This Case commentary is written by Viswa Ganesh K, a Fourth-Year law student of School of Excellence in Law, Tamil Nadu Dr Ambedkar Law University

Case Details:-

Court - Hon’ble Supreme Court of India

Equivalent Citation - AIR 2021 SC 3471

Justice/Bench - B R Gavai and R F Nariman

Case Type – Special Leave Petition (Civil)

Decided on – 20th July 2021

Parties:-

Appellant: The Project Director, NHAI

Respondent: M. Hakeem & Anr.

ABSTRACT

The land acquisition made by the government is based upon the public purpose and public interest. It should not prejudice the owner of the land. The government has to compensate the owner, occupier, or possessor of the land in a manner of just, equitable, reasonable, and not illusory. Here, the land is acquired by the National Highway Authority for the construction of the Highways on that land. The amount granted by the central government authority would not be sufficient for the landholders. Then the matter reached the arbitral tribunal and the award was passed. But it won’t be sufficient. The District Court decided to increase the amount of compensation mentioned in the award which was supported by the High Court. Finally, the matter reached the Apex Court to seek the proper justice.

INTRODUCTION

The NHAI has the power to acquire the land for the construction of the High Ways and it is largely utilized by the people in the country. It would be compensated as equivalent to the market value of the land, must be just, fair, and reasonable, and not be illusory to the aggrieved families, their livestock, and their buildings in that land. Additionally, the mental agony is compensated by the government as in the name of solatium, the owner had to leave their habitat and their neighbours.

Here, the parties would be aggrieved by the national highway’s authority in terms of the amount of compensation given to their land. It is not at all related to the sale deed of the property, minimal award was passed. The justification made by the government upon the acquisition of the land involves the public purpose under the Land Acquisition Act. It is referred to the arbitration to the District Court and then the High Court. Finally, the matter reached the Apex Court for adjudication, the justice would be served upon the interest of the public in the welfare nation.

FACTS OF THE CASE

The NHAI issued several notifications upon the acquisition of the land under the National Highways Act of 2009. It empowers the central government to acquire the land for the construction of the national highway for public use. The competent authority had the power to determine the amount of compensation payable to the mandatory acquisition of the land. In contrast, if the party is feeling aggrieved with the amount of compensation, then the parties have the opportunity to make an application before the central government under section 3G (5) of the NH Act and determined by the arbitrator appointed by the central government.

In the present case, the Special District Revenue Officer (SDRO), a competent authority dealt with this matter and awarded the compensation as prescribed by the guideline value of the respective land to the owners of the land. They were not satisfied with the amount of compensation. The aggrieved parties moved on to the appeal before the District and Sessions Judge under Section 34 of the Arbitration and Conciliation Act, 1996 and the court ordered to increase the awarded compensation. It was challenged in the Hon’ble High Court of Madras and upheld the decision. So, the NHAI appealed to the Hon’ble Apex Court.[1]

ISSUES RAISED BEFORE THE COURT

1. Is the power of the arbitrator to set aside the award including modification of the award under section 34 of the Act, 1996, or not?

2. Whether the compensation made by the competent authority under the NH Act been final or not?

ARGUMENTS FROM THE APPELLANT SIDE

The land acquisition process would be speed-up by the NHAI upon the construction of Highways for public purposes under the National Highways Act, 1997. It is specified in section 3 of the Act. The amount of compensation would be determined by the competent authority and the Land Acquisition Act prescribes the detailed procedure for the determination of the amount of compensation to the appellate court.[2]

Section 34 of the Arbitration and Conciliation Act, 1996, settled a law that ensures the award could not be altered upon the merits of the case and no power had been vested in the appellate court under the Land Acquisition Act. It is aligned with the provisions of the UNCITRAL Model Law. The Counsel quoted that the modification of an award would not be possible as per the decree of the Balaswamy V. ISG Novasoft Technologies Limited by the Madras High Court.

ARGUMENTS FROM THE RESPONDENT SIDE

The compensation would be abysmal as it was not relevant to the sale deed of the acquisition of the properties by the central government. The District Judge ordered to increase the amount of compensation and to deposit the amount of the entire award in the court. The Appeal was not allowed to be filed against the judgment of the district court by the NHAI comes under the scope of Art. 12 of the Supreme Law of the land.[3]

The Single Judge laid down the distinction between the consensual arbitration and the appointed arbitration made by the central government as per the Gayathri Balaswamy.[4] Case.

