Sri. M a George Vs the Arbitrator and Deputy Commissioner

SRI.M.A.GEORGE, S/O LATE ULHANAM ABRAHAM, AGED ABOUT 82 YEARS, R/AT MUNDEKEL HOUSE, UDANE POST, SHIRADY VILLAGE, KADABA TALUK, DAKSHINA KANNADA-574 221.

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…APPELLANT

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Digitally signed by PRAJWAL A Location: High Court of Karnataka

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(BY SRI. SATHISH V., ADVOCATE)

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AND:

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THE ARBITRATOR AND DEPUTY COMMISSIONER, DAKSHINA KANNADA, MANGALURU-575 001.

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THE PROJECT DIRECTOR NHAI PIU HASSAN, HASANAMBA NILAYA, INDIRANAGAR, NEAR VARASIDDIVINAYAKA TEMPLE,

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SATHYAMANGALA LAYOUT, HASSAN-573 201.

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THE COMPETENT AUTHORITY AND THE SPECIAL LAND ACQUISITION OFFICER, (NHAI) NH.48, HASSAN - B.C.ROAD DIVISION, OPP. HDFC BANK,

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BH ROAD, HASSAN DIST-573 103.

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…RESPONDENTS

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(BY SRI.SHOBITH.N ADVOCATE FOR R2; R1 AND R3 SERVED UN-REPRESENTED)

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THIS MFA IS FILED UNDER SECTION 37(1)(C) OF THE ARBITRATION AND CONCILIATION ACT, 1996 AGAINST THE JUDGMENT AND AWARD DATED 24.06.2023 PASSED IN ARBITRATION SUIT NO.136/2019 ON THE FILE OF THE I ADDITIONAL DISTRICT JUDGE, DK, MANGALURU, DISMISSING THE ARBITRATION PETITION FILED UNDER SECTION 34 OF THE ARBITRATION AND CONCILIATION ACT, R/W ORDER VII RULE 1 OF CPC, ETC.

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THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE V KAMESWAR RAO and HON'BLE MR JUSTICE S RACHAIAH

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ORAL JUDGMENT

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(PER: HON'BLE MR JUSTICE V KAMESWAR RAO)

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This appeal has been filed by the appellant

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challenging the order dated 24.06.2023 passed by the Court of I Additional District Judge, Dakshina Kannada, Mangaluru (‘District Judge’ for short) in Arbitration Suit

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No.136/2019, whereby the learned District Judge has dismissed the said suit which was filed by the appellant herein under Section 34 of the Arbitration and Conciliation Act, 1996 (‘Act of 1996’ for short) read with Order VII Rule 1 of CPC.

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The facts to be noted for the purpose of this appeal are, the appellant herein was the absolute owner of the land in Sy.No.25-2B1B(P3) measuring 0.21 cents, 25-2B1B(P3) measuring 0.31 cents and in Sy.No.252B1B1 measuring 0.05 cents (converted). Out of the total extent of aforesaid land, about 0.15 cents of land was acquired by the 2^nd respondent for widening NH-48. An amount of Rs.68,47,274/- was paid to the appellant as compensation.

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The plea of the appellant before the learned Arbitrator was that, the 3^rd respondent has determined Rs.5,00,000/- for the RCC house of the appellant, which is only for half portion of the house of the appellant, which was demolished. According to him, the remaining portion

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of the said house is not useful to the appellant. Hence, the 3^rd respondent ought to have paid full compensation.

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The case of the appellant was, he requires about Rs.30,00,000/- for construction of new house. Further it was stated, there were teakwood and coconut trees, shop buildings, coconut oil mill and flour mill, etc., on the acquired land which were the source of livelihood of the appellant. The compensation determined is not in accordance with law.

