Bangalore District Court
National Highways Authority Of India vs M/S. Mohan Aluminium on 7 February, 2020
IN THE COURT OF XV ADDITONAL CITY CIVIL &
SESSIONS: JUDGE AT BENGALURU (CCH.NO.3)
Dated this 7 th day of February 2020.
A.S No. 177/2017
Present :- Sri. Jaishankar . B.Sc., LL.M.
XV Additional City Civil &
Sessions Judge, Bengaluru.
Plaintiff :- National Highways Authority of India,
Survey No.13,
Nagasandra Village,
14th Km From
Bangalore - Tumkur Road,
Bangalore - 560 073.
Represented by its Project Director,
NHAI, PIU Bangalore.
(Rep. by Sri.R.K.S., Adovate)
V/s
Defendant :- 1. M/s. Mohan Aluminium
Pvt. Limited,
Having its registered office at No.228,
Uppar Palace Orchards,
Sadashivnagar,
Bangalore - 560 080.
Represented by its Managing Director
Mr.Rajesh Jain.
(Rep. by Sri.N.R.R., Adovate)
2. The Arbitrator & Special Deputy
Commissioner-1,
Bangalore Urban District,
Kandaya Bhavana,
K.G.Road,
Bangalore - 560 009.
3. The Assistant Commissioner &
Competent Authority,
National Highways Authority of India,
Mulabagilu-Kolar-Bangalore Section,
NH -4,
3rd Main Road, Palasandra Layout,
Gulpet,
Kolar - 563 102.
(D1 and D2 Exparte)
Date of Institution of the
suit: 11.12.2017
Nature of the Suit (suit for
pronote, Suit for
declaration and Arbitration Suit
Possession,
Date of the
commencement of NIL
recording of the Evidence:
Date on which the
Judgment was
pronounced: 07.02.2020
Total duration: Year/s Month/s Day/s
02 01 26
J U DG ME N T
The plaintiff has filed the suit praying to set aside
Arbitral award passed by the 2nd defendant in Case No.
ARB/NH-4(BET)/180/2010-11 dated 07.09.2017 and to
grant such other reliefs as the Court may deem fit.
2. The brief averments of the application/plaint filed
under Section 34 (2) of the Arbitration and Conciliation
Act 1996 is as hereunder :-
That they have filed this suit highly aggrieved by the
arbitral award passed by the order passed by the 2 nd
defendant in case ARB/NH-4(BET)/180/2010-11 dated
07.09.2017. The plaintiff Authority of India was
constituted by an Act of parliament, "The National
Highways Authority of India Act, 1988". It is responsible
for the Development, Maintenance and Management of
National Highways entrusted to it and for matters
connected or incidental thereto. The Central Government
for the purpose of widening and upgradation (four/six
laning) of Mulabagilu-Kolar-Bangalore Section from Kms.
237 to 320 issued Preliminary Notification bearing
No.S.O.1032 (E) under Section 3-A(1) of the National
Highways Act 1956 in respect of acquisition of lands
situated at Bhattarahalli Village, Bidarahalli Hobli,
Bangalore East Taluk amongst other lands which was
published in the official Gazette on 28.04.2008. followed
by public notice under Section 3-G(3) published in two
local newspapers i.e., Kannada Prabha & Times of India
on 22.12.2008 inviting claims from all the persons
interested in the land to be acquired.
3. Further case of the plaintiff is that an enquiry
under Section 3-G(4) was conducted on 28.01.2009.
Hence, the procedures as mandated under National
Highways Act was duly complied before passing of the
award. Under the said Notification amongst other lands
acquired, the dry (agricultural) lands in Sy. No. 29/1 to
an extent of 64 Sq.Mtrs situated at Bhattarahalli Village,
Bidarahalli Hobli, Bangalore East Taluk belonged to the
1st defendant was also acquired. In accordance with
Section 3(a) of the National Highways Act, the 3 rd
defendant was appointed as the Competent Authority by
the Central Government to perform the task related to
acquisition of land for the Project including hearing of
objection, deciding on objection, determination of
compensation and releasing of such compensation. The
3rd defendant vide his award dated 20.04.2009 bearing
No.LAQ/NH-7/NH-4/S.R.2/2007-08 determined the
market value of NA lands at Rs. 8,341.79/- per Sq. Mtr.
