Allahabad High Court
Kali Ram vs Dedicated Freight Corridor ... on 16 July, 2025
Author: Piyush Agrawal
Bench: Piyush Agrawal
HIGH COURT OF JUDICATURE AT ALLAHABAD Neutral Citation No. - 2025:AHC:113666 Reserved on 8.5.2025 Delivered on 16.7.2025 Court No. - 10 Case :- APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 62 of 2023 Appellant :- Kali Ram Respondent :- Dedicated Freight Corridor Corporation Of India Ltd. And 2 Others Counsel for Appellant :- Kartikeya Saran,Suchita Mehrotra Counsel for Respondent :- Anant Kumar Tiwari,Vaibhav Tripathi With Case :- APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 64 of 2023 Appellant :- Kali Ram Respondent :- Dedicated Freight Corridor Corporation Of India Ltd. And 2 Others Counsel for Appellant :- Kartikeya Saran,Suchita Mehrotra Counsel for Respondent :- Vaibhav Tripathi HON'BLE PIYUSH AGRAWAL, J.
1. Heard Ms. Suchita Mehrotra, learned counsel for the appellant and Mr. Vaibhav Tripathi, learned counsel for the respondent.
2. Similar controversy is being raised in both the appeals, therefore, with the consent of the parties, both the appeals are decided by a common order, treating APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 62 of 2023 as leading case.
3. APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 62 of 2023 has been filed against the order dated 6.10.2022 passed by the Additional District and Sessions Judge, Muzaffarnagar passed in the application under Section 34 of Arbitration and Conciliation Act 1996 (herein after referred to as the 'Act').
4. Brief facts as stated in the appeal are that the appellant is the owner of the properties situated at Khasra No. 162 and 167 village Meerapur, tehsil Sadar, Distt. Muzaffarnagar admeasuring 946 Sq. Meter and 1360 Sq. Meter respectively. The said land was acquired by the Dedicated Freight Corridor Corporation of India (D.F.C.C.) vide its notification dated 18.4.2016 issued under Section 20 A of Railways Act, 1989 as published on 4.5.2016 in local newspapers i.e. Hindustan and Dainik Jagran. On 22.1.2017, a declaration of acquisition was notified in the newspaper as per Section 20 E of the Railways Act, 1989 regarding acquisition of land admeasuring 25444 Sq. Meter or 2.5444 hectares and thereafter on 26.12.2017 a standard award of Rs. 983 per Sq. Meter was declared by respondent no. 2 for the entire land of 2.5444 hectare. Being aggrieved to the said award, the appellant invoked the arbitration provision under Section 20 F (6) of Railways Act, seeking fair determination of the award by the Arbitrator. Thereafter the Arbitrator / District Magistrate, Muzaffarnagar vide order dated 24.11.2020 dismissed the arbitration application filed by the appellant. Against the said award, the petitioner filed an application under Section 34 of the Act registered as Arbitration Case No. 106 of 2021, before the District Judge, Muzaffarnagar, which was dismissed by the impugned order dated 6.10.2022. Hence the present appeal.
5. Learned counsel for the appellant submits that the arbitral award has been passed contrary to the public policy same is in violation of the provisions of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 ( herein after referred to as 'RFCTLARR Act') and Railways Act, 1989. She further submits that the arbitral award as well as the impugned order is in violation of RFCTLARR Act and Railways Act, therefore, the grievance raised by the appellant qualifies the conditions provided under Section 34 of the Arbitration Act.
6. She further submits that Explanation of Section 26 of RFCTLARR Act (also Section 20 G -2 of Railways Act) specifically provides that while determining the market value, sale agreements registered for "similar type of area" in the near village or vicinity shall be taken into account. She submits that as a general practice, the market value of the land is subject to its location, boundaries, nature of use, etc and uniform standard value cannot be imposed on properties bearing different characteristics, for instances, a landlocked agrarian property might not bear the same market value as one situated near a Highway or Railway station having better access to basic amenities.
7. She further submits that the property in question bearing Khasra No. 162 and 167 are located adjacent to Panipat Khatima National Highway and village Meerapur having more than 3000 residents has been recognized as semi urban or industrial area, therefore, market value of the property in the area is similar to the property of the appellant, which around Rs. 15000 Sq. Meter as of year 2018. She further submits that Vehalna Chowk of Muzaffarnagar which is a heavy industrial area is only 50 meter away from the Highway and merely 2 kms from the property in question.
