National Highways Authority of India, through its Project Director Vs Om Prakash Singh and 2 Others

Heard Sri Abhishek Pathak, learned counsel for the appellant and Sri Prasidh Narayan Singh, learned counsel along with Sri J.N. Singh, learned counsel for the respondent no. 1 on caveat.

¶12

The instant appeal has been preferred under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act of 1996") assailing the judgment and order dated 08.08.2025 passed by the Additional District Judge-I, Ambedkar Nagar in Arbitration Case No. 4 of 2022 whereby the petition preferred under Section 34 of the Act of 1996 filed by the respondent no. 1 has been allowed and the matter has been remitted for consideration afresh.

¶13

The submission of learned counsel for the appellant is that the Court while exercising powers under Section 34 of the Act of 1996 has overstepped its jurisdiction, inasmuch as, it has entered into the merits of the dispute and it has re-appraised the evidence which is not within the domain of the Court exercising powers under Section 34 of the Act of 1996.

¶14

It is further urged that where a view has been taken by an Arbitrator after considering the material available on record, unless it is shown to be perverse, such view has to be accepted and the courts under Section 34 of the Act of 1996 are not empowered to take a different view, thus, the

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¶17

Court while entering into the factual aspect, has re-appraised the evidence which is not permissible, accordingly, the order impugned dated 08.08.2025 is bad in the eyes of law.

¶18

It has further been submitted by the learned counsel for the appellant that the court further over-stepped its jurisdiction by ignoring the principles enunciated in Section 34 (4) of the Act of 1996.

¶19

In case if certain technical errors were discovered by the court in exercise of powers under Section 34 of the Act, it was always open for the court to have taken recourse to the provisions of Section 34(4) enabling the Arbitral Tribunal to iron out the creases and to eliminate the ground upon which the petition under Section 34 of the Act was preferred. Having ignored this aspect, the order passed by the Court stands vitiated.

¶20

The learned counsel for the appellant has relied upon a decision of the Apex Court in the case of Kinnari Mullick and Another v. Ghansyam Das Damani:2018 (11) SCC 328 and another decision of a coordinate Bench of this Court in Hema Agarwal and 2 others v. National Highway Authority of India and another:2025:AHC:148001 .

¶21

It is thus urged that for the aforesaid reasons, the order impugned cannot be sustained and as such deserves to be set aside.

¶22

Sri Prasidh Narain Singh, learned counsel appearing for the private respondent has urged that the court while considering the respective submissions has merely considered the impact of certain awards which were passed in respect of a contiguous land-holder and thereafter it has come to the conclusion that the award cannot be sustained as two equal persons cannot be treated differently.

¶23

The entire reasoning of the Court is on the aforesaid premise and it is not a case where the court has undertaken an independent or re-appraisal of evidence, hence, the submission made by learned counsel for the appellant does not flow from the record.

¶24

It has further been urged that the reliance placed by the learned counsel for the appellant in the case of Kinnari Mullick (supra) will not have any impact for the reasons, ingredients mentioned therein are not met.

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¶27

It is thus urged that once the award passed by the Statutory Authority under the National Highway Authority of India Act has been set aside and the matter has been remitted for decision, considering the observations made, it cannot be said that the court has overstepped its jurisdiction, hence, the appeal deserves to fail.

¶28

The Court has heard the learned counsel for the parties and also perused the material on record.

¶29

Apparently, the scope of proceedings under Section 34 of the Act of 1996 is limited, the award can only be set aside on the ground mentioned in Section 34 or if it fails to pass the patent illegality test as enunciated by the judicial pronouncements of the Apex Court as well as various High Courts.

¶30

In the aforesaid backdrop, if the controversy is seen in the present case, also noticing the averments of the respective parties which have been incorporated in the judgment under challenge, it would reveal that the contention relates to how the land acquired under the NHAI Act is to be valued for the purposes of determining the compensation.

¶31

It is not disputed that on the date of the notification made under Section 3-G, the land in question was recorded in the revenue records as agricultural.

¶32

It is also not disputed that arbitral proceedings or an award is per se inter-se the parties and it does not partake the nature of a judgment in rem rather it is a judgment in personam between the contracting parties who had agreed to get their disputes resolved through the forum of Arbitration.

¶33

In the instant case, since the proceedings emanate from the NHAI Act, accordingly, there is a statutory scheme. This Court in case of (i) Chandra Kishori v. Union of India; 2023 SCC Online All 3950; Nitin Maheshwari v. Union of India: MANU/UP4080/2023 (iii) Harish Tripathi v. National Highway Authority of India; MANU/UP/4213/2023 had the occasion to consider the scheme of the NHAI Act and the proceedings before the statutory Arbitrator.

¶34

The core question that is involved in such proceedings is determination of the compensation based on the market value. As already

¶35

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¶37

noticed above in the Chandra Kishori (Supra), Nitin Maheshwari (supra) and Harish Tripathi (supra) , this Court had noticed that how the valuation/market value is to be determined and applying the aforesaid principles, it would indicate that merely taking note of awards which have been passed in case of contiguous or near-by tenure-holders ipso-facto may not give rise to any inference that the court has re-appraised or enter into the arena reserved for the Arbitral Tribunal.