RELATED PROVISIONS

Arbitration and Conciliation Act, 1996

Section 34 deals with the Application for setting aside arbitral awards and the time limit to challenge an Award before the court.

National Highway Act, 1956

Section 3(a), Section 3A, and Section 3G deal with the determination of the amount payable as compensation to the owner or any other person who had the right to enjoyment over the land.

JUDGEMENT AND ITS ANALYSIS

The Arbitral tribunal highlighted that the process of the alternate dispute resolution was to ensure the minimum intervention by the court under section 34 of the Arbitration and Conciliation Act, 1996, and also pointed out in the UNCITRAL Model Law adopted. The decision of the Delhi High Court in Cybernetics Network Pvt. Ltd V. Bisquare Technologies, held that the jurisdiction under this section made the court incapable body to dealing with the already settled matter in the Arbitration Tribunal.

The Supreme Court analysed the nature and scope of the Highway construction and the awarded compensation and also stated that the wording of section 34 of the Act, 1996 dealt with the power to modify, revise, or change awards was not relevant, by exercising its power under the Article 142 of the Supreme law of the land.[5]

The Apex Court held that the petition was dismissed and ordered that the increase in the awarded compensation made by the lower court was valid as it involved the greater public interest, prejudiced by the National Highway Authority of India.

The Apex Court highlighted that the arbitration is independent of the influence of the court, the ultimate decision authority vested with the parties themselves. They have autonomy over their outcome in the terms of the award and binding upon them. In Contrast, it had the power to minimal interference with the award to annul the whole or part of it to serve the ends of justice to the society.

The public interest should always prevail over the private interest. But the private interest won’t be ignored by the government upon the land acquisition matters. To deal with those matters, the Land Acquisition Act of 2013 prescribes the provision for a fair, just, and reasonable amount of compensation including mental agony and solatium.

In the landmark judgment of McDermott International Inc. V. Burn Standard Co. Ltd, the SC held that the court had no authority to modify an arbitrator’s mistake, their powers would be limited to quashing the award, allowing the parties to commence with the fresh arbitration proceedings under the section 34 of the Arbitration and Conciliation Act, 1996[6]. At the same time, it contravenes public policy and the larger public interest, the court had the power to modify such an award as per the 2015 amendment and made it align with Article 34 of the UNCITRAL model law.

CONCLUSION

The Right to property had been shifted to the constitutional right from its sphere of fundamental right as done with the purpose of acquiring the land for the public purpose. It was the exclusive power vested with the appropriate government upon certain welfare matters. As of earlier, the court dealt with many numbers of cases as the compensation won’t be sufficient as to the market value of the land.

In comparison with the developed nations, the alternate dispute resolution would reach its high value and status among the people of the US and UK within their jurisdiction. The arbitral award won’t be modified by the court as it is left with the statutes made by the parliament. In India, the same application would be there and in contrast, the land acquisition act provides a mechanism to approach the grievance settlement authority and the option to approach the court where justice is not been served as expected. At last, the legislature as well as the judiciary had to serve the greater public interest with the satisfaction of the private interest in the democratic nation.

REFERENCES

1. Devansh Dixit, The Project Manager, Nhai V. M. Hakeem & Anr: A Critical Analysis, (Nyaayshastra Law Review, Gujarat) 149-154.

2. https://indianarbitartionlaw.com

3. https://jgu.edu.in

4. Gayatri Balaswamy V. ISG Novasoft Technologies Ltd., 2019 SCC OnLine Mad 15189.

5. https://indiankanoon.org

6. https://main.sci.gov.in

[1] Devansh Dixit, The Project Manager, Nhai V. M. Hakeem & Anr : A Critical Analysis (Nyaayshastra Law Review, Gujarat) 149-154.

[2] The Project Manager, Nhai V. M. Hakeem & Anr.: SC settles the scope of modifying an arbitral award, https://indianarbitartionlaw.com accessed Sep 10, 2024.

[3] The Project Manager, Nhai V. M. Hakeem & Anr| Mapping ADR, https://jgu.edu.in accessed Sep 11, 2024.

[4] Gayatri Balaswamy V. ISG Novasoft Technologies Ltd., 2019 SCC OnLine Mad 15189.

[5] The Project Manager, Nhai V. M. Hakeem & Anr, https://indiankanoon.org accessed Sep 12, 2024.

[6]The Project Manager, Nhai V. M. Hakeem & Anr, https://main.sci.gov.in accessed Sep 13, 2024.