High Court
Legal Reasoning
15.2024ARBA.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAY,BENCH AT AURANGABAD.ARBITRATION APPEAL NO. 5 OF 2024 1.Paras Jawarilal Raka (G.P.A. Holder) Age-55 years, Occ : Farmer, 2.Prafulla Bansilal Chordiya Age- 70 years, Occ : Farmer, 3.Rajesh Prafullakumar Chordiya Age-45 years, Occ : Farmer, Appl. Nos.2 and 3 R/o 8, Manglam, Jai Nagar, Jalgaon. 4.Chandrashekhar Jawarilal Raka Age - 46 years, Occ : Farmer, Appli. No.1 & 4 R/o 180, Navi Peth, Jalgaon. Appli No.1 GPA holder for himself & Appli No.2 to 4. ..APPELLANTS -VERSUS-1.The Competent Authority (Land Acquisition), National Highway No.6 and Special Land Acquisition Officer, Jalgaon Address :- Collector Office, Jalgaon. 2.National Highway Authority of India,Project Implementation Unit Dhule Survey No.10/2, Plot No.11, Mansaram Nagar, Near Circuit House, Sakri Road, Dhule. ..RESPONDENTS WITH ARBITRATION APPEAL NO. 6 OF 2024 1.Sanjay Bhaulal Chaudhari Age-51 years, Occ : Farmer, GPA holder for himself & for Applicant No.2a to 2f and legal heir of Appli no.2. 25.2024ARBA.odt2.Bhaulal Kautik Chaudhari (Died) Through Lrs. 2a.Padmabai Bhaulal Chaudhari Age- 87 years, Occ : Nil, 2b.Gokul Bhaulal Chaudhari Age-65 years, Occ : Farmer, 2c.Indu Suresh Chaudhari Age-58 years, Occ : Housewife, 2d.Arun Bhaulal Chaudhari Age-58 years, Occ : Farmer, 2e.Rekha Manohar Chaudhari Age-54 years, Occ : Farmer, 2f.Kishor Bhaulal Chaudhari Age-48 years, Occ : Farmer, 2g.Rashi Shashikant Chaudhari Age-45 years, Occ : Housewife, Appli No.1, 2a, 2c, 2f R/o 308, Joshi Peth, Jalgaon. Appli No.2d, 2e R/o Kolhe Nagar, Jalgaon. Appli No.2b R/o Khote Nagar, Jalgaon. Appli No.2g R/o Warora, Tq. & Dist. Chandrapur. ..APPELLANTS -VERSUS-1.The Competent Authority (Land Acquisition), National Highway No.6 and Special Land Acquisition Officer, Jalgaon Address :- Collector Office, Jalgaon. 2.National Highway Authority of India,Project Implementation Unit Dhule Survey No.10/2, Plot No.11, Mansaram Nagar, Near Circuit House, Sakri Road, Dhule. ..RESPONDENTS 35.2024ARBA.odt...Advocate for appellants : Mr. M.R. MalpaniAdvocate for Respondent No.2 : Mr. D.S. Manorkar AGP for respondent/State : Mr. R.D. Raut …CORAM :ROHIT W. JOSHI, J. RESERVED ON : 07.07.2025PRONOUNCED ON : 14.07.2025PJUDGMENT :1.The present appeals are filed under Section 37 of theArbitration and Conciliation Act, 1996 (Hereinafter referred to as “Aand C Act”). The appellants in both the appeals will be referred as “landowners” and respondents will be referred as “NHAI”. 2.The lands of the appellants in both the appeals came to beacquired by NHAI under the National Highways Act, 1956 (Hereinafterreferred to as “NH Act”). The amount of compensation granted by theLand Acquisition Officer was not acceptable to the land owners andtherefore, they took resort to arbitration seeking enhancement ofcompensation as contemplated under Section 3-G(5) of the NH Act.Vide award dated 16th October, 2017, the sole arbitrator grantedenhancement in the amount of compensation. As regards the statutorybenefits, the learned arbitrator held that both the parties will abide bythe decision of the Hon’ble Supreme Court in SLP(Civil)
Legal Reasoning
45.2024ARBA.odtNo.15104/2024 pending before the Hon’ble Supreme Court of India. 3.Dissatisfied with the amount of compensation awarded,the land owners preferred two separate applications under Section 34of the A and C Act seeking enhancement in amount of compensation.Both these applications came to be dismissed by the learned PrincipalDistrict Judge vide judgment and order dated 15th March, 2022.Aggrieved by the dismissal of Section 34 applications, the presentappeals have been filed under Section 37 of the A and C Act. 4.Although, the enhancement in amount of market valuedetermined by the arbitrator was sought in Section 34 proceedings, thelearned counsel for the appellants has stated that the claim in thepresent appeals is restricted only to the statutory benefits payable tothe land owners as per the Land Acquisition Act (Hereinafter referredto as "LA Act"). The grounds in memorandum of appeals are also withrespect to statutory benefits payable as per the LA Act. 5.In this regard, it needs to be mentioned that Section 3-J ofthe NH Act provided that the provision of LA Act, 1894 will not beapplicable to acquisition under NH Act. However, Section 3-J of the NHAct was declared as unconstitutional by the Hon’ble Supreme Court in 55.2024ARBA.odtthe matter of Union of India and another Vs. Tarsem Singh and othersreported in (2019) 9 SCC 304. This judgment was delivered on19.09.2019. 6.Since the only contention in the present appeals pertains togrant of statutory benefits, the relevant clause in the operative order ofthe award passed by the learned arbitrator is reproduced hereinbelowfor ready reference :- "(6) Both the parties shall abide by and execute theratio of the decision of the Hon'ble Supreme Court inSLA (Civil) 15104/2014, as and when it is finallydecided in respect of claim of statutory benefits underthe Land Acquisition Act, 1894." 7.The aforesaid clause makes reference to SLP (Civil)No.15104/2014, which was disposed of by the Hon’ble Supreme Court,vide order dated 21.07.2016. It appears from perusal of the said orderthat the High Court had granted solatium to the land owners inaddition to the compensation payable for the lands acquired under theprovisions of NH Act. The Union of India had challenged the saidjudgment before the Hon’ble Supreme Court. However, during thecourse of hearing, a statement was made by the learned SolicitorGeneral of India that solatium in terms of the order passed by the High