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We note, the learned Arbitrator has determined

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the claim of the appellant in the following manner:

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“ ORDER

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By exercising powers u/s 3-G (5 to 7) of the National Highways Act 1956 and as per the order of the central government No.NHAI/LA/RR/2001/9 Dated 11.04.2007 and also considering the fact that the acquired land is Converted Residential & Dry in nature, it is ordered that compensation for the scheduled land be increased and paid at the rate of Rs. 29,120/- (Rupees Twenty Nine Thousand One Hundred Twenty Only) in respect of the Converted Residential land in Sy.No.25/2B1B1 measuring 202.35 Sq.mts & Rs.2,839/- (Rupees Two Thousand

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Eight Hundred Thirty Nine Only) in respect of the Dry land in Sy. No.25/2B1B1 measruing 384.65 Sq.mts of Shirady Village for every cent of land with 9% interest applicable under section 3-H(5) of the National 1 Highways Act 1956 to the legal owner of the said land acquired in Award No.LAQ/NHAI/SLAO/HSN/AWD/DK/3&3A/Shirady/20 15-16 dated 01-10-2015. The 2nd Respondent shall take action for payment of increased amount of compensation to the legal owner of the aforesaid land at once.”

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The appellant being not satisfied with the award

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dated 23.07.2019 of the learned Arbitrator, has preferred a suit under Section 34 of the Act of 1996 before the learned District Judge seeking setting aside of the said award. The learned District Judge had framed the following points for his consideration:

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“1. Whether petition is within time as prescribed under Section 34(3) of Arbitration and Conciliation Act 1996?

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2. Whether plaintiff complied the provisions of Section 34(5) of the A & C Act?

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3. Whether the petitioner made out grounds for setting aside the arbitral award as provided

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under section 34 of Arbitration and Conciliation Act 1996?

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4. What order?”

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On point No.3, the conclusion drawn by the

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learned District Judge was the following:

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“18. Point No.3:- In view of the finding of this court on mandatory requirements, this court proceeds to examine whether plaintiff made out grounds to set aside the arbitral award as provided under Sub Section 2 or 2-A of Section 34 of the Act.

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19. In this case the arbitration award arose out of statutory arbitration. Plaintiff has no say in the appointment of arbitrator. Section 3 G(5) of the National Highways Act provides that if the amount determined by the Land Acquisition Authority 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. The appointment of arbitrator under the National Highways Act is not a consensual process and it is only by the acquiring authority. Defendant No.2 appeared before the arbitrator and resisted the enhancement claim of the plaintiff.

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20. Plaintiff filed this suit being aggrieved by the quantum of compensation enhanced by the learned Arbitrator. It is contended by the learned

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counsel for the plaintiff that defendant No.2 has not paid proper compensation towards the building demolished and also not considered agricultural improvements in the acquired land. The learned counsel for the defendant No.2 strenuously contends that National Highway Authority has awarded total compensation of Rs. 74,75,670/- to the plaintiff. Authority has awarded Rs.31,60,387/towards building and also Rs. 84.097/towards horticulture/forest tree value. It is further contended that they applied provisions of RFCTLARR Act and paid total compensation of Rs. 74,75,670/-. On careful examination plaintiff has not adduced any evidence before the arbitrator to substantiate his contention that compensation awarded towards structure and trees is unreasonable and not based on proper assessment of the compensation. On careful examination of the compensation assessment sheet/award. the Land Acquisition officer has assessed to the entire building and also awarded compensation Rs.66,360/- towards 4 coconut trees and Rs. 55,160/- towards 12 teak trees and one Nandhi tree. They applied 100% solatium. 12% additional market value and 9% interest to the assessed compensation.

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21. Learned arbitrator taking into consideration of the nature of the property enhanced compensation with regard to land acquired. The arbitrator while

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passing the award taken consideration of the parameters provided in Sec.3G(7) of National Highways Act and also considered that property acquired situated adjacent to National Highway 48 having good potential for future development. The learned arbitrator after taking into consideration of all the contentions passed the impugned award. As such plaintiff has not made out any grounds to interfere with the arbitral award on that ground.

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22. In this case evidently award was passed by the Spl. LAO on 1.10.2015 in LAQ/SLAO/HSN/AWARD/DK/3&3A /Shirady/2015-16. In view of the same the provisions of RFCTLARR Act are applicable to the case in hand. On careful examination of the arbitral award, the learned arbitrator even though discussed with regard to applicability of RFCTLARR Act to the case on hand, has not mentioned the same in the impugned order. Defendant No.2 authority has produced memo with voucher with regard to payment of enhanced compensation by applying provisions of RFCTLARR Act,2013 and thereby substantiates that they paid enhanced compensation by applying the provisions of RFCTLARR Act, 2013 to the plaintiff. On that count also award of the arbitrator cannot be interfered by this court.

