Bangalore District Court
National Highways Authority Of India vs M/S Prestige Garden Resorts Pvt Ltd on 11 March, 2024
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A.P. No.143/2021
KABC010125942021
IN THE COURT OF THE II ADDITIONAL CITY CIVIL AND
SESSIONS JUDGE AT BANGALORE (C.C.H. No.17)
Dated this the 11th day of March 2024.
PRESENT:
Sri. Padma Prasad, B.A.Law.LL.B.
II Addl. City Civil and Sessions Judge, Bangalore.
: A.P. NO.143/2021
PETITIONER:
National Highways Authority of India.
Project Implementation Unit- Bengaluru
Sy.No.13, 14th K.M.
Nagasandra
Bangalore - Tumkur Road (NH-4)
Bangalore - 560 073.
Represented by its Project Director
(By Sri. SJP, Advocate)
Vs.
RESPONDENTS
1) M/s. Prestige Garden Resorts Pvt. Ltd.
Having its registered office at : 'Palcon House'
No. 1 Main Guard Cross Road
Bengaluru -560 001.
Represented by its Authorized Signatory
Mr. Nayeem Noor.
2) The Arbitrator & Special Deputy
Commissioner-I
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A.P. No.143/2021
Bengaluru Urban District,
Hyderabad - Bengaluru Section (NH-7),
Office of the Deputy Commissioner,
1st Floor, K.G. Road,
Bengaluru - 560 009.
3) The Special Land Acquisition & Competent
Authority,
National Highways Authority of India,
Hyderabad - Bengaluru Section (NH-7),
No.678/3, Neerubhavi Kempanna Layout
Hebbal, Bengaluru-24
Represented by the Special Land
Acquisition Officer
(R-1 - Absent )
(R-2 & 3 - Exparte)
: JUDGMENT :
The petitioner has filed this petition being aggrieved by the arbitral award passed by the Special Deputy Commissioner/Arbitrator, Bengaluru Urban District, Bengaluru, in No. LAQ/ARB/NH-7/CR/17/2014-15 dated 12.02.2021 pertaining to Sy. No.79 measuring 3737.5 Sq. Meters (40,215.5 Sq. feets) of Shettigere village.
.2. The definite case of the petitioner is that the Sy. No. 79 measuring 3737.5 Sq. Meters situated at 3 A.P. No.143/2021 Shettigere village, Bengaluru North Taluka, Bengaluru, belonging to the respondent No.1 has been acquired under Preliminary Notification under Section 3A(1) dated 09.12.2009 and Final Notification under Section 3D(1) and (2) vide S.O. No. 1622(E) dated 02.07.2010 and the said site has been acquired under Section 3(D)(1) and (2) of NH Act. The respondent No.3 has passed the award by adopting the rate of 1314 Sq. feet and in total a sum of Rs.5,28,43,167/- has been awarded as compensation and the said amount has been disbursed to the respondent No.1. The respondent No.1 received the said amount under protest and filed an application for enhancing proper and fair compensation. Accordingly, the said application is taken by the respondent No. 2 for consideration.
.3. In the said petition/proceedings before the respondent No.2, this petitioner filed statement of objections stating that the application filed by the petitioner for reference is not maintainable either in law 4 A.P. No.143/2021 or on facts. The respondent No. 1 has not produced any documents for enhancing the compensation. Further, it is claimed by the petitioner that the proper compensation has been awarded by the respondent No.3 and claimed that the respondent No. 3 has awarded excess amount than the market value of the property under Preliminary Notification. The petitioner in the objection statement also stated about the provisions of law and case Laws and prayed for dismissal of the reference.
.4. Thereafter, the Arbitrator hold an inquiry and passed common order in LAQ/ARB/NH-7/CR-17/2014- 15 dated 12.02.2021.