In Order to determine the market value, the 3 rd defendant
has obtained both the sales statistics for the period
08.11.2007 to 08.11.2008 (one year) as well as the
Guidance Value for the relevant period for lands situated
at Bhattarahalli Village from the office of the Sub-
Registrar, K.R. Puram Taluk. The 3rd defendant observed
that there was no sale transactions in respect of NA lands
and the guidance value was Rs. 8,341.79/- per Sq. Mtr.
Considering the actual physical characteristics of the
acquired lands after sport inspection, the 3 rd defendant
relied upon the Guidance value and accordingly
determined the market value as Rs.8,341.79/- per
Sq.Mtr. for NA land. Therefore, the compensation
awarded is in accordance with Section 3-G(7) (a) of the
National Highways Act. While determining the amount of
compensation, the market value of the lands as on the
date of Preliminary Notification has to be taken into
consideration. The compensation for trees and structures
falling in the acquired extent was paid in accordance with
the valuation report of the approved Government
Valuators. The 1st defendant during the award enquiry
had claimed a sum of Rs. 32,280/- sq.Mtr as
compensation in respect of the subject lands. But, the 1 st
defendant did not produce any documents during the
enquiry to prove the same. At the time of publication of
Preliminary Notification, an amount of Rs.5,33,875/- was
disbursed as compensation towards the lands, structures
and trees respectively to the 1st defendant.
4. Further case of the plaintiff is that being aggrieved
by the award passed by the 3rd defendant, the 1st
defendant approached the 2nd defendant who was
appointed as an Arbitrator by the Central Government
under Section 3-G(5) of the National Highways Act,
seeking enhancement of compensation. The Arbitration
proceedings was instituted in case No.ARB/NH-
4(BET)180/2010-11 seeking enhancement of
compensation along with interest for the subject land.
They entered appearance and filed written submissions
with several Judgments in support of its defense. The 2 nd
defendant however without application of mind and
proper appreciation of facts enhanced the compensation
from Rs. 8,341.79/- per Sq. Mtr to Rs. 25,025.37/- per
Sq.Mtr thereby determining the compensation for the
subject lands by three times of the market value
determined by the 3rd defendant without assigning any
reasons. The 2nd defendant has also awarded interest at
the rate 9% p.a. from the date of taking possession of the
lands till actual payment and user charges under Section
3-G (2) of the National Highways Act at the rate of 10%
p.a. The said order passed by the 2 nd defendant is
perverse, patently illegal, capricious and against the very
fundamentals of Arbitration and Conciliation Act, 1996.
The 2nd defendant has grossly erred in not following the
provisions of Section 3-G (7) (a) of the National Highways
Act while passing the impugned award which is contrary
to provisions of Section 28 of Arbitration and
Conciliation Act. The 2nd defendant had completely failed
to follow the mandatory procedure prescribed under
section 31(3) of the Arbitration and Conciliation Act,
thereby rendering the impugned order patently illegal as
held by the Apex Court in ONGC Ltd v Saw Pipes Ltd
reported in AIR 2003 SC 2629. The 2 nd defendant has not
assigned any reasons for fixing the compensation amount
at three times of the amount already paid by the 3 rd
defendant especially when the parties had neither agreed
that no reasons should to be given nor the impugned
order is an award on agreed terms under Section 30 of
the Arbitration and Conciliation Act.
5. Further case of the plaintiff is that the 2 nd
defendant has completely lost sight of the fact that the 3 rd
defendant had determined the market value of the
subject lands considering the guidance value and sale
statistics for the relevant period which was in accordance
with the provisions of the National Highways Act. The 2 nd
defendant has observed at para4(1) page 3 that the 1 st
defendant is a farmer and is earning livelihood by way of
agriculture. The defendant has stated NA lands belonging
to the 1st defendant are acquired which an error apparent
on the face of record. Various Courts have held that the
Courts may consider the acquired lands as having
potential value by considering the sale instances and
deduct reasonable developmental charges in order to
give the Claimant the benefit of higher compensation by
treating agricultural lands as having potential value to be
utilized for non-agricultural purpose in future. Such
criteria including the requirement of the claimant proving
that the acquired lands are situated within the developed
area of municipal limits and production of sale instances
by him are not considered. There are no materials to
establish that the 1st defendant has fulfilled the criteria
by producing relevant documents or instances. It is also
observed that in view partial acquisition of various lands,
the remaining portion of the lands have become useless
without any documents on record. The 2 nd defendant has
not even verified or mentioned what was the total extent
of land belonging to the 1st defendant and what is the
actual extent of land acquired which has resulted in the
alleged severance of land in order to come to such a
conclusion. The 2nd defendant has held that all the
subject lands are abutting National Highway on account
of which their market value was obviously higher than
what was determined by the 3 rd defendant and there is a
distinction between the market value determined out of
sales statistics and guidance value from the actual
market value of lands which is highly capricious. The 2nd
defendant has ultimately not explained what is the actual
market value referred to in the impugned order. The 2 nd
defendant has also held that there is a provision for
giving 10% more compensation on the basis of the
Judgment of the Hon'ble Apex Court in 2009 AIR SCW
page 1515 which is totally misconstrued. The said
Judgment referred to by the 2nd defendant is not passed
by the Hon'ble Apex Court and it is only reported in
Hon'ble Supreme Court Weekly Reporter. The facts of the
said case are entirely distinct and the same has no
applicability to this case. Absolutely, no discussion of
the contentions raised by them in the statement of
objections as well as written submissions made by them.
