Case Note & Summary
The petitioners, the Project Director of the National Highway Authority of India (NHAI) and the Secretary, Union of India, challenged an order dated 11.10.2023 passed by the learned District Judge, Yavatmal in M.J.C. No. 14/2016. The District Judge had allowed an application filed by respondent Nos. 3 and 4 under Section 34(4) of the Arbitration and Conciliation Act, 1996 (A&C Act), remitting the matter to the Arbitrator (respondent No. 1) to resume arbitration and determine the claim afresh, particularly with respect to solatium. The background involves acquisition of land for widening of NH-7 under the National Highways Act, 1956 (NH Act). The Competent Authority passed an award on 30.03.2012 granting compensation of Rs. 36,01,773/- for 0.5400 HR land. Respondent Nos. 3 and 4 sought enhancement under Section 3(G)(5) of the NH Act, and the Arbitrator on 04.09.2015 awarded enhanced compensation of Rs. 4,28,65,200/- along with 10% for loss of easement rights and interest at 9% p.a., but did not grant solatium. NHAI challenged this award under Section 34 of the A&C Act before the District Judge. After more than six years, respondent Nos. 3 and 4 filed an application under Section 34(4) seeking remission for inclusion of solatium. The District Judge allowed the application, remitting the matter to the Arbitrator to pass an award including solatium. NHAI filed the present writ petition contending that the District Judge erred because the NH Act expressly bars application of the Land Acquisition Act, 1894 (Section 3(J)), and thus solatium was not payable. The court held that the power under Section 34(4) is limited to curing defects that are capable of being cured; directing the arbitrator to consider solatium when the law does not permit it is beyond the scope of the provision. The impugned order was quashed and set aside, and the District Judge was directed to proceed with the Section 34 application on its merits.
Headnote
A) Arbitration Law - Section 34(4) A&C Act - Remission for Curable Defects - The court under Section 34(4) can only adjourn proceedings to allow the arbitral tribunal to cure defects that are capable of being cured; it cannot be used to direct the arbitrator to reconsider a claim that was never legally permissible. Held that the District Judge exceeded jurisdiction by remitting the matter for inclusion of solatium when the NH Act barred such claim (Paras 6, 11-12).
B) Land Acquisition - National Highways Act, 1956 - Solatium - Section 3(J) NH Act - The Land Acquisition Act, 1894 is expressly excluded from acquisitions under the NH Act; therefore, solatium under the Land Acquisition Act is not payable. The arbitrator's award not granting solatium was not a defect curable under Section 34(4) A&C Act (Paras 6, 11).
C) Arbitration Law - Section 34 A&C Act - Scope of Remission - The power under Section 34(4) is limited to adjourning proceedings to enable the tribunal to take action to eliminate defects that render the award liable to be set aside under Section 34(2). It does not permit the court to direct the tribunal to pass a fresh award on new points. Held that the impugned order remitting the matter for fresh consideration including solatium was beyond the scope of Section 34(4) (Paras 6, 11-12).
Issue of Consideration
Whether the learned District Judge erred in remitting the matter to the Arbitrator under Section 34(4) of the Arbitration and Conciliation Act, 1996 for fresh consideration including the point of solatium, when the National Highways Act, 1956 expressly bars the application of the Land Acquisition Act, 1894 and thus solatium was not payable.
Final Decision
The writ petition is allowed. The impugned order dated 11.10.2023 passed by the learned District Judge, Yavatmal in M.J.C. No. 14/2016 is quashed and set aside. The learned District Judge is directed to proceed with the application under Section 34 of the A&C Act on its own merits in accordance with law.
Law Points
- Section 34(4) of Arbitration and Conciliation Act
- 1996
- Section 3(G)(5) of National Highways Act
- 1956
- Section 3(J) of National Highways Act
- Solatium not applicable under NH Act
- Remission only for curable defects
- Arbitrator cannot be directed to reconsider solatium
Case Details
2025 LawText (BOM) (02) 298
Writ Petition No. 3596/2024
Mr. Anish A. Kathane for petitioners; Ms. Deepa Charlewar, AGP for respondent Nos.1 & 2; Mr. Dipesh Mehta a/w Mr. Rohan H. Chandurkar for respondent Nos.3 & 4
Project Director, National Highway Authority of India & Secretary, Union of India
Additional Commissioner, Nagpur and Arbitrator under National Highways Act, 1956; Competent Authority & Special Land Acquisition, Yavatmal; Dr. Jairaj S/o Moreshwar Pathak; Shri. Prabhakar Pathak
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Nature of Litigation
Writ Petition under Article 226/227 challenging the order of the District Judge remitting the matter to the Arbitrator under Section 34(4) of the A&C Act for fresh consideration including solatium.