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23. Further the jurisdiction of the court U/s. 34 of A & C Act is very limited and supervisory in

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nature. Court is empowered to interfere only when plaintiff has made out grounds enumerated under sub-section (2) or 2(a) of Sec.f34 of the Act. In this case plaintiff has not made out any grounds and suit is filed only for enhancement of compensation awarded by the learned arbitrator. In view of the same this court proceeds to examine the law on this point.

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24. The Hon'ble High Court of Karnataka in its decision reported in ILR 2010 KAR 3811H.M.Shankarmurthy v/s National Highway Authority of India held that, a provision for setting aside an award contending that the award is not sustainable in Law on any one of the grounds as indicated above can never be construed as a provision enabling the land owner for seeking enhancement of the compensation amount as determined by the arbitrator. The application filed for enhancement was not tenable.

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25. The Hon'ble Supreme Court in its decision reported in 2021 SCC Online SC 473 Project Director, National Highway v/s M.Hakim., has held that if one were to include the power to modify an award in Section 34, one would be crossing the lakshman rekha and doing what, according to the justice of a case, ought to be done. In interpreting a statutory provision, a judge must put himself in the shoes of parliament and then ask whether parliament

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intended this result. Parliament very clearly intended that no power of modification of an award exists in Section 34 of the Arbitration and Conciliation Act 1996. It is only for parliament to amend the aforesaid provision in the light of the experience of the courts in the working of the Arbitration Act. In view of the same this court is of the considered opinion that the suit is devoid of 13 merits. Hence point No.3 taken up for consideration is held in Negative.”

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Submissions:

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The submission of learned counsel for the appellant is that, the impugned judgment passed by the learned District Judge is not sustainable in the eyes of law in view of the fact that the land acquired by the respondent is 4 ft. and not 2 ft. for widening the road; whereas in the same area, the land of the neighbour was acquired only to the extent of 2 ft. This aspect was not considered by the learned District Judge. According to him, the existence of commercial buildings like oil mill, hotel, grocery shops, flour mill, etc., on which the appellant had spent around Rs.65,00,000/-, have not been

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considered for granting compensation. The Shirady Village is a business centered place. The value of the land considered by the competent authority is very low and not fair and reasonable. The appellant had suffered a loss of Rs.1,65,00,000/-, out of which the learned Arbitrator has awarded only a sum of Rs.75,75,884/-. He seeks setting aside of the arbitral award.

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On the other hand, learned counsel for the 2^nd respondent would justify the award of the learned Arbitrator as well as the order passed by the learned District Judge.

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Analysis:

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Having heard the learned counsel for the parties, the submissions of the learned counsel for the appellant, as noted above, are unmerited. The learned Arbitrator has applied his mind thoroughly and considered all aspects of the case before increasing the compensation amount over and above the compensation awarded by the 3^rd respondent-Special Land Acquisition Officer (‘SLAO’ for

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short). This is very clear from the findings arrived at by

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the learned Arbitrator on points No.1 and 2 as under:

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“Point No 1:- On perusal of records it is obvious that the 2^nd Respondent has passed award on 01-102015 and issued Gazette extra-ordinary u/s 3-A(1) of N.H Act 1956 through notification S.O.1677(E) Dated 02-07-2014 for acquisition of land for widening of NH-48(75). The award was published for the knowledge of general public in the daily news papers "Vijaya Karnataka" in Kannada language and "Deccan Herald" in English language on 16-08-2014.

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After conducting enquiry u/s 3-C, the final notification as per section 3-D(1) in respect of the award was published in the Gazette of India, extraordinary vide S.O.No.3279(E) dated 26-12-2014 and the same was published in daily news papers "Vijaya Karnataka" in Kannada language and "Deccan Herald" in English language on 06-01-2015.

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On 06-01-2015 notices were issued to the interested parties through news papers for filing their claims as per section 3-G of the said act and to appear on 19-01-2015 & 20-01-2015 along with relevant records.

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The 2^nd Respondent after verification of the records has passed the final award in LAQ/SLAO/HSN/AWARD/ DK/3&3A/Shirady/2015-16

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dated 01-10-2015 determining the amount of compensation to be paid to the land loosers as per section 3-G of the Act by taking into consideration of the average three year's sale statistics of lands and guidance value of the land surrounding the land acquired as on the date of Sec.3-A notification.