6. Further case of the plaintiff is that the 1st
defendant has to establish the market value as on the
date of Preliminary Notification and the 2 nd defendant
has erroneously without any basis, on assumptions
determined the market value of the subject lands as
three times. No reasons have been assigned by the 2 nd
defendant for enhancement. There is a time gap of 11
months between the issuance of Final notification and
award Notice and if compensation was disbursed in 2007
itself, the 1st defendant would have had an opportunity
to purchase some other lands. It is completely contrary
to the provisions of National Highways Act. The 2 nd
defendant in page 4 at para 7 has rejected the contention
of the 1st defendant that guidance value as on the date of
passing of the award should be taken into account for
determination of compensation on the ground of Section
3-G(7) (a) of the National Highways Act, it is the market
value as on the date of Preliminary Notification only
should be taken into account. Therefore, the 2 nd
defendant has not looked into the relevant provisions of
law, but has intentionally given the land loser the benefit
of higher compensation without any basis for the reason
best known to her. It is a settled principle of law that it is
only the market value as on the date of publication of
Preliminary Notification is relevant for determining the
market value under Section 3-G(5) of the National
Highways Act. But, contrary to this, 2 nd defendant has
taken into account the present market value, which is
evident from the statement recorded at para 4 of page 3
wherein it is observed by the 2 nd defendant that there is
an escalation in the market value every year. The said
reason is in conflict with the public policy of India and it
deserves to be set aside, because the subject lands have
already been utilized for the formation of road and project
is complete and since the 2nd defendant is not aware
whether the subject lands are a part of a larger extent of
land owned by the 1st defendant. The impugned order is
completely bald and lacks any reasoning and there is
absolutely no discussion about any of the documents and
judgments relied upon by them. The 2 nd defendant has
not all considered the merits of the case and has simply
gone by the formula of three times. There are no reasons
forthcoming from the impugned order as to how the 2 nd
defendant has arrived at specific conclusion to enhance
the compensation by for fixing it three times which is
clearly against the law laid down by the Hon'ble Apex
Court in SomDatt Builders Ltd. V/s State of Kerala 2010
2 AWC (Supp) 1390 SC. The 2 nd defendant has passed the
impugned order without proper application of mind
which has resulted in serious miscarriage of justice. The
non-adherence of the provisions of Section 3-G(7) of
National Highways Act is perverse and against all
cannons of law. The 2nd defendant has not assigned any
reasons for enhancement of compensation and reasons
assigned are fictitious and preposterous. The order is not
a speaking order and the same is liable to be set aside.
Hence, the suit.