.5. Being aggrieved by the impugned Arbitral Award, the petitioner filed this petition under Section 34(2) of the Arbitration and Conciliation Act, 1996, setting up the following :
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A.P. No.143/2021 :GROUNDS:
The petitioner claims that the impugned award passed by the respondent No. 2 is perverse, patently illegal, capricious and goes against the very fundamental of Arbitration and Conciliation Act. The petitioner claims that the respondent No. 2 has not made any attempt to investigate the market value of the subject lands as on the date of publication of Preliminary Notification. The only observation made by the respondent No. 2 at page 4 of the impugned Arbitral Award is that the respondent No. 3 has obtained sale statistics from the office of the Sub- Registrar and determined the market value at Rs. 1,500/- per Sq. feet and added a percentage of 50 on the guidance value on the ground that the said additional was provided for under the Special instructions to the notification dated 21.09.2011 and also added a further percentage of 25 as enhanced without according any reasons and arrived at Rs. 2,625/- per Sq. feet by adding Rs. 1311/- to the compensation decided by the respondent No. 3 i.e., Rs.6
A.P. No.143/2021 1,314/- per Sq. feet in respect of acquired land and the Arbitrator for enhancement of compensation relied upon the guidance value for the year 2011-12 published under notification bearing No. CVC/19/2010-11 dated 21.09.2011 that provides the market value of the NA lands abutting National Highway was Rs.1,500/- per Sq. feet and accordingly, enhanced the compensation at Rs. 1,500/-
per Sq. feet and the said finding is completely irrelevant and the said document is not part and parcel of the arbitral proceedings and the said fact is also not brought to the notice of the petitioner. The respondent No. 2 in placing reliance upon the guidance value that came into the effect nearly 2 years after publication of the Preliminary Notification for the second stage of acquisition of lands in Shettigere village is highly atrocious and as such, it is illegal. The petitioner also stated about the provisions of law as well as decisions of the Hon'ble Supreme Court and Hon'ble High Courts and prayed to allow the petition as prayed.7
A.P. No.143/2021 .6. The respondents 1 to 3 though served with the notice, not chosen to appear before this Court to resist the petition. The entire records in LAQ/ARB/NH-7/CR/17/2014-15 secured from the Arbitrator.
.7. On the basis of above, the points for consideration are as under:
1) Whether the impugned award of the Arbitrator/SLAO is against law, fact, evidence and probabilities of the case and liable to be intervened by this Court?
2) What order or award?
.8. Heard the arguments. The learned advocate for the petitioner relied on judgments reported in (1) AIR 2003 SC 2629 (Oil and Natural Gas Corporation Ltd Vs. Saw Pipes Ltd); (2) (2009)10 SCC 259 (Som Datt Builders Vs. State of Kerala; (3) AIR 2019 SC 5041 (Ssangyong Engineering and Construction Co. Ltd Vs. National 8 A.P. No.143/2021 Highways Authority of India (NHAI) and W.A. No. 31066/2012 & 31094-96/2012 T. Yunis Vs. NHAI and others. Perused the materials on record, on that basis my findings on the above points are as under:
Point No.1 : In the affirmative Point No.2 : As per final order, for the following:
REASONS .9. POINT No.1: Before proceeding further in this case, it is relevant to note admitted and undisputed facts in this case. The respondent No.1 M/s. Prestige Garden Resorts Pvt. Ltd., is an owner of the lands in Sy. No. 79 measuring to an extent of 3737.5 Sq. Meters i.,e, 40,215.5 Sq. feet of Shettigere village and the said property has been acquired for widening of NH-7 under Preliminary Notification dated 09.12.2009 and Final Notification dated 02.07.2010 is an admitted fact. It is also an admitted and undisputed fact in this case that the respondent No.3/Special Land Acquisition and Competent Authority of National Highways Authority of 9 A.P. No.143/2021 India being a SLAO determined the compensation at Rs.
1,314/- per Sq. feet for the acquired land. It is also admitted and undisputed fact that a sum of Rs.
5,28,43,167/- was disbursed to the respondent No. 1 as compensation.
