Dismissed

H T Krishnamurthy v. Project Director

Karnataka HC17 Mar 2021MFA/7286/2015

Case brief

AI extract

What is this about?

This First Appeal No. 7286/2015 (AA) before the High Court of Karnataka dismissed an appeal filed under Section 34 of the Arbitration and Conciliation Act. The appellant challenged an award regarding land acquisition compensation for National Highway NH-48. Upholding the District Judge's order, the Court held that Section 34 cannot be invoked merely to enhance compensation, citing ILR 2010 KAR 371

What did the court decide?

The appeal filed under Section 34 of the Arbitration and Conciliation Act was dismissed, confirming the award of the Arbitrator.

H T Krishnamurthy Vs Project Director — Arbitration | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 17^TH DAY OF MARCH, 2021

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PRESENT

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THE HON’BLE MRS.JUSTICE S.SUJATHA

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AND

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THE HON’BLE MR. JUSTICE P.N.DESAI

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M.F.A.No.7286/2015 (AA)

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BETWEEN :

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H.T.KRISHNAMURTHY S/O THIMMEGOWDA @ THAMMANNA AGED ABOUT 50 YEARS, R/O HONNENAHALLI VILLAGE, HIRISAVE HOBLI, CHANNARAYAPATNA TALUK, HASSAN DISTRICT-572201 ...APPELLANT

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(BY SRI HALESHA R.G., ADV.)

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AND :

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1 . PROJECT DIRECTOR NATIONAL HIGHWAY, DEVELOPMENT PROJECT, NH.48, BANGALORE-560072.

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2 . SPECIAL LAND ACQUISITION OFFICER & COMPETENT AUTHORITY, NATIONAL HIGHWAY, (NELAMANGALA-HASSAN DIVISION) KUNIGAL, TUMKUR DISTRICT-16.

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3 . TECHNICAL MANAGER N.H.A.I. KUNIGAL, TUMKUR DISTRICT-16.

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4 . DEPUTY COMMISSIONER ARBITRATOR, HASSAN DISTRICT-201. …RESPONDENTS

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(BY SRI R.V.NAIK, ADV. FOR R-1 TO R-3; R-4 SERVED.)

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THIS M.F.A. IS FILED UNDER SECTION 37(1)(b) OF ARBITRATION AND CONCILIATION ACT, AGAINST THE JUDGMENT AND DECREE DATED 09.01.2015 PASSED IN A.C.No.45/2013 ON THE FILE OF THE PRINCIPAL DISTRICT JUDGE, HASSAN, DISMISSING THE APPEAL FILED UNDER SECTION 34 OF ARBITRATION AND CONCILIATION ACT.

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THIS APPEAL COMING ON FOR ADMISSION, THIS DAY, S. SUJATHA, J ., DELIVERED THE FOLLOWING:

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J U D G M E N T

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This appeal is directed against the judgment and decree dated 09.01.2015 passed in A.C. No.45/2013 by the Principal District Judge, Hassan, (‘District Court’ for short).

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It transpires that the appellant filed an

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appeal under Section 34 of the Arbitration and Conciliation Act, 1996 (‘Act’ for short) read with Section 3G(6) of the National Highways Act, 1956, against the award dated 10.05.2013 passed by the learned Arbitrator.

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It appears that the Special Land Acquisition

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Officer acquired the lands owned by the appellant i.e.,

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land and buildings existed in Sy.Nos.124/3 and 142/5B, measuring an extent of 61 and 26 square meter, situated at Honnenahalli village, Hirisave Hobli, Channarayapattana Taluk, for the purpose of formation of 4/6 lane of National Highway NH-48 for public purpose. The Preliminary Notification under Section 3A(1) of the National Highways Act, 1956 was issued on 01.06.2006 and thereafter Final Notification dated 24.09.2009 was published. Respondent - Authority has determined the compensation for the lands, building and trees, in total at Rs.5,57,716/-.