7. The defendants No.2 and 3 though served with
summons they have remained absent and as such they
were placed exparte. The defendant No.1 has appeared
through his Counsel and has filed his objection and has
contended as follows :-
That the suit filed by the plaintiff is not maintainable
either in law or on facts. The suit of the plaintiff is highly
frivolous, vexations, tainted with malafide objects, illegal
motive and also to harass him. The averments made in
the plaint are all false. The defendant No.3 has acquired
his land in two stage i.e., in the 1st stage of land
measuring 1,772 sq.mtrs and in the 2 nd stage, land
measuring 64 sq.mtrs was acquired. The plaintiff has
requested the defendant No.3 for acquisition of adjacent
lands of existing National Highway No.4 for the purpose
of widening of the Mulbagilu-Kolar-Bangalore Noational
Highway No.4. Accordingly, preliminary notification
issued on 14.12.2006 and Final Notification was issued
on 14.11.2007. He had filed a claim application
contending to pay the compensation under prevailing
market value to the acquired land and to other collateral
losses which are affected due to land acquisition at the
time of 3A(1) Gazette Notification before the defendant
No.3. The defendant No.3 has not offered an opportunity
of hearing on the claim application and straightaway
passed the impugned award calculating the
compensation at the rate of 6,996.34 per square meter
and issued a joint Award notice. The defendant No.3 has
not followed Section 3G(7) of the Act while determining
the market value and taken the basis of award on the
Sub-registrars guideline value rate effective for the period
18.12.2003 to 18.12.2006 and arrived at a meager
compensation which is not proper. However, he has
received the deposited award amount under protest. He
had preferred the appeal before the Hon'ble Arbitrator
and Deputy Commissioner, Bengaluru for enhancement
of compensation. After contest between the parties, the
Deputy Commissioner has allowed the said appeal partly
on 07.12.2017 by fixing the compensation amount at the
rate of Rs.2,470/- per sq.ft with interest 9% p.a., along
with 10% easement. The award of compensation passed
by the defendant No.3 is not based on any strong
evidence of prevailing market valuation of the lands. By
observing all the aspects, defendant No.2 has rightly
enhanced the compensation to the acquired land. Now a
days to purchase a land in the vicinity of the acquired
land costs high budget and compensation amount is
wrongly assessed by the defendant No.3. He has become
a victim. It is a clear violation of fundamental rights to
livelihood guaranteed under the Constitution of India.
8. The defendant No.1 has further contended that
Rules 98 and 99 of the Land Acquisition Manual provide
that if the land is agricultural and is likely to be used for
commercial establishment, especially when the
residential and commercial constructions are already
situated in the adjoining lands, they are also relevant
for fixation of compensation of the land. The defendant
No.2 has taken into consideration all the aspects rightly
and as allowed the appeal. The value of the acquired
land of the project affected person shall be determined for
the purpose of payment of compensation without
depreciation. The affected persons in the project will be
entitled to four types of compensation and assistance
which are compensation for loss of land, crops/trees,
compensation for structures (residential/commercial) and
other immovable assets. They are also entitled for
assistance for loss of business/wage income and re-
building and/or restoration of community
resources/facilities. The main categories underwent
impact of disturbance in the life and livelihood as a result
of the project which includes loss of commercial
establishments, loss of commercial space, loss of
residential (dwelling) units, loss of livelihood and loss of
common property resources and also the common
property that are utilized by the affected community
persons for their everyday civic requirements. He was
compelled to lose his commercial land due to
implementation of the project. The 3 rd defendant while
determining the compensation for the acquired land has
wrongly applied the Guide Line market value and thereby
arrived at a meager compensation to the acquired land,
which is not scientifically assessed. Therefore, the
defendant No.2 has considered these aspects and rightly
allowed the appeal filed by him. Under Section 3G(7)(a)
of the National Highways Act, the market value of the
land means not the guideline value fixed by the Sub-
registrar. In general seller receives more money to his
property from the purchaser. Inspite of it, purchaser will
register the property to his name as per the guideline
value of the Sub-registrar which is generally in practice.
The registering of the property to the guideline value of
the sub-registrar is also with an intention to avoid the
registration charges, tax and for other hidden purposes.
It is an open secret that the market value is always
comparatively higher than the Guidelines market value of
the Sub-registrar. As such, actual market value has to be
considered as per the decision reported in (1987)1 SCC
587 in the case Mahabir Prasad Santuka and others Vs.
Collector, Cuttack and others. The 3 rd defendant has
neither complied Section 3G(7) of the N.H.Act1956 nor
complied the Land Acquisition Act,1894 while passing
the award. The 3rd defendant has overlooked the said
Acts and took his own deviation in determining the
compensation without considering the additional market
value, solatium and interest as provided under the Land
Acquisition Act. The 2nd defendant has considered all
these aspects and has rightly allowed the appeal. The
acquired land was used as for commercial purpose and
it was having all amenities and facilities including
residential layouts, Market, Resorts and big hotels.
Industries are also situated adjacent to the acquired
land. The acquired land is a developed urban land. The
acquired land is in the jurisdiction of Bangalore City.