Decision
65.2024ARBA.odtCourt would be paid to the land owners. In view of the abovestatement, the SLP was disposed of with directions to pay the amountof solatium to the land owners along with interest thereon. 8.Although, SLP was disposed of on 21.07.2016, it appearsthat the parties were not aware about the same and the learnedarbitrator was, therefore, not apprised about the said order dated21.07.2016. In view of the aforesaid, the arbitrator has directed thatthe parties will be bound by outcome of the said SLP. 9.As stated above, the Hon’ble Supreme Court has declaredSection 3-J of the NH Act as unconstitutional in the matter of TarsemSingh (supra). The Hon’ble Supreme Court has issued followingdeclaration in para 52 of the order :- "52. .... We therefore declare that the provisions of theLand Acquisition Act relating to solatium and interestcontained in Sections 23(1-A) and (2) and interestpayable in terms of Section 28 proviso will apply toacquisitions made under the National Highways Act.Consequently, the provision of Section 3-J is, to thisextent, violative of Article 14 of the Constitution ofIndia and, therefore, declared to be unconstitutional." 10.In view of clear exposition of law by the Hon’ble Supreme 75.2024ARBA.odtCourt, there is no doubt with respect to entitlement of the appellants toreceive solatium and interest payable under Sections 23(1-A) and (2)and Section 28 of the LA Act. Clause (6) of the award, as stated above,directs that the parties will be bound by adjudication of SLP (Civil)No.15140/2014, where directions were issued for payment of solatium.In the said matter, directions are not issued for payment of interest asper Sections 23 and 28 of the LA Act. 11.The issue that falls for consideration in the present appealsis that whether the relief of statutory benefits could be awarded by thelearned District Judge while entertaining the application under Section34 and/or by this Court while entertaining the appeal under Section 37of the A and C Act. 12.In this context, it will be profitable to refer to a divisionbench judgment of this Court in the matter of Rishabhkumar BabulalJejani Vs. Secretary to the Government of India and others reported in2022 (1) B.C.R. 659. The judgment is delivered in an appeal filedunder Section 37 of the A and C Act. The land owners had prayed forgrant of solatium and interest in view of the judgment of the Hon’bleSupreme Court in the matter of Tarsem Singh (supra). The DivisionBench has taken note of the judgment of the Hon’ble Supreme Court 85.2024ARBA.odtwhereby Section 3-J of the NH Act was held to be unconstitutional andthe land owners were declared to be entitled to solatium and interestunder Sections 23(1-A), 23(2) and 28 of the LA Act. 13.Having noticed the said judgment, the Division Benchposed a question to itself, as to whether the statutory benefits whichwere not granted by the arbitrator could be granted in an appeal underSection 37 of the A and C Act and further as to whether granting suchamount would amount to modification of the award. In the judgmentof the Hon’ble Supreme Court in the matter of Project Director,National Highways No.45 E and 220 National Highways Authority ofIndia Vs. M. Hakeem reported in 2021 AIR (SC) 3471, wherein theaward passed by the arbitrator under the NH Act cannot be modified ina proceeding under Sections 34 and 37 of the A and C Act was noticedand in the light of the aforesaid judgment, it is held that the awardpassed by the arbitrator can either be confirmed or struck down in aproceeding under Section 34 and/or appeal under Section 37 of the Aand C Act and that the courts exercising jurisdiction under Sections 34and 37 of the A and C Act do not have jurisdiction to modify the award.In the light of above, it is held in paragraph 39 of the judgment asunder :- "39. As has been pointed out by us hereinabove,McDermott (supra) has been followed by this Court in 95.2024ARBA.odtKinnari Mullick (supra). Also, in Dakshin Haryana BiljiVitran Nigam Ltd. v. Navigant Technologies Pvt. Ltd.,2021 SCC OnLine SC 157, a recent judgment of thisCourt also followed McDermott(supra) stating thatthere is no power to modify an arbitral award underSection 34 as follows:- (f) In law, where the Court sets aside the awardpassed by the majority members of the tribunal,the underlying disputes would require to bedecided afresh in an appropriate proceeding. Under Section 34 of the Arbitration Act, the Courtmay either dismiss the objections filed, anduphold the award, or set aside the award if thegrounds contained in sub-sections (2) and (2A)are