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On further enhancement of compensation

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sought by the appellant, the Deputy Commissioner, Hassan, having been appointed as an Arbitrator by the Central Government as per Sections 3G(5) and (6) of the Act, examined the matter and enhanced the

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compensation awarded by the Special Land Acquisition Officer. The said order of the Arbitrator was challenged in A.C.No.45/2013 before the learned District Judge.

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In response to the notice issued by the

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learned District Judge, respondent No.2 appeared through his counsel; respondent Nos.1 and 3 remained absent and respondent No.4 was represented by the District Government Pleader.

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6. Respondent No.2 contested the matter by

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filing statement of objections, setting up the primary defence that the Special Land Acquisition Officer has determined the compensation under Section 3G(7) of the National Highways Act, 1956 based on the market value of the land as on the date of 3A Notification at the rate of agricultural land value. The Arbitrator ordered for payment of compensation at three times the rate fixed by the Special Land Acquisition Officer, there is no scope for further enhancement of compensation. On

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these grounds, respondents prayed for dismissal of the appeal.

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The learned District Judge having heard the

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arguments of the respective parties has framed the points for consideration as under:-

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1) Whether the appellant made out any grounds to enhance the compensation under Section 34 of the Arbitration and Conciliation Act?

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2) Whether the appellant has made out any grounds for interference of this Court?

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3) What Order?

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The learned District Judge exercising the

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powers under Section 34 of the Act examined the matter and dismissed the same. It is against the said order and award, the present appeal has been filed by the appellant.

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Learned counsel Sri. Halesha R.G.,

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appearing for the appellant vehemently contends that

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the learned District Judge ought to have enhanced the compensation having regard to the nature of the lands, building and trees which were existing at the acquired land. There was no agreement between the parties for arbitral proceedings. The determination of the compensation by the learned Arbitrator is not in conformity with the market value of the lands fixed at Hirisave. Thus, the learned counsel made an endeavor to contend that the compensation determined by the learned Arbitrator confirmed by the District Court is not just and reasonable. Learned counsel argued that the award passed by the learned Arbitrator is against the public policy.

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Section 34 of the Act as it stood during the relevant period, reads thus:-

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“34. Application for setting aside arbitral award.- (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in

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accordance with sub-section (2) and sub-section (3).

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(2) An arbitral award may be set aside

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by the Court only if, -

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(a) the party making the application furnishes proof that,-

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(i) a party was under some incapacity; or

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(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for time being in force; or

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(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

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(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters

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beyond the scope of the submission to arbitration:

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Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration my be set aside; or

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(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

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(b) the Court finds that,-

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(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force; of

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(ii) the arbitral award is in conflict

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with the public policy of India.

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A reading of the said provision clearly

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indicates that it is an enabling provision to seek for setting aside the award on anyone or the other of the grounds enumerated in the said provision. At any stretch of imagination, the attempt made by the appellant for seeking enhancement of compensation invoking Section 34(2) of the Act cannot be held to be sustainable in law.

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Moreover, the issue involved herein is no more res integra in view of the Co-ordinate bench decision of this Court in the case of H.M.

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Shankaramurthy vs. National Highways Authority

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of India and Others reported in ILR 2010 KAR 3711 , wherein it has been categorically held that a provision for setting aside an award contending that the award is not sustainable in law on any one of the grounds other

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than specified in Section 34 (2) of the Act can never be construed as a provision enabling the land owner seeking for enhancement of the compensation amount as determined by the Arbitrator. Accordingly rejection of the application under Section 34 of the Act by the learned District Judge has been upheld holding that the application itself was not tenable.

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The said ruling of the Co-ordinate bench of this Court is squarely applicable to the facts of the present case.

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We are not inclined to accept the arguments of the learned counsel that the determination of compensation made by the Arbitrator, if not found to the satisfaction of the appellant, the same could partake the character of public policy.

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