MOU with the METRO cash and carry India Pvt. Ltd. On
15th May 2008 the adjacent land in Sy.No.29/1 of
Bhatarahalli village was sold at the rate of Rs.2,470/- per
sq.ft. Based on this document produced regarding the
same, the 2nd defendant has enhanced the compensation
and allowed the appeal filed by him. Since, the acquired
land is in an urban area which has readily available
infrastructural facilities, the award passed by the 2 nd
defendant is proper. The 3rd defendant has violated the
principles of law by not considering the proper market
value. After detailed enquiry and due verification of the
entire materials and by giving opportunity to the both
parties, the 2nd defendant has rightly passed a detailed
order by allowing the appeal filed by him. The said order
in accordance with law. The plaintiff had filed similar
suit challenging the arbitral award in A.S.No.2/2013 and
it has been dismissed on 23.09.2017. In view of the
same, the plaintiff is not entitled to same relief sought in
the suit. On all these grounds, he has prayed for
dismissal of the suit.
9. I have heard the arguments of both sides and
perused the entire materials on record. Now the points
that arise for my consideration are as follows :-
1.Whether the plaintiff proves that the impugned award passed by the Arbitrator is patently illegal, perverse and opposed to public policy?
2. Whether the plaintiff has made out any of the grounds under Section 34(2) of the Arbitration and Conciliation Act, 1996, so as to set aside the impugned award passed by defendant No.2/Arbitrator?
3. What order?
10 . Having regard to the arguments heard and the materials on record, I answer the above points as here under :-
Point No.1 :- In the negative
Point No.2 :- In the negative
Point No. 3 :- As per final order
R E A S ON S
11. Points No.1 & 2 :- Since these two points are interconnected, they are taken up together for discussion to avoid repetition. It is the case of the plaintiff Authority that for the purpose of widening and upgradation (four/six laning) of Mulabagilu-Kolar- Bangalore National Highway, a Preliminary Notification bearing No.S.O.1032 (E) under Section 3-A(1) of the National Highways Act, 1956. Under the said Notification amongst other lands acquired, the Non- agricultural (NA) land in Sy. No. 29/1 to an extent of 64 Sq.Mtrs situated at Bhattarahalli Village, Bidarahalli Hobli, Bangalore East Taluk belonged to the 1 st defendant was also acquired. The 3 rd defendant was appointed as the Competent Authority by the Central Government to perform the task related to acquisition of land for the Project. The 3rd defendant vide his award dated 20.04.2009 bearing No.LAQ/NH-7/NH- 4/S.R.2/2007-08 determined the market value of NA lands acquired at the rate of Rs. 8,341.79/- per Sq. Mtr. In Order to determine the market value, the 3 rd defendant has obtained both the sales statistics for the period 08.11.2007 to 08.11.2008 (one year) as well as the Guidance Value for the relevant period for lands situated at Bhattarahalli Village from the office of the Sub-Registrar, K.R. Puram Taluk. The 3 rd defendant has observed that there were no sale transactions in respect of NA lands and the guidance value was Rs.8,341.79/- per Sq. Mtr. Considering the actual physical characteristics of the acquired lands after sport inspection, the 3rd defendant relied upon the Guidance value and accordingly determined the market value as Rs.8,341.79/- per Sq.Mtr. for NA land. Therefore, the compensation awarded is in accordance with Section 3-G(7) (a) of the National Highways Act. While determining the amount of compensation, the market value of the lands as on the date of Preliminary Notification has to be taken into consideration. The 1 st defendant during the award enquiry had claimed a sum of Rs. 32,280/- sq.Mtr as compensation in respect of the subject lands and he did not produce any documents during the enquiry to support his claim.
12. Further case of the plaintiff is that being aggrieved by the award passed by the 3 rd defendant and the 1st defendant approached the 2nd defendant who is appointed as an Arbitrator by the Central Government under Section 3-G(5) of the National Highways Act, seeking enhancement of compensation. The Arbitration proceedings was instituted in case No.ARB/NH- 4(BET)180/2010-11 seeking enhancement of compensation along with interest for the subject land. They appeared and filed their objection and also the written submissions with several Judgments. The 2 nd defendant however without application of mind and proper appreciation of law enhanced the compensation from Rs. 8,341.79/- per Sq. Mtr to Rs. 25,025.37/- per Sq.Mtr thereby determining the compensation for the subject lands by three times of the market value determined by the 3rd defendant without assigning any reasons. The 2nd defendant has also awarded interest at the rate 9% p.a. and user charges at the rate of 10% p.a. The said order is perverse, patently illegal and capricious. The 2nd defendant has grossly erred in not following the provisions of Section 3-G (7) (a) of the National Highways Act while passing the impugned award which is contrary to provisions of Section 28 of Arbitration and Conciliation Act. The 2 nd defendant had completely failed to follow the mandatory procedure prescribed under section 31(3) of the Arbitration and Conciliation Act. He has also not assigned any reasons for fixing the compensation amount at three times of the amount already paid by the 3rd defendant. The impugned order is completely bald and without reasoning. Absolutely, there is no discussion of the judgments relied upon by them. Hence, it is necessary to set aside the Arbitral award passed by the 2nd defendant.