8. Learned counsel for the appellant further submits that market value of several properties located in the area was considered @ 12500 per Sq. Meter for evaluation of stamp duty. She further submits that the respondent authorities have not evaluated the market value of the property in question in legally sound manner as for determination of market value of the land under acquisition, the respondents have only considered the sale deeds that were cheap or were not similar to the land of the appellant.
9. In support of her submission, learned counsel for the appellant has relied upon following judgements :
(i) Ssangyong Engineering and Construction Company Limited Vs. National Highways Authority of India, (2019) 15 SCC 131,
(ii) Associate Builders Vs. Delhi Development Authority, (2015) 3 SCC 49
10. Per contra, Mr. Vaibhav Tripathi, learned counsel for the respondent supports the impugned order and submits that fair compensation has been awarded to the appellant and there is no illegality in the impugned order.
11. He further submits that it is incorrect to suggest that no opportunity was given to the appellant to adduce the cogent material but on the contrary ample opportunity for adducing the evidence to the parties was given and after scrutinizing each and every aspect of the matter, the orders have been passed. He further submits that the competent authority has examined 29 sale deeds in order to determine market value and taking the highest value / average value of the sale deed as an exemplar, therefore, the determination of compensation has rightly been made.
12. In support of his submission, he has relied upon the following judgements :
(i) MMTC Ltd. Vs. Vedanta Ltd. (2019) 4 SCC 163
(ii) Dyna Technologies Pvt. Ltd. Vs. Crompton Greaves Ltd. (2019) 20 SCC 1,
(iii) Delhi Airport Metro Express Pvt. Ltd. Vs. DMRC, (2022) 1 SCC 131
(iv) Mehrawal Khewaji Trust (Reg.) Faridkot and others Vs. State of Punjab and others, 5 SCC 432,
(v) Valliyamal and another Vs. Special Tehsildar Land Acquisition and another, 2011 8 SCC 91,
(vi) Bhupal Singh Vs. State of Haryana, 2015, 5 SCC 801,
(vii) Union of India and another Vs. Raghubir Singh 1989 , 2 SCC 754
(viii) Ashok Kumar and another Vs. State of Haryana, 2016, 4 SCC 544.
13. After hearing learned counsel for the parties, the Court has perused the records.
14. The record shows that the property in question has been acquired by the Dedicated Freight Corridor Corporation of India, respondent no. 2 with a special project for construction of Eastern Dedicated Freight Corridor vide its notification dated 18.4.2016 under Section 20 A of the Railways Act, 1989 as published on 4.5.2016 and a declaration of acquisition was notified in local newspaper as per Section 20 E of the Railways Act, 1989 on 22.1.2017. The determination for payment of compensation was made on the ground of 29 sale deeds but the record shows that while fixing the compensation, the authorities have totally misdirected for not taking into consideration that the land of the appellant was adjacent to Panipat Khatima National Highway and about 3000 residents are living in village Meerapur, which is recognized as semi urban or industrial area as within 2 kms of the land in question Vehalna Chowk of Muzaffarnagar, which is an industrial area, is situated. Therefore, it appears that the property of the appellant is extremely valuable.
15. Further no weightage of the exemplars cited by the appellant has been given by the respondent authorities, while passing the impugned arbitral award, which shows that the orders have been passed without considering the material available on record, therefore patent illegality has been committed by the respondent authorities which is against the public policy.
16. The Apex Court in the case of Associate Builders Vs. Delhi Development Authority (2015) 3 SCC 49 has clearly laid down the scope of "Public Policy of India" with regard to Section 34 of the Act.
17. Similar view has been taken in the case of Sangyong Engineering and Construction Co. Ltd. Vs. National Highways Authority of India (2019) 15 SCC 131 in which the Apex Court has affirmed the power to challenge arbitral award on the ground of violation of principles of natural justice.
18. Hon'ble the Apex Court in the case of Bombay Slum Redevelopment Corporation Private Limited Vs. Samir Narain Bhojwani, (2024) 7 SCC 218 has held that the appellate court while exercising powers under Section 37 of the Act can remand the matter when exceptional circumstances make an order of remand unavoidable.
19. In the present case, the objection raised by the appellant has not been considered / addressed by the respondent authorities, therefore, the matter requires reconsideration.
20. In view of above, both the appeals are allowed. The impugned orders are side aside.
21. The matter is remanded to the Arbitrator / District Magistrate, Muzaffarnagar, who shall decide the issue afresh by reasoned and speaking order, after consideration of all the material adduced by the appellants, in accordance with law.
Order Date :- 16.7.2025 Rahul Dwivedi/-