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IN THE HIGH COURT OF JHARKHAND AT RANCHI
Arbitration Appeal No. 08 of 2017
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Pradeep Kumar
… …. Appellant
Versus
Competent Authority cum District Land Acquisition Officer, National Highway Authority of India 2. Project Director, National Highway Authority of India, Ranchi 3. Executive Engineer, Building Construction Department, Hazaribagh
… …. Respondents
----- CORAM: HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY
----- For the Appellant : Mr. Pradeep Modi & Sarvendra Kumar, Advocates For the Respondents : Mrs. Sweety Topno, Advocate
----- C.A.V. ON 29.08.2022
PRONOUNCED ON 10.11.2022
The present appeal has been filed under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 for quashing the order dated 27.04.2017 passed by the Civil Judge (Sr. Div.)-I, Hazaribagh in Misc. Case No. 01 of 2012 whereby and whereunder, the objection/application filed by the appellant for setting aside the Award dated 31.10.2011 passed by the Arbitrator, National Highway Authority of India (hereinafter called as NHAI), NH-33 has been rejected. 2.
Respondent no. 2 – Project Director, National Highway Authority of India (NHAI), undertook the project of widening of NH-33 between Hazaribagh to Ranchi by making it four lane and for the purpose of widening, adjacent lands on side of NH-33 were acquired under the provisions of National Highways Act, 1956. 3. The appellant is a permanent resident of Hazaribagh and has ancestral lands adjacent to NH-33 under Plot No. 446, 447, 472 falling under Hazaribagh Town at Village Misipiri. There was boundary wall and construction, including a Hanuman temple made over Plot No. 472 and was a source of livelihood for the appellant and his family as there are shops constructed on the said plot. 4.
On 13.07.2009 a notification under Section 3A of the National Highways Act, 1956 was issued by the District Land Acquisition Officer, Hazaribagh (respondent no.1), for acquiring the lands of Plot No. 472, area 0.19 acre under Thana No. 120, Circle Hazaribagh Sadar in Mouza Misipiri, Distt. Hazaribagh along with construction made thereon for widening of NH-33. On 24.04.2010 an Award of Rs.22,82,015/- was prepared by respondent no. 1 in the name of the appellant as compensation for acquisition of aforesaid land along with construction.
On 07.08.2010 the appellant filed objection to the compensation amount before the Deputy Commissioner, Hazaribagh stating therein that the valuation has been done treating the land as Tanr-III at the old rate and proper valuation of construction made thereon was not done. 6.
The appellant obtained valuation report of construction done by respondent no.1 for acquired land udner R.T.I. Act from respondent no. 3 which revealed that the valuation of Bajrangbali temple has been arbitrary done at a petty sum of Rs.34,000/-. The appellant obtained valuation report for construction made on the acquired land of Plot No. 472 from registered valuer Sri Bachulal, property valuer, Hazaribagh duly registered with the Income Tax Department having Registration No. Cat-I of 148/99-2000 C.C.I.T. (Admn.), Patna, Govt. of India assessed the value of land and construction made thereon including temple at Rs.45,26,440/- which is far more than compensation awarded by respondent no. 1. 7.
On 30.03.2011 the appellant moved before the Additional Collector- cum-Arbitration NH 33, Hazaribagh for enhancement of compensation on the basis of valuation report prepared by registered valuer Sri Bachulal. On 04.04.2011 an application for enhancement of compensation was registered as Case No. 46 of 2011 before the Additional Collector-cum-Arbitrator, Hazaribagh and notices were issued. 8.
On 28.06.2011 Respondent no. 1 filed its objection and on 26.08.2011 the appellant filed rejoinder stating therein that the Award was prepared without the physical verification of construction, especially Hanuman temple and without taking the help of the specialist in the field. 9.
The appellant filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter called as the Act) before the Sub-Judge-I, Hazaribagh challenging the order dated 31.10.2011 passed by the Arbitrator, registered as Misc. Case No. 01/2012. Though respondent no. 3 appeared before the Sub Judge-I but did not file any show cause/objection. However, the Civil Judge (Sr. Div.)-I, Hazaribagh dismissed the case vide order dated 27.04.2017 without considering the valuation report of registered valuer in proper perspective. 10.