13. The defendant No.1 has filed his written statement and has contended that the defendant No.3 has not followed the Section 3G(7) of the National Highway Act while determining the market value to the acquire land. He has taken the basis of award on the Sub-Registrar guideline value rate effective for the period of one year and arrived at a meager compensation. The award of compensation passed by the defendant No.3 is not based on any strong evidence of prevailing market valuation of the lands. Now a days to purchase a land in the vicinity of the acquired land costs high budget and compensation amount is wrongly assessed by the defendant No.3. The 3 rd defendant while determining the compensation for the acquired land has wrongly applied the Guide Line market value and thereby arrived at a meager compensation to the acquired land, which is not scientifically assessed. Under Section 3G(7)(a) of the National Highways Act, the market value of the land means not the guideline value fixed by the Sub- registrar. The registering of the property to the guideline value of the sub-registrar is also with an intention to avoid the registration charges. It is an open secret that the market value is always comparatively higher than the Guidelines market value of the Sub-registrar. As such, actual market value has to be considered as per the decision reported in (1987)1 SCC 587 in the case Mahabir Prasad Santuka and others Vs. Collector, Cuttack and others. The 3 rd defendant has neither complied Section 3G(7) of the National Highway Act,1956 nor complied the Land Acquisition Act,1894 while passing the award. The acquired land was used as for commercial purpose and it was having all amenities and facilities including residential layouts, Market, Resorts and big hotels. Industries are also situated adjacent to the acquired land. The acquired land is a developed urban land. The adjacent land in Sy.No.29/1 of Bhatarahalli village was sold at the rate of Rs.2,470/- per sq.ft. The plaintiff had filed similar suit challenging the Arbitral Award in A.S.No.2/2013 and it has been dismissed on 23.09.2017. In view of the same, the plaintiff is not entitled to same relief sought in the suit. On all these grounds,the defendant No.1 has prayed to dismiss the suit.
14. During the course of the arguments, the Counsel for the plaintiff argued that this suit has been filed under Section 34(2) of the Arbitration and Conciliation Act 1996 seeking to set aside the Arbitral award dated 07.09.2017 passed by the 2 nd defendant. The 3rd defendant has passed award by taking into consideration of the guidance value for the relevant period in accordance with Section 3-G(7)(a) of the National Highways Act. The 2nd defendant without application of mind and proper appreciation of facts, enhanced the compensation from Rs.8,341.79- per Sq Mtrs to Rs.25,025.37/- per Sq Mtrs. thereby determining the compensation for the subject lands by three times of the market value. It is clearly against the law laid down by the Hon'ble Apex Court in SomDatt Builders Ltd. V/s State of Kerala reported in 2010 2 AWC (Supp) 1390 Supreme Court. The 2nd defendant at para 1 page 3 of the impugned arbitral award has stated that the defendant No.1 is a small farmer, who is making livelihood by way of agricultural which is an error apparent on the face of it. Admittedly, the Subject lands are NA lands and compensation was awarded at NA rate. The 2nd defendant has also stated that subject lands are commercial in nature. Since, the award is passed considering land as NA land, proper compensation was already granted by the 3 rd defendant. The order passed by the 2nd defendant to enhance the compensation is opposed to public policy. The 2 nd defendant has relied upon a circular of the State Government in R.D 13- LAQ/2006 dated 26th February 2006 which was not produced by the any of the parties. Since, the order passed by 2nd defendant is illegal, perverse and arbitrary it has to be set aside. Hence, prayed to decree the suit. In support of the oral arguments, the Counsel for the plaintiff has relied on a decision reported in 2010 (2) AWC 1390 SC in which in the case of Som Datt Builders Ltd. V/s State of Kerala it is held by the Hon'ble Supreme Court "the requirement of reasons in support of the award under Section 31 (3) of the Arbitration and Conciliation Act, 1996 is not an empty formality. It guarantees fair and legitimate consideration of the controversy by the Arbitral Tribunal. It is true that Arbitral Tribunal is not expected to write Judgment like a Court nor it is expected to give elaborate and detailed reasons in support of its findings, but mere noticing the submissions of the parties or reference to documents is no substitute for reasons which the Arbitral tribunal is obliged to give. Howsoever, brief these may be, reasons must be indicated in the award as that would reflect a thought process leading to a particular conclusion. To satisfy the requirement of Section 31 (3), the reasons must be stated by the Arbitral Tribunal upon which the award is based; want of reasons would make such award legally flawed". The Counsel for plaintiff has also relied on another decision reported in AIR 2003 SC 2629 in which in the case of Oil and Natural Gas Corporation Ltd. V/s Saw Pipes Ltd in which the Hon'ble Supreme Court has listed certain cases when the Court could set aside the award - Firstly the award could be set aside when the applying party provided proof that it was under some incapacity; or the arbitration agreement was not valid; or the award dealt with a dispute contemplated by the terms of the arbitration clause; or the applying party was not properly notified of the appointment of the arbitrator. Secondly, the composition of the Tribunal has to be in accordance with the agreement of the parties for a Court to set aside the award - In addition, the award could be set aside if it went against the public policy of India". By relying on these decisions, the Counsel argued that since the award is illegal and arbitrary and since it is also opposed public policy of India, it is necessary to set aside the same in view of the principles laid down in the above decisions.
