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TMI Blog2023 (4) TMI 1396X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013 Act or determination of compensation shall apply to acquisition in question. The reliance on the decision of Rajasthan High Court in Gopa Ram s case [ 2018 (1) TMI 1657 - RAJASTHAN HIGH COURT] by NHAI is of no avail. In that case, the admitted position was that the land owners had received compensation prior to 31.12.2014. The issue that deposit of compensation would tantamount to the payment made to land owners was not involved. The issue raised that compensation is to be determined only as per factors mentioned in Section 3-G(7) of the 1956 Act is no longer res integra. The Supreme Court in National Highways Authority of India v. Sri P. Nagaraju @ Chelluvaish and another, [ 2022 (7) TMI 1413 - SUPREME COURT] held that Section 3-G (7) of the 1956 Act provides basic parameters of determination of compensation and after 2013 Act was made applicable to acquisition under the 1956 Act, the factors provided under Sections 26 and 28 of the 2013 Act will also apply. Thus, beneficial provisions of the 2013 Act would also be applicable to the acquisition in question. From the perusal of the award passed by CALA and the arbitral award, it is evident that no reasons are recorded. In awar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 58-2022, FAO-579-2022, FAO-780-2022, FAO-653-2022, FAO-615-2022, FAO-572-2022 and FAO-2060-2022 HON'BLE MR. JUSTICE AVNEESH JHINGAN For the Appellant : K.S. Kang, D.K. Singal, Sumit Gupta, B.S. Toor, Rahul Garg and Vishavdeep Gupta, Advocates For the Respondent : Puneet Bali, Senior Advocate, Vishal Aggarwal, Karan Nehra and Nitin Mehta, Advocates JUDGMENT AVNEESH JHINGAN, J. 1. The Union of India/National Highways Authority of India(NHAI) and the land owners are before this Court in appeals under Section 37 of Arbitration and Conciliation Act, 1996 (for short 'the 1996 Act'). 2. The aforementioned appeals are being disposed of by a common order as these arise from one acquisition, involving similar facts and issues. 3. For convenience the facts are being considered from FAO-756-2022 and cross appeal FAO-2065-2022. 4. The facts shorn off unnecessary details are that notification under Section 3-A of the National Highways Act, 1956 (for short, 'the 1956 Act') was notified on 25.5.2012, proposing to acquire lands of twenty five villages on National Highway No. 64 from 50.700 Kms to 209.500 Kms (Patiala-Sangrur-Bathinda stretch). The notification under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (for short, 'the 2013 Act') would not apply to the acquisition in question. The submission is fortified by arguing that the conditions in clause 4.6 (iii)(a) and (b) of the guidelines dated 28.12.2017 issued by the Ministry of Road Transport and Highways (hereinafter referred to as 'MORTH') (hereinafter referred to as 'guidelines') were complied with by NHAI. It is argued that the prior to 31.12.2014 full amount of the award was deposited. Decision of Rajasthan High Court in Gopa Ram v. Union of India, Civil Writ Petition No. 12746 of 2017, decided on 22.1.2018 was relied upon to argue that the terms 'deposit' and 'paid' used in guidelines have same meaning. It is contended that market value was to be determined as per the provisions of 3G(7) of the 1956 Act and other provisions of the 2013 Act cannot be made applicable. The grievance is that modification of award under Section 34 of the 1996 Act is without jurisdiction. The alternative plea taken is that in case the 2013 Act applies, the compensation is to be calculated as per First Schedule and the determination of market value by the arbitrator was not in consonance with it. 7. Learned se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... area in the near village or near vicinity area during immediately preceding three years of the year in which such acquisition of land is proposed to be made. Explanation 2.-For determining the average sale price referred to in Explanation 1, one-half of the total number of sale deeds or the agreements to sell in which the highest sale price has been mentioned shall be taken into account. Explanation 3.-While determining the market value under this section and the average sale price referred to in Explanation 1 or Explanation 2, any price paid as compensation for land acquired under the provisions of this Act on an earlier occasion in the district shall not be taken into consideration. Explanation 4.