made out. There is no power to modify anarbitral award."14.The said judgment in the matter of Rishabhkumar (supra)is recently followed by a learned Single Judge (Civil AppellateJurisdiction) in judgment dated 09.06.2025 in Arbitration Appeal(Stamp) No.22121/2023 and other connected appeals. The conclusionsare drawn by the learned Single Judge following the judgment in thematter of Rishabhkumar (supra) and M. Hakeem (supra) by holdingthat although, the statutory benefits are payable to land owners in viewof the judgment in the matter of Tarsem Singh (supra), the samecannot be awarded by a court exercising jurisdiction either under 105.2024ARBA.odtSection 34 and Section 37 of the A and C Act if the arbitrator has notawarded the same. 15.It will be pertinent to mention here that a Division Benchof this Court (civil appellate jurisdiction), vide its judgment dated09.05.2025 passed in Writ Petition No.9608/2023 and other connectedpetitions has directed NHAI to pay land owners statutory benefits ofsolatium and interest in terms of the judgment of the Hon’ble SupremeCourt in the matter of Tarsem Singh (supra). While issuing the saidmandamus objection pertaining to alternate remedy of taking recourseto Section 34 came to be rejected. The Division Bench has taken intoconsideration the judgment in the matter of Rishabhkumar (supra) tohold that the relief of statutory benefits cannot be granted by Courtunder Section 34 or 37 of the A and C Act. Relevant observations in thejudgment are as under:- "9. ..... There is no point in relegating the Petitioners tothe remedy under Section 37 of the Arbitration Act,when the relief they claim cannot be granted undersuch proceedings. 10.If we were to relegate the Petitioners to theremedy of Section 37, the Appeal Court, being boundby the decision in Rishabhkumar (supra), would haveno option but to dismiss such appeals by declining tomodify the arbitral award. This would be futile. Such a 115.2024ARBA.odtremedy can hardly be called an efficacious one.Accordingly, we reject the unfortunate contention thatthese Petitions should not be entertained because thePetitioners have an alternative remedy under Section37 of the said Act." 16.It will also be appropriate to refer to paragraph 13 of thejudgment, where the Division Bench has recorded that NHAI did nothave any objection regarding entitlement of the land owners to receivesolatium and interest in terms of the judgment in the matter of TarsemSingh (supra), the relevant portion whereof reads as under :- "13.In all these matters, as noted earlier, there is nodispute about the Petitioners being entitled to thebenefits of the solatium and interest under the decisionof the Hon'ble Supreme Court in Tarsem Singh(Supra)." 17.It will be pertinent to mention that the petitioners/landowners in the said matters had initially filed objection under Section 34of the A and C Act raising grievance with respect to non-payment ofsolatium and interest in terms of Tarsem Singh (supra). The learnedDistrict Judge held that the land owners were entitled to receivesolatium and interest as per Tarsem Singh (supra), however, thelearned District Judge expressed inability to pass judgment for paymentof the said amount in view of the judgment in the matter of 125.2024ARBA.odtRishabhkumar (supra). In view of the aforesaid the said petitions cameto be filed seeking a writ of mandamus for payment of statutory dues. 18. Likewise vide judgment dated 08.04.2025 passed in WritPetition No.11932/2019 (civil appellate jurisdiction) and otherconnected maters, directions were issued for payment of solatium andinterest for land acquired under the NH Act in a petition filed underArticle 226 of the Constitution of India. 19.In view of the aforesaid, the entitlement of the appellantsto receive solatium and interest for their lands cannot be disputed,however, at the same time, it will not be permissible for this Court tomodify the award in order to direct payment of statutory benefits to theappellants since the same will amount to modification of award, whichis beyond the scope of jurisdiction of this Court while entertainingappeal under Section 37 of the A and C Act. 20.As noted above, arbitral tribunal vide clause (6) of theoperative order in the award has held that both the parties shall abideby the decision in SLP (Civil) No.15105/2024. However, in the saidmatter, on a statement made on behalf of the Union of India, directionsare issued for payment of solatium, however, directions are not issued 135.2024ARBA.odtfor payment of interest. The appellants are also entitled for payment ofinterest in addition to solatium. NHAI has not challenged the awardpassed by the arbitrator. NHAI is, therefore, directed to deposit theamount of solatium payable to both the land owners along with interestwith this Court on or before 31st August, 2025. As regards the interest,the appellants are at liberty to avail of appropriate remedy with respectto the same. 21.In view of the above, the appeals are disposed of with noorders as to costs. 22.Civil Applications, if any, stand disposed of. [ROHIT W. JOSHI]JUDGEsga/