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Hence in my opinion the 2^nd Respondent has acquired land and passed the compensation award by following due procedures as laid down under the N.H. Act 1956 and there is no procedural error in the process.

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Point No 2: As per section 3-G (7) of the said Act 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 into consideration:-

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a) The market value of the land on the date of publication of the notification under section 3-A;

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b) The damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the severing of such land from other land;

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c) The damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the acquisition

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injuriously affecting his other immovable property in any manner, or his earnings;

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d) If, in consequences of the acquisition of the land, the person interested is compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change,

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As per the provisions of Sec. 105 of the RFCTLARR Act 2013, the provisions of the said Act is not applicable to the Land Acquisition cases of the N.H Act 1956. But the Ministry of Road Transport & Highways, Govt. of India in its letter No.11011/30/2015-LA dated 29-04-2015 has clarified that all the awards of compensation made on or after 01-01-2015 for acquisition of land under the N.H Act 1956 will be as per the FIRST SCHEDULE to the RFCTLARR Act 2013.

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In the present case, the 2^nd Respondent has determined award based on the provisions of Sec.3G(7)(a) to (d) of the N.H Act 1956. But the provisions of Sec. (b) (c) & (d) have not been taken into consideration properly. I have carefully considered the facts of the case. The Applicant suffer irreparable loss and perpetual revenue loss due to severing of acquired land from the rest of his land, demolition of building/structure and destruction of trees etc. Further, the district of Dakshina Kannada

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with Mangaluru city as its headquarters is densely populated and one of the fastest growing district. Hence the availability of land is scarce. The land acquired has good potential for future development. Hence on account of all these factors it is considered that the compensation determined by the 2nd Respondent is less than the reasonable rate.”

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The aforesaid would reveal that, the learned Arbitrator, noted the fact that the 3^rd respondent-SLAO has determined the compensation to be paid to the landlosers as per Section 3G of the National Highways Act, 1956 by taking into consideration the average three years sale statistics of the land and guidance value of the land surrounding the land acquired as on the date of Section 3A notification. That apart, the learned Arbitrator also by noting the fact that, the 3^rd respondent-SLAO has only determined the award on the basis of the provisions of Section 3G(7)(a) and not by considering the provisions under sub-sections (b), (c) and (d) and by holding that the appellant suffered irreparable loss and perpetual revenue loss due to severing of acquired land from the rest of his

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land, demolition of building/structure and destruction of trees and also the fact Dakshina Kannada with Mangaluru City as its headquarters is densely populated and one of the fastest growing district and availability of the land is scarce, the acquired land has good potential for future development, has increased the compensation at the rate

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of Rs.29,120/- per cent in respect of the converted residential land measuring 202.35 sq.mts. and Rs.2,839/per cent in respect of the dry land measuring 384.65 sq.mts.

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The aforesaid reveals, the learned Arbitrator has taken into consideration the effect of acquisition on the loss of revenue and also the fact that the buildings which were standing on the acquired land have been demolished, the compensation was increased. So in that sense, the pleas as urged by the learned counsel for the appellant by highlighting the aspect that the buildings which were standing on the acquired land have not been considered, is not tenable and contrary to the record.

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In the given facts, we are of the view that the impugned judgment and decree passed by the learned District Judge dismissing the suit under Section 34 of the Act of 1996 is justified, moreso in view of the law noted by the learned District Judge in the judgments of the Supreme Court in the cases of Union of India -Vs.-

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Tecco Trichy Engineers and Contractors [(2005) 4 SCC 230] and Dakshin Haryana Bijli Vitran Nigam Limited -Vs.- Navigant Technologies Pvt. Ltd. [2021 SCC OnLine SC 157] .

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We accordingly dismiss the appeal.

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No costs.

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Sd/(V KAMESWAR RAO) JUDGE

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Sd/(S RACHAIAH) JUDGE

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PA List No.: 1 Sl No.: 33

Sri. M a George v. the Arbitrator and Deputy Commissioner

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Sri. M a George v. the Arbitrator and Deputy Commissioner

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