Therefore, the power of the
Court under Section 34 of the Act to make the interference with the award is
always a vexed subject. The same has been observed by the Hon’ble
Supreme Court in the latest decision reported in 2024 (2) SCC 375 after
eloquent discussion of the all the earlier decision in paragraph No.33:
33.To disentangle and balance the competing the
principles, the degree and scope of intervention of
courts when an award is challenged by one or both
parties needs to be stated. Reconciliation as a
statement of law and in particular application in a28/56
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11.3.Further, the Hon’ble two member bench of the Supreme Court in
the said decision has finally held as follows in paragraph No 47:
47.We have extensively analysed the award,
its patent flaws and illegalities which emanate from
it, like the manifest lack of reasoning in arriving at
the conclusion and the calculation of amounts
awarded, which, in fact, amount to double or part-
double payments, besides being contradictory, etc.
11.4. In the case of Associate Builders v. DDA, reported in
(2015) 3 SCC 49, the Hon’ble two member bench of the Supreme Court has
held that if the award is against the public policy and suffers from patent
illegality, the power under section 34 can be invoked.:
31. The third juristic principle is that a decision which
is perverse or so irrational that no reasonable person
would have arrived at the same is important and
requires some degree of explanation. It is settled law
that where:
(i) a finding is based on no evidence, or
(ii) an Arbitral Tribunal takes into account something
irrelevant to the decision which it arrives at; or29/56
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(iii) ignores vital evidence in arriving at its decision,
such decision would necessarily be perverse.
11.5. From the above, as on date, there is a decision in favour of
justification of the exercise of power under Section 34 of the Act to
determine the compensation by the learned Judge, presiding over the
arbitration Tribunal and also a contra view. In view of the said situation, the
Hon’ble Supreme Court has referred the matter to the larger Bench. It is
settled principle that pending reference is not a bar to decide the cases on
merits. Further, in this case, the land losers have travelled a long way to get
their legitimate compensation from the year 2006 onwards. In the said
circumstances, “the rigour of procedure” applicable to the ordinary dispute
arising out of the contract between the parties is not applicable to these type
of statutory arbitration for determination of the compensation.
12. Procedure is the handmaid of the justice. The procedural
technicalities can not hamper the proper determination of compensation in
order to restitute the land loser.
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12.1. The procedural rigour attached with the Arbitration and
Conciliation Act is also some what relaxed in the applicability of limitation
under Section 37 of Arbitration and Conciliation Act by the Hon’ble Three
Judges Bench of the Supreme Court reported in 2021 (6) SCC 460. Earlier,
in 2020 (2) SCC 109, the Hon’ble Two Members Bench of the Supreme
Court has held that the appeal filed under Section 37 beyond the period of
limitation mentioned is not maintainable. Subsequently, the Hon’ble Three
Judges Bench of the Supreme Court in 2021 6 SCC 460 relaxed the said
rigour and applied Section 5 of the Limitation Act. Therefore, similar
deviation of the procedural requirement is a timely requirement to deal with
the power of the Arbitration Tribunal to decide the application filed either
by the land loser to get proper compensation or the Government Authorities
to save the Government Exchequer, and also in order to protect the interest
of both parties upon the principle of equity, good conscience as applied by
His Lordship Thiru Justice Krishna Iyer, in the case of Rattan Lal v.
Vardesh Chander, reported in (1976) 2 SCC 103 at page 114, wherein he
held as follows:
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text of justice, equity and good conscience and
Cardozo has crystallised the concept thus:
“Life casts the mould of conduct which
will some day become fixed as law. Free
India has to find its conscience in our
rugged realities and no more in alien
legal thought. In a larger sense, the
insignia of creativity in law, as in life, is
freedom from subtle alien bondage, not a
silent spring nor hothouse flower.”12.2. The said principle of equity, good conscience, was elaborated and
reiterated by the Hon’ble Constitution Bench of Supreme Court in 2020 (1)
SCC 1 M. Siddiq (Ram Janmabhumi Temple-5J) v. Suresh Das paragraph
Nos.1019,1020,1022.. under headings “Justice, Equity and Good
Conscience today”
1022. The common underlying thread is that justice,
good conscience and equity plays a supplementary role
in enabling courts to mould the relief to suit the
circumstances that present themselves before courts
with the principal purpose of ensuring a just outcome.