.10. Subsequent to the receipt of compensation or passing of the award, the respondent No. 1 M/s. Prestige Garden Resorts Pvt. Ltd., filed an application before the respondent No. 2 claiming that they are entitled for compensation at the rate of Rs. 12,000/- per Sq. feet. On basis of the said application, the respondent No. 2 hold an enquiry and passed common order in LAQ/ARB/NH-
7/CR-17/2014-15 dated 12.02.2021. The respondent No. 2 in its order enhanced the compensation at Rs. 1,500/-
per Sq. feet and added a percentage of 50 on the guidance value on the ground that the said additional was provided for under the Special instructions to the notification dated 21.09.2011 and also added a further percentage of 25 as enhanced without according any 10 A.P. No.143/2021 reasons and arrived at Rs. 2,6,25/- per Sq. feet by adding Rs. 1311/- to the compensation decided by the respondent No. 3 i.e., Rs. 1,314/- per Sq. feet.
.11. The said enhancement has been challenged by the petitioner in this petition. The grievance of the petitioner is that the respondent No. 2 without considering the relevant provisions of NHA Act and also without considering the guidance value or market value of the property as on the date of Preliminary Notification enhanced the compensation by relying on the guidance value of the year 2011-12 published vide notification bearing No. CVC/19/2010-11 dated 21.09.2011 and the said document is not part of arbitration proceedings. Further the preliminary notification is of the year 2009 and the Arbitrator / respondent No. 2 enhanced the compensation on the basis of the market value of the year 2011. In the case on hand, the Arbitrator has enhanced compensation to tune of Rs. 75%. Of course there is some reason for enhancement of 50%, but there 11 A.P. No.143/2021 is no reasoning for enhancement of 25% of the compensation amount. It is simply stated that 25% compensation has been enhanced by using the discretion. It is well settled principle of law that discretion must be used judiciously and not arbitrarily. What ever the enhancement has been granted by the Arbitrator, certainly effect the State or State Exchequer. Hence, Arbitrator shall give reasons for enhancement of the compensation. As already stated above, the Arbitrator / respondent No.2 has not given any explanation for enhancement of 25% in addition to 50%. Hence such enhancement cannot be accepted.
.12. The petitioner also claimed that the decision of the respondent No.1 based on the said notification is without knowledge of the petitioner and said guidance value of the year 2011-12 has not been brought to the notice of the petitioner. Accordingly, claimed that such award is liable to be set aside as per Section 24 of National Highways Authority Act. In this context, the 12 A.P. No.143/2021 petitioner relied on the decision reported in (2019) 15 SCC 131 in a case of Ssangyong Engineering and Construction Company Limited Vs. National Highways Authority of India. It is true that in the said decision, the Hon'ble Supreme Court held that whatever the document relied by the Arbitrator shall be brought to the notice of the parties, so that the parties can make submission or give a rebuttal evidence about such documents. However, in the case on hand, such notification is not found in the record received from the Arbitrator.
.13. In the case on hand, though the respondent No.1 served with the notice not chosen to appear before the court to resist the case of the petition case or to support the award passed by the respondent No. 2. Absolutely no material placed before the court to disbelieve the petition case or to substantiate the award passed by the respondent No. 2. Hence, this Court is of the humble opinion that the petitioner has made out sufficient grounds to intervene with the award passed by 13 A.P. No.143/2021 the Arbitrator and the award is liable to be set aside. Accordingly, the point No. 1 is held in the affirmative.
.14. Point No.2: In view of my above finding, I proceed to pass the following.
ORDER Petition is allowed.
Consequently, the award passed by the Arbitrator / respondent No. 2 in case No.LAQ/ARB/NH- 7/CR/17/2014-15 dated 12.02.2021 pertaining to Sy. No.79 measuring 3737.5 Sq. Meters (40,215.5 Sq. feets) of Shettigere village is set aside.
Office is directed to send the LCR.
(Dictated to the Stenographer Grade-I, transcribed by her, revised by me and after corrections, pronounced in open Court on this the 11 th day of March, 2024) (PADMA PRASAD) II Addl. City Civil and Sessions Judge, & Spl. Judge, Bangalore.
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