15. On the other hand, the Counsel for the defendant No.1 has argued that the defendant No.3 has not followed Section 3-G(7) of the National Highways Act while determine the market value. He has only taken the Sub- Registrar's guidance value and arrived at a meagre compensation which is not proper. The award passed by the 2nd defendant is proper and he has rightly enhanced the compensation. Now a days to purchase a land in the vicinity of the acquired land costs high budget and it is having high commercial value. As per Section 98 and 99 of Land Acquisition manual if the land is agricultural and he is likely to be used for commercial establishment, the same has to be taken into consideration. They have to grant compensation for loss of crops, trees, structures, loss of business, loss of commercial space, loss of residential units, loss of livelihood and other factors. As per Section 3-G(7) actual market value has to be taken into consideration but the defendant No.3 has not done so. The acquired land was used for commercial purpose having all facilities including residential layouts, market, resorts and big hotels. Industrial area is also situated adjust to the acquired land. It is within jurisdiction of Bengaluru city. METRO cash and carry limited has entered into MOU on 15.05.2008 to purchase the land in Sy.No.29/1 at Bhattarahalli Village at the rate of Rs.2,470/- per Sq.ft and copy of MOU was produced before the 2nd defendant. The acquired land in urban area in infrastructural facilities and entire surroundings of the land is well developed and it is within the vicinity of IT and BT corridor. Number of super specialty hospital, International educational institution, number of IT and BT companies and huge residential apartments are also situated within the vicinity. The METRO station is situated at a distance just 2 to 3 kilometers. KIADB has paid compensation at the rate of Rs.10,000/- per sq. ft., and the said notification is issued much prior to the notification on hand. The Arbitrator has considered all these facts and has rightly passed a detailed order. The plaintiff had filed another suit in A.S.No.2/2013 and it is dismissed on 23.09.2017. Hence, this suit is also not maintainable. In support of his argument he has relied on the decision reported in 2010(2) AWC 1390(SC) SomDatt Builders Ltd. Vs. State of Kerala which the plaintiff Counsel has also relied and the judgment in A.S.No.2/2013. By relying on these decisions, the Counsel for the defendant No.1 argued that the award of the Arbitrator is proper and there is no illegality. Hence, prayed to dismiss the suit.
16. I have perused the entire materials on record, the main ground urged by the plaintiff in this suit is that the Arbitration Award passed by the 2 nd defendant is perverse, patently illegal and capricious. The 2 nd defendant has not given any reason for fixing the compensation amount at three times of the amount already paid by the 3rd defendant. Hence, it has to be set aside. Before going to the facts of the case, it is just and proper to refer to Section 34(2) of Arbitration and Conciliation Act 1996. In the said provision it is stated as to on what grounds an arbitration award can be set aside by the Court. The said Section 34(2) reads as here under :-
Section 34(2) An arbitral award may be set said by the Court only if,
(a) the party making the application furnishes proof that,
(i) a party was under some incapacity, or
(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 the time being in force; or
(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
(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 beyond the scope of the submission to arbitration:
(v) the composition of the arbital 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
(b) the Court finds that-
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
As such, as per the said provision, an Arbitral Award can be set aside by the Court only on the grounds mentioned in the said provision. Even in the decisions relied on by the Counsel for the plaintiff Hon'ble Supreme Court has held that the arbitration award can be set aside only on those grounds.