Where the existing statutory framework is inadequate
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for courts to adjudicate upon the dispute before them,
or no settled judicial doctrine or custom can be availed
of, courts may legitimately take recourse to the
principles of justice, equity and good conscience to
effectively and fairly dispose of the case. A court cannot
abdicate its responsibility to decide a dispute over legal
rights merely because the facts of a case do not readily
submit themselves to the application of the letter of the
existing law. Courts in India have long availed of the
principles of justice, good conscience and equity to
supplement the incompleteness or inapplicability of the
letter of the law with the ground realities of legal
disputes to do justice between the parties. Equity, as an
essential component of justice, formed the final step in
the just adjudication of disputes. After taking recourse
to legal principles from varied legal systems, scholarly
written work on the subject, and the experience of the
Bar and Bench, if no decisive or just outcome could be
reached, a Judge may apply the principles of equity
between the parties to ensure that justice is done. This
has often found form in the power of the court to craft
reliefs that are both legally sustainable and just.
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12.3. At this stage, this Court reminds and observes the immortal
words of the Hon’ble Chief Justice chagla in the case of firm Kaluram
Sitaram Vs The Dominion of India reported in AIR 1954 BOM 50, that
“when the state deals with a citizen it should not ordinary rely on
technicalities and if the state is satisfied that the case of citizen in a just
one, even the legal defences may be open it, it must act, as has been said by
the eminent judges, as an honest person”.
12.4. The above said immortal words of the Hon’ble Chief Justice
chagla in the case has been also reiterated by the Hon’ble Supreme Court in
various judgments including the judgment reported in 2017 (16) SCC 757,
2018 (5) SCC 430, 2015 (14) SCC 801.
12.5. The Hon’ble Supreme Court also in 2010 (1) SCC 512 has held
that statutory authorities cannot raise frivolous and unjust objection.
12.6. In spite of that, the authorities has been raising the technical
plea. It is seen from the past experience, that the Government always raised
number of technicalities in order to deprive the livelihood of the persons
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like the respondents on every occasion so as to prolong the payment of the
legitimate compensation. The question of technicalities always arise in the
case of adjudication between the downtrodden and the Government
authorities ie., in the case of inequality. Whenever, the fight is between two
groups of inequality, suppressed people become the victim of technicality.
One of the said circumstance, raised by the NHAI in this case is relating to
the procedural technicality which would cause serious prejudice to the land
losers who have been longing for fair determination of compensation for
their acquired land.
12.7.The money value is going down on day to day basis on the
account of the raising inflation. In this aspect it is relevant to extract the
following portion of the Hon’ble Supreme Court : In K.Krishna Reddy V.
Collector (LA) (1988) 4 SCC 163.
After all money is what money buys. What the
claimants could have bought with the compensation in
1977 cannot do in 1988. Perhaps, not even one-half of it.
It is a common experience that the purchasing power of
rupee is dwindling. With rising inflation….
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13.The power of compulsive acquisition has an inbuilt element of
duty and responsibility upon the State to pay the compensation which is
just, fair and without delay1 . Therefore, considering the fact that the
acquisition was made long back and when there is no true nature of
arbitration proceedings set up in the NHAI Act, the learned Tribunal Judge
should exercise the jurisdiction and determine the compensation in the
interest of the land loser in order to achieve of the object of speedy
disbursement of compensation.
13.1. The Hon’ble Division Bench of this Court in C.M.A.No.386 of
2016, made an elaborate discussion regarding the similar plea raised by the
NHAI, has considered the pre-amendment and post-amendment provision of
34 of the Arbitration and Conciliation Act and held as follows:
44.From the above judgment, this Court finds that
the scope for modification of award had been recognized
where the offending part is not severable from the rest.