Remedy Sought
Petitioners (NHAI) sought quashing of the order dated 11.10.2023 passed by the District Judge, Yavatmal in M.J.C. No. 14/2016, which allowed the application under Section 34(4) of the A&C Act and remitted the matter to the Arbitrator.
Filing Reason
The District Judge allowed the application under Section 34(4) of the A&C Act and remitted the matter to the Arbitrator to pass an award including the point of solatium, which the petitioners contended was beyond the scope of Section 34(4) and contrary to the express bar under Section 3(J) of the NH Act.
Previous Decisions
The Competent Authority passed an award on 30.03.2012 granting compensation of Rs. 36,01,773/-. The Arbitrator passed an award on 04.09.2015 enhancing compensation to Rs. 4,28,65,200/- with 10% for loss of easement rights and interest at 9% p.a., but did not grant solatium. NHAI challenged the award under Section 34 of the A&C Act before the District Judge. Respondent Nos. 3 and 4 filed an application under Section 34(4) which was allowed by the impugned order.
Issues
Whether the District Judge erred in remitting the matter to the Arbitrator under Section 34(4) of the A&C Act for fresh consideration including solatium.
Whether the power under Section 34(4) of the A&C Act can be used to direct the Arbitrator to consider a claim that is not legally permissible under the NH Act.
Whether the non-grant of solatium by the Arbitrator constituted a curable defect under Section 34(4) of the A&C Act.
Submissions/Arguments
Petitioners argued that the District Judge grossly erred in remitting the matter for fresh consideration including solatium, as the NH Act expressly bars the application of the Land Acquisition Act, 1894 under Section 3(J), and thus solatium was not payable. The award not granting solatium was not a curable defect under Section 34(4).
Respondents argued that under Section 34(4) of the A&C Act, the court has discretion to adjourn proceedings to allow the arbitral tribunal to cure defects, and the order remitting the matter was appropriate and needs no interference.
Ratio Decidendi
The power under Section 34(4) of the Arbitration and Conciliation Act, 1996 is limited to adjourning proceedings to enable the arbitral tribunal to cure defects that are capable of being cured and that render the award liable to be set aside under Section 34(2). It does not permit the court to direct the tribunal to reconsider a claim that was never legally permissible under the governing statute. Since the National Highways Act, 1956 expressly excludes the application of the Land Acquisition Act, 1894 (Section 3(J)), solatium was not payable, and the arbitrator's failure to grant it was not a defect curable under Section 34(4). The District Judge exceeded jurisdiction by remitting the matter for inclusion of solatium.
Judgment Excerpts
The learned District Judge grossly erred in law by remitting the matter indirectly for fresh consideration to the respondent no.1, i.e. the learned Arbitrator for passing an award including point of solatium.
The law with regards to acquisition of land for the purposes under the National Highways Act, as it stood on the date of award i.e 04.09.2015, is that the provisions of the Land Acquisition Act, 1894 were not applicable to the present matter due to the express bar contained in section 3(J) of the NH Act.
Thus, there was no irregularity in the order dated 04.09.2015 passed by the Ld. Arbitrator. In view of the same Ld. District Court was barred from having resort to section 34(4) of the A & C Act, and thus there was no question of the matter being remitted back to the said Arbitrator for passing a fresh award.
Procedural History
The Competent Authority passed an award on 30.03.2012. Respondent Nos. 3 and 4 filed an arbitration application under Section 3(G)(5) of the NH Act, which was decided by the Arbitrator on 04.09.2015. NHAI challenged the award under Section 34 of the A&C Act before the District Judge, Yavatmal in M.J.C. No. 14/2016. On 11.10.2023, the District Judge allowed an application under Section 34(4) filed by respondent Nos. 3 and 4, remitting the matter to the Arbitrator. NHAI filed the present writ petition challenging that order.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34, Section 34(4)
- National Highways Act, 1956: Section 3(G)(5), Section 3(G)(7), Section 3(D), Section 3(J), Section 3(G)2
- Land Acquisition Act, 1894:
