A bench of Justices P S Narasimha and Manoj Misra allowed the appeals filed by S Jayalakshmi and others against the judgment of the High Court of Judicature at Madras on September 28, 2021.

 

The High Court had then allowed the Section 37 appeals under the Arbitration and Conciliation Act, 1996 arising out of the order of the Principal District Judge, Vellore under Section 34 of the Act, modifying the arbitral award of November 19, 2009, under the National Highways Act, 1956.

 

The appellant’s lands were acquired under the Highways Act under a notification issued under Section 3A(1) of the Act on April 05, 2022. The acquisition proceedings led to the passing of an award on June 06, 2005, as per which compensation at the rate of Rs 355.21 per sq mtr was granted.

 

In the proceedings initiated by the appellant under Section 3G(5) of the Highways Act, the arbitrator enhanced the compensation and granted an amount of Rs 495 per sq mtr by award of November 19, 2009.

 

The appellant challenged the award by filing an application under Section 34 of the Act which came to be allowed by modifying the award and enhancing the compensation to Rs 4500 per sq mtr, along with interest at the rate of 9% p.a.

 

Questioning the order passed by the District Judge under Section 34, the Special District Revenue Officer, the competent authority filed an appeal under Section 37 of the Act before the high court.

 

During the pendency of the appeal on July 20, 2021, the bench noted, that the top court delivered its judgment in the case of “Project Director, National Highways No. 45 E and 220, National Highways Authority of India vs M Hakeem & Another" holding that the jurisdiction of the courts under Sections 34 and 37 will not extend to modifying an arbitral award.

 

By the order impugned, following the judgment of the Supreme Court in M Hakeem’s case, the high court allowed the Section 37 appeal and set aside the order passed by the Principal District Judge Vellore under Section 34.

 

Examining the appeal, the bench said, "It is true that this court in M Hakeem’s case has held that while exercising jurisdiction under Section 34 and 37, courts cannot modify an arbitral award. However, while allowing the appeal, this court exercised its discretion under Article 136 of the Constitution in not interfering with the grant of compensation in favour of the Respondents."

 

The court pointed out, that there was no doubt about the fact that the acquisition in the present proceedings and the acquisition that fell for consideration in M Hakeem’s case was one and the same.

 

"While this court laid down the law by holding that an arbitral award cannot be modified, the High Court had to naturally follow the decision of this court. At the same time, the High Court could not have exercised the discretion which the Supreme Court exercised in granting the same compensation to the appellant as was granted to the Respondents in M Hakeem’s case. To this extent, the High Court is correct in following the judgment of this Court in M Hakeem’s case," the bench said.

 

However, in order to maintain parity and grant to the appellants the same benefits as were extended to similarly placed claimants in M Hakeem’s case, the court thought it appropriate to exercise our power under Article 142 of the Constitution to direct that the appellants would be paid the same compensation as was granted by the Principal District Judge, Vellore, the bench pointed out.

 

"We allow the appeals and in modification of the order passed by the High Court, direct that the appellants shall be granted the compensation as determined by the Principal District Judge, Vellore with all consequential benefits," the bench ordered.