Author: Shefali Chaudhary, IInd year student at ICFAI University Dehradun
Citation: ICL 2021 (4) All. 91
Date of decision: April 19, 2021
Original copy: N/A
Bench: Saral Srivastava
Statutes involved: Arbitration and Conciliation Act, Land Control Act, 1942
Issues in Question:
- Whether respondent no.1 is entitled to compensation on the basis of agriculture land or commercial land.
Background of the Case:
- The appealing party as per under Section 3-A (1) of the National Highway Act, 1956 gave notice on 16.11.2009 regarding the lands in number of villages for the broadening of NH-24 to four-paths. By the said notice, Gata No.193 region 0.1260 hectare (land in question) in Maujampur village, Tehsil Sadar, area Shahjahanpur originally owned by respondent no.1 was also included.
- The declaration under Section 3-D of the ‘Act, 1956’ in regard to the land being referred to was given on 08.10.2010. The competent authority while discarding the protest of respondent held that since land being referred to as agricultural land, thus, the compensation will be paid according to circle rates relevant to agriculture land. Appropriately, it determined compensation depending on circle rates relevant to agribusiness land and announced the award on 05.10.2012 under Section 3-G of the Act, 1956.
- Feeling aggrieved by the award, respondent no.1 favored application under Section 3-G (5) of the Act, 1956 to bring this matter to the Arbitrator. So the application of respondent no.1 was alluded to by the Sole Arbitrator, Shahjahanpur for the case of respondent no.1.
- The Sole Arbitrator, Shahjahanpur by request dated 30.06.2016 dismissed the appeal of respondent no.1 holding that he was unable to prove that the land being referred to was outside the domain of U.P. RoadSide Land Control Act, 1942, in this manner, the authority appropriately figured the compensation getting the land be agricultural land.
- Feeling aggrieved by the decision of the Arbitrator, Shahjahanpur in this case, the respondent no.1 filed application under Section 34 of the Act, 1996 before the District Judge, Shahjahanpur.
- The District Judge, Shahjahanpur by request dated 06.08.2020 dismissed the complaint of the appellant against the appeal of the respondent under Section 34 of the Act, 1996. It put away the award dated 30.06.2016 passed in Arbitration Case No.16 of 2016 and directed to pay the compensation as per the commercial land under 3 Of the act, 1956.
- The High Court in this case held–
- i) The topic of the dispute isn’t fit for settlement by arbitration under the law for the time being in power, or
- ii) The arbitral award is in conflict with the public strategy of India.
- The Court said that at this point it would be beneficial to refer to several judgements of the Apex court for section 34 of the act 1996. In Dyna Technologies Private Limited Vs. Crompton Greaves Limited (2019) 20 SCC 1, the Apex Court has held that Section 34 of the Act, 1996 limits challenge to the award just on the grounds specified in that.
- Court held that in arbitration if the challenge relating to the award depends on indecency or impropriety then, at that point it will be challenged under Section 34 of the Arbitration Act. In the event that the challenge relating to the award depends on the ground of unintelligible similarity would be likeness giving no reasons by any means. Going to the last viewpoint concerning the challenge on adequacy of reasons, the Court while deciding the case under Section 34 needs to adjudicate the legitimacy of such an award dependent on the particularity of reason required having respect to the nature of issues succumbing for consideration.
- The Court said that It would also be appropriate to reproduce Section 3-G (7) of the Act, 1956 which provides criteria for assessment of compensation of the land acquired. The authority while deciding the compensation amount under sub section 1 or sub section 5 should look into the following points;
- Market value of the landin question
- Any damages faced by the person acquiring such land
- The consequence if the person in possession of the land is forced to change his place or business
- The court held that it is very much evident from the facts produced above that the arbitral award is unreasonable for need consideration of the evidence shown by respondent no.1 demonstrating that land was commercial as under Section 3A. Thus the Arbitrator has failed to follow all the criteria provided under Section 3-G (7) of the Act, 1956 for determination of the compensation and the arbitral award is in violation of Section 3-G (7) of the Act, 1956.
- Accordingly, in the light of the above conversation, this Court said that the District Judge, Shahjahapur has not submitted any mistake or unlawfulness in presuming that the current case falls inside the ambit of Section 34 of the Act, 1996 and has properly given the award.
- In this way, it tends to be inferred that the arbitrator or the judge in deciding the amount is just to consider the market value of the land on the date of issuing under Section 3A of Act, 1956 and the nature of land recorded in the revenue record isn’t applicable for deciding the amount. Thus, the court found that the District Judge has appropriately given the compensation of the land treating it as commercial land.
- Thus, in accordance with the read set above, the appeal lacks merit and is thus dismissed.
- This case is the another example where High Court talked about the interference of the courts in the arbitration matters and said that provisions of arbitration in the act of 1956 has been inserted to benefit the land owners and provide quick decision so in such cases the court is not authorised to change the amount of award to provide any relief to the land owners.
- The Allahabad High Court reliably held in the above case that the best technique to survey the market value of land would be the sum that a willing buyer would pay to the owner of the land.