Both the Arbitrator as well as the Court below without assigning specific reason rejected the valuation report of registered property valuer. Court below have failed to appreciate that there was no physical verification of construction made on the acquired plot and the competent authority has
arbitrarily fixed the cost of construction as Rs.4,54,154.70. Learned Court below has relied on the judgment passed by the Hon’ble Apex Court as reported in (2003) 5 SCC 705 wherein it has been held that the Award can be set aside only if it is patently illegal being against the Public Policy. 11. The power of Court while exercising its jurisdiction under section34 of Arbitration and Conciliantion Act, 1996 is a limited one. The court does not sit in appeal against the award of the arbitrator. Specific grounds have been laid down under this provision on which the award can be set aside or interfered with. It has been held in K.V. Mohammed Zakir v. Regional Sports Centre, (2009) 9 SCC 357 “6. It is equally well settled, where the arbitrator acts within jurisdiction, “the reasonableness of the reasons” given by the arbitrator is not open to scrutiny by courts. However, if the reasons are such as no person of ordinary prudence can ever approve of them or if the reasons are so “outrageous in their defiance of logic” that they shock the conscience of the court, then it is a different situation. And in an appropriate case the court may interfere. However, the degree of such unreasonableness must be greater than the standard in a certiorari proceeding”. In SAIL v. Gupta Brother Steel Tubes Ltd., (2009) 10 SCC 63 the Court observed “29. The legal position is no more res integra that the arbitrator having been made the final arbiter of resolution of disputes between the parties, the award is not open to challenge on the ground that arbitrator has reached at a wrong conclusion. The courts do not interfere with the conclusion of the arbitrator even with regard to construction of a contract, if it is a possible view of the matter. The words “no award shall be set aside” in Section 30 mandate the courts not to set aside the award on the ground other than those specified in Section 30. In a case such as this, where the arbitrator has given elaborate reasons that compensation Clause 7.2 is not attracted for the breaches for which the compensation has been claimed by the respondent and such view of the arbitrator is a possible view, we are afraid in the circumstances, award is not amenable to correction by the court”. 12. Under the above settled position of law the matter for consideration is whether the award of the arbitrator is open to interference in the present case? Was the arbitrator bound by the report of the valuer relied upon by the appellant?
It is settled principle of law that this Court will not sit in appeal over the decision of the arbitrator on facts or law. The interference shall be made only in the event that some material has not been considered or the award is perverse or that a prudent person will not arrive at the same conclusion on the basis of the materials on record. 14. Learned Court below has noted that Hazaribagh district acquisition of land has been done into two sections and adopted the date of registration of land i.e. Ranchi/Ramgarh-Hazaribagh and Hazaribagh-Barhi Section. The arbitrator adopted the rate of registration of land at that time of village concerned along with 30% solatium thereon as the market value of land in question. The rate of the land has been ascertained on the basis of rate of average five registered deeds of the village concerned. The rate was assessed and confirmed by the report dated 28.1.08 of the committee constituted under the Chairmanship of Sub-Divisional Officer, Hazaribag thereafter 10% increase had also been made in the subsequent years. 15. In view of the above reasons, I do not find any room or scope for interference in assessment of the rate of land, solely on the basis of the assessment of valuer examined on behalf of the appellant. On these materials the award of the arbitrator cannot be said to be perverse or that he had misconducted himself as far as the valuation of land is concerned. 16. However, there appears to be some substance in the contention advanced on behalf of the appellant that the valuation of the temple along with the sculpture of Lord Hanuman installed in the temple had been assessed only at Rs.34,000, whereas the valuer has assessed it to be a work of art, and the valuation of the temple has been assessed to be Rs.12,70,750. The temple was constructed in an area 10’7’’ x 10’7” x 20’ with an iron gate. The learned court below has not assigned any reason for the paltry amount as valuation for the temple. The arbitrator in his award dated 31.10. 2011 has also not stated anything in his order regarding the valuation of the structure of the temple which appears on the face of it to be unreasonable. The argument of the appellant that the temple had sculptures engraved in it with art value, appear to be exaggerated, as no evidence has been led to show its antiquity or that the sculptures having any art value. Considering the fact that acquisition process took place more than 10 years ago, the valuation of the temple as such should be roughly assessed to be around Rs. 3 lakh at the time of its acquisition. The award of the arbitrator is therefore enhanced by Rs 3 lakh as the valuation of the
temple structure along with the sculpture over and above Rs 34,000 which had been assessed by the learned Arbitrator.
Assessment of compensation of the land by the Arbitrator needs no interference.
The appellant shall, however, be entitled to a further compensation of Rs.3 lakh with 18% interest from the date of award till the payment, as compensation for the acquisition of the temple on the land acquired by the respondent no.1. This amount shall be over and above the amount already paid to the appellant for the land acquisition. The award of the Arbitrator is, accordingly, modified.
The respondent is directed to pay the said compensation amount within a month of this order to the appellant.
The appeal is allowed as at above. Consequently, I.A. No. 5342 of 2022 stands disposed of.
(Gautam Kumar Choudhary, J.) Jharkhand High Court, Ranchi Dated the 10th November, 2022 AFR / AKT