It is also significant to note that, in the above judgment,
obviously Explanation (2) prohibiting review on merits
of the dispute introduced later, is not referred to. This
Court still has some reluctance to hold that the Hon’ble
Supreme court, in M.Hakeem’s case (supra), has ruled
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out the power to modify the award only on the basis of
Explanation (2) found in Section 34(2)(b)(ii). However,
there is a legislative background for introducing 2015
amendment on 31.12.2015 with retrospective effect from
23.10.2015. After the judgment of Hon’ble Supreme
Court in ONGC Ltd. v. Saw Pipes Ltd. Reported in
(2003) 5 SCC 705, where definition of “public policy”
was expanded to include “patent illegality’, it appears
that some eminent jurists expressed their concern and
apprehended that the judgment in Saw Pipes Ltd.
(Supra) might permit judicial review of arbitral awards
fro error of law apparent on the face of the record.
Hence, Law Commission, in its 264th report,
recommended to amend Section 34(2)(b)(ii) by
introducing Explanation 1 and Sub-Section 2A with
proviso to Section 34 of the Act. The Law Commission,
thereafter, noticed the judgment of Hon’ble Supreme
Court in oil and Natural Gas Corporation Limited v.
Western GECO International Limited reported in
(2014) 9 SCC 263 permitting review of an award on
merits if the decision is per se untenable resulting in
miscarriage of justice. Since the Law Commission
opined that such a power of reviewing an award on
merits is contrary to the object of 1996 Act to minimize
the judicial intervention, the Law Commission, in its
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“Supplementary” to 246th Report on amendment to
Arbitration and Conciliation Act,1996, recommended
further clarification by amendment which led to the
inclusion of Explanation 2 in 2015. Thu, it is evident
now that the judgment of Hon’ble Supreme Court in Oil
and Natural Gas Corporation Limited v. Western GECO
International Limited reported in (2014) 9 SCC 263 is a
binding precedent on the interpretation of Section 34 of
Arbitration and Conciliation Act, 1996, before 2015
amendment and this judgement alone will prevail when
we consider the scope of modification of award while
challenging the award of District Collector under
Section 3-G(5) of NH Act, 1956.
13.1. Even though, the Hon’ble Supreme Court in 2021 9 SCC 1
declared law that under Section 34, the Court has no power to modify the
award passed by the arbitrator, but, on facts has laid the following binding
precedents:
In the case of NHAI v. M. Hakeem, reported in (2021) 9 SCC 1
Also, we cannot shut our eyes to the fact that the
arbitrator has awarded compensation on a completely
perverse basis i.e. by taking into account “guideline
value” which is relevant only for stamp duty purposes,
and not taking into account sale deeds which would have38/56
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fact that the awards in all these cases are therefore
perverse, the District Judge rightly interfered with the
same.
13.2. Therefore, this Court holds that the Learned District Judge
correctly interfered with the award and the same is in accordance with
Section 34 of the Arbitration and Conciliation Act.
14. In view of the above discussion, this Court inclines to test the
determination of the compensation is in accordance with law. Before the
Tribunal, the claimant produced Ex.P4 to fix the market value of the
acquired land at the rate of Rs.29,212/- per cent. Ex.P4, dated 30.04.2003 ,
is prior to the notification and well within the statistical period mentioned in
Section 3 G of the NH Act. In the said document, nearby the acquired land,
land measuring 1845 Sq.Ft., has been sold as a house site at Rs.1,23,615/-.
Further, the claimant also produced the award passed in A.R.O.P.No.52 of
2013 dated 28.02.2019 relating to the same acquisition to show that
Rs.18,696/- per cent was fixed. There was no contra evidence adduced on
the side of the appellant.
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14.1.This court also perused the above documents and evidence
adduced in support of the same. The competent authority in his original
communication has observed that the lands are potential one. It is admitted
fact also that the lands are already situated adjoining the existing Madurai –
Chennai NH Road. Now the project is expansion of the existing NH road.
