The Appellant, Bhartiya Rashtriya Rajmarg Pradhikaran, has preferred the present appeal under Section 37 of the Arbitration and Conciliation Act 1996, praying for setting aside the Order passed by the District Judge, Shahjahanpur in Arbitration Case No. 16 of 2016 under Section 34 of the Act, 1996. The Allahabad High Court, however, rejected the appeal owing to lack of merit.
Background
In this case, in the exercise of power under Section 3-A (1) of the National Highway Act 1956, the Appellant issued notification dated 16.11.2009 concerning the lands situated in the number of villages for the widening of NH-24 to four lanes. The said notification also acquired gate No. 193, area 0.1260 hectare situated in village Maujampur, Tehsil Sadar District Shahjahanpur, owned by Respondent no. 1. The competent authority, while disposing of Respondent’s objection, held that since the land in question was recorded as agriculture land, compensation should be calculated and paid as per circle rates applicable to agriculture land. Feeling aggrieved by the award, Respondent no. 1 preferred application under Section 3-G (5) of the Act, 1956, to refer the matter to the Arbitrator. The Sole Arbitrator/Collector, Shahjahanpur, by Order dated 30.06.2016, dismissed the application of Respondent no. 1, holding that he could not prove that the land in question was outside the purview of U.P. RoadSide Land Control Act 1942. Therefore, the competent authority rightly computed the compensation treating the land to be agricultural land. Feeling aggrieved by the Order of the Sole Arbitrator/Collector, Shahjahanpur, the Respondent no. 1 preferred application under Section 34 of the Act, 1996 before the District Judge, Shahjahanpur. The District Judge, Shahjahanpur, by Order dated 06.08.2020, rejected the Appellant’s objection against the Respondent’s application under Section 34 of the Act, 1996. It set aside the award dated 30.06.2016 and directed for payment of compensation, treating the land as commercial land. The District Judge, Shahjahanpur, in allowing the application of Respondent no. 1, after noticing in detail the scope of Section 34 of the Act, 1996, concluded that the Arbitrator’s award was against the public policy and principles of natural justice. Further, after examining the evidence led by Respondent no. 1, the District Judge found that the land in question was commercial land, and accordingly, it was directed for payment of compensation of the land in question based on the commercial rate applicable on the date of notification under Section 3-A of the Act, 1956.
Arguments Before the Court
The learned counsel for the Appellant challenged the Order of the District Judge and contended that the District Judge in passing the Order on the application under Section 34 of the Act, 1996 has acted as an appellate authority and has reappraised the evidence on record which was beyond the scope of Section 34 of the Act, 1996. He submitted that Section 34 of the Act, 1996 stipulates certain preconditions which, if present, would entitle the Court to interfere under Section 34 of the Act, 1996. Further, he submitted that the District Judge has travelled beyond jurisdiction in interfering with the award under Section 34 of the Act, 1996 as no condition envisaged under said Section was present in the instant case that empowers the Courts to invoke its jurisdiction. Thus, he submitted that the District Judge’s Order, Shahjahanpur was without jurisdiction and deserved to be set aside. He further submitted that it was established from the evidence on record that land in question was recorded as agricultural land on the date of notification under Section 3-A of the Act, 1956; therefore, merely because land in question was being used for commercial purposes, it would not become commercial land. Accordingly, he submitted that the District Judge had committed a manifest error of law apparent on the face of the record in treating the land to be commercial land and directing for payment of compensation based on commercial land. Thus, the submission was that the impugned Order was per se illegal and not sustainable in law.
Court’s Observations
The Court heard the learned counsel for the Appellant and perused the record and the facts of the case. The Court referred to Section 34 of the Act, 1996 and referred to a few Apex Court judgments to appreciate the scope of Section 34 of the Act, 1996.
Further, the Court referred to Section 3-G (7) of the Act, 1956, and pointed out that in the present case, the Arbitrator has failed to assess the compensation appropriately and thus, has failed to follow the criteria provided in Section 3-G (7) of the Act, 1956 for determining the compensation. The Court held that the District Judge, Shahjahanpur, has not committed any error or illegality in concluding that the present case falls within the ambit of Section 34 of the Act, 1996 and has rightly interfered with the award.
The Court also referred to a few Apex Court judgments where Apex Court has explained concerning the Land Acquisition Act 1894 as to what criteria should be adopted by the Courts in fixing the ‘market value’ of land. The Apex Court has consistently held in the above judgments that the best method to assess the market value of land would be the amount that a willing purchaser would pay to the landowner. Applying the principle laid down by the Apex Court, the Court found that the view taken by the District Judge that Respondent no. 1 was entitled to compensation as per the commercial rate of the land was correct and in conformity with the criteria provided for determination of compensation under Section 3G(7) of the Act, 1956 for the reason that in the present case, the land in question was commercial land. Hence, it was apparent that the willing purchaser would offer the price of commercial land to purchase the land in question, which meant that the market value of the land in question was the price of commercial land in the area where the land was situated. The Court, thus, concluded that the competent authority or the Arbitrator in determining the compensation was only to consider the market value of the land on the date of notification under Section 3-A of Act, 1956, and the nature of land recorded in the revenue record was not relevant for determining the compensation.
Court’s Decision
Based on the reasons above, the Court found that the District Judge has rightly modified the award and issued direction to pay compensation of the land treating it as commercial land. The Court rejected the contention of the counsel for the Appellant that the District Judge has acted illegally and beyond its jurisdiction in directing the Appellant to pay compensation on the commercial rate. The Court held that the appeal lacked merit and accordingly dismissed it.
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