Case Note & Summary
These ten arbitration appeals arose from land acquisition compensation disputes under the National Highways Act, 1956. The appellants were landowners whose lands in village Babhulkhed, Taluka Balapur, District Akola were compulsorily acquired for widening of National Highway No.6. The Ministry of Road Transport and Highways issued a notification under Section 3-A of the National Highways Act on 25.11.2011, followed by a final notification under Section 3-D on 30.10.2012. The Competent Authority cum Special Land Acquisition Officer passed an award under Section 3-G(1) on 30.03.2013, awarding compensation of Rs.1,18,872 for land bearing Gat No.7 admeasuring 1300 sq.mtr for the lead appellant. Aggrieved, the appellant sought enhancement under Section 3-G(5) before the arbitrator, who passed a primary award on 03.08.2019 partly allowing some claims and rejecting others without reasons. The appellant then filed an application under Section 33(4) read with Section 33(1) of the Arbitration and Conciliation Act, 1996 for an additional award on omitted claims. The arbitrator allowed that application and passed an additional award on 27.11.2020, enhancing compensation to Rs.650 per sq.mtr based on ready reckoner for lands on highway, plus 10% statutory easement rights. Both the appellant and the National Highway Authority of India filed applications under Section 34 of the Arbitration and Conciliation Act before the Principal District Judge, Akola. The NHAI sought to set aside only the additional award, while the appellant challenged the primary award and sought resumption of arbitral proceedings. By common order dated 21.03.2023, the Principal District Judge allowed the NHAI's application, set aside the additional award, and dismissed the appellant's application. The appellants filed the present arbitration appeals. Their main contentions were that the NHAI had mounted a partial challenge to the arbitral award, which is impermissible under Section 34; that the doctrine of merger applied to the additional award; that the primary award remained intact after setting aside the additional award, leaving them without remedy; and that the arbitrator had sufficient material, including ready reckoner, to enhance compensation. The respondent NHAI supported the Principal District Judge's order and argued that the arbitrator was not justified in passing the additional award. The High Court admitted the appeals and heard them finally, after recording that all appeals involved a similar issue. The provided judgment text ends before the court's analysis and final decision; therefore, the final holding and ratio are not included. The appeals were reserved for judgment on 05.03.2025 and pronounced on 16.04.2025.
Headnote
A) Arbitration Law - Additional Arbitral Award - Section 33(4) of Arbitration and Conciliation Act, 1996 - The appellant filed an application under Section 33(4) read with Section 33(1) seeking an additional award for claims omitted in the primary award dated 03.08.2019; the arbitrator allowed the application and passed an additional award on 27.11.2020 granting compensation of Rs.650 per sq.mtr based on ready reckoner of lands on highway along with 10% statutory easement rights; the Principal District Judge later set aside the additional award on the ground that the arbitrator was not justified in passing it (Paras 6-9). B) Arbitration Law - Setting Aside of Arbitral Award - Section 34 of Arbitration and Conciliation Act, 1996 - The appellant contended that the NHAI had challenged only the additional award, not the primary award, and that a partial challenge to an arbitral award cannot be permitted under Section 34; the appellant relied on the doctrine of merger, arguing that after passing of additional award, it merged with the primary award and if the additional award was bad in law, the entire award should be set aside leaving parties free to begin arbitration again under Section 3-G(5) of the National Highways Act, 1956 (Paras 8-9). C) Land Acquisition Law - Compensation Determination - Sections 3-A, 3-D, 3-G(1), 3-G(5) of National Highways Act, 1956 - Land bearing Gat No.7, admeasuring 1300 sq.mtr at village Babhulkhed, Taluka Balapur, District Akola was acquired for widening of National Highway No.6; the competent authority awarded Rs.1,18,872 on 30.03.2013; the appellant sought enhancement before the arbitrator, who partly allowed the claim in the primary award and later enhanced compensation to Rs.650 per sq.mtr in the additional award; the appeals challenged the setting aside of the enhanced compensation (Paras 4-9).
Issue of Consideration
Whether partial challenge to an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 is permissible; Whether an additional award passed under Section 33(4) merges with the primary award and should be set aside along with the primary award; Whether the arbitrator had material to enhance compensation to Rs.650 per sq.mtr; Whether the Principal District Judge erred in setting aside the additional award while leaving the primary award intact
Law Points
- Doctrine of merger applies to additional award under Section 33(4) of Arbitration and Conciliation Act
- 1996
- partial challenge to arbitral award under Section 34 is impermissible
- arbitrator must have material to enhance compensation
- if additional award is set aside
- entire award should be set aside
- Section 3-G(5) of National Highways Act
- 1956 provides arbitration for compensation determination