From the evidence on record, it is seen that the the acquired lands are
situated in the developed area. The claimant also produced sufficient
material to prove the potentialities. Number of famous hospitals, schools,
Kalyana Mandapams (famous marriage halls), existence of the Madurai
Bench of Madras High Court, spontaneous development of the real estate
and the development of house projects on the both side. Therefore, this
Court holds that the claimants pleaded the potentiality and have established
the same through evidence.
14.In the case of Land Acquisition Officer, Revenue Divisional Officer v.
L. Kamalamma, (1998) 2 SCC 385 at page 387, the Hon’ble Supreme
Court has also held that judicial notice of the prices of land can been
taken, at paragraph 6, it has been held as follows:
15.
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6. The general trend in the prices of land is on the
rise and the judicial notice of the same had been taken
by the High Court correctly .
Therefore this Court also takes judicial notice of the fact that the lands are
located on the way to the airport from Madurai Bench of Madras High Court.
On both side of the land, number of hospitals, number of hotels and various
promoters are promoting house sites. There was no contra evidence on the side
of the appellants. The above narrated principles laid down by the Hon’ble
Supreme Court to determine the market value of the land has not been
considered by the Arbitrator. The Arbitrator has not considered the sale deed
produced by the claimants to prove the market value and potential value of the
acquired land. As held by the Hon’ble Supreme Court in Suresh Kumar
Vs.Town Improvement Trust reported in 1989 (2) SCC 329, failing to
consider the potential value of the acquired land is an error of principle.
Therefore, the learned trial Judge has correctly determined the market value
in accordance with law and the same requires no interference. The various
Courts including this Court had struck down the 3J of the NHAI Act and
directed to pay the solatium and interest, the Arbitrator failed to grant the said
amount. Hence, in all aspects, apart from the above general discussion, the
Arbitrator simply dismissed the petition. Therefore, no determination of fair
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compensation and no award was passed in accordance with law. In the said
circumstances, the learned Principal District Judge, has rightly invoked the
power under Section 34 of the Aribitration Act, 1996, and determined the fair
compensation.
14.3. The “NHAI” National Highways Authority of India constituted
under Amended Act 68 of 1988” to the National Highways Act, 1956.
“NHAI” has become implementing authority for road infrastructure
development project of nation envisioned by ministry of Road Transport
and Highways. Therefore, for effective implementation of programme, due
to constraint of resources, the entire programme of development of road
infrastructure was entrusted with private entrepreneurship .To further the
implementation of infrastructure through participation of private
entrepreneurship, further amendment was proposed with major change of
acquisition procedures in the Amendment Act, 16 of 1997.
14.4.After Act 16 of 1997, the Union Government passed the
National Highways (Collector of fees by any person for the use of Section
of National Highways /Permanent Bridge/ Temporary Bridge on national
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High ways) Rules 1997, The National Highways (Rate and Fee) Rules 1997
and the National Highways Fees for the use of National Highway Section
and Permanent Bridge Public funded projects) Rules 1997 and prescribed
rate of fee by bringing the National. Therefore, from the above scheme,
NHAI recovers the Road cost through collection of “Toll Fee”. All most, in
all the National Highways, the Government has taken a policy to collect
“Toll Fee” and they are continuously collecting “Toll Fee”.
14.5. When NHAI is collecting more than a sum of Rs.150/- for Car,
Rs.2,250/- for a lorries as “toll fee” for single trip and when the price of the
15 kgs rice is more than Rs.700/-, the Arbitrator without considering that the
market value of the nearby land is more than Rs.50,000/- per cent has fixed
the market value of the acquired land at the rate of Rs.17.17 per sq.mtr, or
a sum of Rs.695/- per cent and the same shocks the judicial conscience of this
Court.
