Limited Remedy Available Under S. 34 Of A&C Act Against Award Of Compensation Under NHA, Is Not A Ground To Invoke HC’s Writ Jurisdiction: Bombay High Court

The Bombay High Court has ruled that though the scope for challenging the compensation awarded by the Arbitrator to the landowners under Section 3-G (5) of the National Highways Act, 1956 (NHA) is limited to the parameters provided under Section 34 of the Arbitration and Conciliation Act, 1996 (A & C Act), the same cannot be a ground to invoke the High Court’s writ jurisdiction under Article 226 of the Constitution of India. The bench of Justice Avinash G. Gharote dismissed the contention of the landowners that since the Court under Section 34 of A&C Act has no power to modify the award or substitute a new award for further enhancement of the compensation than what was awarded by the Arbitrator, the petitioners were rendered remediless. The Court held that absence of a remedy and the limited scope of a remedy are two different things, and it is permissible for the Legislature to narrow down the scope of any challenge which a Statute may provide to a litigant. The same cannot be a ground to create an additional remedy of invoking the writ jurisdiction of the High Court under Article 226 of the Constitution, the Court remarked. The petitioners are land owners who challenged the compensation granted to them for the land acquired under the National Highways Act, 1956. In the statutory arbitration proceedings invoked by the land owners under Section 3-G (5) of the NHA, the Arbitrator passed an award partly allowing their claim for enhancement of compensation. The respondent no. 1, the Ministry of Road Transport and Highways, challenged the arbitral award by filing an application under Section 34 of the A&C Act. The District Court allowed the application and set aside the arbitral award, restoring the compensation awarded by the Land Acquisition Officer. In an appeal filed under Section 37 of the A&C Act, the Bombay High Court set aside the judgment of the District Court and restored the award passed by the Arbitrator. In a batch of writ petitions filed before the Bombay High Court, the petitioners/ landowners, including M/s Omanand Industries, challenged the arbitral award passed by the Arbitrator and sought its modification. The petitioners sought further enhancement of the compensation awarded to them by the Arbitrator. They pleaded that since the District Court under Section 34 of the A&C Act has no power to modify the award or substitute a new award for further enhancement of compensation than what was awarded by the Arbitrator, the petitioners were rendered remediless. In such circumstances, it was permissible for the petitioners to invoke the writ jurisdiction of the High Court under Articles 226 and 227 of the Constitution of India, to lay a claim for further enhancement of compensation, the petitioners pleaded. Noting that the provisions of the A&C Act have been made applicable to every arbitration proceeding under Section 3-G (5) of the NHA, the Court reckoned that the grounds for challenging the award passed by the Arbitrator under Section 3-G (5) is controlled and limited by the provisions of Section 34 of the A&C Act. The bench concluded that under Section 34 of the A&C Act, the Court does not have any power to modify an award and the power is restricted to setting aside the award. Referring to the provisions of the NHA, the Court took note that in case the compensation determined by the Competent Authority under Section 3-G (1) of the NHA is not acceptable, the same can be challenged before the Arbitrator. The Arbitrator is then empowered to determine the compensation under Section 3-G (5) of the NHA. The Court further observed, “The determination of the compensation by the Arbitrator under Section 3-G (5) of the N.H. Act is then open to further scrutiny, by the Court under Section 34 of the A & C Act which, in turn, is susceptible to a further challenge under Section 37 of the A & C Act, which, in turn, can be carried to the Hon’ble Apex Court in a petition for special leave to appeal under Article 136 of the Constitution of India.” “It is, thus, apparent that there are as many as five opportunities provided to the landowner whose land is acquired under the N.H. Act, to question the grant of compensation awarded to him,” the Court concluded. The bench held that though the scope and the parameters for such challenge also go on reducing as a higher forum is to be approached, but that is the very basis of a hierarchical form of system without which the system may not work at all. Further, the same cannot be a ground to create an additional remedy by invoking the writ jurisdiction of the High Court under Article 226 of the Constitution, the Court held. Referring to the facts of the case, the bench took note that the petitioners had failed to avail the remedy provided under Section 34 of the A&C Act, against the award passed by the Arbitrator under Section 3-G (5) of the NHA. The Court thus...

Limited Remedy Available Under S. 34 Of A&C Act Against Award Of Compensation Under NHA, Is Not A Ground To Invoke HC’s Writ Jurisdiction: Bombay High Court

Parina Katyal

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