-While determining the market value under this section and the average sale price referred to in Explanation 1 or Explanation 2, any price paid, which in the opinion of the Collector is not indicative of actual prevailing market value may be discounted for the purposes of calculating market value. (2) The market value calculated as per sub-section (1) shall be multiplied by a factor to be specified in the First Schedule. (3) Where the market value under sub-section (1) or sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crops and trees which may be on the land at the time of the Collector's taking possession thereof; thirdly, the damage (if any) sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of severing such land from his other land; fourthly, the damage (if any) sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings; fifthly, in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; sixthly, the damage (if any) bona fide resulting from diminution of the profits of the land between the time of the publication of the declaration under section 19 and the time of the Collector's taking possession of the land; and seventhly, any other ground which may be in the interest of equity, justice and beneficial to the affected families. xx xx xx 105. Provisions of this Act not to apply in certain cases or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition injuriously affecting his other immovable property in any manner, or his earnings; (d) if, in consequences of the acquisition of the land, the person interested is compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change. First Schedule of the 2013 Act THE FIRST SCHEDULE [See section 30(2)] COMPENSATION FOR LAND OWNERS The following components shall constitute the minimum compensation package to be given to those whose land is acquired and to tenants referred to in clause (c) of section 3 in a proportion to be decided by the appropriate Government. Sr. No. Component of compensation package in respect of land acquired under the Act Manner of determination of value Date of determination of value 1. 2 3 4 1. Market value of land To be determined as provided under section 26 2. Factor by which the market value is to be multiplied in the case of rural areas 1.00 (One) to 2.00 (Two) based on the distance of project from urban area, as may be notified by the appropriate Government. 3. Factor by which the market value is to be multiplied in the case of urban areas 1(One). 4. Value of assets attached ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted on 3rd April, 2015 to give continuity to the provisions of the RFCTLARR (Amendment) Ordinance, 2014; And whereas, the RFCTLARR (Amendment) Second Ordinance, 2015 (5 of 2015) was promulgated on 30th May, 2015 to give continuity to the provisions of the RFCTLARR (Amendments) Ordinance, 2015 (4 of 2015); And whereas, the replacement Bill relating to the RFCTLARR (Amendment) Ordinance, 2015 (4 of 2015) was referred to the Joint Committee of the Houses for examination and report and the same is pending with the Joint Committee; As whereas, as per the provisions of article 123 of the Constitution, the RFCTLARR (Amendment) Second Ordinance, 2015 (5 of 2015) shall lapse on the 31st day of August, 2015 and thereby placing the land owners at the disadvantageous position, resulting in denial of benefits of enhanced compensation and rehabilitation and resettlement to the cases of land acquisition under the 13 Acts specified in the Fourth Scheduled to the RFCTLARR Act as extended to the land owners under the said Ordinance; And whereas, the Central Government considers it necessary to extend the benefits available to the land owners under the RFCTLARR Act to similarly placed land ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot;. Same was the position under the 1894 Act. This is further fortified from the provisions contained in Section 69(2) of the RFCTLARR Act. As such, it is clarified that the relevant date of determination of market value of land is the date on which notification under Section 3A of the National Highways Act, 1956 is published. (iii) By now, it is also a settled proposition that the First, Second and Third Schedule of the RFCTLARR Act, 2013 shall be applicable to the NH Act, 1956 with effect from 01.01.2015. As such, the following is clarified: (a) All cases of Land acquisition where the Awards had not been announced under Section 3G of the NH Act till 31.12.2014 or where such awards had been announced but compensation had not been paid in respect of majority of the land holdings under acquisition as on 31.12.2014, the compensation would be payable in accordance with the First Schedule of the RFCTLARR Act, 2013. (b) In cases, where the land acquisition process was initiated and award of compensation under Section 3G had also been announced before 01.01.2015 but the full amount of Award had not been deposited by the acquiring agency with the CALA, the compensation amount would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch circumstances, the State Government shall specify the floor price and minimum price per unit of the land acquired based upon the calculation as per sub-section (1) considering similar types of land situated in the immediate adjoining areas. 13. Section 28 of the 2013 Act lays down seven para-meters to be considered by the Collector for determining the amount of compensation. 