14.6.Even though detailed guiding factors were incorporated in the
3G-(7) of NHAI to determine market value and other Damages, the
Arbitrator dismissed the application without any judicial approach on the
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basis of the document adduced to determine the market value on the side of
the claimants. The Arbitrator simply copied the award of competent
authority contrary to Section 3 G(7) of the Act. Section 3G(7) of the Act,
clearly fixes the detailed obligation, on the part of the arbitrator to
determine the amount by taking into consideration the market value of the
land on the date of the publication of section 3(A) of the Act, and also
providing damages sustained by the persons in acquiring the land and
taking possession by the Land Acquisition Officer. If the landowner is
compelled to change his residence or place of the business the reasonable
expenses if incurred, the same should be properly compensated. This
mandatory duty is cast upon both the competent authority as well as the
arbitrator. If none of the above procedure is followed, then it is a case of
apparent illegality on the part of the arbitrator. His decision suffers from
perversity. His method of approach in determining the compensation is
against known public policy. In such a situation, in numerous cases the
Hon’ble Supreme Court has upheld the power exercised by the Arbitration
Tribunal under Section 34 of the Arbitration Act. Therefore, the extra
ordinary situation warranted the Arbitration Tribunal to determine the
compensation under Section 34 of Arbitration and Conciliation Act, on the
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basis of material produced before it by following the precedents laid down
by the Hon’ble Supreme Court:
(1) 2024 (2) SCC 375 ; (2) 2018 (11) SCC 328 ; (3) 2022 (3) SCC 237
Therefore, this Court finds no grounds to interfere in the said award under
Section 37 of the Arbitration Act, 1996.
14.7. In addition to the above reasons, number of appeals filed by
NHAI against the same notification were dismissed either at the stage of
condoning delay or after numbering of the main case. In all the dismissal
cases, they took a similar plea and the same was not accepted by this Court.
Therefore, in this case, the said dismissal is binding on this Court in the
present proceedings. It is settled principle, if in a group of cases arising out
of the same acquisition, the technical plea was declined in one group of
cases, the same would operate as resjudicata in the remaining cases. In
C.M.A.(MD).Nos.104 of 2019 etc batch, the Project Director, National
Highways 7 K.K.Nagar, Madurai Vs. R.Karuppaiah, the Hon’ble Division
Bench of this Court also accepted the said point. Therefore, this Court finds
no reason to differ with the reasoning of the said ratio on factual and legal
aspects for the reason that the same arose out of the same acquisition and
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the same issue. Therefore, on a over all assessment of the above facts, it is
clear that the learned tribunal Judge correctly took into consideration of the
various documents including earlier award passed relating to the same
acquisition and correctly fixed the market value.
15. It is a well settled principle that jurisdiction under section 37 of
the Act is very much limited and rigour attached with section 34 is also
applicable to the section 37 and the same has been fortified by the Hon’ble
Supreme Court in the following ratio in the case of Haryana Tourism Ltd.
v. Kandhari Beverages Ltd., reported in (2022) 3 SCC 237
9. As per settled position of law laid down by
this Court in a catena of decisions, an award can be
set aside only if the award is against the public policy
of India. The award can be set aside under Sections
34/37 of the Arbitration Act, if the award is found to
be contrary to: (a) fundamental policy of Indian law;
or (b) the interest of India; or (c) justice or morality;
or (d) if it is patently illegal. None of the aforesaid
exceptions shall be applicable to the facts of the case
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on hand. The High Court has entered into the merits
of the claim and has decided the appeal under Section
37 of the Arbitration Act as if the High Court was
deciding the appeal against the judgment and decree
passed by the learned trial court. Thus, the High
Court has exercised the jurisdiction not vested in it
under Section 37 of the Arbitration Act. The impugned
judgment and order [Kandhari Beverages
Ltd. v. Haryana Tourism Ltd., 2018 SCC OnLine
P&H 3233] passed by the High Court is hence not
sustainable.