17. Now, we have to see whether the arbitration award passed by the 2nd defendant is in violation of Section 34(2) of Arbitration and Conciliation Act and whether there are sufficient grounds to set aside the same. On perusing the award passed by the 3 rd defendant in LAQ/NH-7/NH-4/S.R.2/2007-08 dated 20.04.2009, it can be seen that award is passed basing only the sale statistics for the period from 08.11.2007 to 08.11.2008 as well as the guidance value of the Sub- Registrar office, K.R. Puram Taluk. As such, by considering the guidance value, the 3rd defendant has passed the award that the 1 st defendant is entitled for compensation at the rate of Rs. 8,341.79/- per Sq. Mtr. Aggrieved by the same, the 1 st defendant has instituted the Arbitration Proceedings before the 2 nd defendant in ARB/NH-4(BET)180/2010-11 and after that the award under challenge in the suit has been passed. The 2 nd defendant has passed a detailed order by considering that the property of the defendant No.1 which is acquired by the plaintiff Authority is facing the National Highway and it has the potential of being used for Industrial and Commercial purpose. Further, the defendant No.2 has also observed that the acquired land is very valuable and the land owners are also entitled for additional market value under Section 23(1-A) and solatium under Section 23(2) Land Acquisition Act as per the order passed by the Hon'ble High Court in Lalitha's case. She has also observed that the award of compensation passed by the 3 rd defendant is basing only the guidance value of the Sub-Registrar Office and the same cannot be taken into consideration. It is also observed that as per the Government Notification No.R.D 13 Land Acquisition dated 24.02.2006 that for establishment of sub-stations of KPTCL at the time of purchase of land the District Committee has to fix the compensation of the land to be acquired at 2 to 3 times higher than the actual market price. The defendant No.1 has contended that the acquired land was used for commercial purpose having all facilities including residential layouts, market, resorts and big hotels. Industrial area is also situated adjust to the acquired land. It is within jurisdiction of Bangalore city. METRO cash and carry limited has entered into MOU on 15.05.2008 to purchase the land in Sy.No.29/1 at Bhattarahalli village at the rate of Rs.2,470/- per Sq.ft and copy of MOU was produced before the 2 nd defendant. The acquired land in urban area in infrastructural facilities and entire surroundings of the land is well developed and it is within the vicinity of IT and BT corridor. Number of super specialty hospital, inter national educational institution, number of IT and BT companies and huge residential apartments are also situated within the vicinity. The METRO station is situated at a distance just 2 to 3 kilometers. KIADB haspaid compensation at the rate of Rs.10,000/- per sq. ft and the said notification is issued much prior to the notification on hand. As such, by considering all these facts and by holding that the land acquired is very valuable and since the 3rd defendant has not considered the actual market value as on the date of notification, the defendant No.2 has enhanced the compensation. In the decision reported in AIR 2019 Supreme Court 4689 in the case Union of India and another Vs.Tarsem Singh and others the Hon'ble Supreme Court has held that "the object of Amendment Act is not served by removing solatium and interest-object of amendment Act of National Highways Laws (Amendment) Act has no relationship to Directive Principles and hence, not protected under Art.31-C. As such, Arbitration Award passed by the 2nd defendant is on merits by considering the entire materials placed on record. Absolutely, there are no materials to hold that the said Arbitration award passed by the 2nd defendant is perverse, patently illegal and capricious. There are also no materials to hold that the said award passed by the 2 nd defendant is against the Public policy of India. Another suit filed by the plaintiff earlier in A.S.No.2/2013 is also dismissed on 23.09.2017. As such, the plaintiff has not made out any grounds mentioned in Section 34(2) of the Arbitration and Conciliation act 1956 to set aside the award. The award passed by the 2nd defendant is on merits and by taking into consideration of the facts which are relevant to decide the compensation to be granted in land acquisition cases. As such, the decisions relied on by the Counsel for the plaintiff are not applicable to the facts of this case. The Order of the 2nd defendant is proper, legal and it is passed basing on sound principle and reasoning and there are no grounds to set aside the same. Hence, I answer points No.1 and 2 in the negative.
1 8. Point No.3 :- In view of the above findings on points No.1 to 3, the following is made.
O R DE R The suit filed by the plaintiff under Section 34(2) of the Arbitration and Conciliation Act,1996 is dismissed. No order as to costs.
Office directed to draw decree accordingly.
(Dictated to the Stenographer, transcribed and typed by her, corrected and then pronounced by me in the open court on this the 7 th day of February 2020.) (Jaishankar) XV Addl.City Civil & Sessions Judge, Bengaluru.