14. As per Section 105 (1) of the 2013 Act, subject to the provisions of sub-section (3), the provisions of the 2013 Act shall not apply to the enactment specified in Fourth Schedule. The 1956 Act finds mention in Fourth Schedule. Under sub-section (3) of Section 105 within one year from the date of commencement of the 2013 Act, the Central Government by a notification could make applicable the beneficial provisions of the 2013 Act with regard to determination of compensation in accordance with First, Second and Third Schedule to the enactment specified in Fourth Schedule. The application of new Act shall be made with exceptions or modification that it may not result in reduction of compensation or dilution of the provisions of the 2013 Act. 15. Ordinance No. 9 of 2013 was promulgated on 31.12.2014 extend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 31.12.2014, the award under Section 3-G of the 1956 Act was announced by CALA, the amount deposited by the acquiring agency with CALA and compensation paid to the land owners in respect of majority of land holdings under acquisition. 18. Section 3-G(7) of the 1956 Act stipulates four factors to be considered by the competent authority or the arbitrator for calculating the compensation to be awarded to the land owners. 19. As per Section 28(1)(a) of the 1996 Act, the arbitral Tribunal has to decide the dispute in arbitration as per the substantive law being in force in India at the relevant time. 20. Section 31(3) of the 1996 Act provides that the award must contain reasons for the conclusion arrived at, the exception under Section 31(3)(a) being where the parties have agreed that no reasons are to be given. 21. Before dealing with the issue in the present case, it would be relevant to have a little background. As per Section 3-J of the 1956 Act, the provisions of the 1894 Act shall not apply to the acquisition under the 1956 Act. The Division Bench of this Court in Golden Iron and Steel Forging v. Union of India and others, 2011(4) RCR (Civil) 375 held the Section to be ultr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to a larger Bench. In this view of the matter, we are of the view that the view of the Punjab and Haryana High Court is correct, whereas the view of the Rajasthan High Court is not correct." 22. There is no dispute that from 1.1.2015 the beneficial provisions of the 2013 Act were made applicable to the land acquired under the 1956 Act and the other enactments specified in Fourth Schedule. 23. The issue in hand is whether the provisions of the 2013 Act would apply to the cases where CALA had announced the award and the amount deposited by the acquiring agencies with the competent authority prior to 31.12.2014, but the compensation was not paid to majority of the acquired land holdings? 24. The first contention raised by learned counsel for NHAI that the pre-conditions of clause 4.6(iii)(a) and (b) of the guidelines were fulfilled has a fallacy. It cannot be ignored that the entire exercise undertaken by the Central Government was with a view to extend the beneficial provisions of the 2013 Act to the land acquired under the 1956 Act. The laudable object being that there should be no discrimination between the land acquired under the 2013 Act and the 1956 Act. Three or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interpretation and would result in doing violence to the plain language of the guidelines and to the intent for issuing the guidelines. 28. It is admitted case that payment to majority of land holdings under acquisition was not made as on 31.12.2014. 29. If the argument of learned counsel for NHAI is accepted, the result would be that if the case of the land owners falls in sub-clause (b), they would be ousted from the benefit of 2013 Act in spite of the fact that they are fully covered under sub-clause (a). In such circumstances, the condition under sub-clause (a) would be rendered redundant. The clauses cannot be read in a manner which render the other clause otiose. 30. The issue has another angle. As per Section 3-G(1) of the 1956 Act, the amount determined by the competent authority for the land acquired shall be paid. Under Section 3-G(2) of the 1956 Act, amount is to be paid to the owner or any other person whose right of enjoyment in land is affected by acquisition. Whereas under Section 3-H(1), the Central Government shall in the manner prescribed deposit the amount determined under Section 3-G with the competent authority. Thereafter, in compliance of Section 3-H(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess of acquisition depending on the urgency, the method of determining the compensation cannot be different as the market value of the land and the hardship faced due to deprivation of the property would be the same irrespective of the Act under which it is acquired or the purpose for which it is acquired. In that light, if Section 28 of RFCTLARR Act, 2013 is held not applicable in view of Section 3J of NH Act, the same