15.1.The competent authority and the arbitrator have not properly
considered the documents filed by the land loser to fix the correct market
value of the land and determine the proper compensation as per the statutory
requirement. The competent authority and arbitrator, not even applied their
mind to grant solatium and other statutory benefits. In the said
circumstances, the learned Tribunal Judge in order to provide timely relief
and in the interest of justice has correctly exercised power under Section 34
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of the Arbitration Act and hence, this Court finds every justification ion the
part of the learned Principal Sessions Judge, as Judge of Arbitration
Tribunal, in invoking power under Section 34 of the Arbitration Act, 1996
to re-determine the compensation without remanding the matter to the
arbitrator and also correctly fixed the market value and awarded
compensation and therefore, this Court also concurs with the finding of the
learned trial judge in determining the market value of the acquired land
Rs.18,696/- per cent, and there is no grounds to exercise the power under
Section 37 of the Act in determining the market value of the acquired land
Rs.18,696/- per cent.
16. As per the “Tarsemcase-2” reported in 2021 SCC Online S.C.
3175, the paragraph No.41 of the “Tarsemcase-1” reported in 2019 (9) SCC
304 is deleted. Therefore, the landsowners are not entitled for any amount
under Section 23(1)(A) of the Land Acquisition Act, 1894. Hence, this
Court is unable to concur with the decision of the learned Tribunal Judge in
granting the 12% additional value of the amount as per the Section 23(1)(A)
of the Land Acquisition Act, 1894, on the basis of the subsequent
development of law i.e., subsequently the Hon’ble Supreme Court in 2021
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SCC Online SC 3175 has clarified that the land loser is not entitled to the
compensation under Section 23(1)(A) of the land Acquisition of the Act,
1894. Therefore, this Court inclines to set aside the award in respect of the
granting of the compensation under the head of 23(1)(A) of the Land
Acquisition Act, 1894, to the extent of 12% amount.
17.However, in all cases, the learned Tribunal Judge failed to grant
10% additional amount as per the 3 G of the NH Act, to the enhanced
market value of the land and hence, this Court is duty bound to grant 10%
additional compensation of the enhanced market value of the acquired land.
18.In view of the above discussion, this Court re-determined the
compensation for the extent of the 3600 Sq.mtrs or 88.954 cents land of
the respondent/land looser situated in the Elanthaikulam village acquired
for the expansion of NH-four way lane.
49/56 https://www.mhc.tn.gov.in/judis C.M.A(MD).No.751 of 2022 Solatium of 12% 30% on additional Total market value value 10% on the compensation Total Market as per the under sale price as awarded Types of Value per judgment of Section 23 per the (after deducting authority Sq.mtrs/cents the 2019 9 (1) (a) of section 3G(2) the amount SCC 304 the Land of NHAI Act already Amount acquisition received) awarded Act Amount awarded by the (3600X17.17) Rs.67,993 Competent Rs.61,812 Authority Amount (3600X17.17) awarded by the Rs.67,993 Arbitrator Rs.61,812 Amount Rs.22,55,142 awarded by the (88.954X18696) Rs.4,98,925 Rs.93,133 (-67993) = Arbitration Rs.16,63,084 Tribunal Rs.21,87,149 Rs.23,28,318 Amount (88.954X18696) awarded by this Rs.4,98,925 Rs.1,66,309 (-67993) = Court Rs.16,63,084 Rs.22,60,325/-
Accordingly, the respondent/claimant in Arbitration O.P.No.
22/2015 is entitled to Rs.22,60,325/- with interest of 9%, from the date of
possession till date of deposit. The cost awarded in said Arbitration Award
is hereby confirmed.