¶38

Even in the instant case, it would indicate that the court on its own and noticing the material placed before it which was also part of the record before the arbitral proceedings found that there is some disparity regarding the grant of compensation and for the aforesaid purpose without making any comment, it has set aside the order, requiring the statutory Arbitrator to take a re-look.

¶39

The aforesaid issue regarding remand as well as the severance of the award was the subject matter of profound consideration by the Apex Court in the constitution Bench decision of Gayatri Balasamy v. ISG Novasoft Technologies Ltd., (2025) 7 SCC 1, however, the principles laid therein are not attracted in the case at hand.

¶40

Taking note of the relevant provisions of the Act of 1996 as well as the judgments of the Apex Court in (i) UHL Power Co. Ltd. v. State of H.P., (2022) 4 SCC 116 and (ii) AC Chokshi Share Broker (P) Ltd. v. Jatin Pratap Desai, (2025) 5 SCC 321 which has been followed by a Division Bench of this Court in UCM Coal Co. Ltd. v. Adani Enterprises Ltd: 2025:AHC-LKO:58732-DB, it would reveal that in so far as the first submission advanced by the learned counsel for the appellant relating to entering into the domain of the re-appraising the evidence is concerned, is not made out.

¶41

The judgement relied upon by the learned counsel for the appellant in Kinnari Mullick (Supra) if seen, would indicate the scope of Section 34(4) of the Act of 1996 and the relevant portion of the said report reads as under:-

¶42

"12. 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

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¶45

Section 34(4) of the Act which is the repository of power invested in the Court. The same reads thus:

¶46

"Section 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."

¶47

13. 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 Arbitral Tribunal will eliminate the grounds for setting aside the arbitral award. The power under this provision is that the arbitral award has not been quintessence for exercising set aside. Further, the challenge to the said award has been set up aside Further, 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 the 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. This legal position has been expounded In the case of McDermott International Inc. (supra). In paragraph 8 of the said decision, the Court observed thus:

¶48

"8.....parliament has not conferred any power of remand to the Court to remit the matter to the arbitral tribunal except to adjourn the proceedings as provided under sub-section (4) of Section 34 of the Act. The object of sub-section (4) of Section 34 of the Act is to give an opportunity to the arbitral tribunal to resume the arbitral proceedings or to enable it to take such other action which will eliminate the grounds for setting aside the arbitral award."

¶49

(emphasis supplied)

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¶52

14. In any case, the limited discretion available to the Court under Section 34(4) can be exercised only upon a written application made in that behalf by a party to the arbitration proceedings. It is crystal clear that the Court cannot exercise this limited power of deferring the proceedings before it suo moto. Moreover, before formally setting aside the award, if the party to the arbitration proceedings fails to request the. Court to defer the proceedings pending before it, then it is not open to the party to move an application under Section 34(4) of the Act. For, consequent to disposal of the main proceedings under Section 34. of the Act by the Court, it would become functus officio. In other words, the limited remedy available under Section 34(4) is required to be invoked by the party to the arbitral proceedings before the award is set aside by the Court."

¶53

Having taken note of the aforesaid, it would reveal that the basic criteria or ingredients for invoking Section 34 (4) of the Act of 1996 is not applicable nor made out.

¶54

The learned counsel for the appellant could not dispute the fact that no application was give to the court seized with the matter under Section 34(4) to exercise its power under Section 34(4) of the Act of 1996.

¶55

It also could not be demonstrated successfully as to the ground upon which the initial petition under Section 34 (1) of the Act of 1996 was filed, what was those technicalities which could have been ironed out while considering or invoking the powers under Section 34 (4) of the Act of 1996.

¶56

In absence of such material which has not been indicated nor it could be canvassed that the same existed, the reliance upon the provisions of Section 34(4) of the Act of 1996 and upon the judgment of the Apex Court in Kinnari Mullick (supra) does not come to the aid of the appellant.

¶57

In so far as the decision of the coordinate Bench in Hema Agarwal (supra) is concerned , the same also has no applicability in the instant case rather it has merely relied upon the decision of the Apex Court in Kinnari Mullick (supra) and as noticed above where it could not be shown as to how the provisions of Section 34 (4) would apply, hence, the judgment of this Court in Hema Agarwal (supra) is not of any help to

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the appellants.

In the aforesaid circumstances, this Court finds that the submissions advanced by the learned counsel for the appellant have no merit and the appeal is accordingly dismissed , leaving it open for the appellant to take recourse as may be available in law while participating in the arbitral proceedings which is the necessary corollary and outcome after passing of the impugned order dated 08.08.2025. Costs are made easy.

¶62

(Jaspreet Singh,J.)

¶63

November 25, 2025

¶64

Asheesh

¶65

Digitally signed by :- ASHEESH KUMAR High Court of Judicature at Allahabad, Lucknow Bench

National Highways Authority of India, through its Project Director v. Om Prakash Singh and 2 Others

Case brief

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National Highways Authority of India, through its Project Director v. Om Prakash Singh and 2 Others

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