will be violative of Article 14 of the Constitution. In that circumstance, the observation in Tarsem Singh (supra) that Section 3J of NH Act is unconstitutional to that extent though declared so while on the aspect of solatium and interest, it is held so on all aspects relating to determination of compensation. In any event, the extracted portion of the notification dated 28.08.2015 is explicit that the benefits available to the land owners under RFCTLARR Act is to be also available to similarly placed land owners whose lands are acquired under the 13 enactments specified in the Fourth Schedule, among which NH Act is one. Hence all aspects contained in Section 26 to 28 of RFCTLARR Act for determination of compensation will be applicable notwithstanding Section 3J a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which could be set aside under Section 34." 37. In M/s. Som Datt Builders Ltd. v. State of Kerala, 2009(10) SCC 259, the Supreme Court held: "The requirement of reasons in support of the award under Section 31(3) 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 finding/s 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 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. In what we have discussed above, it cannot be said that High Court was wrong in observing that no reasons have been assigned by the arbitral tribunal as to whether the period of completion extended by the empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Arbitral Tribunal must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground. Construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair-minded or reasonable person could do." 39. The Supreme Court in Sri P. Nagaraju @ Chelluvaish and another's case (supra) held: "Leaving aside the facts in the instant case for a while, if in a matter as against the determination of the market value by the SLAO, the land loser had referred to the exemplar sale deeds and seeks higher compensation than prescribed in the guidance value, and in that circumstance, if no reasons are assigned by the learned Arbitrator for such determination and either approves the SLAO award or awards a lesser amount than the actual entitlement, in such circumstance the arbitration process which is thrust on the land loser should not be an impediment and limited interference should not be a reason to deny the just and fair compensation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo options are available to the Court considering the appeal under section 37 of the Arbitration Act. The High Court either may relegate the parties for fresh arbitration or to consider the appeal on merits on the basis of the material available on record within the scope and ambit of the jurisdiction under section 37 of the Arbitration Act. However, the High Court has no jurisdiction to remand the matter to the same Arbitrator unless it is consented by both the parties that the matter be remanded to the same Arbitrator." 41. The law is settled that the arbitral award shall contain reasons to support the conclusion arrived at, unless otherwise agreed between the parties. Non-recording of reasons in consonance with Section 31(3) of the 1996 Act results in violation of Section 28(1)(a) of the 1996 Act, rendering the award patently illegal for not deciding the proceedings in accordance with the substantive law. Further that in exercise of powers under Sections 34 and 37 of the 1996 Act, neither the award can be modified nor the matter can be remanded back to the same arbitrator. The court can set aside the award, relegating the parties for fresh arbitration or consider the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... untarily. To achieve the object for expeditious acquisition, the mechanism has been provided under the 1956 Act which provides for determination of the compensation by CALA. In case of grievance, an arbitrator is appointed by the Central Govt. There is no quarrel with the proposition that the arbitrator is not to give reasons as are required in a judgment but it cannot be lost sight of the fact that in such cases arbitral award has far reaching effect due to number of land owners involved and the area under acquisition. It would be desirable if the arbitrators record reasons, making evident as to how the material available was dealt with. These small steps to an extent will curtail litigation and the time spent in litigation can be reduced. Majority of the persons affected are the farmers and rustic villagers who would be able to make out as to whether just compensation has been awarded for land acquired or not. In the case in hand, the acquisition was of 2012, the arbitral award was passed in March 2019, an earnest effort should be made by the arbitrator to conclude the matter expeditiously. The delay deprives the land owners (most of them being farmers) of the just compensation. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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