19. Suggestion:
19.1.Collector is the Arbitrator to determine the compensation. To
determine the same, he has to record evidence and receive the documents as
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C.M.A(MD).No.751 of 2022per the procedure stated in the Civil Procedure Code to determine the
market value and damages. After recording the evidence, it further requires
judicial appreciation of the said recorded evidence considering the
submission of the land owners. Thereafter, he has to determine the quantum
of the compensation and pass the award after fixing the quantum of
compensation and other statutory benefits. The award must contain the
judicial reasoning for arrival. Therefore, the entire process of determining
compensation amount is more like the exercise of the judicial function as a
“person designata”. Therefore, the Collector requires much time to pass
award. But, as we all know that the Collector is the authority acting in
various capacities. There are more than 30 legislations empowering the
District Collector in the Joint Secretary rank to act in various capacities
statutorily. That apart the District Collector is heading the District
Administration and they are also heading the revenue department of the
District concerned. He is also the Chief District Protocol Officer. He has to
work in tandem with the Ministers etc.,. Whenever an incident takes place
in the revenue district concerned, that is to be firstly informed to the District
Collector, who has to look into the matter. Any natural calamities, untoward
incidents or law and order issues and communal clash take place, the same
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C.M.A(MD).No.751 of 2022are to be brought to the notice of the District Collector cum District
Magistrate, who is responsible to manage the situation, whenever such kind
of contingencies arise in the district concerned. When such a heavy and
burdensome job or duty is cost upon the District Collector, one cannot
expect that the District Collector would determine the fair compensation, by
applying his judicial mind in following the above procedure and quantify
the compensation. Therefore, sometimes miscarriage of justice takes place
by way of dismissing the arbitration application filed by the land owners.
This Court perused the Arbitration orders passed by the District Collector
relating to this Land Acquisition Proceedings. All the land owners’
Arbitration Original Petitions were dismissed. There was total non-
application of mind. Even there is no reference about the guiding factors
mentioned in Section 3-G(7) of the NHAI Act. He simply affirmed the order
of the competent authority. The Collector is the immediate superior to
“DRO” namely the competent authority. He always accompanies the
Collector and hence, there is probable circumstance to interfere with his
determination. In this case, all the land losers arbitration proceedings have
been dismissed by simply copying the original order of DRO/competent
authority.
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C.M.A(MD).No.751 of 2022
19.2. Therefore, a miscarriage of justice has taken place. As a sequel,
the land owners legitimate right of getting fair compensation is deprived.
The right of receiving fair compensation is not only the statutory right, it is
also the constitution obligation on the part of the Government. However, the
facts remains that, these kind of the orders are passed with total non-
application of mind in routine and cavalier manner by the District Collector
under the capacity of the Arbitrator within the meaning of Section 3-G.(5)
of the NHAI Act. If this kind of violations take place continuously, that
would not augment well to maintain the rule of law. Therefore, in order to
streamline this system and overcome this kind of miscarriage of justice and
also redress the grievance of the land losers and in some cases even the
exorbitant increase of the award at the cost of the Government exchequer,
when such miscarriage of justice is noticed in the determination of the fair
compensation process like the present one, this Court is duty bound to
sensitize and would suggest that the Central Government as a constitutional
guardian of the land losers has to think of appointing a retired High Court
Judge as Arbitrator to discharge the said function of determination of the
compensation. Or other wise, let them follow the scheme of reference to
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C.M.A(MD).No.751 of 2022
determine the compensation mentioned in the Tamil Nadu Highways Act.
20. Accordingly, this Civil Miscellaneous Appeal is dismissed with
the following modification of award:
The first respondent/claimant in Ar.O.P.No.22 of 2015 is entitled to
Rs.22,60,325/- with interest of 9%, from the date of possession till the date
of deposit. The cost awarded in the said Ar.O.P., is hereby confirmed. There
shall be no order as to costs.
Consequently, connected Civil Miscellaneous Petition is closed.
[V.B.S.J.] [K.K.R.K.J.]
01.08.2024
NCC :Yes/No
Index :Yes/No
Internet :Yes/No
sbn
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C.M.A(MD).No.751 of 2022
To
1. The learned Principal District Judge,
Madurai.
2. The District Revenue Officer/Competent Authority,
Land Acquisition, (National Highways -45B),
Collectorate Buildings,
Madurai-625 020.
3. The Special Government Pleader,
Madurai Bench of Madras High Court, Madurai.
4. The Section Officer,
VR Section,
Madurai Bench of Madras High Court, Madurai.
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C.M.A(MD).No.751 of 2022
V.BHAVANI SUBBAROYAN, J.
AND
K.K.RAMAKRISHNAN, J.
sbn
C.M.A(MD). No.751 of 2022
and
C.M.P(MD).No.6600 of 2022
01.08.2024
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