Udayakumar v. Project Director NHAI & Special Deputy Collector SLAO NHDP

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE V.CHITAMBARESH** ## **&** **THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI** **MONDAY ,THE 21ST DAY OF JANUARY 2019 / 27TH POUSHA, 1940** ## **Arb.A.No. 68 of 2015** **AGAINST THE IMPUGNED ORDER IN OPARB 11/2010 of ADDL.DISTRICT COURT, NORTH PARAVUR** ## **APPELLANT/PETITIONER:** **UDAYAKUMAR AGED 47 YEARS S/O. KRISHNAPPAN, PUTHUPARAMBIL HOUSE, THOTTAKKATTUKARA, ALUVA WEST VILLAGE.** **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** **THIS ARBITRATION APPEAL HAVING BEEN FINALLY HEARD ON 17.01.2019, THE COURT ON 21.01.2019 DELIVERED THE FOLLOWING:** Arb.A.No.68/2015 2 **“CR”** ## **V.CHITAMBARESH &** ## **R.NARAYANA PISHARADI, JJ.** ************************** Arb.A.No.68 of 2015 ---------------------------------------------Dated this the 21[st] day of January, 2019 ## **JUDGMENT** ## **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 Arb.A.No.68/2015 3 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. Arb.A.No.68/2015 4 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. Arb.A.No.68/2015 5 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. Arb.A.No.68/2015 6 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_ Arb.A.No.68/2015 7 _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 Arb.A.No.68/2015 8 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_ Arb.A.No.68/2015 9 _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_ Arb.A.No.68/2015 10 _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. (sd/-) ## **V.CHITAMBARESH, JUDGE** ## (sd/-) ## **R.NARAYANA PISHARADI, JUDGE** jsr/18/01/2019 True Copy PS to Judge Arb.A.No.68/2015 11 The name of the Counsel for the appellant mentioned in the causetitle of the judgment dated 21/1/19 in Arb.Appeal 68/15 is corrected as Advocate Chincy Gopakumar instead of Advocate K.S.Rajeev as per order dated 18/2/19 in IA 1/19 in Arb.Appeal 68/15. (sd/-) Assistant Registrar