Case Note & Summary
The case involves an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, filed by M/s. Agrawal Foodstuff LLP against an order dated September 18, 2025, passed by a Section 34 Court. The Section 34 Court had set aside an Arbitral Award dated April 4, 2024, which was rendered in a statutory arbitration under the Maharashtra Highways Act, 1955, concerning land acquisition compensation. The appellant's core grievance before the Section 34 Court was the misclassification of its land as 'agricultural land' instead of 'non-agricultural land', which affected the compensation amount. The Section 34 Court, after detailed analysis, found the award arbitrary and set it aside, remanding the matter for fresh consideration with liberty to the parties to lead evidence. The appellant argued that the Section 34 Court should have modified the award by applying the correct classification and the rate applicable to non-agricultural land as seen in adjoining land, rather than remanding. The High Court disagreed, holding that the remand was appropriate because various factors under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and the potentiality of adjoining land required factual determination through evidence. The High Court found no error in the Section 34 Court's order and dismissed the appeal, upholding the remand for fresh adjudication.
Headnote
A) Arbitration Law - Appeal under Section 37 - Scope of Remand - Section 37, Arbitration and Conciliation Act, 1996 - The appellant challenged an order under Section 34 setting aside an arbitral award and remanding the matter for fresh consideration. The appellant argued that the court should have modified the award by correcting the classification of land from agricultural to non-agricultural. The High Court held that the Section 34 Court's order allowing parties to lead evidence was appropriate, as factors under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and potentiality of adjoining land required factual determination. Held that the appellate court under Section 37 should not interfere with a reasoned remand order. (Paras 1-7)
B) Land Acquisition - Classification of Land - Compensation - Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - The core grievance was misclassification of 'non-agricultural land' as 'agricultural land' in the arbitral award. The appellant sought application of the rate for non-agricultural land based on adjoining land. The High Court noted that the Section 34 Court had given detailed reasons for setting aside the award, including analysis of adjoining land and legislative intent of the Maharashtra Agricultural Lands Act, 1961 and Maharashtra Land Revenue Code, 1966. Held that the matter required evidence on various factors, and remand was justified. (Paras 2-6)
Issue of Consideration
Whether the Section 34 Court, after setting aside an arbitral award, should have modified the award by applying the correct classification of land instead of remanding the matter for fresh consideration.
Final Decision
The High Court dismissed the appeal, upholding the Section 34 Court's order setting aside the arbitral award and remanding the matter for fresh consideration. The court held that the remand was appropriate as various factors under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and the potentiality for compensation granted to adjoining land required evidence to be led by the parties.
Law Points
- Section 37 of Arbitration and Conciliation Act
- 1996
- Section 34 of Arbitration and Conciliation Act
- Scope of appellate court under Section 37
- Remand after setting aside award under Section 34
- Classification of land for compensation
- Right to Fair Compensation and Transparency in Land Acquisition
- Rehabilitation and Resettlement Act
- 2013
Case Details
2026 LawText (BOM) (04) 109
Arbitration Appeal (ST) No. 37045 of 2025
Somasekhar Sundaresan, J.
Mr. Tarak Shah for the Appellant; Mr. A. R. Patil, Addl. G. P., for the Respondent-State; Mr. Kunal Damle a/w Mr. Ankit Patil, for Respondent Nos. 2 to 4
M/s. Agrawal Foodstuff LLP
The Land Acquisition Officer and Dy. Collector, General Administration
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Nature of Litigation
Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against an order under Section 34 setting aside an arbitral award in a statutory arbitration under the Maharashtra Highways Act, 1955.
Remedy Sought
The appellant sought to set aside the Section 34 order and instead have the court modify the arbitral award by correcting the classification of land from agricultural to non-agricultural and applying the corresponding compensation rate.
Filing Reason
The appellant was aggrieved by the Section 34 Court's order setting aside the arbitral award and remanding the matter for fresh consideration, instead of modifying the award to reflect the correct classification of land.
Previous Decisions
An Arbitral Award dated April 4, 2024 was passed in a statutory arbitration under the Maharashtra Highways Act, 1955. The Section 34 Court set aside the award by order dated September 18, 2025, and remanded the matter for fresh consideration.
Issues
Whether the Section 34 Court, after setting aside an arbitral award, should have modified the award by applying the correct classification of land instead of remanding the matter for fresh consideration.
Submissions/Arguments
The appellant argued that the Section 34 Court ought not to have remanded the matter; instead, it should have applied the principles on which it found the award to be arbitrary to rectify the error, specifically by applying the same value seen from the record in respect of the adjoining land and modifying the award.
The appellant further submitted that the core grievance was misclassification of 'non-agricultural land' as 'agricultural land', and correction of such classification should be treated as a computational error, as the only outcome would be applying the rate for non-agricultural land as seen in the adjoining piece of land.
Ratio Decidendi
Under Section 37 of the Arbitration and Conciliation Act, 1996, an appellate court should not interfere with a reasoned order of a Section 34 Court that sets aside an arbitral award and remands the matter for fresh consideration, especially when the remand allows parties to lead evidence on factual issues such as land classification and compensation factors under relevant statutes.
Judgment Excerpts
The challenge in this Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 is to an order dated September 18, 2025, passed under Section 34 of the Act, by which an Arbitral Award dated April 4, 2024, which was passed in a statutory arbitration conducted under the Maharashtra Highways Act, 1955, has been set aside.
I am unable to agree. The Impugned Order explicitly allows the Appellant and the Respondent to lead evidence, since various factors stipulated in the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and the potentiality for compensation granted to adjoining land, as well as sale instances, would have to be considered.
Procedural History
An arbitral award was passed on April 4, 2024 under the Maharashtra Highways Act, 1955. The appellant filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, which was allowed by order dated September 18, 2025, setting aside the award and remanding the matter. The appellant then filed the present appeal under Section 37 against that order.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 37, Section 34
- Maharashtra Highways Act, 1955:
- Maharashtra Agricultural Lands Act, 1961:
- Maharashtra Land Revenue Code, 1966:
- Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013:
